Document:

Exhibit 10.1(k)

 

THIS INSTRUMENT AND THE RIGHTS
AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND TO THE
EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT (AS AMENDED, THE “SUBORDINATION
AGREEMENT”), DATED AS OF NOVEMBER 14, 2005, AMONG EVOLVING SYSTEMS, INC.,
A DELAWARE CORPORATION, THE OTHER OBLIGORS (AS DEFINED THEREIN), THE JUNIOR
CREDITORS (AS DEFINED THEREIN) AND CAPITALSOURCE FINANCE LLC, AS AGENT FOR THE
LENDERS FROM TIME TO TIME A PARTY TO THE CREDIT AGREEMENTS (AS DEFINED THEREIN),
ALL AS MORE PARTICULARLY DESCRIBED IN THE SUBORDINATION AGREEMENT, AND EACH
HOLDER OF THIS INSTRUMENT, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE
PROVISIONS OF THE SUBORDINATION AGREEMENT.

 

	
  $                                    Principal
  Amount

  	
   

  	
  November 14, 2005

  

 

SUBORDINATED
NOTE

 

EVOLVING
SYSTEMS, INC.

 

FOR
VALUE RECEIVED, EVOLVING SYSTEMS, INC., a Delaware corporation (“Maker”),
having its principal place of business at 9777 Mount Pyramid Court, Englewood,
Colorado 80112, hereby promises to pay to the order of [Insert Name of Payee] (“Payee”),
having an address at [Insert Address of
Payee], the principal sum of                     
Dollars ($                    )
in lawful money of the United States of America on or before May 16, 2011
(the “Maturity Date”).

 

1.             Definitions; Interpretations.  In addition to other terms defined elsewhere
in this Note, the capitalized terms set forth in Schedule 1
attached hereto and incorporated herein by reference shall have the meanings
set forth therein unless defined elsewhere herein or the context otherwise
clearly requires.  Except as otherwise
provided herein, financial and accounting terms used elsewhere in this Note
shall be defined in accordance with GAAP.

 

2.             Payments of Principal and Interest.  On each Quarterly Payment Date, so long as
the payment is otherwise permitted under the terms of the Subordination
Agreement, Payee shall receive a payment consisting of principal and accrued
and unpaid interest equal to Payee’s Pro Rata Share of Maker’s Available Cash
for Payment, if any. All payments shall be applied first to accrued and unpaid
interest and then to principal outstanding under this Note. On each Quarterly
Payment Date, Maker shall deliver to Payee a certificate of the chief financial
officer of Maker setting forth in reasonable detail a calculation of Maker’s
Available Cash for Payment for the most recently ended fiscal quarter.

 

3.             Pre-Default Interest Rate.  So long as no Event of Default (as
hereinafter defined) has occurred and is continuing, the outstanding principal
balance of this Note shall bear interest at a rate per annum equal to eleven
percent (11%).  From and after January 1,
2008, so long as no Event of Default has occurred and is continuing, the
outstanding principal balance of this Note shall bear interest at a rate per
annum equal to fourteen percent (14%). 
To the extent not paid when due, interest shall be compounded quarterly
until paid.

 

4.             Post-Default Interest Rate.  Following the occurrence and during the
continuance of an Event of Default, the outstanding principal balance of this
Note shall bear interest at a rate per annum (the “Default Rate”) equal
to two percent (2%) in excess of the interest rate then payable pursuant to Section 3
of this Note.

 

 

5.             Optional Prepayment.  From and after the date hereof, Maker may
prepay the Notes in whole or in part and Payee will be entitled to an amount
equal to Payee’s Pro Rata Share of such prepayment.  There shall be no premium or penalty in
connection with any prepayment.  Such
prepayment shall include all accrued and unpaid interest on the principal
amount of such prepayment.  Each such
prepayment shall be applied first against accrued and unpaid interest, if any,
and then against outstanding principal under this Note.

 

6.             Payment Upon Change of Control.  On or before the date that is ten (10) business
days prior to Maker’s mailing of a stockholder proxy and notice of a
stockholder meeting in connection with a stockholder meeting called for the
purpose of approving a Capital Transaction, Maker shall provide Payee with
written notice of the proposed Capital Transaction (the “Transaction Notice”).  The Transaction Notice shall describe in
reasonable detail the terms and conditions of the Capital Transaction and the
consideration to be paid upon the consummation of the Capital Transaction.  In the event the Capital Transaction would
result in a Change of Control of Maker, then as a condition of such Capital
Transaction, provision shall be made in the definitive documentation to be executed
by the parties to such Capital Transaction whereby Payee may exercise its
rights as set forth in this Section 6. 
Upon a Change of Control of Maker, Payee, in its sole discretion, shall
have the right to declare the entire unpaid principal balance of this Note,
together with interest accrued thereon and with all other sums due or owed by
Maker hereunder, due and payable immediately following consummation of the
Change of Control.  Maker shall pay to
Payee said amounts within two (2) business days following consummation of
the Change of Control; provided that Payee must exercise the payment option set
forth in this Section 6 within forty-five (45) days after receipt of a
written notice from Maker regarding the Change of Control, which notice shall
describe in reasonable detail the terms and conditions of the Change of Control
and the consideration to be paid upon the consummation of the Change of
Control.

 

7.             Affirmative Covenants.  Maker covenants and agrees that, so long as
any Indebtedness is outstanding hereunder, it shall comply, and shall cause its
Subsidiaries (to the extent applicable) to comply, with each of the following
(unless otherwise consented to in writing by a Super Majority of Payees), provided, however, except for the
provisions of subsections (a), (c), (d) and (h), none of the provisions of
this Section 7 shall be applicable to Maker until the Payment in Full of
the Senior Debt (as such terms “Payment in Full” and Senior Debt” are defined
in the Subordination Agreement):

 

(a)           Upon the request from time to time of
any Requesting Holder, (i) provide such Requesting Holder and its
representatives (at Maker’s expense) access to Maker’s books and records and to
any of Maker’s and its Subsidiaries’ properties or assets upon three (3) days’
advance notice and during regular business hours in order that such Requesting
Holder or its representatives may make such audits and examinations and make
abstracts from such books, accounts, records and other papers of Maker and its
Subsidiaries, provided, however, that
the same Requesting Holder may conduct such inspections and examinations no
more frequently than twice in any 12-month period, unless an Event of Default
has occurred and is continuing, in which case none of the Requesting Holders
shall be so limited, and (ii) upon reasonable advance notification to
Maker, permit such Requesting Holder or its representatives to discuss the
affairs, finances and accounts with, and be advised as to the same by, officers
and independent accountants, all as such Requesting Holder may deem
appropriate, including without limitation, for the purpose of verifying any
certificate delivered by Maker to Payee under Section 2 hereof, provided that any such parties are a party to, or bound by,
an acceptable non-disclosure agreement. 
Each Requesting Holder shall conduct at least one meeting with an
executive officer of Maker in the course of each such inspection and
examination or discussion with officers or independent accountants.

 

(b)           Comply with all laws, ordinances or governmental
rules or regulations to which it is subject, and shall obtain and maintain
in effect all licenses, certificates, permits, franchises and

 

2

 

other governmental authorizations necessary to the ownership
of its properties or to the conduct of its businesses, except where the failure
to so comply or obtain or maintain would not reasonably be expected to have a
Material Adverse Effect.

 

(c)           Except as otherwise permitted under Section 8
of this Note, at all times preserve and keep in full force and effect (i) its
corporate existence and (ii) take all reasonable action to maintain all
rights and franchises necessary or desirable in the normal conduct of its
business, except to the extent that failure to do so in the case of clause (ii) of
this Section 7(c) would not reasonably be expected to have a Material
Adverse Effect.

 

(d)           Furnish to Payee notice of the
occurrence of any Event of Default within five (5) business days after it
becomes known to any of Maker’s Authorized Officers.

 

(e)           File all income tax or similar tax
returns required to be filed in any jurisdiction and to pay and discharge all
taxes shown to be due and payable on such returns and all other taxes,
assessments, governmental charges, or levies payable by any of them, to the
extent such taxes and assessments have become due and payable and before they
have become delinquent, provided that
Maker need not pay any such tax or assessment if the amount, applicability or
validity thereof is contested by Maker on a timely basis in good faith and in
appropriate proceedings, and Maker has established adequate reserves therefor
in accordance with GAAP on it books.

 

(f)            Operate Maker’s Business (as defined
in Section 8(m) of this Note) in the ordinary course of business except as
provided herein.

 

(g)           In any fiscal year, increase the
Compensation of Executive Officers of Maker only with the unanimous consent of
the Compensation Committee.

 

(h)           Deliver promptly to Payee written
notice of the occurrence of an “event of default” under and as defined in
either of the Senior Credit Agreements describing in reasonable detail the
nature of such event of default.

 

8.             Negative Covenants.  Maker covenants and agrees that so long as
any Indebtedness is outstanding hereunder, neither it nor any of its
Subsidiaries shall undertake any of the following without obtaining the prior
written consent of a Super Majority of Payees, provided,
however, except for the provisions of subsections (a), (j), (k) and
(l), none of the provisions of this Section 8 shall be applicable to Maker
until the Payment in Full of the Senior Debt (as such terms “Payment in Full”
and Senior Debt” are defined in the Subordination Agreement):

 

(a)           voluntarily liquidate, dissolve or
wind up, except for the liquidation, dissolution and winding-up of Telecom
Software Enterprises, LLC (“TSE”) (including, without limitation, any
liquidation, dissolution or winding-up of TSE by means of a merger of TSE with
and into Maker, with Maker as the surviving entity);

 

(b)           pay, declare or set aside any sums
for the payment of any dividends, or make any distributions on, any shares of
its capital stock or other securities or make prepayments of principal on any
Indebtedness except in the case of the following (each, a “Permitted Payment”):

 

(i)            prepayments of principal or payments
of interest on:  (A) any of the
Notes; (B) any Indebtedness incurred under the Working Capital Exclusion
as provided in Section 8(e)(v) of this Note; provided that there is no Event of Default
under this Note; (C) promissory notes issued to Peter McGuire and Lisa
Marie Maxson pursuant to the Acquisition Agreement dated October 15, 2004
by and among Maker, Peter McGuire and Lisa Marie Maxson (collectively, the “TSE

 

3

 

Promissory Notes”); provided that there is no Event of Default under this Note;
or (D) any Indebtedness permitted under Section 8(e)(xi), 8(e)(xii)
or 8(e)(xiii);

 

(ii)           dividends or distributions payable in
the common stock of Maker or any of its Subsidiaries;

 

(iii)          payments in accordance with any Series B
Approved Plan (as such term is defined in the Series B Designation);

 

(iv)          dividends or distributions payable by
any of Maker’s Subsidiaries to Maker or any other Subsidiary of Maker; and

 

(v)           regularly scheduled payments of
principal on Indebtedness permitted under Section 8(e);

 

(c)           purchase, acquire or obtain (i) any
capital stock or other proprietary interest, directly or indirectly, in any
other entity or (ii) all or a substantial portion of the business or
assets of another Person for consideration (including assumed liabilities)
other than Investments permitted under Section 8(i) and Permitted
Acquisitions;

 

(d)           (i)            sell
or transfer all or a substantial portion of its assets to another Person; (ii) sell,
transfer or otherwise dispose of any notes receivable or accounts receivable,
with or without recourse; or (iii) sell, lease, transfer or otherwise
dispose of any asset or group of assets (other than as described in clause (ii) above),
except:

 

(i)            sales of inventory in the ordinary
course of business;

 

(ii)           sales or liquidations of Investments
permitted by Section 8(i);

 

(iii)          (A) sales or other dispositions
of property by any Subsidiary of Maker to Maker or to any other Subsidiary and (B) sales
or other dispositions of property by Maker to any if its Subsidiaries;

 

(iv)          sales or other dispositions of
obsolete, surplus or worn out property, whether now owned or hereafter
acquired, in the ordinary course of business, or other assets not practically
usable in the business of Maker or its Subsidiaries; provided
that the aggregate amount of such sales or dispositions does not
exceed $250,000 in any fiscal year of Maker;

 

(v)           Licenses of intellectual property of
Maker or its Subsidiaries in the ordinary course of business and which would
not otherwise reasonably result in a Material Adverse Effect; and

 

(vi)          sales, transfers or other dispositions
that constitute a Change of Control so long as Maker complies with the terms of
Section 6 of this Note, if applicable;

 

(e)           create, incur, assume or suffer to
exist any Indebtedness, except, so long as no Event of Default then exists or
would exist as a result thereof, the following (“Permitted Indebtedness”):

 

(i)            Indebtedness outstanding on the date
this covenant becomes effective and listed on a schedule delivered to
Payee on such date, and any refinancings, refundings, renewals or extensions
thereof; provided that the amount of such
Indebtedness is not increased at the time of such refinancing, refunding,
renewal or extension;

 

4

 

(ii)           obligations under the Notes and the
TSE Promissory Notes;

 

(iii)          intercompany Indebtedness between (A) Maker
and any of its Subsidiaries and (B) a Subsidiary of Maker and any other
Subsidiary of Maker;

 

(iv)          purchase money Indebtedness to fund
the purchase of property otherwise permitted under Section 8(g) of
this Note and Indebtedness constituting Capital Leases permitted under Section 8(g);

 

(v)           Indebtedness in the form of an
unsecured line of credit in an amount not to exceed in the aggregate the
principal amount of $2,000,000 at any time outstanding (the “Working Capital
Exclusion”);

 

(vi)          Accrual of interest, accretion or
amortization of original issue discount or payment-in-kind interest in
connection with Indebtedness otherwise permitted under this Section 8(e);

 

(vii)         (A) Indebtedness incurred in
connection with a Permitted Acquisition and (B) Indebtedness for Capital
Leases assumed pursuant to a Permitted Acquisition, provided
that the aggregate Indebtedness of clauses (A) and (B) of
this Section 8(e)(vii) outstanding at any time does not exceed
$1,000,000;

 

(viii)        the Series B Preferred Stock, to
the extent under GAAP, the Series B Preferred Stock would be treated as
debt or mezzanine financing on the financial statements of Maker;

 

(ix)           Indebtedness incurred in connection
with the financing of insurance premiums in the ordinary course of business in
an amount not to exceed $500,000 in any fiscal year;

 

(x)            Indebtedness in respect of Maker’s
guarantee of the expenses incurred by certain employees in connection with the
use of credit cards sponsored by Maker in an aggregate amount not to exceed
$150,000 at any time outstanding;

 

(xi)           Indebtedness of Evolving Systems
Holdings Limited or its Subsidiaries in favor of Royal Bank of Scotland PLC in
the aggregate principal amount of 800,000 pounds at any time outstanding;

 

(xii)          Unsecured Indebtedness in respect of
Interest Rate Protection Agreements in an aggregate notional or contract amount
not to exceed $250,000 at any time outstanding; and

 

(xiii)         reimbursement obligations under letters
of credit in a face amount not to exceed $500,000 at any time outstanding;

 

(f)            mortgage, encumber, or create or
suffer to exist Liens on any of its assets, other than the following (each, a “Permitted
Lien”);

 

(i)            Liens that arise out of operation of
law;

 

(ii)           easements, rights-of-way,
restrictions (including zoning restrictions) and other similar encumbrances
affecting real property which, in the aggregate, are not substantial in amount,
and which do not in any case materially detract from the value of the property

 

5

 

subject thereto or materially interfere with the
ordinary conduct of the business of the applicable Person and none of which is
violated by existing or proposed restrictions on land use;

 

(iii)          Liens securing Indebtedness permitted
under Sections 8(e)(iv) and 8(e)(vii); provided that (A) such
Liens do not at any time encumber any property other than the property financed
by such Indebtedness and (B) the Indebtedness secured thereby does not
exceed the cost of property being acquired on the date of acquisition and (C) such
Liens are granted substantially contemporaneously with the acquisition of such
property;

 

(iv)          Liens existing on the date this
covenant becomes effective and listed on a schedule delivered to Payee on
such date and any renewals or extensions thereof, provided
that (A) the property covered thereby is not changed, (B) the
amount secured or benefited thereby is not increased, and (C) any renewal
or extension of the obligations secured or benefited thereby is not prohibited
by this Note;

 

(v)           Liens on insurance policies and the
proceeds thereof incurred in connection with the financing of insurance
premiums in the ordinary course of business in an amount not to exceed $500,000
in any fiscal year; and

 

(vi)          Liens securing Indebtedness permitted
under Section 8(e)(xi) and 8(e)(xiii);

 

(g)           make or commit to make any Capital
Expenditures (whether by expenditure of cash or the incurrence of Indebtedness
for Capital Leases to fund the acquisition of property pursuant to any
permitted Capital Expenditure); except
to the extent that the cash paid for the Capital Expenditure, when taken
together with the aggregate liability required by GAAP consistently applied and
in accordance with Maker’s past practice, to be reflected in Maker’s financial
statements in respect of any Capital Lease (“Lease Liability”) plus the
sum of (i) any cost incurred by Maker in connection with the acquisition,
delivery or installation of the property which is the subject of the Capital
Lease, but which cost is not included in the Lease Liability and (ii) to
the extent not otherwise reflected in the Capital Lease payments, interest
expense incurred in respect of the Capital Lease for the relevant fiscal year
(which for purposes of this Note will be deemed a Capital Expenditure made or
committed during the fiscal year in which the Capital Lease is signed or
becomes effective, whichever first occurs), does not exceed $2,000,000 in any
fiscal year;

 

(h)           enter into any transaction with any
of its Affiliates that is less favorable to Maker or any of its Subsidiaries
than would have been the case if such transaction had been effected on an arms
length basis with a Person other than an Affiliate, except for intercompany
cross-license agreements, intercompany transfer pricing agreements and
arrangements and other transactions between and among Maker and its
Subsidiaries otherwise permitted under this Note;

 

(i)            enter into or make any Investments,
other than the following (each, a “Permitted Investment”):

 

(i)            Cash Equivalents;

 

(ii)           equity Investments (A) by Maker
in any Subsidiary and (B) by a Subsidiary of Maker in any other Subsidiary
of Maker;

 

(iii)          Investments consisting solely of
appreciation in value of existing Investments permitted hereunder;

 

6

 

(iv)          any Permitted Payments under Section 8(b) of
this Note, without duplication; and

 

(v)           any Permitted Indebtedness under Section 8(e) of
this Note, without duplication.

 

(j)            change its fiscal year;

 

(k)           change or amend its Certificate of
Incorporation or Bylaws in a manner adverse to Payee’s rights and remedies
under this Note; or

 

(l)            engage in any material line of
business not related to the OSS communications industry or any business
reasonably related or incidental thereto (the “Maker’s Business”).

 

9.             Determination of Accretive in Connection with Permitted
Acquisitions.

 

(a)           In the event Maker proposes to enter
into an agreement to acquire another Person (the “Proposed Acquisition”),
Maker shall deliver written notice of such event, together with the Financial
Projections, to Payee, no later than twenty (20) calendar days prior to the
contemplated effective date of the Proposed Acquisition.  The Financial Projections shall be deemed
accepted and conclusive and binding upon all holders of the Notes (including
Payee), unless holders of the Notes holding at least 40% of the Aggregate
Principal Indebtedness shall give written notice to Maker (such holders who
give such notice, the “Disagreeing Payees”) of the items in the
Financial Projections with which the Disagreeing Payees disagree (the “Accretive
Calculation Disagreement Notice”) within twenty (20) calendar days after
the receipt by Payee of the Financial Projections.  The Accretive Calculation Disagreement Notice
shall specify each item disagreed with by the Disagreeing Payees (or the Disagreeing
Payees’ calculation thereof), the reason for the disagreement and a restatement
of the item disagreed with to reflect the view of the Disagreeing Payees.  If Maker disagrees with the Disagreeing
Payees’ position as set forth in the Accretive Calculation Disagreement Notice,
then Maker shall notify the Disagreeing Payees within twenty (20) calendar days
after the receipt by Maker of the Accretive Calculation Disagreement Notice (“the
Maker’s Notice Period”) that Maker disagrees with the Accretive
Calculation Disagreement Notice.  Maker
and the Disagreeing Payees shall, during the twenty (20) calendar days after
receipt by the Disagreeing Payees of such notice (the “Negotiation Period”),
negotiate in good faith to resolve any such disagreements.  If at anytime during but not later than the
end of the Negotiation Period Maker and the Disagreeing Payees have been unable
to resolve their disagreements, either Maker or the Disagreeing Payees will
have the right to engage on behalf of Maker and Disagreeing Payees, Grant Thornton
LLP (or such other Person mutually agreed to in writing by Maker and the
Disagreeing Payees) (the “Unaffiliated Firm”) to resolve the items set
forth in the Accretive Calculation Disagreement Notice with respect to which
there is continuing disagreement between Maker and the Disagreeing Payees.  If Maker notifies the Disagreeing Payees in
writing that it agrees with the Accretive Calculation Disagreement Notice or
does not provide the Disagreeing Payees with notice of Maker’s disagreement by
the expiration of the Maker’s Notice Period or if an Unaffiliated Firm is not
engaged as provided in this Section 9(a), the Financial Projections, as
modified by the Accretive Calculation Disagreement Notice, shall be binding on
Maker and all holders of the Notes.

 

(b)           The Unaffiliated Firm, employing such
procedures as it in its sole discretion deems necessary or appropriate in the
circumstances, shall resolve those disagreements with the Financial Projections
as set forth in the Accretive Calculation Disagreement Notice which remain
unresolved between Maker and the Disagreeing Payees.  The Unaffiliated Firm shall submit to Maker
and the Disagreeing Payees a report of its review of the contested items in the
Accretive Calculation Disagreement Notice as quickly as practicable and shall
include in such report its determination as to

 

7

 

whether the effect of the Proposed Acquisition is
Accretive.  The determination so made by
the Unaffiliated Firm shall be conclusive, binding on and non-appealable by,
Maker and all holders of the Notes.  The
fees and disbursements of the Unaffiliated Firm shall be borne one half by
Maker and one half by the holders of the Notes (based upon their Pro Rata
Shares at the time of the engagement of the Unaffiliated Firm in accordance
with Section 9(a) of this Note). 
Notwithstanding all of the foregoing, Maker may elect, at any time, not
to comply with this Section 9 with respect to a Proposed Acquisition (or
if Maker otherwise fails to properly comply with the terms of this Section 9)
in which event, the Proposed Acquisition shall be deemed not to be Accretive.

 

(c)           None of the provisions of this Section 9
shall be applicable to Maker until the Payment in Full of the Senior Debt (as
such terms “Payment in Full” and “Senior Debt” are defined in the Subordination
Agreement).

 

10.           Events of Default.

 

(a)           For purposes of this Note, an “Event
of Default” shall have occurred hereunder if any of the following have
occurred, provided, however, the
occurrence of any of the following events, other than those set forth in
subsections (a)(i), (a)(iii), (a)(iv), and (a)(vii), shall not be an Event of
Default unless and until the Payment in Full of the Senior Debt (as such terms “Payment
in Full” and “Senior Debt” are defined in the Subordination Agreement):

 

(i)            Maker shall fail to pay within one (1) business
day after the date when due any payment of principal, interest, fees, costs,
expenses or any other sum payable to Payee hereunder or otherwise, including
the other Notes;

 

(ii)           Maker shall default in the
performance of any other agreement or covenant contained herein (other than as
provided in Section 10(a)(i) of this Note) or under any other Note,
and such default shall continue uncured for twenty (20) consecutive days after
notice thereof to Maker given by Payee;

 

(iii)          Maker becomes insolvent or generally
fails to pay its debts as such debts become due or admits in writing its
inability to pay its debts as such debts become due; or shall suffer a custodian,
receiver or trustee for it or substantially all of its property to be appointed
and if appointed without its consent, not be discharged within ninety (90)
consecutive days; makes a general assignment for the benefit of creditors; or
suffers proceedings under any law related to bankruptcy, insolvency,
liquidation or the reorganization, readjustment or the release of debtors to be
instituted against it and if contested by it not dismissed or stayed within
ninety (90) consecutive days; if proceedings under any law related to
bankruptcy, insolvency, liquidation, or the reorganization, readjustment or the
release of debtors is instituted or commenced by or against Maker and, in the
case of proceedings not instituted or commenced by Maker, if contested by Maker,
and not dismissed or stayed within ninety (90) consecutive days; if any order
for relief is entered relating to any of the foregoing proceedings which order
is not stayed; if Maker shall call a meeting of its creditors with a view to
arranging a composition or adjustment of its debts; or if Maker shall by any
act or failure to act indicate its consent to, approval of or acquiescence in
any of the foregoing;

 

(iv)          (A) This Note or any of the other
Notes shall, for any reason (other than payment or satisfaction in full of the
obligations represented thereby) not be or shall cease to be in full force and
effect (other than in accordance with its terms) or shall be declared null and
void or (B) the validity or enforceability of any of the Notes shall be
contested by Maker;

 

(v)           If Maker shall be in default with
respect to any payment, when due (subject in each case to applicable grace or
cure periods), of any Indebtedness in excess of $175,000

 

8

 

(other than under this Note or any other Note), or any
other default shall occur under any agreement or instrument evidencing such
Indebtedness, if the effect of such non-payment default is to accelerate the
maturity of such Indebtedness or to permit the holder thereof to cause such
Indebtedness to become due prior to its stated maturity, and such default shall
not be remedied, cured, waived or consented to within the period of grace with
respect thereto, or any other circumstance which arises (other than the mere
passage of time) by reason of which any such Indebtedness shall become or be
declared to be due and payable prior to its stated maturity;

 

(vi)          Beginning with the fiscal half year
ending December 31, 2005, as of the last day of any fiscal half year
ending in any June or December, Maker’s Ratio of Indebtedness to EBITDA
shall be greater than 4-to-1.  For
purposes of calculating EBITDA for this Section 10(a)(vi), (x) all
non-cash charges for goodwill impairment resulting from the transactions
contemplated by the Stock Purchase Agreement shall be added back to Net Income;
and (y) Net Income shall not be modified as a result of any “mark to market”
adjustments resulting from any anti-dilution or other adjustments with respect
to this Note or the Maker’s Series B Preferred Stock.  For the purposes of calculating Indebtedness
for this Section 10(a)(vi), Indebtedness shall not be modified as a result
of any “mark to market” adjustments resulting from any anti-dilution or other
adjustments with respect to this Note or the Maker’s Series B Preferred
Stock; or

 

(vii)         Subject to Section 11(b) of
this Note, if Maker shall have failed to maintain an effective Shelf
Registration Statement as provided under Section 5 of the Series B
Designation (a “Registration Event of Default”).

 

Notwithstanding
anything contained herein to the contrary, no Event of Default shall be deemed
to have occurred under this Note if the Event of Default resulted solely from a
breach of any representation, warranty or covenant of TTGL under the Stock Purchase
Agreement.

 

(b)           In the event that Payee transfers any
portion of the outstanding principal balance of this Note to any Person (other
than Payee’s shareholders and Affiliates of such shareholders) and, at the time
of transfer, Payee does not also transfer the greater of (i) a number of
Registrable Shares at least equal to the product of the number of Registrable
Shares then held by Payee, its shareholders or Affiliates of such shareholders
multiplied by a fraction, the numerator of which is the amount of the
outstanding principal balance of this Note transferred to such Person, and the
denominator of which is the aggregate principal amount of all Notes held by
Payee or (ii) at least 50,000 Registrable Shares (the “Share Transfer
Minimum”) to such Person, Section 10(a)(vii) of this Note shall
terminate with respect to the portion of this Note so transferred.  In the event Payee transfers any of the
outstanding principal of this Note to any Person (other than Payee’s
shareholders and Affiliates of such shareholders) and, at the time of transfer,
also transfers to such Person at least the Share Transfer Minimum, the
occurrence of a Registration Event of Default shall continue to constitute an
Event of Default and such Person shall be entitled to exercise the remedies
arising under this Note upon the occurrence and during the continuation of a
Registration Event of Default.  Without
limiting any of the foregoing and for purposes of clarity, for so long as this
Note is held by Payee, its shareholders or the Affiliates of such shareholders
(regardless of whether in the event of a transfer of this Note to any of Payee’s
shareholders or the Affiliates of such shareholders Payee simultaneously
transfers the Share Transfer Minimum) the occurrence of a Registration Event of
Default shall constitute an Event of Default and the remedies available to
Payee upon the occurrence and during the continuation of an Event of Default
shall continue unaffected with respect to the portion of this Note held by
Payee, Payee’s shareholders and Affiliates of such shareholders.

 

9

 

11.           Consequences of Default.

 

(a)           Upon the occurrence and during the
continuance of an Event of Default, the entire unpaid principal balance of this
Note, together with interest accrued thereon and with all other sums due or
owed by Maker hereunder, as well as all out-of-pocket costs and expenses
(including but not limited to attorneys’ fees and disbursements) incurred by
Payee in connection with the collection or enforcement of this Note, shall at
the option of the Requisite Payees, upon notice to Maker (except if an Event of
Default described in Section 10(a)(iii) of this Note shall occur in
which case acceleration shall occur automatically without notice) be declared
to be due and payable immediately, and payment of the same may be enforced and
recovered by the entry of judgment of this Note and the issuance of execution
thereon.

 

(b)           In addition to all of the sums
payable hereunder, Maker agrees to pay Payee all reasonable costs and expenses
incurred by Payee in connection with any and all actions taken to enforce
collection of this Note upon the occurrence of an Event of Default, including
all reasonable attorneys’ fees.

 

12.           Remedies not Exclusive.  The remedies of Payee provided herein or
otherwise available to Payee at law or in equity shall be cumulative and
concurrent, and may be pursued singly, successively and together at the sole
discretion of Payee, and may be exercised as often as occasion therefor shall
occur; and the failure to exercise any such right or remedy shall in no event
be construed as a waiver or release of the same.

 

13.           Ranking.  This Note is one of several Notes issued by
Maker to several Persons.  Subject to the
right of each holder of the Notes to accelerate payment of all amounts due or
owed by Maker to such holder under such holder’s Note upon a Change of Control
in accordance with Section 6 of the Notes, each Note is ranked pari passu with each other Note in the
payment of interest and principal, and payments of interest and principal by
Maker under the Notes, including prepayments, if any, shall be made based upon
the Pro Rata Share of each holder of a Note. 
In the event it is determined that Payee has received payments in
respect of interest or principal under this Note which are disproportionately
greater than payments of interest or principal made to one or more obligees due
in respect to the other Notes (determined in accordance with the preceding
sentence) then Payee shall be deemed to have received and shall hold such
greater amount solely in trust for the benefit for each of the obligees to whom
such excess should inure, and Payee shall forthwith deliver such excess amount
to Maker for payment to such other obligees.

 

14.           Notices; Payments.  All notices required to be given to any of
the parties hereunder shall be in writing and shall be deemed to have been
sufficiently given for all purposes when presented personally to such party or
sent by certified or registered mail, return receipt requested, to such party
at its address set forth below:

 

	
  If to Maker:

  	
   

  	
  Evolving
  Systems, Inc.

  
	
   

  	
   

  	
  9777 Pyramid
  Court, Suite 100

  
	
   

  	
   

  	
  Englewood,
  CO 80112

  
	
   

  	
   

  	
  Attention:
  Anita Moseley, General Counsel

  
	
   

  	
   

  	
  Tel: (303)
  802-2599

  
	
   

  	
   

  	
  Fax: (303)
  802-1138

  
	
   

  	
   

  	
   

  
	
  With copy to:

  	
   

  	
  Holme
  Roberts & Owen LLP

  
	
   

  	
   

  	
  1700 Lincoln
  St., Suite 4100

  
	
   

  	
   

  	
  Denver, CO
  80203-4541

  
	
   

  	
   

  	
  Attention:
  Charles D. Maguire, Jr., Esq.

  
	
   

  	
   

  	
  Tel: (303)
  861-7000

  

 

10

 

	
   

  	
   

  	
  Fax: (303)
  866-0200

  
	
   

  	
   

  	
   

  
	
  If to Payee:

  	
   

  	
  [Payee Name]

  
	
   

  	
   

  	
  [Payee Address]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attn:

  
	
   

  	
   

  	
  Tel:

  
	
   

  	
   

  	
  Fax:

  
	
   

  	
   

  	
   

  
	
  With copy to:

  	
   

  	
  [Insert Name and Address]

  

 

Such
notice shall be deemed to be given when received if delivered personally or
five (5) business days after the date mailed.  Any notice mailed shall be sent by certified
or registered mail.  Any notice of any
change in such address shall also be given in the manner set forth above.  Whenever the giving of notice is required,
the giving of such notice may be waived in writing by the party entitled to
receive such notice.

 

Unless
otherwise agreed by Maker and Payee, all payments hereunder by Maker to Payee
shall be made by wire transfer to an account designated in writing by Payee.

 

15.           Severability.  In the event that any provision of this Note
is held to be invalid, illegal or unenforceable in any respect or to any
extent, such provision shall nevertheless remain valid, legal and enforceable
in all such other respects and to such extent as may be permissible.  Any such invalidity, illegality or unenforceability
shall not affect any other provisions of this Note, but this Note shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.

 

16.           Successors and Assigns; Assignment.  This Note inures to the benefit of Payee and
binds Maker, and its successors and assigns, and the words “Payee” and “Maker”
whenever occurring herein shall be deemed and construed to include such
respective successors and assigns.  Maker
may not assign or transfer this Note, without the consent of Payee.  At any time and from time to time, Payee, in
its sole discretion, may transfer to any Person all or a portion of the
outstanding principal and/or accrued interest hereunder without the consent of
Maker, provided, however, that: 
(A) the minimum aggregate amount of such transfer shall be at least
equal to the lesser of (i) $500,000 in principal amount and (ii) the
outstanding principal balance of this Note at the time of transfer; (B) any
such transfer shall be to (i) one holder or (ii) an Affiliated Group
of holders (excluding natural persons) with a common manager, general partner
or investment adviser; and (C) the transfer shall be made in accordance
with applicable securities laws.  For
purposes of determining whether the aggregate amount being transferred under
this Note meets the $500,000 threshold in the preceding sentence, all amounts
of Notes to be transferred by Advent Holders may be aggregated and all amounts
of Notes to be transferred by Apax Holders may be aggregated.  This Note may not be assigned, transferred or
sold by Payee to any Person that engages in, or controls an entity that engages
in, a business competitive with Maker’s Business.  Furthermore, as a condition of the transfer,
any transferee of Payee of this Note must agree to become bound by the
provisions of this Note and the Subordination Agreement.

 

17.           Entire Agreement.  This Note (together with the other Notes and
the Subordination Agreement) contains the entire agreement between the parties
with respect to the subject matter hereof and thereof.

 

18.           Modification of Agreement; Waivers.  No provision of this Note may be modified,
altered, amended or waived, except by an agreement in writing signed by both
Maker and a

 

11

 

Super Majority of Payees; provided, however, that no
modification, alteration, amendment or waiver shall, without the consent of
Payee:

 

(a)           extend the Maturity Date of this Note
or postpone any payment of principal or change the payment amount due under Section 2
of this Note;

 

(b)           waive any Event of Default under Section 10(a)(i) of
this Note;

 

(c)           reduce the percentage specified in
the definitions of Requisite Payees or Super Majority of Payees;

 

(d)           increase the percentage specified in
the definitions of Requesting Holder;

 

(e)           amend Sections 3, 4, 5, 13 or 18 of
this Note; provided, however, that a
Super Majority of Payees may waive the requirement of payment of default
interest under Section 4 of this Note in connection with a concurrent
waiver of an Event of Default; or

 

(f)            release Maker from its obligation to
pay this Note.

 

19.           Releases by Maker.  Maker hereby releases Payee from all
technical and procedural errors, defects and imperfections whatsoever in
enforcing the remedies available to Payee upon a default by Maker hereunder and
hereby waives all benefit that might accrue to Maker by virtue of any present
or future laws exempting any property, real or personal, or any part of the
proceeds arising from any sale of any such property, from attachment, levy or
sale under execution, or providing for any stay of execution, exemption from
civil process or extension of time, and agrees that such property may be sold
to satisfy any judgment entered on this Note, in whole or in part and in any order
as may be desired by Payee.

 

20.           Waivers by Maker.  Maker (and all endorsers, sureties and
guarantors) hereby waives presentment for payment, demand, notice of demand,
notice of nonpayment or dishonor, protest and notice of protest of this Note,
and all other notices in connection with the delivery, acceptance, performance,
default or enforcement of the payment of this Note (other than notices
expressly required by the terms of this Note); liability hereunder shall be
unconditional and shall not be affected in any manner by an indulgence,
extension of time, renewal, waiver or modification granted or consented to by
Payee.

 

21.           Revenue and Stamp Tax.  Maker shall pay all reasonable out-of-pocket
expenses incurred by Payee in connection with any revenue, tax or other stamps
now or hereafter required by law at any time to be affixed to this Note.

 

22.           Governing Law.  This Note shall be governed by and construed
in accordance with the laws of the State of Delaware, without reference to
conflict of laws principles.

 

23.           Limitations of Applicable Law.  Notwithstanding any provision contained
herein, Maker’s liability for the payment of interest shall not exceed the
limits now imposed by any applicable usury law. 
If any provision of this Note requires interest payments in excess of
the highest rate permitted by law, the provision in question shall be deemed to
require only the highest such payment permitted by law.  Any amounts theretofore received by Payee
hereunder in excess of the maximum amount of interest so permitted to be
collected by Payee shall be applied by Payee in reduction of the outstanding
balance of principal or, if this Note shall theretofore been paid in full, the
amount of such excess shall be promptly returned by Payee to Maker.

 

12

 

24.           Consent to Jurisdiction and
Service of Process.  Maker
irrevocably appoints each of Maker’s Authorized Officers as its
attorneys-in-fact upon whom may be served any notice, process or pleading in
any action or proceeding against it arising out of or in connection with this
Note.  Maker hereby consents that any
action or proceeding against it may be commenced and maintained in any court
within the State of Delaware or in the United States District Court of Delaware
by service of process on any such officer. 
Maker further agrees that the courts of the State of Delaware and the
United States District Court of Delaware shall have jurisdiction with respect
to the subject matter hereof and the person of Maker.  Notwithstanding the foregoing, Payee, in its
absolute discretion, may also initiate proceedings in the courts of any other
jurisdiction in which Maker may be found or in which any of its properties may
be located.

 

25.           Headings.  The headings of the sections of this Note are
inserted for convenience only and do not constitute a part of this Note.

 

26.           WAIVER OF JURY TRIAL.  MAKER HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS NOTE OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF PAYEE.  THIS
PROVISION IS A MATERIAL INDUCEMENT FOR PAYEE’S ADVANCING THE FUNDS UNDER THIS
NOTE.

 

27.           ACKNOWLEDGEMENTS.  MAKER ACKNOWLEDGES THAT IT HAS HAD THE
ASSISTANCE OF COUNSEL IN THE REVIEW AND EXECUTION OF THIS NOTE, AND FURTHER
ACKNOWLEDGES THAT THE MEANING AND EFFECT OF THE FOREGOING WAIVER OF JURY TRIAL
SET FORTH IN SECTION 26 HAVE BEEN FULLY EXPLAINED TO MAKER BY SUCH
COUNSEL.

 

[Signature
Page Follows]

 

13

 

IN
WITNESS WHEREOF, Maker has duly executed this Note as of the date first set
forth above.

 

	
   

  	
  EVOLVING SYSTEMS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian R. Ervine

  	
   

  
	
   

  	
  Name:

  	
  Brian R. Ervine

  
	
   

  	
  Title:

  	
  Executive
  Vice President and Chief

  
	
   

  	
  Financial
  and Administrative Officer

  
					

 

 

	
  Acknowledged and Agreed:

  
	
   

  
	
  PAYEE:

  
	
   

  
	
  [Insert Name of Payee]

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  

 

 

SCHEDULE 1

DEFINITIONS

 

“Accretive”
shall mean, with respect to a Proposed Acquisition, that the projected pro
forma consolidated EBITDA (calculated on a per share basis) of Maker and the
other constituent entity(ies) in such transaction, and the respective
Consolidated Subsidiaries of Maker and such constituent entity(ies) for the
twelve calendar month period immediately following such transaction, is not
less than the projected EBITDA (calculated on a per share basis), on a
consolidated basis, of Maker and its Consolidated Subsidiaries for the same
period, all as presented in the Financial Projections.

 

“Advent
Holders” shall mean any holder of the Notes that is an investment fund and (i) is
an Affiliate of Advent International Corporation or (b) for which Advent
International Corporation is the investment advisor (with full authority to
bind).

 

“Affiliate”
shall mean, with respect to any Person, any other Person which directly or
indirectly Controls, is Controlled by or is under common Control with such
Person.

 

“Affiliated
Group” shall mean a group of Persons, each of which is an Affiliate of some
other Person in the group.

 

“Aggregate
Principal Indebtedness” shall mean, as of any date of determination, the
sum of the principal amounts outstanding under the Consideration Notes in
effect at such time.

 

“Apax
Holders” shall mean Apax WW Nominees Ltd with company number
04693597, an entity formed and registered in England and Wales with company
number 02140054 and any holder of the Notes that is an investment fund and (i) is
an Affiliate of Apax Partners Ltd. or (b) for which Apax Partners Ltd. is
the investment advisor (with full authority to bind).

 

“Authorized
Officer” shall mean, with respect to Maker, the chief executive officer,
chief financial officer, any vice president, treasurer, comptroller, or general
counsel.

 

“Available
Cash for Payment” shall mean, with respect to any Quarterly Payment Date,
an amount equal to (i) Revolving Loan Availability plus (ii) Unrestricted
Cash plus (iii) the Fair Market Value of Marketable Securities minus
(iv) $4.5 million.

 

“Capital
Expenditures” shall mean, with respect to any Person for any period, the
aggregate of all expenditures (whether paid in cash, or incurred by entering
into a synthetic lease arrangement or a Capital Lease, or otherwise accrued as
a liability) by such Person during that period which, in accordance with GAAP,
are or should be included in “additions to property, plant or equipment” or
similar items reflected in the statement of cash flows of such Person, and all
research and development expenditures which in accordance with GAAP are or
should be accounted for as a capital expenditure in the balance sheet of that
Person, but excluding expenditures to the extent reimbursed or financed from
insurance proceeds paid on account of the loss of or the damage to the assets
being replaced or restored, or from awards of compensation arising from the
taking by condemnation or eminent domain of such assets being replaced.

 

“Capital
Lease”, as applied to any Person, shall mean any lease of any property
(whether real, personal or mixed) by that Person as lessee which, in accordance
with GAAP, is or should be accounted for as a capital lease on the balance
sheet of that Person.

 

“Capital
Transaction” shall mean any consolidation or merger of Maker with another
entity, or the sale of all or substantially all of its assets to another
entity, or any reorganization or reclassification of the Common Stock or other
equity securities of Maker.

 

 

“Cash
Equivalents” shall mean any of the following: (i) full faith and
credit obligations of the United States of America, or fully guaranteed as to
interest and principal by the full faith and credit of the United States of
America, maturing in not more than one year from the date such investment is
made; (ii) time deposits and certificates of deposit, Eurodollar time
deposits, overnight bank deposits and other interest bearing deposits or
accounts (other than securities accounts) or bankers’ acceptances having a
final maturity of not more than one year after the date of issuance thereof of
any commercial bank incorporated under the laws of the United States of America
or any state thereof or the District of Columbia, which bank is a member of the
Federal Reserve System and has a combined capital and surplus of not less than
$500,000,000.00 and with a senior unsecured debt credit rating of at least “A-2”
by Moody’s or “A” by S&P; (iii) commercial paper of companies, banks,
trust companies or national banking associations incorporated or doing business
under the laws of the United States of America or one of the States thereof or
the District of Columbia, in each case having a remaining term until maturity
of not more than two hundred seventy (270) days from the date such investment
is made and rated at least P-1 by Moody’s or at least A-1 by S&P; (iv) repurchase
agreements with any financial institution having combined capital and surplus
of not less than $500,000,000.00 with a term of not more than seven (7) days
for underlying securities of the type referred to in clause (i) above; and
(v) money market funds which invest primarily in the Cash Equivalents set
forth in the preceding clauses (i) - (iv).

 

“Change
of Control” shall mean (i) any Person, Affiliated Group or group (such
term being used as defined in the Securities Exchange Act of 1934, as amended),
other than a Primary Holder (as such term is defined in the Series B
Designation) acquiring ownership or control of in excess of 50% of equity
securities having voting power to vote in the election of the Board of
Directors of Maker either on a fully diluted basis or based solely on the
voting stock then outstanding, (ii) if at any time, individuals who at the
date hereof constituted the Board of Directors of Maker (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the shareholders of Maker, as the case may be, was approved by a
vote of the majority of the directors then still in office who were either
directors at the date hereof or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of Maker then in office, (iii) the direct or indirect
sale, transfer, conveyance or other disposition, in one or a series of related
transactions, of all or substantially all of the properties or assets of Maker
to any Person or (iv) the adoption of a plan relating to the liquidation
or dissolution of Maker.

 

“Compensation”
shall mean all salary and bonuses, but excludes any compensation under any
equity incentive plan.

 

 “Consolidated Subsidiaries” shall mean
all Subsidiaries of a Person which are required or permitted to be consolidated
with such Person for financial reporting purposes in accordance with GAAP.

 

“Control”
shall mean, as to any Person, the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
greater than 50% of the voting securities of such Person or by acting as the
general partner of a limited partnership (the terms “Controlled by” and “under
common Control with” shall have correlative meanings.)

 

 “EBITDA” shall mean for any period, Net
Income for such period plus, without duplication, the aggregate amounts
deducted in determining Net Income during such period, the sum of (a) interest
paid on Indebtedness for such period, (b) income taxes for such period, (c) depreciation
expense for such period and (d) amortization expense for such period, all
as determined in accordance with GAAP as applied in accordance with past
practice.

 

2

 

“ESI
Entities” shall mean each individually and all collectively, Maker, TSE,
Evolving Systems Holdings, Inc., Evolving Systems, Ltd., Evolving Systems
Holdings, Ltd. and all guarantors of the Senior Debt (as defined in the
Subordination Agreement) or the Notes, if any.

 

“Executive
Officer” shall mean any officer of Maker whose compensation is determined
by the Compensation Committee of the Board of Directors of Maker.

 

“Fair
Market Value of Marketable Securities” shall mean, with respect to any
Quarterly Payment Date, (without duplication for any amounts included in
Unrestricted Cash) the fair market value (determined in a commercially
reasonable manner) of all readily marketable securities (as defined in the UCC)
set forth on the balance sheet(s) of the ESI Entities as of the end of the
applicable fiscal quarter.

 

“Financial
Projections” shall mean written financial projections prepared by Maker and
certified by Maker’s chief financial officer, prepared in good faith and based
upon reasonable assumptions and estimates regarding the economic, business,
industry market, legal and regulatory circumstances and conditions relevant to
Maker.

 

“GAAP”
shall mean generally accepted accounting principles set forth in the Opinions
of the Accounting Principles Board of the American Institute of Certified
Public Accountants and in statements of the Financial Accounting Standards
Board; and such principles observed in a current period shall be comparable in
all material respects to those applied in a preceding period.

 

“Guaranty”
shall mean, as to any Person, any direct or indirect obligation of such Person
guaranteeing or intending to guarantee, or otherwise providing credit support,
for any Indebtedness, Capital Lease, dividend or other monetary obligation (“primary
obligation”) of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, by contract, as a general partner or otherwise,
including, without limitation, any obligation of such Person, whether or not
contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, or (c) to purchase property, securities or services from
the primary obligor or other Person, in each case, primarily for the purpose of
assuring the performance of the primary obligor of any such primary obligation
or assuring the owner of any such primary obligation of the repayment of such
primary obligation.  The amount of any
Guaranty shall be deemed to be an amount equal to (x) the stated or
determinable amount of the primary obligation in respect of which such Guaranty
is made (or, if the amount of such primary obligation is not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder)) or (y) the stated
maximum liability under such Guaranty, whichever is less.

 

“Indebtedness”
shall mean (without double counting), at any time and with respect to any
Person, (i) indebtedness of such Person for borrowed money (whether by
loan or the issuance and sale of debt securities) or for the deferred purchase
price of property or services purchased (other than amounts constituting trade
payables arising in the ordinary course of business and payable in accordance
with customary trading terms not in excess of 90 days or, if overdue for more
than 90 days, as to which a dispute exists and adequate reserves in conformity
with GAAP have been established on the books of such Person); (ii) all
indebtedness of such Person evidenced by a note, bond, debenture or similar
instrument (whether or not disbursed in full in the case of a construction
loan); (iii) indebtedness of others which such Person has directly or
indirectly assumed or guaranteed or otherwise provided credit support therefore
(other than for collection or deposit in the ordinary course of business); (iv) indebtedness
of others secured by a Lien on assets of such Person, whether or not such
Person shall have assumed such indebtedness (provided,
that if such Person has not assumed such indebtedness of another
Person then the

 

3

 

amount of indebtedness of such Person pursuant to this clause (iv) for
purposes of this Note shall be equal to the lesser of the amount of the
indebtedness of the other Person or the fair market value of the assets of such
Person which secures such other indebtedness); (v) obligations of such
Person relative to the face amount of letters of credit, acceptance facilities,
or drafts or similar instruments issued or accepted by banks and other
financial institutions for the account of such Person; (vi) that portion
of obligations of such Person under Capital Leases that is properly classified
as a liability on a balance sheet in conformity with GAAP; (vii) all
obligations of such Person under any Interest Rate Protection Agreement; (viii) deferred
payment obligations of such Person resulting from the adjudication or
settlement of any litigation; and (ix) any Guaranty by such Person in
respect of any of the foregoing.

 

“Interest
Rate Protection Agreement” shall mean any interest rate swap agreement,
interest rate cap agreement, synthetic cap, collar or floor or other financial
agreement or arrangement designed to protect a Maker or any of its Subsidiaries
against fluctuations in interest rates or to reduce the effect of any such
fluctuations.

 

“Investment”
shall mean any investment in any Person, whether by means of acquiring or
holding securities, capital contribution, loan, time deposit, guaranty or
otherwise.

 

“Lien”
shall mean any mortgage, pledge, security interest, encumbrance, lien or charge
of any kind whatsoever (including, without limitation, any conditional sale or
other title retention agreement, any agreement to grant a security interest at
a future date, any lease in the nature of security, and the filing of, or
agreement to give, any financing statement under the Uniform Commercial Code of
any jurisdiction).

 

“Material
Adverse Effect” shall mean a (i) a material adverse effect upon the
business, operations, properties, assets or condition (financial or otherwise)
of Maker or (ii) the material impairment of the ability of Maker to
perform its obligations under the Notes or of any of the holders of the Notes
to enforce the obligations of Maker under the Notes.

 

 “Net Income” shall mean for any period,
net income on a consolidated basis for that period determined in accordance
with GAAP applied consistently with past practice.

 

 “Notes” shall mean the Subordinated
Notes dated as of November     , 2005, including this
Note, in the original aggregate principal amount of $              ,
issued by Maker in exchange for those certain Secured Notes referred to as “A
Notes” in the original aggregate principal amount of $11,950,000, as such
Subordinated Notes may be amended, restated, modified or replaced in
substitution by any other note or notes from time to time.

 

“Permitted
Acquisitions” shall mean any acquisition of fifty percent (50%) or more of
the equity interests or all or substantially all of the assets of a third party
so long as (i) such acquisition is Accretive, and approved by Maker’s
board of directors, (ii) following the consummation of the acquisition
Maker has a cash balance of at least $5,000,000, on a consolidated basis, and (iii) Maker
does not incur any Indebtedness in connection with such acquisition.

 

“Person”
shall mean any natural person, corporation, division of a corporation,
partnership, limited liability partnership, limited liability company, trust,
joint venture, association, company, estate, unincorporated organization or
government or any agency or political subdivision thereof.

 

“Pro
Rata Share” shall mean at any time of determination thereof, the proportion
that the outstanding principal amount of this Note bears to the aggregate
outstanding principal amount of all of the Notes.

 

4

 

“Quarterly
Payment Date” shall mean the tenth (10th) business day (as
hereinafter defined) following the earlier of (i) delivery to Senior Agent
of the financial statements and compliance certificates of Maker and the other
ESI Entities for the applicable fiscal quarter as required by the Senior Credit
Agreements and (ii) the due date for delivery under the Senior Credit
Agreements for the financial statements and compliance certificates of Maker
and the other ESI Entities for the applicable fiscal quarter as required by the
Senior Credit Agreements (commencing with the tenth (10th) business
day following the earlier of (i) delivery to Senior Agent of the audited
financial statements and compliance certificates for the fiscal year ending December 31,
2005 as required by the Senior Credit Agreements and (ii) the due date for
delivery under the Senior Credit Agreements of the audited financial statements
and compliance certificates for the fiscal year ended December 31, 2005 as
required by the Senior Credit Agreements). 
For purposes of this definition, “business day” shall mean any day other
than a Saturday, Sunday or other day on which the Federal Reserve or Senior
Agent is authorized or required by law to be closed.

 

“Registrable
Shares” shall have the meaning set forth with respect thereto in the
Investor Rights Agreement dated as of November 1, 2004.

 

“Requesting
Holder” shall mean, on any given date of determination:  (a) any holder holding 40% or more of
the Aggregate Principal Indebtedness at the time of such request and (b) any
group of holders holding 40% or more of the Aggregate Principal Indebtedness at
the time of such request provided that
such holders have appointed a single representative to act on behalf of such
holders with respect to the rights described in Section 7(a) of this
Note and the other Notes.

 

“Requisite
Payees” shall mean, on any given date of determination, holders of the
Notes holding 50.1% or more of the Aggregate Principal Indebtedness.

 

“Revolving
Loan Availability” shall mean, with respect to any Quarterly Payment Date,
the average daily amount of “Availability”(as defined in the Revolving Loan
Credit Agreement) for the last calendar month of the applicable fiscal quarter.

 

“Revolving
Loan Credit Agreement” shall mean the Revolving Loan Credit Agreement,
dated as of the date hereof, among Evolving Systems Holdings, Ltd, as borrower,
Evolving Systems Ltd., as guarantor, Senior Agent, as agent, and CSE Finance, Inc.,
as the initial lender, as amended, amended and restated modified or
supplemented from time to time (subject to any applicable restrictions
contained in the Subordination Agreement).

 

“Series B
Designation” shall mean the Certificate of Designation of Maker’s Series B
Convertible Preferred Stock, as filed with the Secretary of State of the State
of Delaware.

 

“Senior
Credit Agent” shall mean CapitalSource Finance LLC, a Delaware limited
liability company, as agent for the “Lenders” from time to time party to the
Senior Credit Agreements, together with its successors and permitted assigns
pursuant to the terms of the Senior Credit Agreements and the Subordination
Agreement.

 

“Senior
Credit Agreements” shall mean collectively the Term Loan Agreement and the
Revolving Loan Credit Agreement.

 

 “Stock Purchase Agreement” shall mean
the Stock Purchase Agreement, dated as of November 2, 2004, by and among
Maker, TTGL and the parties listed therein.

 

5

 

“Subordination
Agreement” shall mean that certain Subordination Agreement, dated as of the
date hereof, among Maker, the other obligors named therein, the Senior Agent
and the holders of the Notes.

 

“Subsidiary”
shall mean with respect to any Person, any corporation, association, joint
venture, partnership or other business entity (whether now existing or
hereafter organized) of which at least a majority of the voting stock or other
ownership interests having ordinary voting power for the election of directors
(or the equivalent) is, at the time as of which any determination is being
made, owned or controlled by such Person or one or more subsidiaries of such
Person or by such Person and one or more subsidiaries of such Person.

 

“Super
Majority of Payees” shall mean, on any given date of determination, holders
of the Notes holding 60% or more of the Aggregate Principal Indebtedness.

 

“Term
Loan Agreement” shall mean the Credit Agreement, dated as of the date
hereof, among Maker, the other obligors referred to therein and CapitalSource
Finance LLC, as agent and the initial lender, as amended, amended and restated,
modified or supplemented from time to time (subject to any applicable
restrictions contained in the Subordination Agreement).

 

“TTGL”
shall mean Tertio Telecoms Group Ltd., an entity formed and registered in
England and Wales with a company number 4419858.

 

“UCC”
shall mean the Uniform Commercial Code as in effect from time to time in the
State of Delaware.

 

“Unrestricted
Cash” shall mean, with respect to any Quarterly Payment Date, the amount of
unrestricted cash and Cash Equivalents determined in accordance with GAAP and
set forth on the balance sheet(s) of the ESI Entities as of the end of the
applicable fiscal quarter

 

6Exhibit 10.1

 

 TETRA TECH, INC.

 

 

EXECUTIVE COMPENSATION POLICY

 

Approved By:

Compensation Committee:                            11/14/2005

Document Owner:                        Compensation
Committee

 

 

TABLE OF CONTENTS

 

	
  Section

  	
   

  	
   

  	
   

  
	
  1.0

  	
  PURPOSE

  	
   

  
	
  2.0

  	
  PHILOSOPHY

  	
   

  
	
  3.0

  	
  SCOPE

  	
   

  
	
  4.0

  	
  ROLES AND RESPONSIBILITIES

  	
   

  
	
  5.0

  	
  EXECUTIVE COMPENSATION COMPONENTS AND PLAN

  	
   

  
	
  6.0

  	
  PROCESS
  FLOW/SCHEDULE

  	
   

  
	
  7.0

  	
  APPENDIX I - POSITIONS COVERED BY THE EXECUTIVE COMPENSATION POLICY

  	
   

  
	
  8.0

  	
  APPENDIX
  II - EXAMPLES

  	
   

  
	
  9.0

  	
  APPENDIX
  III - APPROVAL FORMS

  	
   

  

 

Tetra Tech Confidential

 

1

 

1.0                               PURPOSE

 

The purpose of this document is to define the executive compensation
policy for Tetra Tech, Inc.

 

2.0                               PHILOSOPHY

 

Tetra Tech’s executive compensation program is designed to:

 

•                  Align
the interests of executive officers with those of the stockholders;

 

•                  Attract,
motivate, reward, and retain top level executives upon whom, in large part, the
success of the Company depends;

 

•                  Be
competitive with compensation programs for companies of similar size and
complexity with whom the Company competes for executive talent, including
direct competitors;

 

•                  Provide
compensation based upon the short-term and long-term performance of both the
individual executive and the Company; and

 

•                  Strengthen
the relationship between pay and performance by emphasizing variable, at-risk
compensation that is dependent upon the successful achievement of specified
corporate and individual goals.

 

3.0                               SCOPE

 

This policy applies to all executive officers of Tetra Tech, Inc. as
well as any other positions recommended by the Chief Executive Officer (CEO) in
consultation with the Chairman and approved by the Board of Directors that have
a particularly significant impact on the overall success of the Company.

 

4.0                               ROLES AND RESPONSIBILITIES

 

Compensation Committee

 

•                  Under
delegated authority from the Board of Directors, develops, administers, and
monitors executive compensation in the long-term interests of the Company and
its stockholders;

 

•                  Evaluates
the performance of the Chairman and the CEO, and establishes the compensation
of the Chairman and the CEO ;

 

•                  Establishes
the compensation of all executive officers of the Company based, in part, on
the CEO’s recommendations; and

 

•                  Determines
that performance goals have been attained before payment.

 

Audit Committee

 

•                  Jointly
with the Compensation Committee determines the individual performance factor for
the CFO position.

 

2

 

Chief Executive Officer

 

•                  Reviews
the performance of all other officers of the Company, and, in consultation with
the Chairman, makes specific recommendations to the Compensation Committee in
regard to their compensation; and

 

•                  Develops
performance targets for all other executive officers and, in consultation with
the Chairman, recommends those performance targets to the Compensation
Committee.

 

Human Resources

 

•                  Acquires
information regarding peer group and other competitor pay practices, and
provides analysis of this information to the CEO, the Chairman, and the
Compensation Committee; and

 

•                  Provides
compensation practice trend data to the CEO, the Chairman, and the Compensation
Committee.

 

Finance and Accounting

 

•                  Provides
Corporate performance data for use in determining the degree to which certain
performance objectives have been met; and

 

•                  Assures
payments have been properly accrued for and reported.

 

5.0                               EXECUTIVE COMPENSATION COMPONENTS AND PLAN

 

The primary components of compensation for
executive officers are base salary, annual performance bonuses, and long-term
incentive compensation.

 

5.1                               BASE SALARY

 

Base salaries for positions in Appendix I are
reviewed on an annual basis to ensure internal equity and external
competitiveness.  Salaries are reviewed
to determine whether the base compensation is within a reasonable range of
executive pay levels at other companies that potentially compete with the
Company for business and executive talent. 
Total compensation is considered during this analysis.  Consideration is given to individual
performance, experience and time in the position, initiative, contribution to
overall corporate performance, and salaries paid to other executives in the
Company.  The review and determination
occur as shown in Section 6.0.

 

5.2                               ANNUAL PERFORMANCE BONUSES

 

This component is intended to promote the
interests of the Company by providing both an incentive and a financial reward
for those managerial and other key employees who contribute most to the
operating results and growth of the Company. 
Each year the Company identifies a target amount of incentive
compensation for each executive officer and the other key positions listed in
Appendix I.  This target is expressed as
a percentage of base salary.

 

Bonuses are paid based upon meeting
pre-determined performance criteria. 
These criteria fall into two categories: (1) overall corporate
performance, designated the Corporate Performance Factor (CPF), based on
assessment of how the overall corporation did in achieving its key objectives
and (2) individual contribution, designated the Individual Factor (IF), based
on

 

3

 

individual performance.  The CPF determined by the Compensation
Committee shall have a range of 0 to 1.4 with a target of 1.0 based on
achievement of key objectives. The CPF for group executives and group
controllers will be determined by the CEO based on the contribution of the
specific group to the Corporation. The IF shall have a range of 0 to 1.2 with a
target of 1.0 for expected contribution level. 
The IF will be recommended by the CEO and approved by the Compensation Committee
with the exception of the Chairman, Vice Chairman, CEO, and CFO positions. The
IF for the Chairman/Vice Chairman will be determined by the Compensation
Committee. The IF for the CEO will be recommended by the Chairman and determined
by the Compensation Committee. The IF for the CFO will be recommended by the
CEO and determined jointly by the Audit Committee and Compensation Committee,
giving strong consideration to the Audit Committee’s assessment of the strength
of the Company’s internal financial controls and the accuracy and
appropriateness of its financial reporting.

 

Target bonus amounts as a percentage of base
salary are as follows:

 

TARGET
BONUS AMOUNTS

 

	
  POSITION

  	
   

  	
  PERCENTAGE (%)

  	
   

  
	
  Chairman/Vice Chairman

  	
   

  	
  100

  	
   

  
	
  Chief Executive Officer

  	
   

  	
  75

  	
   

  
	
  Chief Operating Officer

  	
   

  	
  55

  	
   

  
	
  President

  	
   

  	
  55

  	
   

  
	
  Chief Financial Officer

  	
   

  	
  55

  	
   

  
	
  Other Executive Officers

  	
   

  	
  40

  	
   

  
	
  Other Key Positions

  	
   

  	
  30-40

  	
   

  

 

Each Officer is eligible to receive an annual
bonus in the range of 0% to 168% of target, i.e, CPF (1.4) x IF(1.2) = 1.68
(168%) x target)

 

MINIMUM/MAXIMUM
OF BASE

 

	
  POSITION

  	
   

  	
  TARGET PERCENTAGE (%)

  	
   

  	
  MINIMUM (%)

  	
   

  	
  MAXIMUM (%)

  	
   

  
	
  Chairman/Vice Chairman

  	
   

  	
  100

  	
   

  	
  0

  	
   

  	
  168

  	
   

  
	
  Chief Executive Officer

  	
   

  	
  75

  	
   

  	
  0

  	
   

  	
  126

  	
   

  
	
  Chief Operating Officer

  	
   

  	
  55

  	
   

  	
  0

  	
   

  	
  92.4

  	
   

  
	
  President

  	
   

  	
  55

  	
   

  	
  0

  	
   

  	
  92.4

  	
   

  
	
  Chief Financial Officer

  	
   

  	
  55

  	
   

  	
  0

  	
   

  	
  92.4

  	
   

  
	
  Other Executive Officers

  	
   

  	
  40

  	
   

  	
  0

  	
   

  	
  67.2

  	
   

  
	
  Other Key Positions

  	
   

  	
  30-40

  	
   

  	
  0

  	
   

  	
  50.4-67.2

  	
   

  

 

The Board of Directors reserves the right to “zero”
the CPF if results are significantly below expected targets or a manageable
event negatively and severely impacts stockholder value.  The minimum performance threshold is .6;
achievement of less than 60% in either the CPF or IF will result in the
elimination of the bonus paid. Notwithstanding the above, the Compensation

 

4

 

Committee, in consultation with the Chairman
and the CEO, reserve the discretion to adjust specific performance bonus
amounts when deemed to be in the interests of the shareholders.

 

Bonus payments are made by December 15 of
each year, based upon performance in the recently concluded fiscal year.

 

5.3                               LONG-TERM INCENTIVE COMPENSATION

 

Long-term incentive awards are designed to
encourage recipients to achieve long term sustained growth of stockholder
value.  The long-term incentive
compensation program encourages executives to maintain a long-term financial
perspective by linking a substantial portion of their compensation to
stockholder returns and the Company’s long-term financial success.

 

Long-term incentives are generally provided
in the form of equity compensation, such as stock options and/or other equity
related programs.  However, the Board of
Directors reserves the right to utilize deferred cash incentives if beneficial
to the interests of the Company and its stockholders. Long-term incentive
awards may have certain restrictions, such as mandatory vesting periods which
encourage participating executives to continue in the Company’s employ and
thereby act as a retention incentive.

 

Any equity compensation shall be in
accordance with the provisions and limitations of the Equity Incentive Plan
periodically adopted by the Board of Directors and approved by stockholder
vote.  The schedule for distribution of
long term-incentives is shown in Section 6.

 

In addition to the above, the following
guidelines will apply to the long-term incentive plan:

 

•                  A
maximum of 2% of outstanding shares of stock and/or options will be distributed
in any one year period. The Board of Directors retains the discretion to
increase this amount due to special circumstances, such as an acquisition.

 

•                  A
reserve of 10% minimum of the shares available for distribution each year will
be held outside the normal distribution for special needs (i.e., hiring,
retention, etc.) that occur during the year.

 

•                  All
restricted stock grants shall be approved by the Compensation Committee of the
Board of Directors

 

•                  No
more than 0.5% of the outstanding shares of stock and/or options can be
distributed to Executive Officers in one year.

 

•                  The
plan shall target 8-15% of the non-officer population for inclusion in the long
term incentive program.

 

•                  Minimum
grants to non-officers will be 500 shares and maximum grants to non-officers
will be 10,000 shares.

 

5

 

6.0                               PROCESS FLOW/SCHEDULE

 

 

6

 

APPENDIX
I – POSITIONS COVERED BY THE EXECUTIVE COMPENSATION POLICY

 

Consistent with Section 3.0 of the Executive
Compensation Policy, this policy applies to all executive officers of Tetra
Tech, Inc. as well as any other positions recommended by the CEO and approved
by the Board of Directors that have a particularly significant impact on the
overall success of the Company.  Each of
these positions is listed below:

 

Officer Positions:

Chairman

Vice Chairman

Chief Executive Officer

Executive Vice President/Chief Operating
Officer

President

Executive Vice President/Chief Financial
Officer

Senior Vice President Corporate
Administration

Vice President, General Counsel, Secretary

Vice President, Finance and Enterprise
Systems

Vice President, Corporate Controller

Vice President, Investor Relations and
Corporate Development

 

Other Key Positions:

Senior Vice President Tt and President
Remediation and Construction Group

Controller- Remediation and Construction
Group

Senior Vice President Tt and President Environmental
Engineering and Consulting Group

Controller- Environmental Engineering and
Consulting Group

Senior Vice President Tt and President
Systems Support and Security Group

Controller- Systems Support and Security
Group

Senior Vice President Tt and President Civil
Infrastructure Group

Controller- Civil Infrastructure Group

Senior Vice President Tt and President
Government Environmental Services Group

Controller- Government Environmental Services
Group

Vice President, Human Resources

Vice President, Information Services

Vice President, Contracts

Vice President, Marketing and Business
Development

Vice President, Tax and Treasury

 

7

 

APPENDIX II
– EXAMPLES

 

Example 1

 

Narrative:                                            The Company
significantly exceeds each of its key objectives and the CEO significantly
exceeds all individual contribution expectations, maximizing the bonus payment.

 

	
  Position:

  	
  CEO

  	
  Base Salary: $500,000

  	
  CPF: 1.4

  	
  IF: 1.2

  

 

Bonus to be paid:  $500,000 X 0.75 X 1.4 X 1.2 = $630,000

 

Example 2

 

Narrative:                                            The Company
achieves all and exceeds some of its key objectives, and the COO meets all
individual contribution expectations.

 

	
  Position:

  	
  COO

  	
  Base Salary: $360,000

  	
  CPF: 1.2

  	
  IF: 1.0

  

 

Bonus to be paid:  $360,000 X 0.55 X 1.2 X 1.0 = $237,600

 

Example 3

 

Narrative:                                            The Company
meets its key objectives, and the General Counsel meets individual contribution
expectations.

 

	
  Position:

  	
  General Counsel

  	
  Base Salary: $250,000

  	
  CPF: 1.0

  	
  IF: 1.0

  

 

Bonus to be paid: $250,000 X 0.40 X 1.0 X 1.0
= $100,000

 

Example 4

 

Narrative:                                            The Company
meets 80% of its key objectives, and the Corporate Controller significantly
exceeds individual contribution expectations.

 

	
  Position:

  	
  Corporate Controller

  	
  Base Salary: $205,000

  	
  CPF: 0.8

  	
  IF: 1.2

  

 

Bonus to be paid:  $205,000 X 0.40 X 0.8 X 1.2 = $78,820

 

Example 5

 

Narrative:                                            A Group
President leading a company significantly misses key objectives while the
overall corporation meets its goals.

 

	
  Position:

  	
  Group President

  	
  Base Salary: $350,000

  	
  CPF 0.5

  	
  IF: 1.0

  
	
   

  	
   

  	
  (below
  threshold)

  	
   

  

 

Bonus to be paid:   $350,000 X 0.4 X 1.0 X 0.0 = 0

 

8

 

APPENDIX
III – APPROVAL FORMS

 

To:                              Compensation Committee

 

In accordance with the terms and conditions
of the Executive Compensation Policy, the following executives have earned
bonus payments in the amounts indicated. 

 

	
  NAME

  	
   

  	
  POSITION

  	
   

  	
  BONUS TO BE PAID ($)*

  
	
   

  	
   

  	
  Chairman**

  	
   

  	
   

  
	
   

  	
   

  	
  Vice
  Chairman**

  	
   

  	
   

  
	
   

  	
   

  	
  Chief
  Executive Officer**

  	
   

  	
   

  
	
   

  	
   

  	
  Executive
  Vice President- Chief Operating Officer

  	
   

  	
   

  
	
   

  	
   

  	
  President

  	
   

  	
   

  
	
   

  	
   

  	
  Executive
  Vice President- Chief Financial Officer

  	
   

  	
   

  
	
   

  	
   

  	
  Senior
  Vice President Corporate Administration

  	
   

  	
   

  
	
   

  	
   

  	
  Vice
  President, General Counsel, Secretary

  	
   

  	
   

  
	
   

  	
   

  	
  Vice
  President, Finance and Enterprise Systems

  	
   

  	
   

  
	
   

  	
   

  	
  Vice
  President, Corporate Controller

  	
   

  	
   

  
	
   

  	
   

  	
  Vice
  President, Investor Relations and Corporate Development

  	
   

  	
   

  
	
   

  	
   

  	
  Vice
  President, Human Resources

  	
   

  	
   

  
	
   

  	
   

  	
  Vice
  President, Information Services

  	
   

  	
   

  
	
   

  	
   

  	
  Vice
  President, Contracts

  	
   

  	
   

  
	
   

  	
   

  	
  Vice
  President, Marketing and Business Development

  	
   

  	
   

  
	
   

  	
   

  	
  Vice
  President, Tax and Treasury

  	
   

  	
   

  
	
   

  	
   

  	
  Senior
  Vice President Tt and President Remediation and Construction Group

  	
   

  	
   

  
	
   

  	
   

  	
  Controller-
  Remediation and Construction Group

  	
   

  	
   

  
	
   

  	
   

  	
  Senior
  Vice President Tt and President Environmental Engineering and Consulting
  Group

  	
   

  	
   

  
	
   

  	
   

  	
  Controller-
  Environmental Engineering and Consulting Group

  	
   

  	
   

  
	
   

  	
   

  	
  Senior
  Vice President Tt and President Systems Support and Security Group

  	
   

  	
   

  
	
   

  	
   

  	
  Controller-
  Systems Support and Security Group

  	
   

  	
   

  
	
   

  	
   

  	
  Senior
  Vice President Tt and President Civil Infrastructure Group

  	
   

  	
   

  
	
   

  	
   

  	
  Controller-
  Civil Infrastructure Group

  	
   

  	
   

  
	
   

  	
   

  	
  Senior
  Vice President Tt and President Government Environmental Services Group

  	
   

  	
   

  
	
   

  	
   

  	
  Controller-
  Government Environmental Services Group

  	
   

  	
   

  

 

	
  Recommended:

  	
  Chief Executive Officer

  	
   

  
	
   

  
	
  Approved:

  	
  Compensation Committee Chairperson

  	
   

  
				

 

*Worksheet attached

**Bonus amount to be determined by
Compensation Committee

 

9

 

PERFORMANCE BONUS WORKSHEET

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  PERFORMANCE FACTOR

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  TARGET

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  AGGREGATE

  	
   

  	
  BONUS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  BASE

  	
   

  	
  BONUS

  	
   

  	
  CORPORATE

  	
   

  	
  INDIVIDUAL

  	
   

  	
  PERFORMANCE

  	
   

  	
  TO BE

  	
   

  
	
  POSITION

  	
   

  	
  NAME

  	
   

  	
  SALARY

  	
   

  	
  %

  	
   

  	
  $

  	
   

  	
  (0 - 1.4)

  	
   

  	
  (0-1.2)

  	
   

  	
  FACTOR

  	
   

  	
  PAID

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
  Vice
  President, Corporate Human Resources

  	
   

  	
   

  
	
   

  
	
  Chief
  Executive Officer

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