Document:

Exhibit 10.1(g)

 

 

	
   

  	
  DATED

  	
  14 November 2005

  

 

 

(1) EVOLVING SYSTEMS HOLDINGS, INC.

(as Company)

 

- and -

 

(2) CAPITALSOURCE FINANCE LLC

(as Collateral Agent)

 

 

CHARGE OVER SHARES

(UK Secured Obligations)

 

 

CONTENTS

 

	
  1.

  	
  DEFINITIONS AND
  INTERPRETATION

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  COVENANT TO PAY

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  GRANT OF SECURITY

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  CONTINUING SECURITY

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  LIABILITY OF THE
  COMPANY RELATING TO SECURITY ASSETS

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  REPRESENTATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  UNDERTAKINGS BY THE COMPANY

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  RIGHTS AND OBLIGATIONS IN
  RESPECT OF CHARGED INVESTMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  POWER TO REMEDY

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  WHEN SECURITY BECOMES
  ENFORCEABLE

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  ENFORCEMENT OF SECURITY

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  RECEIVER

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  POWERS OF RECEIVER

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  APPLICATION OF PROCEEDS

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  SET-OFF

  	
   

  
	
   

  	
   

  	
   

  
	
  16.

  	
  DELEGATION

  	
   

  
	
   

  	
   

  	
   

  
	
  17.

  	
  FURTHER ASSURANCES

  	
   

  
	
   

  	
   

  	
   

  
	
  18.

  	
  POWER OF ATTORNEY

  	
   

  
	
   

  	
   

  	
   

  
	
  19.

  	
  PAYMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  20.

  	
  STAMP DUTY

  	
   

  
	
   

  	
   

  	
   

  
	
  21.

  	
  COSTS AND EXPENSES

  	
   

  
	
   

  	
   

  	
   

  
	
  22.

  	
  CURRENCIES

  	
   

  
	
   

  	
   

  	
   

  
	
  23.

  	
  INDEMNITY

  	
   

  
	
   

  	
   

  	
   

  
	
  24.

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  25.

  	
  NOTICES

  	
   

  
	
   

  	
   

  	
   

  
	
  26.

  	
  PARTIAL INVALIDITY

  	
   

  
	
   

  	
   

  	
   

  
	
  27.

  	
  RELEASE

  	
   

  

 

 

	
  28.

  	
  COUNTERPARTS

  	
   

  
	
   

  	
   

  	
   

  
	
  29.

  	
  GOVERNING LAW

  	
   

  
	
   

  	
   

  	
   

  
	
  30.

  	
  ENFORCEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE

  	
   

  
	
   

  	
   

  	
   

  
	
  The Initial Charged Securities

  	
   

  

 

 

THIS
AGREEMENT is made on        2005

 

BETWEEN 

 

(1)                                  EVOLVING SYSTEMS HOLDINGS, INC., a company incorporated and registered under the laws of Delaware whose principal place of business is at 9777
Pyramid Court, Suite 100, Englewood, C080112 (the “Company”); and

 

(2)                                  CAPITALSOURCE FINANCE LLC
(as collateral agent for the Lender Parties (as defined below)) (in such
capacity, the “Collateral Agent”).

 

IT IS AGREED:

 

1.                                      DEFINITIONS
AND INTERPRETATION

 

1.1                               Definitions

 

In this
Deed:

 

(a)                                  terms defined in, or construed for the purposes of, the Revolving
Facility Agreement (as defined below) have the same meanings when used in this
Deed (unless the same are otherwise defined in this Deed); and 

 

(b)                                 the following terms have the following meanings:

 

“Act” means the Law of Property Act 1925;

 

“Charged
Investments” means the Charged Securities
and all present and future Related Rights accruing to all or any of the Charged
Securities;

 

“Charged Securities” means:

 

(a)                                  the securities specified in the schedule (The  Initial
Charged Securities) (“Initial
Charged Securities”);

 

(b)                                 any other stocks, shares, debentures, bonds or other securities of
the Company now or in future owned (legally or beneficially) by the Company,
held by any nominee, trustee, fiduciary or clearance system on its behalf or in
which the Company has an interest at any time; and

 

(c)                                  any Related Rights which are constituted by any stocks, shares,
debentures, bonds, warrants, coupons, negotiable instruments, certificates of
deposit or other securities or “investments”
(as defined in part II of schedule II to the Financial Services and
Markets Act 2000 as in force at the date of this Deed) now or in future owned
(legally or beneficially) by the Company, held by any nominee, trustee,
fiduciary or clearance system on its behalf or in which the Company has an
interest at any time;

 

“Default
Rate” has the meaning ascribed to it in the
Revolving Facility Agreement;

 

“Delegate” means any delegate, sub-delegate, agent, attorney or co-trustee
appointed by the Collateral Agent or by a Receiver;

 

1

 

“Party” means a party to
this Deed;

 

“Receiver” means any receiver, receiver and manager or administrative receiver
appointed by the Collateral Agent under this Deed;

 

“Related
Rights” means, in relation to any Charged
Security:

 

(a)                                  all dividends, distributions and other income paid or payable on the
relevant Charged Security or on any asset referred to in paragraph (b) of
this definition; and

 

(b)                                 all rights, monies or property accruing or offered at any time in
relation to such Charged Security whether by way of redemption, substitution,
exchange, bonus or preference, under option rights or otherwise;

 

“Revolving
Facility Agreement” means the revolving
facility agreement dated the same date as this Deed and made between (1) the
Company and (2) CapitalSource Finance LLC, as Agent (including Collateral
Agent), Lender and L/C Issuer;

 

“Security” means the
Security Interests created by or pursuant to this Deed;

 

“Security
Assets” means all property and assets from
time to time mortgaged, charged or assigned (or expressed to be mortgaged,
charged or assigned) by or pursuant to this Deed;

 

“Security Interest” means
any mortgage, pledge, lien, charge, assignment by way of security,
hypothecation, security interest, title retention, preferential right or trust
arrangement or any other security agreement or arrangement having the effect of
security;

 

“Security
Period” means the period beginning on the
date of this Deed and ending on the date on which: 

 

(a)                                  all the UK Secured Obligations have been unconditionally and
irrevocably paid and discharged in full; and

 

(b)                                 no Lender Party has any further commitment, obligation or liability
under or pursuant to the Loan Documents.

 

“Share Pledge (US)” means the share pledge made between (1) Evolving Systems
Holdings, Inc. and (2) CapitalSource Finance LLC (as Collateral
Agent) and dated the same date as this deed and securing the obligations under
the Term Loan Agreement;

 

“Term Loan Agreement” means the term loan facility dated the same date as this Deed and
made between (1) Evolving Systems Inc., Telecom Software Enterprises, LLC
and the Company, (2) CapitalSource Finance LLC, in its capacities as Agent
(including Collateral Agent) and (3) the Lenders from time to time a party
thereto;

 

“UK Secured Obligations”
means all present and future obligations and liabilities (whether actual or
contingent and whether owed jointly or severally or alone or in any other
capacity whatsoever) of the Company to CapitalSource Finance LLC. and/or the
other Lender Parties (or any of them) under or pursuant to the Revolving
Facility Agreement (including all monies covenanted to be paid under this
Deed), provided that no obligation or liability shall be included in the
definition of “UK Secured

 

2

 

Obligations” to the extent
that, if it were so included, this Deed (or any part of it) would constitute
unlawful financial assistance within the meaning of sections 151 and 152 of the
Companies Act 1985 and provided further that the UK Secured Obligations shall
not include any “Obligations” as defined in the Term Loan Agreement or as
arising under any of the Loan Documents (as defined in the Term Loan
Agreement).

 

1.2                               Interpretation

 

(a)                                  Unless a contrary indication appears, any reference in this Deed to:

 

(i)                                     the “Company”, the “Collateral Agent” or any other “Lender Party” shall be construed so as to
include its successors in title, permitted assigns and permitted transferees;

 

(ii)                                  “this Deed”,
the “Revolving Facility Agreement”,
any other “Loan Document” or any
other agreement or instrument shall be construed as a reference to this Deed,
the Revolving Facility Agreement, such other Loan Document or such other
agreement or instrument as amended, supplemented, novated and/or replaced in
any manner from time to time (even if any of the same increases the obligations
of the Company or provides for further advances);

 

(iii)                               “assets” includes
any present and future properties, revenues and rights of every description and
includes uncalled capital;

 

(iv)                              an Event of Default that is “continuing”
shall be construed as meaning an Event of Default that has not been waived in
writing by the Agent nor remedied to the satisfaction of the Agent;

 

(v)                                 “including” or “includes” means including or includes
without limitation;

 

(vi)                              “UK Secured Obligations” includes obligations and liabilities which would be treated as such
but for the liquidation or dissolution of or similar event affecting the
Company;

 

(vii)                           a provision of law is a reference to that provision as amended or re-enacted;
and

 

(viii)                        the singular includes the plural and vice versa.

 

(b)                                 References to clauses and the schedule are to be construed,
unless otherwise stated, as references to clauses and the schedule of this
Deed and references to this Deed include its schedule.

 

(c)                                  Clause and schedule headings are for convenience only and shall
not affect the construction of this Deed.

 

(d)                                 Each undertaking of the Company (other than a payment obligation)
contained in this Deed must be complied with at all times during the Security
Period and is given by the Company for the benefit of the Collateral Agent and
each other Lender Party.

 

(e)                                  If the Collateral Agent or the Agent reasonably considers that an
amount paid by the Company to a Lender Party under a Loan Document is capable
of being avoided or otherwise set aside on the liquidation or administration of
the Company, then that

 

3

 

amount
shall not be considered to have been irrevocably paid for the purposes of this
Deed.

 

(f)                                    The Parties intend that this document shall take effect as a deed
notwithstanding the fact that a Party may only execute this document under
hand.

 

1.3                               Trust

 

All
Security Interests and dispositions made or created and all obligations and
undertakings contained in this Deed to, in favour of or for the benefit of the
Collateral Agent are made, created and entered into in favour of the Collateral
Agent as trustee for the Lender Parties from time to time on the terms of the
Revolving Facility Agreement.

 

1.4                               Third party rights

 

A
person who is not a Party shall have no right under the Contracts (Rights of
Third Parties) Act 1999 to enforce or enjoy the benefit of any term of this
Deed.

 

2.                                      COVENANT
TO PAY

 

2.1                               Covenant to pay

 

(a)                                  The Company covenants in favour of the Collateral Agent that it will
pay and discharge the UK Secured Obligations from time to time when they fall
due subject to any applicable grace periods provided for in the applicable Loan
Documents.

 

(b)                                 Every payment by the Company of a UK Secured Obligation which is
made to or for the benefit of a Lender Party to which that UK Secured
Obligation is due and payable in accordance with the Loan Document under which
such sum is payable to that Lender Party shall operate in satisfaction to the
same extent of the covenant contained in clause 2.1(a).

 

2.2                               Default interest

 

(a)                                  Any amount which is not paid under this Deed when due shall bear
interest (both before and after judgment and payable on demand) from the due
date until the date on which such amount is unconditionally and irrevocably
paid and discharged in full on a daily basis at the rate and in the manner
agreed in the Loan Document under which such amount is payable and, in the
absence of such agreement, at the Default Rate from time to time.

 

(b)                                 Default interest will accrue from day to day and will be charged in
accordance with the Revolving Facility Agreement.

 

3.                                      GRANT
OF SECURITY

 

3.1                               Nature of security

 

All
Security Interests and dispositions created or made by or pursuant to this Deed
are created or made:

 

(a)                                  in favour of the Collateral Agent;

 

(b)                                 with full title guarantee in accordance with the Law of Property
(Miscellaneous Provisions) Act 1994 (but subject to the Share Pledge (US)); and

 

4

 

(c)                                  as continuing security for payment of the UK Secured Obligations.

 

3.2                               Charged Investments

 

The
Company charges and agrees to charge all of its present and future right, title
and interest in and to the following assets which are at any time owned by the
Company, or in which it from time to time has an interest:

 

(a)                                  by way of first fixed charge the Charged Securities referred to in
the schedule (The  Initial Charged Securities (but subject to
the grant of the Security Interests pursuant to the Share Pledge (US)); and

 

(b)                                 by way of first fixed charge all other Charged Securities (not
charged by clause 3.2(a)),

 

in each
case, together with:

 

(c)                                  all Related Rights from time to time accruing to those Charged
Securities; and 

 

(d)                                 all rights which the Company may have at any time against any
clearance or settlement system or any custodian in respect of any Charged
Investments.

 

4.                                      CONTINUING
SECURITY

 

4.1                               Continuing security

 

The
Security is continuing and will extend to the ultimate balance of the UK
Secured Obligations regardless of any intermediate payment or discharge in
whole or in part.  This Deed shall remain
in full force and effect as a continuing security for the duration of the
Security Period.

 

4.2                               Additional and separate security

 

This
Deed is in addition to, without prejudice to, and shall not merge with, any
other right, remedy, guarantee or Security Interest which the Collateral Agent
and/or any other Lender Party may at any time hold for any Secured Obligation. 

 

4.3                               Right to enforce

 

This
Deed may be enforced against the Company without the Collateral Agent and/or
any other Lender Party first having recourse to any other right, remedy,
guarantee or Security Interest held by or available to it or any of them.

 

5.                                      LIABILITY
OF THE COMPANY RELATING TO SECURITY ASSETS

 

Notwithstanding anything contained in this Deed or
implied to the contrary, the Company remains liable to observe and perform all
conditions and obligations assumed by it in relation to the Security
Assets.  The Collateral Agent is under no
obligation to perform or fulfil any such condition or obligation or to make any
payment in respect of such condition or obligation. 

 

5

 

6.                                      REPRESENTATIONS

 

6.1                               General

 

The
Company makes the representations and warranties set out in this clause 6 to
the Collateral Agent and to each other Lender Party.

 

6.2                               No Security Interests

 

The
Security Assets are, or when acquired will be, beneficially owned by the
Company free from any Security Interest other than:

 

(a)                                  as created by this Deed; 

 

(b)                                 as created by the Share Pledge (US); and

 

(c)                                  as permitted by the Revolving Facility Agreement.

 

6.3                               No avoidance

 

This
Deed creates the Security Interests which it purports to create and is not
liable to be avoided or otherwise set aside on the liquidation or administration
of the Company or otherwise.

 

6.4                               Ownership of Security Assets

 

The
Company is the sole legal and beneficial owner of all the Security Assets.

 

6.5                               No proceedings pending or threatened

 

No
litigation, arbitration or administrative proceeding has currently been
started, or so far as the Company is aware, threatened in relation to any
Security Asset.

 

6.6                               Charged Securities fully paid

 

The
Charged Securities are fully paid.

 

6.7                               Entire share capital

 

The
Charged Securities constitute the entire share capital of Evolving Systems
Holdings Ltd.

 

6.8                               Time when representations made

 

(a)                                  All the representations and warranties in this clause 6 are made by
the Company on the date of this Deed and are also deemed to be made by the
Company on the date of each Utilisation Request and each Utilisation Date.

 

(b)                                 Each representation or warranty deemed to be made after the date of
this Deed shall be deemed to be made by reference to the facts and
circumstances existing at the date the representation or warranty is deemed to
be made.

 

6

 

7.                                      UNDERTAKINGS
BY THE COMPANY

 

7.1                               Restrictions on dealing

 

The
Company shall not do or agree to do any of the following without the prior
written consent of the Collateral Agent:

 

(a)                                  create or permit to subsist any Security Interest on any Security
Asset (except as permitted under this Deed, the Share Pledge (US) or by the
Revolving Facility Agreement);

 

(b)                                 sell, transfer, lease, lend or otherwise dispose of (whether by a
single transaction or a number of transactions and whether related or not) the
whole or any part of its interest in any Security Asset other than to its sole
shareholder, Evolving Systems, Inc.; or

 

(c)                                  take or permit the taking of any action which may result in:

 

(i)                                     the rights attaching to any Security Asset being altered in any
respect that is adverse to the interests of the Collateral Agent or Lender; or 

 

(ii)                                  further securities in any relevant company being issued or allotted,
without first granting a Lien over such shares in favour of the Collateral
Agent.

 

7.2                               Deposit of documents of title

 

The
Company shall, immediately upon execution of this Deed (or (in relation to any
Charged Security acquired after the date of this Deed) as soon as is
practicable after its acquisition of such Charged Security) by way of security
for the UK Secured Obligations:

 

(a)                                  deposit with the Collateral Agent (or as the Collateral Agent may
direct (but such direction not to be inconsistent with its direction under the
Share Pledge (US))) all certificates and other documents of title or evidence
of ownership to the Charged Securities and their Related Rights; and

 

(b)                                 execute and deliver to the Collateral Agent:

 

(i)                                     instruments of transfer in respect of the Charged Securities (executed
in blank and left undated); and/or 

 

(ii)                                  such other documents as the Collateral Agent shall reasonably
require to enable it (or its nominees) to be registered as the owner of or
otherwise to acquire a legal title to the Charged Securities and their Related
Rights (or to pass legal title to any purchaser).

 

7.3                               Notification

 

The
Company shall:

 

(a)                                  notify the Collateral Agent within 14 days of receipt of every
notice received by it in relation to the Security Assets; and 

 

(b)                                 (if required by the Collateral Agent) shall immediately provide it
with a copy of that notice and either (A) comply with such notice or (B) make
such objections to it as the Collateral Agent may require or approve.

 

7

 

7.4                               Calls

 

The Company
shall promptly pay all calls or other payments which may become due in respect of the Security Assets and all other
outgoings in respect of the Security Assets.

 

(a)                                  If the Company fails to make such payments, the Collateral Agent may
(without prejudice to the rights of the Collateral Agent under clause 9 (Power to remedy)) make such payments on
behalf of the Company.

 

(b)                                 Any sums so paid by the Collateral Agent shall be repayable by the
Company to the Collateral Agent on demand together with interest at the Default
Rate (both before and after judgment) from the date on which those payments
were made by the Collateral Agent and otherwise in accordance with clause 2.2 (Default interest).

 

7.5                               Compliance with laws

 

The
Company shall comply in all material respects with all obligations in relation
to the Security Assets under any present or future law, regulation, order or
instrument or under bye-laws, regulations or requirements of any competent
authority or other approvals, licences and consents.

 

7.6                               Information

 

(a)                                  The Company shall provide the Collateral Agent with all information
which it may reasonably request in relation to the Security Assets.

 

(b)                                 Without limiting its obligations under clause 7.6(a), the Company
shall comply with all requests for information within its knowledge relating to
a Security Asset which are made under section 212 of the Companies Act
1985 or which could be made under section 212 if the relevant company were
a public limited company or under any similar provision relating to the
Security Assets and, if it fails to do so, the Collateral Agent may provide
such information as it may have on behalf of the Company.

 

7.7                               Not prejudice

 

The
Company shall not do, cause or permit to be done anything which may in any way
depreciate, jeopardise or otherwise prejudice any material portion of the
Security Assets (or make any omission which has such an effect).

 

8.                                      RIGHTS
AND OBLIGATIONS IN RESPECT OF CHARGED INVESTMENTS

 

8.1                               Before Default

 

Unless
a Default occurs and is continuing, the Company shall be entitled to:

 

(a)                                  receive and retain all dividends, distributions and other monies
paid on or derived from the Charged Securities; and

 

(b)                                 exercise all voting and other rights and powers attaching to the
Charged Securities, provided that
it must not do so in a manner which:

 

(i)                                     has the effect of changing the terms of the Charged Securities (or
any class of them) or of any Related Rights; or

 

8

 

(ii)                                  is prejudicial to the interests of the Collateral Agent and/or the
other Lender Parties under this Deed.

 

8.2                               Rights in respect of Charged Investments following an Event of
Default 

 

At any
time following the occurrence of an Event of Default which is continuing, the
Collateral Agent may complete the instrument(s) of transfer for all or any
Charged Securities on behalf of the Company in favour of itself or such other
person as it may select.

 

8.3                               Exoneration of the Collateral Agent

 

At any
time when any Charged Security is registered in the name of the Collateral
Agent or its nominee, the Collateral Agent shall be under no duty to:

 

(a)                                  ensure that any dividends, distributions or other monies payable in
respect of such Charged Security are duly and promptly paid or received by it
or its nominee; or 

 

(b)                                 verify that the correct amounts are paid or received; or 

 

(c)                                  take any action in connection with the taking up of any (or any
offer of any) Related Rights in respect of or in substitution for such Charged
Security.

 

9.                                      POWER TO
REMEDY

 

9.1                               Power to remedy

 

If at
any time the Company does not comply with any of its obligations under this
Deed, the Collateral Agent (without prejudice to any other rights arising as a
consequence of such non-compliance) shall be entitled (but not bound) to
rectify that default.  The Company
irrevocably authorises the Collateral Agent and its employees and agents by way
of security to do all things which are necessary or desirable to rectify that
default.

 

9.2                               Mortgagee in possession

 

The
exercise of the powers of the Collateral Agent under this clause 9 shall not
render it or any other Lender Party liable as a mortgagee in possession.

 

9.3                               Monies expended

 

The
Company shall pay to the Collateral Agent on demand any monies which are
expended by the Collateral Agent in exercising its powers under this clause 9,
together with interest at the Default Rate from the date on which those monies
were expended by the Collateral Agent (both before and after judgment) and
otherwise in accordance with clause 2.2 (Default
interest).

 

10.                               WHEN
SECURITY BECOMES ENFORCEABLE

 

10.1                        When enforceable

 

This
Security shall become immediately enforceable upon the occurrence of an Event
of Default and shall remain so for so long as such Event of Default is
continuing.

 

9

 

10.2                        Statutory powers

 

The
power of sale and other powers conferred by section 101 of the Act (as
amended or extended by this Deed) shall be immediately exercisable upon and at
any time after the occurrence of any Event of Default and for so long as such
Event of Default is continuing.  

 

10.3                        Enforcement

 

After
this Security has become enforceable, the Collateral Agent may in its absolute
discretion enforce all or any part of the Security in such manner as it sees
fit.

 

11.                               ENFORCEMENT
OF SECURITY

 

11.1                        General

 

For the purposes of all powers implied by
statute, the UK Secured Obligations are deemed to have become due and payable
on the date of this Deed.  Sections 93
and 103 of the Act shall not apply to the Security.

 

11.2                        Powers of Collateral Agent

 

At any
time after the Security becomes enforceable, the Collateral Agent may without
further notice (unless required by law):

 

(a)                                  (or if so requested by the Company by written notice at any time
may) appoint any person or persons to be a receiver, receiver, and manager or
administrative receiver of all or any part of the Security Assets and/or of the
income of the Security Assets; and/or

 

(b)                                 appoint or apply for the appointment of any person who is
appropriately qualified as administrator of the Company; and/or

 

(c)                                  exercise all or any of the powers conferred on mortgagees by the Act
(as amended or extended by this Deed) and/or all or any of the powers which are
conferred by this Deed on a Receiver, in each case without first appointing a
Receiver or notwithstanding the appointment of any Receiver; and/or

 

(d)                                 exercise (in the name of the Company and without any further consent
or authority of the Company) any voting rights and any powers or rights which
may be exercised by the person(s) in whose name the Security Assets are
registered or who is the holder of any of them.

 

11.3                        Redemption of prior mortgages

 

At any
time after the Security has become enforceable, the Collateral Agent may:

 

(a)                                  redeem any prior Security Interest against any Security Asset;
and/or

 

(b)                                 procure the transfer of that Security Interest to itself; and/or

 

(c)                                  settle and pass the accounts of the holder of any prior Security
Interest and any accounts so settled and passed shall be conclusive and binding
on the Company.

 

All
principal, interest, costs, charges and expenses of and incidental to any such
redemption and/or transfer shall be paid by the Company to the Collateral Agent
on demand.

 

10

 

11.4                        Privileges

 

Each Receiver
and the Collateral Agent is entitled to all the rights, powers, privileges and
immunities conferred by the Act on mortgagees and receivers when such receivers
have been duly appointed under the Act, except that section 103 of the Act
does not apply.

 

11.5                        No liability

 

(a)                                  Neither the Collateral Agent, any other Lender Party nor any
Receiver shall be liable (a) in respect of all or any part of the Security
Assets or (b) for any loss or damage which arises out of the exercise or
the attempted or purported exercise of, or the failure to exercise any of, its
or his respective powers (unless such loss or damage is caused by its or his
gross negligence or wilful misconduct).

 

(b)                                 Without prejudice to the generality of clause 11.5(a), neither the
Collateral Agent, any other Lender Party nor any Receiver shall be liable, by
reason of entering into possession of a Security Asset, to account as mortgagee
in possession or for any loss on realisation or for any default or omission for
which a mortgagee in possession might be liable.

 

11.6                        Protection of third parties

 

No
person (including a purchaser) dealing with the Collateral Agent or any
Receiver or Delegate will be concerned to enquire:

 

(a)                                  whether the UK Secured Obligations have become payable; or

 

(b)                                 whether any power which the Collateral Agent or the Receiver is
purporting to exercise has become exercisable; or

 

(c)                                  whether any money remains due under any Loan Document; or

 

(d)                                 how any money paid to the Collateral Agent or to the Receiver is to
be applied.

 

12.                               RECEIVER

 

12.1                        Removal and replacement

 

The
Collateral Agent may from time to time remove any Receiver appointed by it
(subject, in the case of an administrative receivership, to section 45 of
the Insolvency Act 1986) and, whenever it may deem appropriate, may appoint a
new Receiver in the place of any Receiver whose appointment has terminated.

 

12.2                        Multiple Receivers 

 

If at
any time there is more than one Receiver of all or any part of the Security
Assets and/or the income of the Security Assets, each Receiver shall have power
to act individually (unless otherwise stated in the appointment document).

 

12.3                        Remuneration

 

Any
Receiver shall be entitled to remuneration for his services at a rate to be
fixed by agreement between him and the Collateral Agent (or, failing such
agreement, to be fixed by the Collateral Agent).

 

11

 

12.4                        Payment by Receiver

 

Only
monies actually paid by a Receiver to the Collateral Agent in relation to the
UK Secured Obligations shall be capable of being applied by the Collateral
Agent in discharge of the UK Secured Obligations.

 

12.5                        Agent of Company

 

Any
Receiver shall be the agent of the Company. 
The Company shall (subject to the Companies Act 1985 and the Insolvency
Act 1986) be solely responsible for his acts and defaults and for the payment
of his remuneration.  No Lender Party
shall incur any liability (either to the Company or to any other person) by
reason of the appointment of a Receiver or for any other reason.

 

13.                               POWERS
OF RECEIVER

 

13.1                        General powers

 

Any
Receiver shall have:

 

(a)                                  all the powers which are conferred by the Act on mortgagees in
possession and receivers appointed under the Act;

 

(b)                                 (whether or not he is an administrative receiver) all the powers which
are listed in schedule 1 of the Insolvency Act 1986; and 

 

(c)                                  all powers which are conferred by any other law conferring power on
receivers.

 

13.2                        Additional powers

 

In
addition to the powers referred to in clause 13.1 (General powers), a Receiver shall have the following powers:

 

(a)                                  to take possession of, collect and get in all or any part of the
Security Assets and/or income in respect of which he was appointed;

 

(b)                                 to manage the Security Assets as he thinks fit;

 

(c)                                  to redeem any security and to borrow or raise any money and secure
the payment of any money in priority to the UK Secured Obligations for the
purpose of the exercise of his powers and/or defraying any costs or liabilities
incurred by him in such exercise;

 

12

 

(d)                                 to sell or concur in selling or otherwise disposing of all or any
part of the Security Assets in respect of which he was appointed without the
need to observe the restrictions imposed by section 103 of the Act.  The consideration for any such transaction
may consist of cash, debentures or other obligations, shares, stock or other
valuable consideration (and the amount of such consideration may be dependent
upon profit or turnover or be determined by a third party).  Any such consideration may be payable in a
lump sum or by instalments spread over such period as he thinks fit;

 

(e)                                  to carry out any sale or other disposal of all or any part of the
Security Assets by conveying, transferring, assigning or leasing the same in
the name of the Company and, for that purpose, to enter into covenants and
other contractual obligations in the name of, and so as to bind, the Company;

 

(f)                                    to take any such proceedings (in the name of the Company or
otherwise) as he shall think fit in respect of the Security Assets and/or
income in respect of which he was appointed (including proceedings for recovery
of rent or other monies in arrears at the date of his appointment);

 

(g)                                 to enter into or make any such agreement, arrangement or compromise
as he shall think fit;

 

(h)                                 to insure, and to renew any insurances in respect of, the Security
Assets as he shall think fit (or as the Collateral Agent shall direct);

 

(i)                                     to appoint and employ such managers and officers and engage such
professional advisers as he shall think fit (including, without prejudice to
the generality of the foregoing power, to employ his partners and firm); and

 

(j)                                     to:

 

(i)                                     give valid receipts for all monies and to do all such other things
as may seem to him to be incidental or conducive to any other power vested in
him or necessary or desirable for the realisation of any Security Asset; 

 

(ii)                                  exercise in relation to each Security Asset all such powers and
rights as he would be capable of exercising if he were the absolute beneficial
owner of the Security Assets; and

 

(iii)                               use the name of the Company for any of the above purposes.

 

14.                               APPLICATION
OF PROCEEDS

 

14.1                        Application

 

All
monies received by the Collateral Agent or any Receiver under or in connection
with this Deed or the Security Assets after the Security has become enforceable
shall (subject to the rights and claims of any person having a security ranking
in priority to the Security) be applied in the following order:

 

(a)                                  first, in satisfaction of, or provision for, all costs, charges and
expenses incurred and payments made by the Collateral Agent, any other Lender
Party or any Receiver and of all remuneration due to the Receiver in connection
with this Deed or the Security Assets;

 

(b)                                 secondly, in or towards the satisfaction of the remaining UK Secured
Obligations; and

 

(c)                                  thirdly, in payment of any surplus to the Company or other person entitled
to it.

 

14.2                        Contingencies

 

If the
Security is enforced at a time when no amounts are due under the Loan Documents
(but at a time when amounts may become so due), the Collateral Agent or a
Receiver may pay the proceeds of any recoveries effected by it into a blocked
suspense account.

 

15.                               SET-OFF

 

Upon
the occurrence and during the continuation of an Event of Default, the
Collateral Agent and each other Lender Party may (but shall not be obliged to)
set off any obligation which is

 

13

 

due and
payable by the Company under the Loan Documents and unpaid against any
obligation (whether or not matured) owed by the Collateral Agent or such other
Lender Party to the Company, regardless of the place of payment, booking branch
or currency of either obligation provided that no obligation shall be set-off
that would constitute unlawful financial assistance within the meaning of
Sections 151 and 152 of the Companies Act 1985. 

 

15.1                        Currency

 

If the
obligations are in different currencies, the Collateral Agent or such other
Lender Party may convert either obligation at the Agent’s rate of exchange for that
currency on the day the provision requires the amount to be converted.  

 

15.2                        Amount

 

If
either obligation is unliquidated or unascertained, the Collateral Agent or
such other Lender Party may set off in an amount estimated by it in good faith
to be the amount of that obligation.

 

16.                               DELEGATION

 

Each of
the Collateral Agent and any Receiver may delegate, by power of attorney (or in
any other manner) to any person, any right, power or discretion exercisable by
it under this Deed upon any terms (including power to sub-delegate) which it
may think fit.  Neither the Collateral
Agent nor any Receiver shall be in any way liable or responsible to the Company
for any loss or liability arising from any act, default, omission or misconduct
on the part of any Delegate.

 

17.                               FURTHER
ASSURANCES

 

The
Company shall, at its own expense, promptly take whatever action the Collateral
Agent or a Receiver may require for:

 

(a)                                  creating, perfecting or protecting the Security Interests intended
to be created by this Deed; and

 

(b)                                 facilitating the realisation of any Security Asset or the exercise
of any right, power or discretion exercisable by the Collateral Agent or any
Receiver or Delegate in respect of any Security Asset,

 

including
the execution of any transfer, conveyance, assignment or assurance of any
property whether to the Collateral Agent or to its nominees, the giving of any
notice, order or direction and the making of any registration which, in any
such case, the Collateral Agent may think expedient provided that the Charged
Securities shall only be transferred in accordance with clause 8.2 of this
Deed.

 

18.                               POWER
OF ATTORNEY

 

The
Company, by way of security, irrevocably and severally appoints the Collateral
Agent, each Receiver and any Delegates to be its attorney to take any action
which the Company is obliged to take under this Deed, including under clause 17
(Further assurances). The Company
ratifies and confirms whatever any attorney does or purports to do pursuant to
its appointment under this clause.

 

14

 

19.                               PAYMENTS

 

19.1                        Payments

 

Subject
to clause 19.2 (Gross-up), all
payments to be made by the Company in respect of this Deed shall be made:

 

(a)                                  in immediately available funds to the credit of such account as the
Collateral Agent may designate; and

 

(b)                                 without (and free and clear of, and without any deduction for or on
account of):

 

(i)                                     any set-off or counterclaim; or

 

(ii)                                  except to the extent compelled by law, any deduction or withholding
for or on account of Tax.

 

19.2                        Gross-up

 

If the
Company is compelled by law to make any deduction or withholding from any sum
payable under this Deed to the Collateral Agent or any other Lender Party, the
sum so payable by the Company shall be increased so as to result in the receipt
by the Collateral Agent or such other Lender Party of a net amount equal to the
full amount expressed to be payable under this Deed.

 

20.                               STAMP
DUTY

 

The
Company shall:

 

(a)                                  pay all present and future stamp, registration and similar Taxes or
charges which may be payable, or determined to be payable, in connection with
the execution, delivery, performance or enforcement of this Deed or any
judgment given in connection therewith; and

 

(b)                                 indemnify the Collateral Agent, each other Lender Party and any
Receiver on demand against any and all costs, losses or liabilities (including,
without limitation, penalties) with respect to, or resulting from, its delay or
omission to pay any such stamp, registration and similar Taxes or charges.

 

21.                               COSTS
AND EXPENSES

 

21.1                        Transaction and amendment expenses

 

The
Company shall promptly on demand pay to the Collateral Agent and each other
Lender Party the amount of all reasonable costs, charges and expenses
(including, without limitation, reasonable legal fees, valuation, accountancy
and consultancy fees (and any VAT or similar Tax thereon)) incurred by the
Collateral Agent or any other Lender Party in connection with: 

 

(a)                                  the negotiation, preparation, printing, execution, registration,
perfection and completion of this Deed, the Security or any document referred
to in this Deed; or 

 

(b)                                 any actual or proposed amendment or extension of, or any waiver or
consent under, this Deed.

 

15

 

21.2                        Enforcement and preservation costs

 

The
Company shall promptly on demand pay to the Collateral Agent, each other Lender
Party and any Receiver the amount of all costs, charges and expenses
(including, without limitation, legal fees (and any VAT or similar Tax
thereon)) incurred by any of them in connection with the enforcement, exercise
or preservation (or the attempted enforcement, exercise or preservation) of any
of their respective rights under this Deed or any document referred to in this
Deed or the Security (including all remuneration of the Receiver).

 

21.3                        Default interest

 

Any amount demanded under clause 21.1 (Transaction and amendment expenses) or
21.2 (Enforcement and preservation costs)
shall bear interest at the Default Rate (both before and after judgment) from
the day on which those costs, charges or expenses were paid, incurred or
charged by the relevant person and otherwise in accordance with clause 2.2 (Default interest).

 

22.                               CURRENCIES

 

22.1                        Conversion

 

All
monies received or held by the Collateral Agent or any Receiver under this Deed
may be converted from their existing currency into such other currency as the
Collateral Agent or the Receiver considers necessary or desirable to cover the
obligations and liabilities comprised in the UK Secured Obligations in that other
currency at the Spot Rate of Exchange. 
The Company shall indemnify the Collateral Agent against all costs,
charges and expenses incurred in relation to such conversion.  Neither the Collateral Agent nor any Receiver
shall have any liability to the Company in respect of any loss resulting from
any fluctuation in exchange rates after any such conversion.

 

22.2                        Currency indemnity

 

No
payment to the Collateral Agent (whether under any judgment or court order or
in the liquidation, administration or dissolution of the Company or otherwise)
shall discharge the obligation or liability of the Company in respect of which
it was made, unless and until the Collateral Agent shall have received payment
in full in the currency in which the obligation or liability was incurred and,
to the extent that the amount of any such payment shall on actual conversion
into such currency fall short of such obligation or liability expressed in that
currency, the Collateral Agent shall have a further separate cause of action
against the Company and shall be entitled to enforce the Security to recover
the amount of the shortfall.

 

23.                               INDEMNITY

 

The
Company shall indemnify the Collateral Agent, each other Lender Party, any
Receiver and any attorney, agent or other person appointed by the Collateral
Agent under this Deed and the Collateral Agent’s officers and employees (each
an “Indemnified Party”) on demand
against any cost, loss, liability or expense (however arising) incurred by any
Indemnified Party as a result of or in connection with:

 

(a)                                  anything done or omitted in the exercise or purported exercise of
the powers contained in this Deed;

 

(b)                                 the Security Assets or the use or holding of them by any person ; or

 

(c)                                  any breach by the Company of any of its obligations under this Deed,

 

16

 

except
to the extent a final and non-appealable order or judgment binding on such
Indemnified Party of a court of competent jurisdiction determines the same
arose out of the gross negligence or wilful misconduct of such Indemnified
Party. 

 

24.                               MISCELLANEOUS

 

24.1                        Appropriation and suspense account

 

(a)                                  The Collateral Agent may apply all payments received in respect of
the UK Secured Obligations in reduction of any part of the UK Secured
Obligations in accordance with the Revolving Facility Agreement.

 

(b)                                 All monies received, recovered or realised by the Collateral Agent
under, or in connection with, this Deed may at the discretion of the Collateral
Agent be credited to a separate interest bearing suspense account for so long
as the Collateral Agent determines (with interest accruing thereon at such
rate, if any, as the Collateral Agent may determine for the account of the
Company) without the Collateral Agent having any obligation to apply such monies
and interest or any part thereof in or towards the discharge of any of the UK
Secured Obligations.

 

24.2                        New accounts

 

If the
Collateral Agent or any other Lender Party receives, or is deemed to be
affected by, notice, whether actual or constructive, of any subsequent Security
Interest (other than as permitted by the Revolving Facility Agreement)
affecting any Security Asset and/or the proceeds of sale of any Security Asset,
it may open a new account or accounts for the Company. If it does not open a new
account, it shall nevertheless be treated as if it had done so at the time when
it received or was deemed to have received such notice. As from that time all
payments made to the Collateral Agent or such other Lender Party will be
credited or be treated as having been credited to the new account and will not
operate to reduce any amount of the UK Secured Obligations.

 

24.3                        Changes to the Parties 

 

(a)                                  The Company may not assign any of its rights under this Deed.

 

(b)                                 The Collateral Agent may assign or transfer all or any part of its
rights under this Deed pursuant to the resignation or removal of the Collateral
Agent in accordance with the Revolving Facility Agreement.  The Company shall, immediately upon being
requested to do so by the Collateral Agent, enter into such documents as may be
necessary or desirable to effect such assignment or transfer.

 

24.4                        Tacking

 

(a)                                  Each Finance Party shall perform its obligations under the Revolving
Facility Agreement (including any obligation to make available further advances).

 

(b)                                 This Deed secures advances already made and further advances to be
made.

 

24.5                        Amendments and waivers

 

Any
provision of this Deed may be amended only if the Collateral Agent and the
Company so agree in writing and any breach of this Deed may be waived before or
after it occurs only if the Collateral Agent so agrees in writing.
A waiver given or consent granted by the Collateral

 

17

 

Agent
under this Deed will be effective only if given in writing and then only in the
instance and for the purpose for which it is given.

 

24.6                        Calculations and certificates

 

A
certificate of the Collateral Agent specifying the amount of any UK Secured
Obligation due from the Company (including details of any relevant calculation
thereof) shall be prima facie evidence of such amount against the Company in
the absence of manifest error.

 

24.7                        Waiver, rights and remedies

 

No
failure to exercise, nor any delay in exercising, on the part of the Collateral
Agent (or any other Lender Party), any right or remedy under this Deed shall
operate as a waiver, nor shall any single or partial exercise of any right or
remedy prevent any further or other exercise, or the exercise of any other
right or remedy.  The rights and remedies
provided are cumulative and not exclusive of any rights or remedies provided by
law.

 

25.                               NOTICES

 

25.1                        Revolving Facility Agreement

 

Clause
12.5 of the Revolving Facility Agreement (Notice)
(relating to all communications to be made under the Revolving Facility
Agreement) is incorporated into this Deed as if fully set out in this Deed
except that references to the Revolving Facility Agreement shall be construed
as references to this Deed.  The address
and fax numbers of each Party for all communications or documents given under
or in connection with this Deed are those identified with its name below or
those subsequently notified from time to time by the relevant Party for the
purposes of the Revolving Facility Agreement to the Agent (or, in the case of the
Agent, by it to the other parties to the Revolving Facility Agreement).

 

25.2                        No deemed notice to Collateral Agent

 

Any
notice to the Collateral Agent shall be deemed to have been given only on
actual receipt by the Collateral Agent.

 

26.                               PARTIAL
INVALIDITY

 

All the
provisions of this Deed are severable and distinct from one another and if at
any time any provision is or becomes illegal, invalid or unenforceable in any
respect under any law of any jurisdiction, neither the legality, validity or
enforceability of any of the remaining provisions nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction will
in any way be affected or impaired.

 

27.                               RELEASE

 

27.1                        Release

 

Upon
the expiry of the Security Period (but not otherwise) the Collateral Agent and
each other Lender Party shall, at the request and cost of the Company, take
whatever action is necessary to release or re-assign (without recourse or
warranty) the Security Assets from the Security.

 

18

 

27.2                        Reinstatement

 

Where any discharge (whether in respect of the obligations of the
Company or any security for those obligations or otherwise) is made in whole or
in part or any arrangement is made on the faith of any payment, security or
other disposition which is avoided or must be restored on insolvency,
liquidation or otherwise (without limitation), the liability of the Company
under this Deed shall continue as if the discharge or arrangement had not
occurred.  The Collateral Agent may
concede or compromise any claim that any payment, security or other disposition
is liable to avoidance or restoration.

 

28.                               COUNTERPARTS

 

This
Deed may be executed in any number of counterparts, and this has the same
effect as if the signatures (and seals, if any) on the counterparts were on a
single copy of this Deed.  

 

29.                               GOVERNING
LAW

 

This Deed is governed by English law.

 

30.                               ENFORCEMENT

 

30.1                        Non-exclusive Jurisdiction of English courts

 

(a)                                  The courts of England have non-exclusive jurisdiction to settle any
dispute arising out of or in connection with this Deed (including a dispute
regarding the existence, validity or termination of this Deed) (a “Dispute”).

 

(b)                                 This clause 30 is for the benefit of the Lender Parties only.  As a result, no Lender Party shall be
prevented from taking proceedings relating to a Dispute in any other courts
with jurisdiction.  To the extent allowed
by law, the Lender Parties may take concurrent proceedings in any number of
jurisdictions.

 

30.2                        Service of process

 

Without
prejudice to any other mode of service allowed under any relevant law the
Company:

 

(a)                                  irrevocably appoints Evolving Systems Limited as its agent for
service of process in relation to any proceedings before the English courts in
connection with any Loan Document and accepts that appointment); and

 

(b)                                 agrees that failure by a process agent to notify the Company of the
process will not invalidate the proceedings concerned.

 

If any
person appointed as process agent is unable for any reason to act as agent for
service of process, the Company must immediately (and in any event within 5
days of such event taking place) appoint another agent on terms acceptable to
the Collateral Agent.  Failing this, the
Collateral Agent may appoint another agent for this purpose.

 

The
Company expressly agrees and consents to the provisions of this clause 30
and clause 29 (Governing law).

 

IN WITNESS of which this
Deed has been duly executed by the Company as a deed and duly executed by the
Collateral Agent and has been delivered on the date written at the beginning of
this Deed.

 

19

 

SCHEDULE

 

The Initial Charged Securities

 

	
  Name of company in which

  shares are held

  	
   

  	
  Name of any

  nominee holder

  	
   

  	
  Class of

  shares held

  	
   

  	
  Number of

  shares held

  	
   

  	
  Issued share

  capital

  	
   

  
	
  Evolving Systems Holdings Ltd

  	
   

  	
  N/A

  	
   

  	
  Ordinary

  	
   

  	
  100

  	
   

  	
  £

  	
  100

  	
   

  
											

 

20

 

EXECUTION PAGE

 

	
  THE COMPANY

  
	
   

  
	
  EXECUTED as a deed (but
  not delivered until

  	
  )

  	
   

  
	
  the
  date of this Deed) by

  	
  )

  	
   

  
	
  EVOLVING SYSTEMS HOLDINGS, INC.

  	
  )

  	
   

  
	
  acting
  by:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Director

  	
  /s/Brian
  R. Ervine

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Secretary

  	
  /s/Anita T. Moseley

  	
   

  
					

 

	
  Address:

  	
  9777
  Pyramid Court

  
	
   

  	
  Suite 100

  
	
   

  	
  Englewood

  
	
   

  	
  CO
  80112

  
	
   

  	
   

  
	
  Facsimile no:

  	
  (303)
  802-1138

  
	
   

  	
   

  
	
  Attention:

  	
  Anita
  Moseley

  
	
   

  	
  Senior
  Vice President)

  

 

 

	
  THE COLLATERAL AGENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED as a deed by

  	
  )

  	
   

  
	
  CAPITALSOURCE FINANCE LLC

  	
  )

  	
   

  
	
   

  	
   

  	
  /s/Steven
  A. Museles

  	
   

  
	
  Address:

  	
  4445
  Willard Avenue

  	
  Signature

  
	
   

  	
  12th
  Floor

  	
   

  
	
   

  	
  Chevy
  Chase

  	
   

  
	
   

  	
  Maryland
  20815

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile no:

  	
  (301)
  841-2313

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
  Corporate
  Finance Group

  	
   

  
	
   

  	
  Portfolio
  Manager)

  	
   

  
						

 

21Exhibit 10.1(h)

 

 

	
   

  	
  DATED

  	
  14 November 2005

  

 

 

(1) THE COMPANIES NAMED IN THIS DEED AS
CHARGING COMPANIES

 

- and -

 

(2) CAPITALSOURCE FINANCE LLC

(as Collateral Agent)

 

 

DEBENTURE

 

 

CONTENTS

 

	
  1.

  	
  DEFINITIONS AND
  INTERPRETATION

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  COVENANT TO PAY

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  GRANT OF SECURITY

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  FIXED SECURITY

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  FLOATING CHARGE

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  CONVERSION OF FLOATING
  CHARGE

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  CONTINUING SECURITY

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  LIABILITY OF
  CHARGING COMPANIES RELATING TO SECURITY ASSETS

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  ACCOUNTS

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  REPRESENTATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  UNDERTAKINGS BY THE
  CHARGING COMPANIES

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  POWER TO REMEDY

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  WHEN SECURITY BECOMES
  ENFORCEABLE

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  ENFORCEMENT OF SECURITY

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  RECEIVER

  	
   

  
	
   

  	
   

  	
   

  
	
  16.

  	
  POWERS OF RECEIVER

  	
   

  
	
   

  	
   

  	
   

  
	
  17.

  	
  APPLICATION OF PROCEEDS

  	
   

  
	
   

  	
   

  	
   

  
	
  18.

  	
  SET-OFF

  	
   

  
	
   

  	
   

  	
   

  
	
  19.

  	
  DELEGATION

  	
   

  
	
   

  	
   

  	
   

  
	
  20.

  	
  FURTHER ASSURANCES

  	
   

  
	
   

  	
   

  	
   

  
	
  21.

  	
  POWER
  OF ATTORNEY

  	
   

  
	
   

  	
   

  	
   

  
	
  22.

  	
  PAYMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  23.

  	
  STAMP DUTY

  	
   

  
	
   

  	
   

  	
   

  
	
  24.

  	
  COSTS
  AND EXPENSES

  	
   

  
	
   

  	
   

  	
   

  
	
  25.

  	
  CURRENCIES

  	
   

  
	
   

  	
   

  	
   

  
	
  26.

  	
  INDEMNITY

  	
   

  
	
   

  	
   

  	
   

  
	
  27.

  	
  MISCELLANEOUS

  	
   

  

 

 

	
  28.

  	
  NOTICES

  	
   

  
	
   

  	
   

  	
   

  
	
  29.

  	
  ACCESSION

  	
   

  
	
   

  	
   

  	
   

  
	
  30.

  	
  PARTIAL
  INVALIDITY

  	
   

  
	
   

  	
   

  	
   

  
	
  31.

  	
  RELEASE

  	
   

  
	
   

  	
   

  	
   

  
	
  32.

  	
  COUNTERPARTS

  	
   

  
	
   

  	
   

  	
   

  
	
  33.

  	
  GOVERNING
  LAW

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 1

  	
   

  
	
   

  	
   

  	
   

  
	
  Initial Charging Companies

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 2

  	
   

  
	
   

  	
   

  	
   

  
	
  Details of Security Assets

  	
   

  
	
   

  	
   

  	
   

  
	
  Part 1 - Property

  	
   

  
	
   

  	
   

  	
   

  
	
  Part 2 - Charged Securities

  	
   

  
	
   

  	
   

  	
   

  
	
  Part 3 - Intellectual Property

  	
   

  
	
   

  	
   

  	
   

  
	
  Trade Marks

  	
   

  
	
   

  	
   

  	
   

  
	
  Part 4 - Relevant Contracts

  	
   

  
	
   

  	
   

  	
   

  
	
  Part 5 - Insurances

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 3

  	
   

  
	
   

  	
   

  	
   

  
	
  Form of
  notice to and acknowledgement from bank operating Security Accounts

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 4

  	
   

  
	
   

  	
   

  	
   

  
	
  Form of notice to
  and acknowledgement by party to Relevant Contract

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 5

  	
   

  
	
   

  	
   

  	
   

  
	
  Form of notice to and
  acknowledgement by insurers

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 8

  	
   

  
	
   

  	
   

  	
   

  
	
  Form of Accession Deed

  	
   

  
	
   

  	
   

  	
   

  
	
  Part 1 - Property

  	
   

  
	
   

  	
   

  	
   

  
	
  Part 2 - Charged Securities

  	
   

  
	
   

  	
   

  	
   

  
	
  Part 3 - Intellectual
  Property

  	
   

  
	
   

  	
   

  	
   

  
	
  Part 4 - Relevant Contracts

  	
   

  

 

 

	
  Part 5 - Insurances

  	
   

  

 

 

	
  THIS DEBENTURE
  is made on

  	
   

  	
  2005

  

 

BETWEEN

 

(1)                                 THE COMPANIES NAMED IN THIS DEED AS
CHARGING COMPANIES (the “Initial Charging Companies”); and

 

(2)                                 CAPITALSOURCE FINANCE LLC (as collateral agent for the Lender Parties (as defined below)) (in
such capacity, the “Collateral Agent”).

 

IT IS AGREED:

 

1.                                      DEFINITIONS AND INTERPRETATION

 

1.1                               Definitions

 

In this
Deed:

 

(a)                                  terms defined in, or construed for the purposes of, the Revolving
Facility Agreement (as defined below) have the same meanings when used in this
Deed (unless the same are otherwise defined in this Deed); and

 

(b)           the following terms have
the following meanings:

 

“Accession Deed” means an accession deed
substantially in the form set out in schedule 8 (Form of Accession Deed);

 

“Account Bank” means The Royal Bank of Scotland plc, Corporate Office, Thames
Valley Corporate, 4 Abbey Gardens, Abbey Street, Reading RG1 3BA or such other
bank with which any Security Account is maintained from time to time;

 

“Act”
means the Law of Property Act 1925;

 

“Assigned Assets” means the Security Assets
expressed to be assigned pursuant to clause 4.2 (Security assignments);

 

“Charged Investments” means the Charged Securities and
all present and future Related Rights accruing to all or any of the Charged
Securities;

 

“Charged Securities” means:

 

(a)                                  the securities specified in part 2 of schedule 2 (Details of Security Assets); and

 

(b)                                 all other stocks, shares, debentures, bonds, warrants, coupons,
negotiable instruments, certificates of deposit or other securities or “investments” (as defined in part II of schedule II
to the Financial Services and Markets Act 2000 as in force at the date of this
Deed) now or in future owned (legally or beneficially) by a Charging Company, held
by a nominee on its behalf or in which such Charging Company has an interest at
any time;

 

1

 

but,
for the avoidance of doubt excluding any shareholding in Evolving Systems GmbH,
unless and until required to be pledged pursuant to clause 6.7(c) of the
Revolving Facility Agreement;

 

“Charging
Companies” means the
Initial Charging Companies and any other company which accedes to this Deed pursuant to an
Accession Deed;

 

“Company” means Evolving Systems Holdings Ltd, a company
incorporated and registered under the laws of England and Wales with number
5272751 with its registered office at One Angel Square, Torrens Street, London
EC1V 1PL;

 

“Default” has the meaning given to that term in the
Revolving Facility Agreement;

 

“Default Rate” has the meaning given to that
term in the Revolving Facility Agreement;

 

“Delegate” means any delegate, sub-delegate, agent,
attorney or co-trustee appointed by the Collateral Agent or by a Receiver;

 

“Event of Default” has the meaning given to that
term in the Revolving Facility Agreement;

 

“Insurances” means all policies of insurance (and all cover notes) which are at
any time held by, or written in favour of, a Charging Company or in which a
Charging Company from time to time has an interest (including, without limitation, the policies of insurance (if any)
specified in part 5 of schedule 2 (Details
of Security Assets));

 

“Intellectual Property” means all
present and future legal and/or equitable interests (including, without limitation,
the benefit of all licences in any part of the world) of each Charging Company
in, or relating to, registered and unregistered trade marks and service marks,
patents, registered designs, utility models, applications for any of the
foregoing, trade names, copyrights, design rights, unregistered designs,
inventions, confidential information, know-how, registrable business names,
database rights, domain names and any other rights of every kind deriving from
or through the exploitation of any of the foregoing (including, without
limitation, the intellectual property rights (if any) specified in part 3 of schedule 2
(Details of Security Assets));

 

“Party” means a party to this Deed;

 

“Permitted Disposal” means a disposal permitted
pursuant to clause 7.7 (Transfer of
Assets) of the Revolving Facility Agreement;

 

“Permitted Indebtedness” has the meaning given to that
term in the Revolving Facility Agreement;

 

“Permitted Lien” has the meaning given to that
term in the Revolving Facility Agreement;

 

“Planning Acts” means (a) the Town and Country Planning Act 1990, (b) the
Planning (Listed Buildings and Conservation Areas) Act 1990, (c) the
Planning (Hazardous Substances) Act 1990, (d) the Planning (Consequential
Provisions) Act 1990, (e) the Planning and Compensation Act 1991, (f) any
regulations made pursuant to any of the foregoing and (g) any other
legislation of a similar nature;

 

2

 

“Property” means all estates and interests in freehold,
leasehold and other immovable property (wherever situated) now or in future
belonging to any Charging Company, or in which any Charging Company has an
interest at any time (including the registered and unregistered land (if any) in England and
Wales specified in part 1 of schedule 2 (Details of Security Assets)), together with:

 

(a)                                  all buildings and fixtures (including trade fixtures) and fixed
plant and machinery at any time thereon;

 

(b)           all easements, rights and agreements in respect thereof;

 

(c)           all proceeds of sale of that property; and

 

(d)           the benefit of all covenants given in respect thereof;

 

“Receivables” means all present and future book debts and other debts, rentals,
royalties, fees, VAT and monetary claims and all other amounts at any time
recoverable or receivable by, or due or owing to, any Charging Company (whether
actual or contingent and whether arising under contract or in any other manner
whatsoever) together with:

 

(a)                                  the benefit of all rights, guarantees, Security Interests and
remedies relating to any of the foregoing (including, without limitation,
negotiable instruments, indemnities, reservations of property rights, rights of
tracing and unpaid vendor’s liens and similar associated rights); and

 

(b)           all proceeds of any of the foregoing;

 

“Receiver”
means any receiver, receiver and manager or administrative receiver appointed
by the Collateral Agent under this Deed;

 

“Related Rights” means, in relation to any Charged Security:

 

(a)                                  all dividends, distributions and other income paid or payable on the
relevant Charged Security or on any asset referred to in paragraph (b) of
this definition;

 

(b)                                 all rights, monies or property accruing or offered at any time in
relation to such Charged Security whether by way of redemption, substitution,
exchange, bonus or preference, under option rights or otherwise;

 

“Relevant Contract” means each agreement, if any, specified in part 4 of schedule 2
(Details of Security Assets)
together with each other agreement supplementing or amending or novating or
replacing the same;

 

“Revolving Facility Agreement” means the revolving
credit facility agreement dated the
same date as this Deed and made between (1) Evolving Systems Holdings Ltd
and Evolving Systems Ltd and (2) CapitalSource Finance LLC in its
capacities as Agent (including Collateral Agent), Lender and L/C Issuer;

 

“Secured Obligations” means all present and future obligations and liabilities (whether
actual or contingent and whether owed jointly or severally or alone or in any
other capacity whatsoever) of any Credit Party to CapitalSource Finance LLC (in
its various capacities) and/or the other Lender Parties (or any of them) under
or pursuant to the Loan Documents (including all monies covenanted to be paid
under this Deed),

 

3

 

provided that no obligation or liability shall be included in the definition
of “Secured Obligations” to the extent
that, if it were so included, this Deed (or any part of it) would constitute
unlawful financial assistance within the meaning of sections 151 and 152 of the
Companies Act 1985 and provided further that the Secured Obligations shall not
include any Obligations (as defined in the Term Loan Agreement) or arising
under any of the Loan Documents (as defined in the Term Loan Agreement);

 

“Security” means the Security Interests created by or pursuant to this Deed;

 

“Security Account” has the
meaning given to that term in clause 11.6(a)(ii);

 

“Security Assets” means all property and assets from time to time mortgaged, charged
or assigned (or expressed to be mortgaged, charged or assigned) by or pursuant
to this Deed;

 

“Security Interest” means any mortgage, pledge, lien, charge, assignment by way of
security, hypothecation, security interest, title retention, preferential right
or trust arrangement or any other security agreement or arrangement having the
effect of security;

 

“Security Period” means the period beginning on the
date of this Deed and ending on the date on which:

 

(a)                                  all the Secured Obligations have been unconditionally and irrevocably
paid and discharged in full; and

 

(b)                                 no Lender Party has any further commitment, obligation or liability
under or pursuant to the Loan Documents.

 

“Term Loan Agreement” means the term loan facility agreement dated the same date as this
Deed and made between (1) Evolving Systems, Inc., Telecom Software
Enterprises, LLC and Evolving Systems Holdings, Inc. (2) CapitalSource
Finance LLc, in its capacities as Agent (including Collateral Agent) and (3) the
Lenders from time to time a party thereto;

 

1.2                               Interpretation

 

(a)                                  Unless a contrary indication appears, any reference in this Deed to:

 

(i)                                     a “Charging Company”,
the “Collateral Agent” or any
other “Lender Party” shall be
construed so as to include its successors in title, permitted assigns and
permitted transferees;

 

(ii)                                  “this Deed”,
the “Revolving Facility Agreement”,
any other “Loan Document” or any
other agreement or instrument shall be construed as a reference to this Deed,
the Revolving Facility Agreement, such other Loan Document or such other agreement
or instrument as amended, supplemented, novated and/or replaced in any manner
from time to time  (even if any of the same increases the obligations of
any Group Company or provides for further advances);

 

(iii)                               “assets” includes
any present and future properties, revenues and rights of every description and
includes uncalled capital;

 

4

 

(iv)                              an Event of Default that is “continuing”
shall be construed as meaning an Event of Default that has not been waived in
writing by the Agent nor remedied to the satisfaction of the Agent;

 

(v)                                 “including” or “includes” means including or includes
without limitation;

 

(vi)                              “Secured Obligations” includes obligations and liabilities which would be treated as such
but for the liquidation or dissolution of or similar event affecting any Group
Company;

 

(vii)                           a provision of law is a reference to that provision as amended or
re-enacted; and

 

(viii)                        the singular includes the plural and vice versa.

 

(b)                                 References to clauses, paragraphs and schedules are to be construed,
unless otherwise stated, as references to clauses, paragraphs and schedules of
this Deed and references to this Deed include its schedules.

 

(c)                                  Clause and schedule headings are for convenience only and shall
not affect the construction of this Deed.

 

(d)                                 Each undertaking of any Charging Company (other than a payment
obligation) contained in this Deed must be complied with at all times during
the Security Period and is given by such Charging Company for the benefit of
the Collateral Agent and each other Lender Party.

 

(e)                                  The terms of the other Loan Documents and of any side letters
between any of the parties thereto in relation to any Loan Document are
incorporated in this Deed to the extent required to ensure that any disposition
of the Property contained in this Deed is a valid disposition in accordance
with section 2(1) of the Law of Property (Miscellaneous Provisions)
Act 1989.

 

(f)                                    If the Collateral Agent or the Agent reasonably considers that an
amount paid by any Charging Company to a Lender Party under a Loan Document is
capable of being avoided or otherwise set aside on the liquidation or
administration of such Charging Company, then that amount shall not be
considered to have been irrevocably paid for the purposes of this Deed.

 

(g)                                 The liabilities and obligations of each Charging Company under this
Deed shall be joint and several.  Each Charging Company
agrees to be bound by this Deed notwithstanding that any other Charging Company
which was intended to sign or be bound by this Deed did not so sign or is not
bound by this Deed.

 

(h)                                 The Parties intend that this document shall take effect as a deed
notwithstanding the fact that a Party may only execute this document under
hand.

 

(i)                                     If there is any conflict or inconsistency between any provision of
this Deed and any provision of the Revolving Facility Agreement, then the
Revolving Facility Agreement shall prevail.

 

1.3                               Trust

 

All
Security Interests and dispositions made or created and all obligations and undertakings
contained in this Deed to, in favour of or for the benefit of the Collateral
Agent are made,

 

5

 

created
and entered into in favour of the Collateral Agent as trustee for the Lender
Parties from time to time pursuant to the terms of the Revolving Facility
Agreement.

 

1.4                               Third party rights

 

A
person who is not a Party shall have no right under the Contracts (Rights of
Third Parties) Act 1999 to enforce or enjoy the benefit of any term of this
Deed.

 

2.                                      COVENANT
TO PAY

 

2.1                               Covenant to pay

 

(a)                                  Each Charging Company, as principal obligor and not merely as
surety, covenants in favour of the Collateral Agent that it will pay and
discharge the Secured Obligations from time to time when they fall due and are
payable.

 

(b)                                 Every payment by a Charging Company of a Secured Obligation which is
made to or for the benefit of a Lender Party to which that Secured Obligation
is due and payable in accordance with the Loan Document under which such sum is
payable to that Lender Party shall operate in satisfaction to the same extent
of the covenant contained in clause 2.1(a).

 

2.2                               Default interest

 

(a)                                  Any amount which is not paid under this Deed when due shall bear
interest (both before and after judgment and payable on demand) from the due
date until the date on which such amount is unconditionally and irrevocably
paid and discharged in full on a daily basis at the rate and in the manner
agreed in the Loan Document under which such amount is payable and, in the absence
of such agreement, at the Default Rate from time to time.

 

(b)                                 Default interest will accrue in accordance with the Revolving
Facility Agreement.

 

3.                                      GRANT
OF SECURITY

 

3.1                               Nature of security

 

All
Security Interests and dispositions created or made by or pursuant to this Deed
are created or made:

 

(a)                                  in favour of the Collateral Agent;

 

(b)                                 with full title guarantee in accordance with the Law of Property
(Miscellaneous Provisions) Act 1994; and

 

(c)                                  as continuing security for payment of the Secured Obligations.

 

3.2                               Qualifying floating charge

 

Paragraph
14 of schedule B1 to the Insolvency Act 1986 applies to any floating
charge created by or pursuant to this Deed (and each such floating charge is a
qualifying floating charge for the purposes of the Insolvency Act 1986).

 

6

 

4.                                      FIXED
SECURITY

 

4.1                               Fixed charges

 

Each
Charging Company charges and agrees to charge all of its present and future
right, title and interest in and to the following assets which are at any time
owned by it, or in which it from time to time has an interest:

 

(a)                                  by way of first legal mortgage:

 

(i)                                     the Property (if any) specified in part 1 of schedule 2 (Details of Security Assets); and

 

(ii)                                  all other Property (if any) at the date of this Deed vested in, or
charged to, such Charging Company (not charged by clause 4.1(a)(i));

 

(b)                                 by way of first fixed charge:

 

(i)                                     all other Property and all interests in Property (not charged by
clause 4.1(a)); and

 

(ii)                                  all licences to enter upon or use land and the benefit of all other
agreements relating to land;

 

(c)                                  by way of first fixed charge all plant and machinery (not charged by
clauses 4.1(a) or 4.1(b)) and the benefit of all contracts, licences and
warranties relating to the same;

 

(d)                                 by way of first fixed charge:

 

(i)                                     all computers, vehicles, office equipment and other equipment (not
charged by clause 4.1(c)); and

 

(ii)                                  the benefit of all contracts, licences and warranties relating to
the same,

 

other
than any which are for the time being part of any Charging Company’s
stock-in-trade or work-in-progress) but, without prejudice to clause 7.7(a) or
(c) of the Revolving Facility Agreement;

 

(e)                                  by way of:

 

(i)                                     first fixed charge the Charged Securities referred to in part 2 of schedule 2
(Details of Security Assets); 

 

(ii)                                  first fixed charge all other Charged Securities (not charged by
clause 4.1(e)(i)),

 

in each
case, together with (A) all Related Rights from time to time accruing to
those Charged Securities and (B) all rights which such Charging Company
may have at any time against any clearance or settlement system or any
custodian in respect of any Charged Investments;

 

(f)                                    by way of first fixed charge:

 

(i)                                     the Security Accounts and all monies at any time standing to the
credit of the Security Accounts; and

 

7

 

(ii)                                  all accounts of such Charging Company with any bank, financial
institution or other person not charged by clause 4.1(f)(i) and all monies
at any time standing to the credit of such accounts, (but excluding any account
subject to a Permitted Lien),

 

in each
case, together with all interest from time to time accrued or accruing on such
monies, any investment made out of such monies or account and all rights to
repayment of any of the foregoing;

 

(g)                                 by way of first fixed charge:

 

(i)                                     the Intellectual Property (if any) specified in part 3 of schedule 2
(Details of Security Assets); and

 

(ii)                                  all other Intellectual Property (if any) (not charged by clause
4.1(g)(i));

 

(h)                                 to the extent that any Assigned Asset is not effectively assigned
under clause 4.2 (Security assignments),
by way of first fixed charge, such Assigned Asset;

 

(i)                                     by way of first fixed charge (to the extent not otherwise charged or
assigned in this Deed):

 

(i)                                     the benefit of all licences, consents, agreements and authorisations
held or used in connection with the business of such Charging Company or the
use of any of its assets; and 

 

(ii)                                  any letter of credit issued in favour of such Charging Company and
all bills of exchange and other negotiable instruments held by it,

 

without prejudice to clauses 7.4(e), 7.7(b) and
7.7(f) of the Revolving Facility Agreement;

 

(j)                                     by way of first fixed charge all of the goodwill and uncalled
capital of such Charging Company.

 

4.2                               Security assignments

 

Each
Charging Company assigns and agrees to assign absolutely (to the extent the
same are assignable and subject to a proviso for reassignment on redemption)
all its present and future right, title and interest in and to:

 

(a)                                  the Relevant Contracts, all rights and remedies in connection with
the Relevant Contracts and all proceeds and claims arising therefrom;

 

(b)                                 the Insurances, all claims under the Insurances and all proceeds of
the Insurances; and

 

(c)                                  the Security Accounts and all monies at any time standing to the
credit of the Security Accounts, together with all interest from time to time
accrued or accruing on such monies, any investment made out of such monies or
account and all rights to repayment of any of the foregoing; and

 

(d)                                 all other Receivables (not assigned under clauses 4.2(a) or 4.2(b) or
4.2(c)).

 

To the
extent that any Assigned Asset described in clause 4.2(b) is not
assignable, the assignment which that clause purports to effect shall operate
as an assignment of all present and future rights and claims of such Charging
Company to any proceeds of the Insurances.

 

8

 

4.3                               Notice of assignment

 

Upon an
Event of Default, which has occurred and is continuing each Charging Company
shall, immediately:

 

(a)                                  in respect of each Relevant Contract to which it is a party, deliver
a duly completed notice of assignment to each other party to that Relevant
Contract, and shall use its reasonable endeavours to procure that each such
party executes and delivers to the Collateral Agent an acknowledgement, in each
case in the respective forms set out in schedule 6 (Form of notice to and acknowledgement by party
to Relevant Contract) (or in such other form as the Collateral Agent
shall agree); and

 

(b)                                 in respect of each of its Insurances, deliver a duly completed
notice of assignment to each other party to that Insurance, and shall use its
reasonable endeavours to procure that each such party executes and delivers to
the Collateral Agent an acknowledgement, in each case in the respective forms
set out in schedule 7 (Form of
notice to and acknowledgement by insurers) (or in such other form as
the Collateral Agent shall agree); and

 

(c)                                  deliver a duly completed notice to the Account Bank and shall use
its best endeavours to procure that the Account Bank executes and delivers to
the Collateral Agent an acknowledgement, in each case in the respective forms
set out in schedule 5 (Form of
notice to and acknowledgement from bank operating Security Accounts)
(or in such other form as the Collateral Agent shall agree).

 

4.4                               Assigned Assets

 

The
Collateral Agent is not obliged to take any steps necessary to preserve any
Assigned Asset, to enforce any term of a Relevant Contract against any person
or to make any enquiries as to the nature or sufficiency of any payment
received by it pursuant to this Deed.

 

5.                                      FLOATING
CHARGE

 

Each
Charging Company charges and agrees to charge by way of first floating charge
all of its present and future:

 

(a)                                  assets and undertaking (wherever located) which are not effectively
charged by way of first fixed mortgage or charge or assigned pursuant to
clause 4.1 (Fixed charges),
clause 4.2 (Security assignments)
or any other provision of this Deed; and 

 

(b)                                 (whether or not effectively so charged or assigned) heritable
property and all other property and assets in Scotland.

 

6.                                      CONVERSION
OF FLOATING CHARGE

 

6.1                               Conversion of notice

 

The
Collateral Agent may, by written notice to a Charging Company, convert the
floating charge created under this Deed into a fixed charge as regards all or
any of the assets of such Charging Company specified in the notice if:

 

(a)                                  an Event of Default has occurred and is continuing; or

 

(b)                                 the Collateral Agent (acting reasonably) considers any Security
Assets (whether or not those specified in the notice) to be in danger of being
seized or sold under any

 

9

 

form of
distress, attachment, execution or other legal process or to be otherwise in
jeopardy.

 

6.2                               Small companies

 

The
floating charge created under this Deed by any Charging Company shall not
convert into a fixed charge solely by reason of a moratorium being obtained
under the Insolvency Act 2000 (or anything done with a view to obtaining such a
moratorium) in respect of such Charging Company.

 

6.3                               Automatic conversion

 

The
floating charge created under this Deed shall (in addition to the circumstances
in which the same will occur under general law) automatically convert into a
fixed charge:

 

(a)                                  in relation to any Security Asset which is subject to a floating
charge if:

 

(i)                                     such Charging Company creates (or attempts or purports to create)
any Security Interest (other
than a Permitted Lien) on or over the relevant Security Asset without the prior
written consent of the Collateral Agent; or

 

(ii)                                  any third party levies or attempts to levy any distress, execution,
attachment or other legal process against any such Security Asset; and

 

(b)                                 over all Security Assets of a Charging Company which are subject to
a floating charge if an administrator is appointed in respect of such Charging
Company or the Collateral Agent receives notice of intention to appoint such an
administrator. 

 

6.4                               Partial conversion

 

The
giving of a notice by the Collateral Agent pursuant to clause 6.1 (Conversion by notice) in relation to any
class of assets of any Charging Company shall not be construed as a waiver or
abandonment of the rights of the Collateral Agent to serve similar notices in
respect of any other class of assets or of any other right of the Collateral
Agent and/or the other Lender Parties.

 

7.                                      CONTINUING
SECURITY

 

7.1                               Continuing security

 

The
Security is continuing and will extend to the ultimate balance of the Secured
Obligations regardless of any intermediate payment or discharge in whole or in
part.  This Deed shall remain in full
force and effect as a continuing security for the duration of the Security
Period.

 

7.2                               Additional and separate security

 

This
Deed is in addition to, without prejudice to, and shall not merge with, any
other right, remedy, guarantee or Security Interest which the Collateral Agent
and/or any other Lender Party may at any time hold for any Secured Obligation. 

 

7.3                               Right to enforce

 

This
Deed may be enforced against each or any Charging Company without the
Collateral Agent and/or any other Lender Party first having recourse to any
other right, remedy, guarantee or Security Interest held by or available to it
or any of them.

 

10

 

8.                                      LIABILITY
OF CHARGING COMPANIES RELATING TO SECURITY ASSETS

 

Notwithstanding
anything contained in this Deed or implied to the contrary, each Charging
Company remains liable to observe and perform all conditions and obligations
assumed by it in relation to the Security Assets.  The Collateral Agent is under no obligation to
perform or fulfil any such condition or obligation or to make any payment in
respect of any such condition or obligation.

 

9.                                      ACCOUNTS

 

No
monies at any time standing to the credit of any account (of any type and
however designated) of any Charging Company with the Collateral Agent and/or
the Lender Parties (or any of them) or in which any Charging Company has an
interest (and no rights and benefits relating thereto) shall be capable of
being assigned to any third party, other than any monies subject to a Permitted
Lien.

 

10.                               REPRESENTATIONS

 

10.1                        General

 

Each
Charging Company makes the representations and warranties set out in this
clause 10  to the Collateral Agent and to
each other Lender Party.

 

10.2                        No Security Interests

 

Its Security Assets are, or when acquired
will be, beneficially owned by such Charging Company free from any Security
Interest other than:

 

(a)                                  as created by this Deed; and

 

(b)                                 as permitted by the Revolving Facility Agreement.

 

10.3                        Charged Securities

 

The Charged Securities are fully paid and
the Charged Securities listed in part 2 of schedule 2 (Details of Security Assets) constitute the
entire share capital owned by each Charging Company in the relevant company.

 

10.4                        Property

 

In relation to the Property, save as disclosed in
accordance with clause 6.7(c ) in schedule 6.7(c) of the Revolving
Facility Agreement:

 

(a)                                  part 1 of schedule 3 (Details
of Security Assets) identifies all freehold and leasehold Properties
which are beneficially owned by each Charging Company at the date of this Deed;

 

(b)                                 except as disclosed in writing, to the Lender Parties, (where
relevant):

 

(i)                                     there is no breach of the Planning Acts or any other law or
regulation which may materially affect the value or marketability of the
Property;

 

(ii)                                  there is no covenant, agreement, stipulation, reservation,
condition, interest, right or other matter affecting a Charging Company’s
ownership or ability to occupy (in a material respect) any Property;

 

11

 

(iii)                               there is no unregistered interest which overrides (A) first
registration or (B) registered dispositions affecting the Property, and
there is no person in adverse possession of the Property;

 

(iv)                              no person has a right to terminate the use of a facility necessary
for the enjoyment and use of the Property;

 

(v)                                 no Charging Company is aware of any adverse claim in respect of the
ownership of, or any interest in, the Property; 

 

(vi)                              the Property is free from any other tenancies or licences; and

 

(vii)                           the Property is in good and substantial repair.

 

10.5                        Time when representations made

 

(a)                                  All the representations and warranties in this clause 10 are made by
each Charging Company on the date of this Deed and (except for those in clause
10.4(a)) are also deemed to be made by each Charging Company:

 

(i)                                     on the date of each Borrowing Certificate and on each Advance under
the Revolving Facility Agreement; and

 

(ii)                                  (in the case of a company that accedes to the terms of this Deed
pursuant to an Accession Deed) on the day on which it becomes a Charging
Company.

 

(b)                                 Each representation or warranty deemed to be made after the date of
this Deed shall be deemed to be made by reference to the facts and
circumstances existing at the date the representation or warranty is deemed to
be made.

 

11.                               UNDERTAKINGS
BY THE CHARGING COMPANIES

 

11.1                        Restrictions on dealing

 

No
Charging Company shall do or agree to do any of the following without the prior
written consent of the Collateral Agent:

 

(a)                                  create or permit to subsist any Security Interest on any Security
Asset except a Permitted Lien;

 

(b)                                 sell, transfer, lease, lend or otherwise dispose of (whether by a
single transaction or a number of transactions and whether related or not) the
whole or any part of its interest in any Security Asset except for a Permitted
Disposal or as in accordance with the Loan Documents.

 

11.2                        Security Assets generally

 

Each
Charging Company shall:

 

(a)                                  permit the Collateral Agent (or its designated representatives), on
reasonable written notice:

 

(i)                                     (and upon reasonable request), access during normal office hours to
the accounting records of such Charging Company and to any documents and
records relating to the Security Assets; and 

 

12

 

(ii)                                  to inspect, take extracts from, and make photocopies of, the same,

 

and to
provide (at the expense of such Charging Company), such clerical and other
assistance which the Collateral Agent may reasonably require to do this;

 

(b)                                 notify the Collateral Agent within 14 days of receipt of every
material notice, order, application, requirement or proposal given or made in
relation to the Security Assets by any competent authority, and (if required by
the Collateral Agent) immediately provide it with a copy of the same and either
(A) comply with such notice, order, application, requirement or proposal
or (B) make such objections to the same as the Collateral Agent may
require or approve in its Permitted Discretion;

 

(c)                                  comply in all material respects with all obligations in relation to
the Security Assets under any present or future law, regulation, order or
instrument or under any bye-laws, regulations or requirements of any competent
authority or other approvals, licences or consents, except where failure to
comply would not reasonably be expected to result in, either individually or in
aggregate, a Material Adverse Effect; 

 

(d)                                 comply with all material covenants and obligations affecting the
Security Assets (or their manner of use), except where failure to comply would
not reasonably be expected to result in, either individually or in aggregate, a
Material Adverse Effect;

 

(e)                                  not, except with the prior written consent of the Collateral Agent
(such consent not to be unreasonably withheld or delayed), enter into any
onerous or restrictive obligation affecting any Security Asset save as
permitted in the Revolving Facility Agreement;

 

(f)                                    unless the Collateral Agent otherwise confirms in writing and
without prejudice to clause 11.7(a), deposit with the Collateral Agent all
title deeds and documents of title relating to the Security Assets (each of
which the Collateral Agent may hold throughout the Security Period);

 

(g)                                 provide the Collateral Agent with all information which it may
reasonably request in relation to the Security Assets;

 

(h)                                 not do, cause or permit to be done anything which may in any way
depreciate, jeopardise or otherwise prejudice any material portion of the
Security Assets (or make any omission which has such an effect).

 

11.3                        Property matters

 

(a)                                  Each Charging Company shall:

 

(i)                                     maintain all buildings and erections forming part of the Security
Assets in a good state of repair;

 

(ii)                                  maintain all plant, machinery, fixtures, fittings and other effects
for the time being owned by it in a good state of repair and good working order
and condition and shall, immediately on request by the Collateral Agent, affix
to any such item (in a prominent position) a durable notice of this Deed (in
any form required by the Collateral Agent); and

 

(iii)                               not sever, unfix or remove any of such plant, machinery, fixtures,
fittings or other effects except for the purposes of effecting any necessary
repairs or of replacing the same with new or improved models.

 

13

 

(b)                                 No Charging Company shall, except with the prior written consent of
the Collateral Agent or as expressly permitted under the Revolving Facility
Agreement, confer on any person:

 

(i)                                     any lease or tenancy of any of the Property or accept a surrender of
any lease or tenancy (whether independently or under any statutory power);

 

(ii)                                  any right or licence to occupy any land or buildings forming part of
the Property; or 

 

(iii)                               any licence to assign or sublet any part of the Property.

 

(c)                                  No Charging Company shall carry out any development within the
meaning of the Planning Acts in or upon any part of the Property without first
obtaining such permissions as may be required under or by virtue of the
Planning Acts and, in the case of development involving a substantial change in
the structure of, or a change of use of, any part of the Property, without
first obtaining the written consent of the Collateral Agent.

 

(d)                                 No Charging Company shall do, or permit to be done, anything as a
result of which any lease may be liable to forfeiture or otherwise be
determined other than in accordance with clause 7.7(c) of the Revolving
Facility Agreement.

 

(e)                                  Each Charging Company shall permit the Collateral Agent and any
person nominated by it at all reasonable times with reasonable notice to enter
any part of the Property and view the state of it.

 

(f)                                    Each Charging Company shall grant the Collateral Agent on request
all reasonable facilities within the power of such Charging Company to enable
the Collateral Agent (or its lawyers) to carry out investigations of title to
the Property and to make all enquiries in relation to any part of the Property
which a prudent mortgagee might carry out. 
Those investigations shall be carried out at the expense of such Charging
Company.

 

(g)                                 Each Charging Company shall, in respect of any freehold or leasehold
Property which is acquired by it after the date of this Deed, the title of
which is registered at the Land Registry or the title to which is required to
be so registered, give the Land Registry written notice of this Deed and
procure that notice of this Deed is clearly noted in the Register to each such
title.

 

11.4                        Insurance

 

Each
Charging Company shall at all times comply with its obligations as to insurance
contained in the Revolving Facility Agreement (and, in particular, clause 6.4
of the Revolving Facility Agreement).

 

11.5                        Intellectual Property

 

Each
Charging Company will at all times comply with its obligations as to
Intellectual Property contained in the Revolving Facility Agreement (and in
particular, clause 5.11 and 6.2(f) of the Revolving Facility Agreement).

 

14

 

11.6                        Dealings with and realisation of Receivables and operation of
Security Accounts 

 

(a)                                  Each Charging Company shall:

 

(i)                                     without prejudice to clause 11.1 (Restrictions
on dealing) (but in addition to the restrictions in that clause),
not, without the prior written consent of the Collateral Agent, sell, assign,
charge, factor or discount or in any other manner deal with any Receivable
(save as permitted in the Loan Documents);

 

(ii)                                  collect all Receivables promptly in the ordinary course of trading
as agent for the Collateral Agent (save as permitted in the Loan Documents) and
immediately upon receipt pay all monies which it receives in respect of the
Receivables into:

 

(A)                              such specially designated account(s) with the Account Bank as the
Collateral Agent may from time to time direct; or

 

(B)                                such other account(s) with such other bank as the Collateral Agent
may from time to time direct, 

 

(each
such account together with all additions to or renewals or replacements thereof
(in whatever currency) being a “Security
Account”) and pending such payment, hold all monies so received upon
trust for the Collateral Agent; and

 

(iii)                               where any Security Account is not maintained with the Collateral
Agent, deliver to the relevant Account Bank a duly completed notice and procure
that such Account Bank executes and delivers to the Collateral Agent an
acknowledgement, in each case in the respective forms set out in schedule 5
(Form of notice to and acknowledgement
from bank operating Security Accounts).

 

(b)                                 The initial Account Bank is The Royal Bank of Scotland plc unless
the Collateral Agent specifies otherwise.

 

(c)                                  Provided that unless and until the Collateral Agent has taken
enforcement action in accordance with the first sentence of clause 9.1(a) of
the Revolving Facility Agreement (“Enforcement
Action”), each Charging Company shall be entitled to withdraw (or
direct any transfer of) all or any part of the monies in any Security Account
without the prior written consent of the Collateral Agent, but following the
occurrence of an Enforcement Action, the Collateral Agent shall be entitled (in
its absolute discretion) to refuse to permit any such withdrawal or transfer.

 

(d)                                 Following the occurrence of an Enforcement Action, each Charging
Company shall deal with the Receivables (both collected and uncollected) and
the Security Accounts in accordance with any directions given in writing from
time to time by the Collateral Agent and, in default of and subject to such
directions, in accordance with this Deed.

 

(e)                                  Each
Charging Company shall deliver to the Collateral Agent such information as to
the amount and nature of its Receivables as the Collateral Agent may from time
to time reasonably require (taking into account the requirements of the Loan
Documents).

 

15

 

11.7                        Charged Investments

 

(a)                                  Each Charging Company shall following the occurrence of an Event of
Default, which is continuing:

 

(i)                                     promptly give notice to any custodian of any agreement with such
Charging Company in respect of any Charged Investment in a form the Collateral
Agent may require; and

 

(ii)                                  use its reasonable endeavours to ensure that the custodian
acknowledges that notice in a form the Collateral Agent may require.

 

(b)                                 Each Charging Company shall promptly pay all calls or other payments
which may become due in respect of its
Charged Investments.

 

11.8                        Rights in respect of Charged Investments

 

(a)                                  Until an Event of Default occurs and is continuing, each Charging
Company shall be entitled to:

 

(i)                                     receive and retain all dividends, distributions and other monies
paid on or derived from its Charged Securities; and

 

(ii)                                  exercise all voting and other rights and powers attaching to its
Charged Securities, provided that
it must not do so in a manner which (A) has the effect of changing the
terms of such Charged Securities (or any class of them) or of any Related Rights
or (B) which is prejudicial to the interests of the Collateral Agent
and/or the other Lender Parties.

 

(b)                                 At any time following the occurrence of an Event of Default which is
continuing and which has led to an acceleration of the Revolving Facility, the
Collateral Agent may complete the instrument(s) of transfer for all or any
Charged Securities on behalf of any Charging Company in favour of itself or
such other person as it may select.

 

(c)                                  At any time when any Charged Security is registered in the name of
the Collateral Agent or its nominee, the Collateral Agent shall be under no
duty to:

 

(i)                                     ensure that any dividends, distributions or other monies payable in
respect of such Charged Security are duly and promptly paid or received by it
or its nominee; or 

 

(ii)                                  verify that the correct amounts are paid or received; or 

 

(iii)                               take any action in connection with the taking up of any (or any
offer of any) Related Rights in respect of or in substitution for any such
Charged Security.

 

11.9                        Relevant Contracts

 

(a)                                  No Charging Company shall, except with the prior written consent of
the Collateral Agent, in its Permitted Discretion, amend, supplement or waive
or otherwise modify any term of any Relevant Contract, terminate any Relevant
Contract or release any other party from its material obligations under any
Relevant Contract.

 

(b)                                 Each Charging Company shall duly perform its material obligations
under each Relevant Contract, shall notify the Collateral Agent of any material
default by it or

 

16

 

any
other party under any Relevant Contract and shall not take any action which
will reduce or impede recoveries in respect of any Assigned Asset save as
permitted in the Revolving Facility Agreement.

 

(c)                                  Each Charging Company shall provide to the Collateral Agent as soon
as practicable upon receipt copies of all notices and material written
information received by it from any other party to any Relevant Contract.

 

12.                               POWER
TO REMEDY

 

12.1                        Power to remedy

 

If at
any time a Charging Company does not comply with any of its obligations under
this Deed, the Collateral Agent (without prejudice to any other rights arising
as a consequence of such non-compliance) shall be entitled (but not bound) to
rectify that default.  The relevant
Charging Company irrevocably authorises the Collateral Agent and its employees
and agents by way of security to do all things (including entering the property
of such Charging Company) which are necessary or desirable to rectify that
default.

 

12.2                        Mortgagee in possession

 

The
exercise of the powers of the Collateral Agent under this clause 12 shall not
render it or any other Lender Party liable as a mortgagee in possession.

 

12.3                        Monies expended

 

The
relevant Charging Company shall pay to the Collateral Agent on demand any
monies which are expended by the Collateral Agent in exercising its powers
under this clause 12, together with interest at the Default Rate from the date
on which those monies were expended by the Collateral Agent (both before and
after judgment) and otherwise in accordance with clause 2.2 (Default interest).

 

13.                               WHEN
SECURITY BECOMES ENFORCEABLE

 

13.1                        When enforceable

 

This
Security shall become immediately enforceable upon the occurrence of an Event
of Default and shall remain so for so long as such Event of Default is
continuing.

 

13.2                        Statutory powers

 

The
power of sale and other powers conferred by section 101 of the Act (as
amended or extended by this Deed) shall be immediately exercisable upon and at
any time after the occurrence of any Event of Default and for so long as such
Event of Default is continuing.  

 

13.3                        Enforcement

 

After
this Security has become enforceable, the Collateral Agent may in its absolute
discretion enforce all or any part of the Security in such manner as it sees
fit.

 

14.                               ENFORCEMENT
OF SECURITY

 

14.1                        General

 

For the
purposes of all powers implied by statute, the Secured Obligations are deemed
to have become due and payable on the date of this Deed. Sections 93 and 103 of
the Act shall not

 

17

 

apply
to the Security.  The statutory powers of
leasing conferred on the Collateral Agent are extended so as to authorise the
Collateral Agent to lease, make agreements for leases, accept surrenders of
leases and grant options as the Collateral Agent may think fit and without the
need to comply with section 99 or 100 of the Act.

 

14.2                        Powers of Collateral Agent

 

(a)                                  At any time after the Security becomes enforceable, the Collateral
Agent may without further notice (unless required by law):

 

(i)                                     (or if so requested by any Charging Company by written notice at any
time may) appoint any person or persons to be a receiver, receiver and manager
or administrative receiver of all or any part of the Security Assets and/or of
the income of the Security Assets; and/or

 

(ii)                                  appoint or apply for the appointment of any person who is
appropriately qualified as administrator of a Charging Company; and/or

 

(iii)                               exercise all or any of the powers conferred on mortgagees by the Act
(as amended or extended by this Deed) and/or all or any of the powers which are
conferred by this Deed on a Receiver, in each case without first appointing a
Receiver or notwithstanding the appointment of any Receiver; and/or

 

(iv)                              exercise (in the name of any Charging Company and without any
further consent or authority of such Charging Company) any voting rights and
any powers or rights which may be exercised by the person(s) in whose name the
Charged Investments are registered, or who is the holder of any of them.

 

(b)                                 The Collateral Agent is not entitled to appoint a Receiver in
respect of any Security Assets of any Charging Company which are subject to a
charge which (as created) was a floating charge solely by reason of a
moratorium being obtained under the Insolvency Act 2000 (or anything done with
a view to obtaining such a moratorium) in respect of such Charging Company.

 

14.3                        Redemption of prior mortgages

 

At any
time after the Security has become enforceable, the Collateral Agent may:

 

(a)                                  redeem any prior Security Interest against any Security Asset;
and/or

 

(b)                                 procure the transfer of that Security Interest to itself; and/or

 

(c)                                  settle and pass the accounts of the holder of any prior Security
Interest and any accounts so settled and passed shall be conclusive and binding
on each Charging Company.

 

All
principal, interest, costs, charges and expenses of and incidental to any such
redemption and/or transfer shall be paid by the relevant Charging Company to
the Collateral Agent on demand.

 

14.4                        Privileges

 

Each
Receiver and the Collateral Agent is entitled to all the rights, powers,
privileges and immunities conferred by the Act on mortgagees and receivers when
such receivers have been duly appointed under the Act, except that section 103
of the Act does not apply.

 

18

 

14.5                        No liability

 

(a)                                  Neither the Collateral Agent, any other Lender Party nor any
Receiver shall be liable (A) in respect of all or any part of the Security
Assets or (B) for any loss or damage which arises out of the exercise or
the attempted or purported exercise of, or the failure to exercise any of, its
or his respective powers (unless such loss or damage is caused by its or his
gross negligence or wilful misconduct).

 

(b)                                 Without prejudice to the generality of clause 14.5(a), neither the
Collateral Agent, any other Lender Party nor any Receiver shall be liable, by
reason of entering into possession of a Security Asset, to account as mortgagee
in possession or for any loss on realisation or for any default or omission for
which a mortgagee in possession might be liable.

 

14.6                        Protection of third parties

 

No
person (including a purchaser) dealing with the Collateral Agent or any
Receiver or Delegate will be concerned to enquire:

 

(a)                                  whether the Secured Obligations have become payable; or

 

(b)                                 whether any power which the Collateral Agent or the Receiver is
purporting to exercise has become exercisable; or

 

(c)                                  whether any money remains due under any Loan Document; or

 

(d)                                 how any money paid to the Collateral Agent or to the Receiver is to
be applied.

 

15.                               RECEIVER

 

15.1                        Removal and replacement

 

The
Collateral Agent may from time to time remove any Receiver appointed by it
(subject, in the case of an administrative receivership, to section 45 of
the Insolvency Act 1986) and, whenever it may deem appropriate, may appoint a
new Receiver in the place of any Receiver whose appointment has terminated.

 

15.2                        Multiple Receivers

 

If at
any time there is more than one Receiver of all or any part of the Security
Assets and/or the income of the Security Assets, each Receiver shall have power
to act individually (unless otherwise stated in the appointment document).

 

15.3                        Remuneration

 

Any
Receiver shall be entitled to remuneration for his services at a rate to be
fixed by agreement between him and the Collateral Agent (or, failing such
agreement, to be fixed by the Collateral Agent).

 

15.4                        Payment by Receiver

 

Only
monies actually paid by a Receiver to the Collateral Agent in relation to the
Secured Obligations shall be capable of being applied by the Collateral Agent
in discharge of the Secured Obligations.

 

19

 

15.5                        Agent of Charging Companies

 

Any
Receiver shall be the agent of the Charging Company in respect of which it is
appointed.  Such Charging Company shall
(subject to the Companies Act 1985 and the Insolvency Act 1986) be solely
responsible for his acts and defaults and for the payment of his remuneration.  No Lender Party shall incur any liability (either
to such Charging Company or to any other person) by reason of the appointment
of a Receiver or for any other reason.

 

16.                               POWERS
OF RECEIVER

 

16.1                        General powers

 

Any
Receiver shall have:

 

(a)                                  all the powers which are conferred by the Act on mortgagees in
possession and receivers appointed under the Act;

 

(b)                                 (whether or not he is an administrative receiver) all the powers
which are listed in schedule 1 of the Insolvency Act 1986; and 

 

(c)                                  all powers which are conferred by any other law conferring power on
receivers.

 

16.2                        Additional powers

 

In
addition to the powers referred to in clause 16.2 (General powers), a Receiver shall have the following powers:

 

(a)                                  to take possession of, collect and get in all or any part of the
Security Assets and/or income in respect of which he was appointed;

 

(b)                                 to manage the Security Assets and the business of any Charging
Company as he thinks fit;

 

(c)                                  to redeem any security and to borrow or raise any money and secure
the payment of any money in priority to the Secured Obligations for the purpose
of the exercise of his powers and/or defraying any costs or liabilities
incurred by him in such exercise;

 

(d)                                 to sell or concur in selling, leasing or otherwise disposing of all
or any part of the Security Assets in respect of which he was appointed without
the need to observe the restrictions imposed by section 103 of the
Act.  Fixtures may be severed and sold
separately from the Property containing them, without the consent of any
Charging Company. The consideration for any such transaction may consist of
cash, debentures or other obligations, shares, stock or other valuable
consideration (and the amount of such consideration may be dependent upon
profit or turnover or be determined by a third party).  Any such consideration may be payable in a
lump sum or by instalments spread over such period as he thinks fit;

 

(e)                                  to alter, improve, develop, complete, construct, modify, refurbish
or repair any building or land and to complete or undertake or concur in the
completion or undertaking (with or without modification) of any project in
which any Charging Company was concerned or interested before his appointment
(being a project for the alteration, improvement, development, completion,
construction, modification, refurbishment or repair of any building or land);

 

20

 

(f)                                    to carry out any sale, lease or other disposal of all or any part of
the Security Assets by conveying, transferring, assigning or leasing the same
in the name of the relevant Charging Company and, for that purpose, to enter
into covenants and other contractual obligations in the name of, and so as to
bind, such Charging Company;

 

(g)                                 to take any such proceedings (in the name of any of the relevant
Charging Companies or otherwise) as he shall think fit in respect of the
Security Assets and/or income in respect of which he was appointed (including
proceedings for recovery of rent or other monies in arrears at the date of his
appointment);

 

(h)                                 to enter into or make any such agreement, arrangement or compromise
as he shall think fit;

 

(i)                                     to insure, and to renew any insurances in respect of, the Security
Assets as he shall think fit (or as the Collateral Agent shall direct);

 

(j)                                     to appoint and employ such managers, officers and workmen and engage
such professional advisers as he shall think fit (including, without prejudice
to the generality of the foregoing power, to employ his partners and firm);

 

(k)                                  to form one or more Subsidiaries of any Charging Company, and to
transfer to any such Subsidiary all or any part of the Security Assets;

 

(l)                                     to operate any rent review clause in respect of any Property in
respect of which he was appointed (or any part thereof) and to apply for any
new or extended lease; and

 

(m)                                to:

 

(i)                                     give valid receipts for all monies and to do all such other things
as may seem to him to be incidental or conducive to any other power vested in
him or necessary or desirable for the realisation of any Security Asset; 

 

(ii)                                  exercise in relation to each Security Asset all such powers and
rights as he would be capable of exercising if he were the absolute beneficial
owner of the Security Assets; and

 

(iii)                               use the name of any Charging Company for any of the above purposes.

 

17.                               APPLICATION
OF PROCEEDS

 

17.1                        Application

 

All
monies received by the Collateral Agent or any Receiver after the Security has
become enforceable shall (subject to the rights and claims of any person having
a security ranking in priority to the Security) be applied in the following
order:

 

(a)                                  first, in satisfaction of, or provision for, all costs, charges and
expenses incurred, and payments made by the Collateral Agent, any other Lender
Party or any Receiver and of all remuneration due to the Receiver in connection
with this Deed or the Security Assets;

 

(b)                                 secondly, in
or towards the satisfaction of the remaining Secured Obligations; and

 

(c)                                  thirdly, in
payment of any surplus to any Charging Company or other person entitled to it.

 

21

 

17.2                        Contingencies

 

If the Security is enforced at a time when no amounts are due under the
Loan Documents (but at a time when amounts may become so due), the Collateral
Agent or a Receiver may pay the proceeds of any recoveries effected by it into
a blocked suspense account.

 

18.                               SET-OFF

 

18.1                        Set-off

 

(a)                                  The Collateral Agent and each other Lender Party may (but shall not
be obliged to) set off any obligation which is due and payable by any Charging
Company and unpaid (whether under the Loan Documents or which has been assigned
to the Collateral Agent or such other Lender Party by any other Charging
Company) against any obligation (whether or not matured) owed by the Collateral
Agent or such other Lender Party to such Charging Company, regardless of the
place of payment, booking branch or currency of either obligation.

 

(b)                                 If the obligations are in different currencies, the Collateral Agent
or such other Lender Party may convert either obligation at a market rate of
exchange in its usual course of business for the purpose of the set-off.

 

(c)                                  If either obligation is unliquidated or unascertained, the
Collateral Agent or such other Lender Party may set off in an amount estimated
by it in good faith to be the amount of that obligation.

 

18.2                        Time deposits

 

Without
prejudice to clause 18.1 (Set-off),
if any time deposit matures on any account which any Charging Company has with
the Collateral Agent or any other Lender Party at a time within the Security
Period when:

 

(a)                                  this Security has become enforceable; and

 

(b)                                 no Secured Obligation is due and payable (but amounts may become so
due),

 

such
time deposit shall automatically be renewed for such further maturity as the
Collateral Agent or such other Lender Party in its absolute discretion
considers appropriate unless the Collateral Agent or such other Lender Party
otherwise agrees in writing.

 

19.                               DELEGATION

 

Each of
the Collateral Agent and any Receiver may delegate, by power of attorney (or in
any other manner) to any person, any right, power or discretion exercisable by
it under this Deed upon any terms (including power to sub-delegate) which it
may think fit.  Neither the Collateral
Agent nor any Receiver shall be in any way liable or responsible to any
Charging Company for any loss or liability arising from any act, default,
omission or misconduct on the part of any Delegate.

 

20.                               FURTHER
ASSURANCES

 

20.1                        Further action

 

Each
Charging Company shall, at its own expense, promptly take whatever action the
Collateral Agent or a Receiver may require for:

 

22

 

(a)                                  creating, perfecting or protecting the Security Interests intended
to be created by this Deed; and

 

(b)                                 facilitating the realisation of any Security Asset or the exercise
of any right, power or discretion exercisable by the Collateral Agent or any
Receiver or Delegate in respect of any Security Asset,

 

including
the execution of any transfer, conveyance, assignment or assurance of any
property whether to the Collateral Agent or to its nominees, the giving of any
notice, order or direction and the making of any registration which in any such
case the Collateral Agent may think expedient.

 

20.2                        Specific security

 

Without
prejudice to the generality of clause 20.1 (Further
action), each Charging Company shall forthwith at the request of the
Collateral Agent execute a legal mortgage, charge, assignment, assignation or
other security over any Security Asset which is subject to or intended to be
subject to any fixed security created by this Deed in favour of the Collateral
Agent (including any arising or intended to arise pursuant to clause 6 (Conversion of floating charge)) in such
form as the Collateral Agent may reasonably require.

 

21.                               POWER
OF ATTORNEY

 

21.1                           Each Charging
Company, by way of security, irrevocably and severally appoints the Collateral
Agent, each Receiver and any Delegates to be its attorney to take any action
which such Charging Company is obliged to take under this Deed, including under
clause 20 (Further assurances).  Each Charging Company ratifies and confirms
whatever any attorney does or purports to do pursuant to its appointment under
this clause.

 

21.2                           Each of the
Collateral Agent, Receiver and any Delegate agrees that the power of attorney
provided under this clause 21 (Power of
Attorney) shall only be relied upon and exercised by such Party upon
the occurrence of an Event of Default which is continuing.

 

22.                               PAYMENTS

 

22.1                        Payments

 

Subject
to clause 22.2 (Gross-up), all
payments to be made by a Charging Company in respect of this Deed shall be
made:

 

(a)                                  in immediately available funds to the credit of such account as the
Collateral Agent may designate; and

 

(b)                                 without (and free and clear of, and without any deduction for or on
account of):

 

(i)                                     any set-off or counterclaim; or

 

(ii)                                  except to the extent compelled by law, any deduction or withholding
for or on account of Tax.

 

22.2                        Gross-up

 

If any
Charging Company is compelled by law to make any deduction or withholding from
any sum payable under this Deed to the Collateral Agent or to any other Lender
Party, the sum so payable by such Charging Company shall be increased so as to
result in the receipt by

 

23

 

the
Collateral Agent or such other Lender Party of a net amount equal to the full
amount expressed to be payable under this Deed.

 

23.                               STAMP
DUTY

 

Each
Charging Company shall:

 

(a)                                  pay all present and future stamp, registration and similar Taxes or
charges which may be payable, or determined to be payable, in connection with
the execution, delivery, performance or enforcement of this Deed or any
judgment given in connection therewith; and

 

(b)                                 indemnify the Collateral Agent, each other Lender Party and any
Receiver on demand against any and all costs, losses or liabilities (including,
without limitation, penalties) with respect to, or resulting from, its delay or
omission to pay any such stamp, registration and similar Taxes or charges.

 

24.                               COSTS
AND EXPENSES

 

24.1                        Transaction and amendment expenses

 

Each
Charging Company shall promptly on demand pay to the Collateral Agent and each
other Lender Party the amount of all reasonable costs, charges and expenses
(including, without limitation, reasonable legal fees, valuation, accountancy
and consultancy fees (and any VAT or similar Tax thereon)) incurred by the
Collateral Agent or any other Lender Party in connection with:

 

(a)                                  the negotiation, preparation, printing, execution, registration,
perfection and completion of this Deed, the Security or any document referred
to in this Deed; or 

 

(b)                                 any actual or proposed amendment or extension of, or any waiver or
consent under, this Deed.

 

24.2                        Enforcement and preservation costs

 

Each
Charging Company shall promptly on demand pay to the Collateral Agent, each
other Lender Party and any Receiver the amount of all costs, charges and
expenses (including (without limitation) legal fees (and any VAT or similar Tax
thereon)) incurred by any of them in connection with the enforcement, exercise
or preservation (or the attempted enforcement, exercise or preservation) of any
of their respective rights under this Deed or any document referred to in this
Deed or the Security (including all remuneration of the Receiver).

 

24.3                        Default interest

 

Any
amount demanded under clauses 24.1 (Transaction
and amendment expenses) or 24.2 (Enforcement
and preservation costs) shall bear interest at the Default Rate
(both before and after judgment) from the day on which those costs, charges or
expenses were paid, incurred or charged by the relevant person and otherwise in
accordance with clause 2.2 (Default interest).

 

25.                               CURRENCIES

 

25.1                        Conversion

 

All
monies received or held by the Collateral Agent or any Receiver under this Deed
may be converted from their existing currency into such other currency as the
Collateral Agent or the

 

24

 

Receiver
considers necessary or desirable to cover the obligations and liabilities
comprised in the Secured Obligations in that other currency at a market rate of
exchange in its usual course of business for the purpose of the conversion.  Each Charging Company shall indemnify the
Collateral Agent against all costs, charges and expenses incurred in relation
to such conversion. Neither the Collateral Agent nor any Receiver shall have
any liability to any Charging Company in respect of any loss resulting from any
fluctuation in exchange rates after any such conversion.

 

25.2                        Currency indemnity

 

No
payment to the Collateral Agent (whether under any judgment or court order or
in the liquidation, administration or dissolution of any Charging Company or
otherwise) shall discharge the obligation or liability of any Charging Company
in respect of which it was made, unless and until the Collateral Agent shall
have received payment in full in the currency in which the obligation or
liability was incurred and, to the extent that the amount of any such payment
shall on actual conversion into such currency fall short of such obligation or
liability expressed in that currency, the Collateral Agent shall have a further
separate cause of action against any Charging Company and shall be entitled to
enforce the Security to recover the amount of the shortfall.

 

26.                               INDEMNITY

 

Each
Charging Company shall indemnify the Collateral Agent, each other Lender Party,
any Receiver and any Delegate and the Collateral Agent’s officers and employees
(each an “Indemnified Party”) on
demand against any cost, loss, liability or expense (however arising) incurred
by any Indemnified Party as a result of or in connection with:

 

(a)                                  anything done or omitted in the exercise or purported exercise of
the powers contained in this Deed;

 

(b)                                 the Security Assets or the use or occupation of them by any person;
or 

 

(c)                                  any breach by any Charging Company of any of its obligations under
this Deed,

 

save
where such cost, loss, liability or expense arises as a result of the gross
negligence or wilful default of the Collateral Agent, Lender Party or Receiver
or Delegate.

 

27.                               MISCELLANEOUS

 

27.1                        Appropriation and suspense account

 

(a)                                  The Collateral Agent may apply all payments received in respect of
the Secured Obligations in reduction of any part of the Secured Obligations in
accordance with the Revolving Facility Agreement.  Any such appropriation shall override any
appropriation by any Charging Company. 

 

(b)                                 All monies received, recovered or realised by the Collateral Agent
under, or in connection with, this Deed may at the discretion of the Collateral
Agent be credited to a separate interest bearing suspense account for so long
as the Collateral Agent determines (with interest accruing thereon at such
rate, if any, as the Collateral Agent may determine for the account of the
relevant Charging Company) without the Collateral Agent having any obligation
to apply such monies and interest or any part thereof in or towards the
discharge of any of the Secured Obligations.

 

25

 

27.2                        New accounts

 

If the
Collateral Agent or any other Lender Party receives, or is deemed to be
affected by, notice, whether actual or constructive, of any subsequent Security
Interest (other than a Permitted Lien) affecting any Security Asset and/or the
proceeds of sale of any Security Asset or the Guarantee ceases to continue in
force, it may open a new account or accounts for any Charging Company.  If it does not open a new account, it shall
nevertheless be treated as if it had done so at the time when it received or
was deemed to have received such notice. 
As from that time all payments made to the Collateral Agent or such
other Lender Party will be credited or be treated as having been credited to
the new account and will not operate to reduce any amount of the Secured
Obligations.

 

27.3                        Changes to the Parties 

 

(a)                                  No Charging Company may assign any of its rights under this Deed.

 

(b)                                 The Collateral Agent may assign or transfer all or any part of its
rights under this Deed pursuant to the resignation or removal of the Collateral
Agent in accordance with the Revolving Facility Agreement.  Each Charging Company shall, immediately upon
being requested to do so by the Collateral Agent, enter into such documents as
may be necessary or desirable to effect such assignment or transfer.

 

27.4                        Memorandum and articles

 

Each
Charging Company certifies that the Security does not contravene any of the
provisions of the memorandum or articles of association of that Charging
Company.

 

27.5                        Tacking

 

(a)                                  Each Finance Party shall perform its obligations under the Revolving
Facility Agreement (including any obligation to make available further
advances).

 

(b)                                 This Deed secures advances already made and further advances to be
made.

 

27.6                        The Land Registry

 

(a)                                  Each Charging Company shall apply to the Chief Land Registrar for a
restriction in the following terms to be entered on the Register of Title
relating to any property registered at the Land Registry (or any unregistered
land subject to first registration) and against which this Deed may be noted:

 

“No disposition of the registered estate by the proprietor
of the registered estate is to be registered without a written consent signed
by the proprietor for the time being of the charge dated •  2005 (the “Charge”)
in favour of CapitalSource Finance LLC (as Collateral Agent) referred to in the
charges register.”

 

(b)                                 Each Charging Company:

 

(i)                                     authorises the Collateral Agent to make any application which the
Collateral Agent deems appropriate for the designation of this Deed, the
Revolving Facility Agreement or any other Loan Document as an exempt
information document under rule 136 of the Land Registration Rules 2003;

 

(ii)                                  shall use its best endeavours to assist with any such application
made by or on behalf of the Collateral Agent; and 

 

26

 

(iii)                               shall notify the Collateral Agent in writing as soon as it receives
notice of any person’s application under rule 137 of the Land Registration
Rules 2003 for the disclosure of this Deed, the Revolving Facility
Agreement or any other Loan Document following its designation as an exempt
information document.

 

(c)                                  No Charging Company shall make any application under rule 138
of the Land Registration Rules 2003 for the removal of the designation of
any such document as an exempt information document.

 

(d)                                 Each Charging Company shall promptly make all applications to and
filings with the Land Registry which are necessary or desirable under the Land
Registration Rules to protect the Security.

 

(e)                                  No Charging Company shall, without the prior written consent of the
Collateral Agent, permit any person to be or become registered under the Land
Registration Act 2002 as the proprietor of a Security Asset who is not so
registered under the Land Registration Act 2002 at the date of this Deed or, in
the case of Property acquired after the date of this Deed, at the date of such
acquisition.

 

27.7                        Amendments and waivers

 

Any
provision of this Deed may be amended only if the Collateral Agent and the
Charging Companies so agree in writing and any breach of this Deed may be
waived before or after it occurs only if the Collateral Agent so agrees in
writing. A waiver given or consent granted by the Collateral Agent under
this Deed will be effective only if given in writing and then only in the
instance and for the purpose for which it is given.

 

27.8                        Calculations and certificates

 

A
certificate of the Collateral Agent specifying the amount of any Secured
Obligation due from a Charging Company (including details of any relevant
calculation thereof) shall be prima facie evidence of such amount against each
Charging Company in the absence of manifest error.

 

27.9                        Waiver, rights and remedies

 

No
failure to exercise, nor any delay in exercising, on the part of the Collateral
Agent or any other Lender Party, any right or remedy under this Deed shall
operate as a waiver, nor shall any single or partial exercise of any right or
remedy prevent any further or other exercise or the exercise of any other right
or remedy.  The rights and remedies
provided are cumulative and not exclusive of any rights or remedies provided by
law.

 

28.                               NOTICES

 

28.1                        Communications in writing

 

Any
communication to be made under, or in connection with, this Deed shall be made
in writing and, unless otherwise stated, may be made by fax or letter (but not
by email).

 

28.2                        Addresses

 

The
address and fax number (and the department or officer, if any, for whose
attention the communication is to be made) of each Party for any communication
or document to be made or delivered under or in connection with this Deed is:

 

27

 

(a)                                  in the case of each Charging Company, that identified with its name
below; and

 

(b)                                 in the case of the Collateral Agent, that identified with its name
below,

 

or any
substitute address, fax number or department or officer as any Charging Company
may notify to the Collateral Agent (or the Collateral Agent may notify to the
Charging Companies, if a change is made by the Collateral Agent) by not less
than five Business Days’ notice. 

 

28.3                        Delivery

 

Clause
12.5 (Notice) of the Revolving Facility Agreement shall apply mutatis mutandis as if set out in this
Deed.

 

28.4                         Notification of address and fax
number

 

Promptly upon receipt of notification of an address and fax number or
change of address or fax number pursuant to clause 28.2 (Addresses) or changing its own address or
fax number, the Collateral Agent shall notify the Agent.

 

28.5                        English language

 

(a)                                  Any notice given under, or in connection with, this Deed must be in
English.

 

(b)                                 All other documents provided under or in connection with this Deed
must be:

 

(i)                                     in English; or

 

(ii)                                  if not in English, and if so required by the Collateral Agent,
accompanied by a certified English translation and, in this case, the English
translation will prevail unless the document is a constitutional, statutory or
other official document.

 

29.                               ACCESSION

 

Each
Charging Company irrevocably authorises the Company to agree to, and execute as
a deed, any duly completed Accession Deed as agent for and on behalf of such
Charging Company.

 

30.                               PARTIAL
INVALIDITY

 

All the
provisions of this Deed are severable and distinct from one another and if at
any time any provision is or becomes illegal, invalid or unenforceable in any
respect under any law of any jurisdiction, neither the legality, validity or
enforceability of any of the remaining provisions nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction will
in any way be affected or impaired.

 

31.                               RELEASE

 

Upon
the expiry of the Security Period (but not otherwise) the Collateral Agent and
each other Lender Party shall, at the request and cost of the Charging
Companies, take whatever action is necessary to release or re-assign (without
recourse or warranty) the Security Assets from the Security.

 

28

 

32.                               COUNTERPARTS

 

This
Deed may be executed in any number of counterparts, and this has the same
effect as if the signatures (and seals, if any) on the counterparts were on a
single copy of this Deed.

 

33.                               GOVERNING
LAW

 

This
Deed is governed by English law.

 

IN
WITNESS of
which this Deed has been duly executed by each of the
Initial Charging Companies as a deed and duly executed by the Collateral Agent
and has been delivered on the date written at the beginning of this Deed.

 

29

 

SCHEDULE 1

 

Initial Charging Companies

 

	
  Company name

  	
   

  	
  Company number

  	
   

  
	
  Evolving Systems Holdings Limited

  	
   

  	
  5272751

  	
   

  
	
  Evolving Systems Limited

  	
   

  	
  2325854

  	
   

  

 

30

 

SCHEDULE 2

 

Details of Security Assets

 

Part 1 - Property

 

	
  Registered land

  
	
  Charging
  

  Company

  	
   

  	
  Address

  	
   

  	
  County/District/London Borough

  	
   

  	
  Title number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  None

  	
   

  	
   

  

 

	
  Unregistered land

  	
   

  
	
  Charging
  

  Company

  	
   

  	
  Address

  	
   

  	
  Document describing the Property

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Date

  	
   

  	
  Document

  	
   

  	
  Parties

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  None

  	
   

  
										

 

Part 2 - Charged Securities

 

	
  Charging

  Company

  	
   

  	
  Name of company in

  which shares are held

  	
   

  	
  Class of

  shares held

  	
   

  	
  Number of

  shares held

  	
   

  	
  Issued share

  capital

  	
   

  
	
  Evolving Systems Holdings Limited

  	
   

  	
  Evolving Systems Limited

  	
   

  	
  Ordinary

  	
   

  	
  1,488,205

  	
   

  	
  74,410.25

  	
   

  
	
   

  	
   

  	
  Evolving Systems Limited

  	
   

  	
  New Ordinary

  	
   

  	
  180,703

  	
   

  	
  9,035.15

  	
   

  
	
   

  	
   

  	
  Evolving Systems Limited

  	
   

  	
  Deferred Ordinary

  	
   

  	
  1,475,104

  	
   

  	
  73,755.20

  	
   

  

 

31

 

Part 3 - Intellectual Property

 

Trade Marks

 

	
  BWT Ref

  	
   

  	
  Country

  	
   

  	
  Applicant

  	
   

  	
  Mark

  	
   

  	
  Registration

  Number

  	
   

  	
  Classes

  	
   

  	
  Date
  of

  Registration

  	
   

  	
  Status

  	
   

  
	
  T31910/001

  	
   

  	
  Community

  	
   

  	
  Tertio Limited

  	
   

  	
  Evident

  	
   

  	
  1620657

  	
   

  	
  09, 16, 38, 42

  	
   

  	
  10/02/2003

  	
   

  	
  Registered/Granted

  	
   

  
	
  T29846/000

  	
   

  	
  Community

  	
   

  	
  Tertio Limited

  	
   

  	
  Tertio

  	
   

  	
  1023795

  	
   

  	
  09, 16, 38, 42

  	
   

  	
  05/10/2000

  	
   

  	
  Registered/Granted

  	
   

  
	
  T29845/000

  	
   

  	
  Community

  	
   

  	
  Tertio Limited

  	
   

  	
  Provident

  	
   

  	
  1022870

  	
   

  	
  09, 16, 38, 42

  	
   

  	
  06/08/2000

  	
   

  	
  Registered/Granted

  	
   

  
	
  T30021/001

  	
   

  	
  United Kingdom

  	
   

  	
  Tertio Limited

  	
   

  	
  Evident

  	
   

  	
  2175390

  	
   

  	
  09, 16, 38, 42

  	
   

  	
  20/08/1998

  	
   

  	
  Registered/Granted

  	
   

  
	
  T30021/000

  	
   

  	
  United Kingdom

  	
   

  	
  Tertio Limited

  	
   

  	
  Evident

  	
   

  	
  2103764

  	
   

  	
  09, 38

  	
   

  	
  27/06/1996

  	
   

  	
  Registered/Granted

  	
   

  
	
  T29846/003

  	
   

  	
  United Kingdom

  	
   

  	
  Tertio Limited

  	
   

  	
  Tertio

  	
   

  	
  2175389

  	
   

  	
  09, 16, 38, 42

  	
   

  	
  20/08/1998

  	
   

  	
  Registered/Granted

  	
   

  
	
  T29846/002

  	
   

  	
  United Kingdom

  	
   

  	
  Tertio Limited

  	
   

  	
  Tertio

  	
   

  	
  1578744

  	
   

  	
  42

  	
   

  	
  20/07/1994

  	
   

  	
  Registered/Granted

  	
   

  
	
  T29846/001

  	
   

  	
  United Kingdom

  	
   

  	
  Tertio Limited

  	
   

  	
  Tertio

  	
   

  	
  2010862

  	
   

  	
  38

  	
   

  	
  10/02/1995

  	
   

  	
  Registered/Granted

  	
   

  
	
  T29845/001

  	
   

  	
  United Kingdom

  	
   

  	
  Tertio Limited

  	
   

  	
  Provident

  	
   

  	
  2184361

  	
   

  	
  09, 16, 38, 42

  	
   

  	
  14/12/1998

  	
   

  	
  Registered/Granted

  	
   

  
	
   

  	
   

  	
  United Kingdom

  	
   

  	
  Tertio Limited

  	
   

  	
  Tertio Technology with Business Sense

  	
   

  	
  2175453

  	
   

  	
  9, 16, 38, 42

  	
   

  	
  28/01/2000

  	
   

  	
  Registered/Granted

  	
   

  
	
   

  	
   

  	
  United Kingdom

  	
   

  	
  Tertio Limited

  	
   

  	
  Stylized Keyboard Design

  	
   

  	
  2201294

  	
   

  	
  9, 16, 38, 42

  	
   

  	
  25/06/1999

  	
   

  	
  Registered/Granted

  	
   

  

 

32

 

	
  BWT Ref

  	
   

  	
  Country

  	
   

  	
  Applicant

  	
   

  	
  Mark

  	
   

  	
  Registration

  Number

  	
   

  	
  Classes

  	
   

  	
  Date
  of

  Registration

  	
   

  	
  Status

  	
   

  
	
   

  	
   

  	
  United Kingdom

  	
   

  	
  Tertio Limited

  	
   

  	
  Observant

  	
   

  	
  2175386

  	
   

  	
  9, 16, 38, 42

  	
   

  	
  20/08/1998

  	
   

  	
  Registered/Granted

  	
   

  
	
   

  	
   

  	
  United Kingdom

  	
   

  	
  Tertio Limited

  	
   

  	
  Observant

  	
   

  	
  2142970

  	
   

  	
  9, 16, 38, 42

  	
   

  	
  22/08/1997

  	
   

  	
  Registered/Granted

  	
   

  
	
   

  	
   

  	
  European Community

  	
   

  	
  Tertio Limited

  	
   

  	
  Stylized Keyboard Design

  	
   

  	
  1225598

  	
   

  	
  9, 16, 42

  	
   

  	
  21/06/2000

  	
   

  	
  Registered/Granted

  	
   

  
	
   

  	
   

  	
  European Community

  	
   

  	
  Tertio Limited

  	
   

  	
  Observant

  	
   

  	
  681585

  	
   

  	
  9, 16, 38, 42

  	
   

  	
  26/12/1999

  	
   

  	
  Registered/Granted

  	
   

  

 

33

 

Part 4 - Relevant Contracts

 

	
  Charging

  Company

  	
   

  	
  Date of Relevant Contract

  	
   

  	
  Parties

  	
   

  	
  Details of Relevant

  Contract

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

None

 

 

Part 5 - Insurances

 

	
  Charging

  Company

  	
   

  	
  Insurer

  	
   

  	
  Insured risks

  	
   

  	
  Policy number

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

None

 

34

 

SCHEDULE 3

 

Form of notice to and acknowledgement from bank operating Security
Accounts

 

	
  To:
  The Royal Bank of Scotland plc

  	
   

  	
   

  
	
   

  	
  Thames
  Valley Corporate

  
	
   

  	
  4
  Abbey Gardens

  
	
   

  	
  Abbey
  Street

  
	
   

  	
  Reading

  
	
   

  	
  RG1
  3BA

  
				

 

Dated: • 2005

 

Dear Sirs

 

	
  Re:

  	
   

  	
  Account Holder: Evolving Systems Holdings
  Ltd and Evolving Systems Ltd
  (the “Charging Companies”)

  
	
   

  	
   

  	
  Security Account Nos: 00366661 (the
  “Security Account[•s]”)

  
	
   

  	
   

  	
  Account Branch: Thames Valley Corporate, 4 Abbey Gardens, Abbey
  Street, Reading RG1 3BA

  

 

1.                                       We give notice that, by a debenture dated November 2005 (the “Debenture”), we have charged to CAPITALSOURCE
FINANCE LLC (the “Collateral Agent”)
as Collateral Agent for certain banks and others (as specified in the
Debenture) all our present and future right, title and interest in and to:

 

(a)                                  the
Security Accounts, all monies from time to time standing to the credit of the
Security Accounts and all additions to or renewals or replacements thereof (in
whatever currency); and 

 

(b)                                 any
other account from time to time maintained with you by each Charging Company and all monies at any
time standing to the credit of such accounts,

 

(together
the “Charged
Accounts”) and to all
interest from time to time accrued or accruing on the Charged Accounts, any
investment made out of any such monies or account and all rights to repayment of
any of the foregoing by you.

 

2.                                       We advise you that until you receive a notice from the Collateral
Agent to the contrary, under the terms of the Debenture, we are entitled to
withdraw any monies from the Security Accounts from time to time subject to no
Enforcement Event having occurred and continuing.  Following an Enforcement Event, and where the
Collateral Agent has given notice to you, we shall only be entitled to withdraw
monies from the Security Account in accordance with directions from the Collateral
Agent.

 

3.                                       We agree that you are not bound to enquire whether the right of the
Collateral Agent to withdraw any monies from any Charged Account has arisen or
be concerned with (a) the propriety or regularity of the exercise of that
right or (b) notice to the contrary or (c) or to be responsible for
the application of any monies received by the Collateral Agent.

 

4.                                       This notice may only be revoked or amended with the prior written
consent of the Collateral Agent.

 

5.                                       Please confirm by completing the enclosed copy of this notice and
returning it to the Collateral Agent (with a copy to each Charging Company)
that:

 

35

 

(a)                                  you
agree to comply with this notice;

 

(b)                                 you
have not, at the date this notice is returned to the Collateral Agent, received
notice of any assignment or charge of or claim to the monies standing to the
credit of any Charged Account or the grant of any security or other interest
over those monies or any Charged Account in favour of any third party and you
will notify the Collateral Agent promptly if you should do so in the future;
and

 

(c)                                  you
do not at the date of this notice and will not in the future exercise any right
to combine accounts or any rights of set-off or lien or any similar rights in
relation to the monies standing to the credit of the Charged Accounts. 

 

6.                                       This notice (and any acknowledgement) is governed by English law.

 

Yours
faithfully

 

 

	
   

  	
   

  
	
  for
  and on behalf of

  
	
  EVOLVING SYSTEMS HOLDING LTD

  

 

 

	
   

  	
   

  
	
  for
  and on behalf of

  
	
  EVOLVING SYSTEMS LTD

  

 

 

Countersigned
by

 

 

	
   

  	
   

  
	
  for
  and on behalf of

  
	
  CAPITALSOURCE FINANCE LLC

  

 

 

[On
copy]

 

	
  To:

  	
  CapitalSource
  Finance LLC

  
	
   

  	
  as Collateral Agent

  	
   

  
	
   

  	
  4445
  Willard Avenue

  	
   

  
	
   

  	
  12th
  Floor

  	
   

  
	
   

  	
  Chevy
  Chase

  	
   

  
	
   

  	
  Maryland

  	
   

  
	
   

  	
  20815

  	
   

  

 

36

 

	
  Copy
  to:

  	
   

  	
  Evolving Systems
  Holding Ltd

  
	
   

  	
   

  	
  Evolving Systems Ltd

  

 

We acknowledge
receipt of the above notice. We confirm and agree:

 

(a)                                  that the matters referred to in it do not conflict with the terms
which apply to any Charged Account; and

 

(b)           the matters set out in
paragraphs 5(a) to 5(c) in the above notice.

 

 

	
   

  	
   

  
	
  for
  and on behalf of

  
	
  The
  Royal Bank of Scotland plc

  

 

Dated: •         200•

 

37

 

SCHEDULE 4

 

Form of notice to and acknowledgement
by party to Relevant Contract

 

To:          [•Insert name and address of relevant
party]

 

Dated: •200•

 

Dear
Sirs

 

Re: [•describe Relevant Contract] dated [•DATE] 200• between (1) you and [•specify parties] and (2) [•Name of Charging Company]
(the “Charging Company”) (the ”Agreement[•s]”)

 

1.                                       We give notice that, by a debenture dated [•DATE] 2005 (the ”Debenture”), we have assigned to CAPITALSOURCE FINANCE LLC (the ”Collateral Agent”) as Collateral Agent for
certain banks and others (as specified in the Debenture) all our present and
future right, title and interest in and to [•insert details of Relevant Contract] (together with any other agreement supplementing or amending the
same, the ”Agreement”)
including all rights and remedies in connection with the Agreement and all
proceeds and claims arising from the Agreement.

 

2.                                       We irrevocably authorise and instruct you from time to time:

 

(a)                                  to
disclose to the Collateral Agent without any reference to or further authority
from us (and without any enquiry by you as to the justification for such
disclosure), such information relating to the Agreement as the Collateral Agent
may at any time and from time to time request;

 

(b)                                 to
pay from time to time due and payable by you to us under the Agreement at the
direction of the Collateral Agent;

 

(c)                                  to
pay or release all or any part of the sums from time to time due and payable by
you to us under the Agreement only in accordance with the written instructions
given to you by the Collateral Agent from time to time;

 

(d)                                 to
comply with any written notice or instructions in any way relating to, or
purporting to relate to, the Debenture, the sums payable to us from time to
time under the Agreement or the debts represented thereby which you receive at
any time from the Collateral Agent without any reference to or further
authority from us and without any enquiry by you as to the justification for or
validity of such notice or instruction; and

 

(e)                                  to
send copies of all notices and other information given or received under the
Agreement to the Collateral Agent.

 

3.                                       We are not permitted to receive from you, otherwise than through the
Collateral Agent, any amount in respect of or on account of the sums payable to
us from time to time under the Agreement or to agree any amendment or
supplement to, or waive any obligation under, the Agreement without the prior
written consent of the Collateral Agent. 

 

4.                                       This notice may only be revoked or amended with the prior written
consent of the Collateral Agent.

 

38

 

5.                                       Please confirm your agreement to the above by completing the
enclosed copy of this notice and returning it to the Collateral Agent (with a
copy to us) that:

 

(a)                                  you
accept the instructions and authorisations contained in this notice and you
undertake to comply with this notice;

 

(b)                                 you
have not, at the date this notice is returned to the Collateral Agent, received
notice of the assignment or charge, the grant of any security or the existence
of any other interest of any third party in or to the Agreement or any proceeds
thereof and you will notify the Collateral Agent promptly if you should do so
in future;

 

(c)                                  you
will not permit any sums to be paid to us or any other person under or pursuant
to the Agreement without the prior written consent of the Collateral Agent;

 

(d)                                 you
will not exercise any right to terminate the Agreement without the prior
written consent of the Collateral Agent.

 

6.                                       This notice (and any acknowledgement) is governed by English law.

 

Yours
faithfully,

 

 

	
   

  	
   

  
	
  For
  itself and on behalf of

  
	
  EVOLVING SYSTEMS HOLDINGS LIMITED

  
	
  EVOLVING SYSTEMS LIMITED

  

 

 

[On
copy]

 

	
  To:

  	
   

  	
  CapitalSource
  Finance LLC

  
	
   

  	
   

  	
  as Collateral Agent

  
	
   

  	
   

  	
   

  
	
  Copy
  to:

  	
   

  	
  Evolving
  Systems Holdings Limited

  
	
   

  	
   

  	
  Evolving
  Systems Limited

  

 

We
acknowledge receipt of the above notice and consent and agree to its
terms.  We confirm and agree to the
matters set out in paragraphs 5(a) to 5(d) in the above notice.

 

 

	
   

  	
   

  
	
  For
  on behalf of

  
	
  [•Name of relevant party]

  
	
   

  
	
  Dated:•  200•

  

 

39

 

SCHEDULE 5

 

Form of notice to and acknowledgement
by insurers

 

To:          [•Insert name and address of insurer]

 

Dated: •200•

 

Dear
Sirs

 

[•Describe insurance policies] dated [•DATE]
200• between (1) you and (2) [•NAME OF CHARGING COMPANY] (the “Charging Company”) (the “Polic[•y][•ies]”)

 

1.                                       We give notice that, by a debenture dated [•DATE]200• (the “Debenture”), we
have [•assigned] to CAPITALSOURCE FINANCE
LLC (the “Collateral Agent”)
as Collateral Agent for certain banks and others (as specified in the
Debenture) all our present and future right, title and interest in and to the
Policies (together with any other agreement supplementing or amending the same,
the “Policies”) including all
rights and remedies in connection with the Policies and all proceeds and claims
arising from the Policies.

 

2.                                       We irrevocably authorise and instruct you from time to time:

 

(a)                                  to
disclose to the Collateral Agent without any reference to or further authority
from us (and without any enquiry by you as to the justification for such
disclosure), such information relating to the Policies as the Collateral Agent
may at any time and from time to time request;

 

(b)                                 to
pay sums from time to time due and payable by you to us under the Policies at
the direction of the Collateral Agent;

 

(c)                                  to
pay or release all or any part of the sums from time to time due and payable by
you to us under the Policies only in accordance with the written instructions
given to you by the Collateral Agent from time to time;

 

(d)                                 to
comply with any written notice or instructions in any way relating to, or
purporting to relate to, the Debenture, the sums payable to us from time to
time under the Policies or the debts represented thereby which you receive at
any time from the Collateral Agent without any reference to or further
authority from us and without any enquiry by you as to the justification for or
validity of such notice or instruction; and

 

(e)                                  to
send copies of all notices and other information given or received under the
Policies to the Collateral Agent.

 

3.                                       We are not permitted to receive from you, otherwise than through the
Collateral Agent, any amount in respect of or on account of the sums payable to
us from time to time under the Policies or to agree any amendment or supplement
to, or waive any obligation under, the Policies without the prior written
consent of the Collateral Agent. 

 

4.                                       This notice may only be revoked or amended with the prior written
consent of the Collateral Agent.

 

5.                                       Please confirm by completing the enclosed copy of this notice and
returning it to the Collateral Agent (with a copy to us) that:

 

40

 

(a)                                  you
accept the instructions and authorisations contained in this notice and you
undertake to comply with this notice;

 

(b)                                 you
have not, at the date this notice is returned to the Collateral Agent, received
notice of the assignment or charge, the grant of any security or the existence
of any other interest of any third party in or to the Policies or any proceeds
of them and you will notify the Collateral Agent promptly if you should do so
in future;

 

(c)                                  you
will not permit any sums to be paid to us or any other person under or pursuant
to the Policies without the prior written consent of the Collateral Agent;

 

(d)                                 you will
not exercise any right to terminate, cancel, vary or waive the Policies or take
any action to amend or supplement the Policies without the prior written
consent of the Collateral Agent.

 

6.                                       This notice (and any acknowledgement) is governed by English law.

 

Yours
faithfully

 

 

	
   

  	
   

  
	
  For
  itself and on behalf of

  
	
  [EVOLVING SYSTEMS HOLDINGS LIMITED]

  
	
  [EVOLVING SYSTEMS LIMITED]

  

 

 

[On
copy]

 

	
  To:

  	
   

  	
  CapitalSource
  Finance LLC

  
	
   

  	
   

  	
  as Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Copy
  to:

  	
   

  	
  [Evolving
  Systems Limited]

  
	
   

  	
   

  	
  [Evolving
  Systems Holdings Limited]

  

 

We
acknowledge receipt of the above notice and consent and agree to its
terms.  We confirm and agree to the
matters set out in paragraphs 5(a) to 5(d) in the above notice.

 

 

	
   

  	
   

  
	
  For
  and on behalf of

  
	
  [•Name of insurer]

  
	
   

  
	
  Dated:•  200•

  

 

41

 

SCHEDULE 8

 

Form of Accession Deed

 

	
  THIS ACCESSION DEED is made on

  	
  200•

  

 

 

BETWEEN

 

(1)           THE
COMPANY SPECIFIED IN SCHEDULE 1 (the “Acceding Company”);

 

(2)           [•Name of Company acting as agent for all
Charging Companies] (the “Company”);
and

 

(3)           [•Name of Collateral Agent] (the “Collateral Agent”).

 

BACKGROUND

 

This
Accession Deed is supplemental to debenture dated •  200• and made between (1) the Charging Companies and (2) the
Collateral Agent (the “Debenture”).

 

IT
IS AGREED:

 

1.                                      DEFINITIONS AND INTERPRETATION

 

(a)                                  Terms
defined in, or construed for the purposes of, the Debenture have the same
meanings when used in this Accession Deed including the recital to this
Accession Deed (unless otherwise defined in this Accession Deed).

 

(b)                                 Clause
1.2 (Interpretation) of the
Debenture shall apply with any necessary changes to this Accession Deed as if
it were set out in full in this Accession Deed.

 

2.                                      ACCESSION OF THE ACCEDING COMPANY

 

(a)                                  By
its execution of this Accession Deed, the Acceding Company unconditionally and
irrevocably undertakes to and agrees with the Collateral Agent to observe and
be bound by the Debenture and grants and creates the charges, mortgages,
assignments and other security which are stated to be granted or created by the
Debenture as if it had been an original party to the Debenture as one of the
Charging Companies.

 

(b)                                 Without
prejudice to the generality of clause 2(a), the Acceding Company:

 

(i)                                     (jointly
and severally with the other Charging Companies) covenants in the terms set out
in clause 3 (Covenant to pay) to
the Debenture; and

 

(ii)                                  with
full title guarantee, charges and assigns (and agrees to charge and assign) to
the Collateral Agent for the payment and discharge of the Secured Obligations,
all its property, assets and undertaking on the terms set out in clauses 4 (Grant of security), 5 (Fixed security) and 6 (Floating charge) of the Debenture,
including (without limiting the generality of the foregoing):

 

(A)                              by way
of first legal mortgage all the freehold and leasehold Property (if any) vested
in or charged to the Acceding Company (including without limitation, the
property specified in part 1 of schedule 2 (Details of Security Assets), together with all buildings and
fixtures (including trade fixtures) at any time thereon;

 

42

 

(B)                                by way
of first fixed charge all the Charged Securities (including, without
limitation, those specified in part 2 of schedule 2 (Details of Security Assets)) together with
all Related Rights from time to time accruing thereto;

 

(C)                                by way
of first fixed charge all Intellectual Property (including, without limitation,
the Intellectual Property specified in part 3 of schedule 2 (Details of Security Assets));

 

(D)                               by way
of assignment the Relevant Contracts (including, without limitation, those
specified in part 4 of schedule 2 (Details
of Security Assets)), all rights and remedies in connection with the
Relevant Contracts and all proceeds and claims arising therefrom; and

 

(E)                                 by
way of assignment the Insurances (including, without limitation those specified
in part 5 of schedule 2 (Details of
Security Assets)), all claims under the Insurances and all proceeds
of the Insurances.

 

(c)                                  Pursuant
to clause 30 of the Debenture (Accession),
the Company, as agent for itself and the existing Charging Companies, consents
to the accession of the Acceding Company to the Debenture on the terms of
clauses 2(a) and 2(b) and agrees that the Debenture shall after the
date of this Accession Deed be read and construed as if the Acceding Company
had been named in the Debenture as a Charging Company.

 

3.                                      INTERPRETATION

 

This Accession Deed shall be read as one with the
Debenture, so that all references in the Debenture to “this Deed”,
and similar expressions shall include references to this Accession Deed.

 

4.                                      COUNTERPARTS

 

This Accession Deed may be executed in any number of
counterparts, and this has the same effect as if the signatures (and seals, if
any) on the counterparts were on a single copy of this Accession Deed.

 

5.                                      THIRD PARTY RIGHTS

 

A person who is not a party to this Accession Deed
shall have no right under the Contracts (Rights of Third Parties) Act 1999 to
enforce or enjoy the benefit of any term of this Accession Deed.

 

6.                                      GOVERNING LAW

 

This Accession Deed is
governed by English law.

 

IN WITNESS of which this
Accession Deed has been duly executed by the Acceding Company and the Company
as a deed and duly executed by the Collateral Agent and has been delivered on
the date written at the beginning of this Accession Deed.

 

43

 

SCHEDULE 1

 

The Acceding Company

 

	
  Company name

  	
   

  	
  Company number

  
	
  •

  	
   

  	
  •

  

 

44

 

SCHEDULE 2

 

Details of Security Assets

 

Part 1
- Property

 

	
  Registered land

  
	
  Address

  	
   

  	
  County/District/London Borough

  	
   

  	
  Title number

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  •

  	
   

  	
  •

  

 

	
  Unregistered land

  	
   

  
	
   

  	
   

  	
  Document describing the Property

  	
   

  
	
  Address

  	
   

  	
  Date

  	
   

  	
  Document

  	
   

  	
  Parties

  	
   

  
	
  •

  	
   

  	
  •

  	
   

  	
  •

  	
   

  	
  •

  	
   

  

 

Part 2
- Charged Securities

 

	
  Name of company in

  which shares are held

  	
   

  	
  Class of shares held

  	
   

  	
  Number of shares

  held

  	
   

  	
  Issued share capital

  	
   

  
	
  •

  	
   

  	
  •

  	
   

  	
  •

  	
   

  	
  •

  	
   

  
	
  •

  	
   

  	
  •

  	
   

  	
  •

  	
   

  	
  •

  	
   

  
	
  •

  	
   

  	
  •

  	
   

  	
  •

  	
   

  	
  •

  	
   

  

 

Part 3
- Intellectual Property

 

[•INSERT DETAILS]

 

Part 4
- Relevant Contracts

 

	
  Date
  of Relevant Contract

  	
   

  	
  Parties

  	
   

  	
  Details of Relevant Contract

  
	
  [•DATE] 200•

  	
   

  	
  •

  	
   

  	
  •

  

 

Part 5
- Insurances

 

	
  Insurer

  	
   

  	
  Insured risks

  	
   

  	
  Policy number

  
	
  •

  	
   

  	
  •

  	
   

  	
  •

  
	
  •

  	
   

  	
  •

  	
   

  	
  •

  

 

45

 

EXECUTION PAGE

 

(Accession Deed)

 

46

 

EXECUTION PAGES

 

	
  THE INITIAL CHARGING COMPANIES

  
	
   

  
	
  EXECUTED as a deed (but
  not delivered 

  	
  )

  	
   

  
	
  until
  the date of this Deed) by

  	
  )

  	
   

  
	
  EVOLVING SYSTEMS HOLDINGS, LTD.

  	
  )

  	
   

  
	
  acting
  by:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Director

  	
  /s/Brian
  R. Ervine

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Secretary

  	
  /s/Anita T. Moseley

  	
   

  
						

 

	
  Address:

  	
  9777
  Pyramid Court

  
	
   

  	
  Suite 100

  
	
   

  	
  Englewood
  Co 80112

  
	
   

  	
   

  
	
  Facsimile No:

  	
  (303)
  802-1138

  
	
   

  	
   

  
	
  Attention:

  	
  Anita
  Moseley

  
	
   

  	
  Senior
  Vice President)

  

 

 

	
  EXECUTED as a deed (but
  not delivered 

  	
  )

  	
   

  
	
  until
  the date of this Deed) by

  	
  )

  	
   

  
	
  EVOLVING SYSTEMS, LTD.

  	
  )

  	
   

  
	
  acting
  by:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Director

  	
  /s/Brian
  R. Ervine

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Secretary

  	
  /s/Anita T. Moseley

  	
   

  
						

 

	
  Address:

  	
  9777
  Pyramid Court

  
	
   

  	
  Suite 100

  
	
   

  	
  Englewood
  Co 80112

  
	
   

  	
   

  
	
  Facsimile No:

  	
  (303)
  802-1138

  
	
   

  	
   

  
	
  Attention:

  	
  Anita
  Moseley

  
	
   

  	
  Senior
  Vice President)

  

 

47

 

	
  THE COLLATERAL AGENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  
	
  CAPITALSOURCE FINANCE LLC

  	
  )

  	
  /s/ Steven A. Museles

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
  4445 Willard Avenue

  
	
   

  	
   

  	
  12th Floor

  
	
   

  	
   

  	
  Chevy Chase

  
	
   

  	
   

  	
  Maryland 20815

  
	
   

  	
   

  	
   

  
	
  Facsimile No:

  	
   

  	
  (301) 841 2313

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  Corporate Finance Group

  
	
   

  	
   

  	
  Portfolio Manager

  
						

 

48

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