SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
October 4, 2019
Evolving Systems, Inc.
(Exact name of registrant as specified in its charter)
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Delaware |
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001-34261 |
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84-1010843 |
9800 Pyramid Court, Suite 400, Englewood, Colorado 80112
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (303) 802-1000
Not applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which |
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Common Stock, par value $0.001 per share |
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EVOL |
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Nasdaq Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On October 4, 2019, Evolving Systems, Inc. (“Evolving Systems”) entered into the Sixth Amendment (“Sixth Amendment”) to the Loan and Security Agreement with East West Bank (“Credit Facility”). The purpose of the Sixth Amendment is to waive certain events of non-compliance with respect to covenants not achieved in prior periods and to amend future covenant requirements.
· Current financial covenants to be replaced by:
· (1) minimum consolidated cash of no less than total bank debt outstanding; and,
· (2) a minimum trailing 3-month fixed consolidated EBITDA amount.
The Sixth Amendment also required Evolving Systems to make an advance payment of principal of $333,333.33. In addition, the Sixth Amendment added any default under the Loan Facility discussed below as an Event of Default under the Credit Facility. Evolving Systems has transacted all loan payments as originally scheduled and expects to be in compliance with the new covenants. The remaining terms and conditions of the Credit Facility and payment schedule remain unchanged.
For information relating to the Credit Facility, previously referred to as the Revolving Facility, please see Evolving Systems’ Current Reports on Form 8-K filed with the SEC on October 25, 2012, November 6, 2014, September 30, 2015, November 10, 2015, and March 3, 2016.
Text of the Agreements. The full text of the Sixth Amendment to the Credit Facility is attached as Exhibit 10.1 to this Current Report on Form 8-K. The foregoing descriptions are qualified in their entirety by reference to such exhibit.
On October 4, 2019, Evolving Systems also entered into the First Amendment (“First Amendment”) to the Term Loan Facility Agreement with East West Bank (“Loan Facility”). The purpose of the First Amendment is to waive certain events of non-compliance with respect to covenants not achieved in prior periods and to amend future covenant requirements.
· Current financial covenants to be replaced by:
· (1) minimum consolidated cash of no less than total bank debt outstanding; and,
· (2) a minimum trailing 3-month fixed consolidated EBITDA amount.
The First Amendment also required Evolving Systems to make an advance payment of principal of $666,666.66. Evolving Systems has transacted all loan payments as originally scheduled and expects to be in compliance with the new covenants. The remaining terms and conditions of the Loan Facility and payment schedule remain unchanged.
For information relating to the Loan Facility, please see Evolving Systems’ Current Report on Form 8-K filed with the SEC on August 22, 2017.
Text of the Agreements. The full text of the First Amendment to the Loan Facility is attached as Exhibit 10.2 to this Current Report on Form 8-K. The foregoing descriptions are qualified in their entirety by reference to such exhibit.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
d) Exhibits. The following exhibits are filed with this report.
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Exhibit No. |
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Description |
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10.1 |
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Sixth Amendment to Loan and Security Agreement between Evolving Systems, Inc. and East West Bank. |
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10.2 |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: October 9, 2019
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Evolving Systems, Inc. | |
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By: |
/s/ MARK P. SZYNKOWSKI |
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Mark P. Szynkowski |
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Senior Vice President Finance |
SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
This Sixth Amendment to Loan and Security Agreement (this “Amendment”) is entered into as of October 4, 2019, by and between EAST WEST BANK (“Bank”) and EVOLVING SYSTEMS, INC., a Delaware corporation (“Borrower”).
RECITALS
Borrower and Bank are parties to that certain Loan and Security Agreement dated as of October 22, 2012 (as amended from time to time, including, without limitation, by that certain Amendment to Loan and Security Agreement dated as of October 22, 2014, that certain Second Amendment to Loan and Security Agreement dated as of April 8, 2015, that certain Third Amendment to Loan and Security Agreement dated as of September 28, 2015, that certain Fourth Amendment to Loan and Security Agreement dated as of November 9, 2015, that certain Fifth Amendment to Loan and Security Agreement dated as of February 29, 2016, and that certain Clarification Agreement to Fifth Amendment to Loan and Security Agreement dated as of February 29, 2016, collectively, the “Agreement”). The parties desire to amend the Agreement in accordance with the terms of this Amendment.
Additionally, Borrower is currently in default (i) under Section 6.8(b) of the Agreement (as in effect prior to the date hereof) due to Borrower’s failure to maintain the minimum required leverage ratio for the measuring period ended March 31, 2019, and June 30, 2019, and (ii) under Section 6.8(c) of the Agreement (as in effect prior to the date hereof) due to Borrower’s failure to maintain the minimum required fixed charge coverage ratio for the measuring periods ended December 31, 2018, March 31, 2019, and June 30, 2019 (collectively, the “Existing Defaults”).
NOW, THEREFORE, the parties agree as follows:
1. Section 6.8 of the Agreement hereby is amended and restated in its entirety to read as follows:
“6.8 Financial Covenants.
(a) Minimum EBITDA. Borrower shall maintain at all times, tested as of the last day of each month, EBITDA, measured on a trailing three (3) month basis, of at least the following amounts for the respective measuring periods set forth below:
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Measuring Period Ending |
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Minimum EBITDA |
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July 31, 2019 |
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$ |
0 |
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August 31, 2019 |
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$ |
0 |
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September 30, 2019 |
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$ |
0 |
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October 31, 2019 |
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$ |
0 |
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November 30, 2019 |
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$ |
150,000 |
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December 31, 2019 |
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$ |
350,000 |
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January 31, 2020 |
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$ |
350,000 |
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February 29, 2020 |
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$ |
400,000 |
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March 31, 2020 |
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$ |
500,000 |
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April 30, 2020 |
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$ |
500,000 |
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May 31, 2020 |
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$ |
550,000 |
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June 30, 2020, and at all times thereafter |
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$ |
600,000 |
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(b) Minimum Cash. Borrower shall maintain at all times, tested as of the last day of each month, unrestricted consolidated cash in demand deposit and/or money market accounts, in an amount greater than the aggregate outstanding amount of Indebtedness by Borrower and its Subsidiaries to Bank at any time.”
2. New Section 8.10 hereby is added to the Agreement to read as follows:
“8.10 Cross-Default. If there is a default in any term, provision, condition, covenant, or agreement contained in that certain Facility Agreement by and among Evolving Systems, Inc., as Parent, Evolving Systems Holdings Limited, as Company and Original Borrower, East West Bank, as Lender, and Evolving Systems, Inc., Evolving Systems BLS Limited, Evolving Systems Holdings Limited, and Evolving Systems Limited, as Original Guarantors, dated as of August 16, 2017 (the “UK Facility Agreement”), or any other agreement entered into in connection with the UK Facility Agreement.”
3. Section 12.8 of the Agreement hereby is amended and restated in its entirety to read as follows:
“12.8 Counterparts. This Agreement and any amendments, renewals, extensions, modifications, or refinancings thereof may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing this Agreement (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original hereof.”
4. Default Waiver. Borrower hereby acknowledges and Bank hereby waives the Existing Defaults (the “Default Waiver”).
5. Waiver of Notice and Cure. Borrower acknowledges that an Event of Default has occurred under the Agreement that, but for the Default Waiver, would have entitled Bank to exercise all the remedies available to Bank under the Agreement and applicable law. Borrower waives all notices of default and rights to cure that are otherwise provided in the Agreement or applicable law, including, but not limited to, rights to notice and redemption under California Uniform Commercial Code sections 9611, 9620 and 9623. Borrower further waives any claim that a sale or other disposition by Bank of the Collateral is not commercially reasonable because Bank disclaims any warranties with respect to such sale or other disposition, including, without limitation, disclaimers of warranties relating to title, possession, quiet enjoyment, or the like.
6. Release.
6.1 Borrower acknowledges that Bank would not enter into this Amendment, including the Default Waiver, without Borrower’s assurance hereunder. Except for the obligations arising hereafter under the Agreement, Borrower hereby absolutely discharges and releases Bank, any person or entity that has obtained any interest from Bank under the Agreement and each of Bank’s and such entity’s former and present partners, stockholders, officers, directors, employees, successors, assignees, agents and attorneys from any known or unknown claims which Borrower now has against Bank of any nature, including any claims that Borrower, its successors, counsel, and advisors may in the future discover they would have now had if they had known facts not now known to them, whether founded in contract, in tort or pursuant to any other theory of liability, including but not limited to any claims arising out of or related to the Agreement or the transactions contemplated thereby.
6.2 Borrower waives the provisions of California Civil Code Section 1542, which states:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.
6.3 The provisions, waivers and releases set forth in this section are binding upon Borrower and Borrower’s shareholders, agents, employees, assigns and successors in interest. The provisions, waivers and releases of this section shall inure to the benefit of Bank and its agents, employees, officers, directors, assigns and successors in interest.
6.4 Borrower warrants and represents that Borrower is the sole and lawful owner of all right, title and interest in and to all of the claims released hereby and Borrower has not heretofore voluntarily, by operation of law or otherwise, assigned or transferred or purported to assign or transfer to any person any such claim or any portion thereof. Borrower shall indemnify and hold harmless Bank from and against any claim, demand, damage, debt, liability (including payment of attorneys’ fees and costs actually incurred whether or not litigation is commenced) based on or arising out of any assignment or transfer.
6.5 The provisions of this section shall survive payment in full of the Obligations, full performance of all the terms of this Amendment and the Agreement, and/or Bank’s actions to exercise any remedy available under the Agreement or otherwise.
7. No course of dealing on the part of Bank or its officers, nor any failure or delay in the exercise of any right by Bank, shall operate as a waiver thereof, and any single or partial exercise of any such right shall not preclude any later exercise of any such right. Bank’s failure at any time to require strict performance by Borrower of any provision shall not affect any right of Bank thereafter to demand strict compliance and performance. Any suspension or waiver of a right must be in writing signed by an officer of Bank.
8. Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement. The Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all respects. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Agreement, as in effect prior to the date hereof.
9. Borrower represents and warrants that the Representations and Warranties contained in the Agreement are true and correct as of the date of this Amendment, and that no Event of Default other than the Existing Defaults has occurred and is continuing.
10. As a condition to the effectiveness of this Amendment, Bank shall have received, in form and substance satisfactory to Bank, the following:
(a) this Amendment, duly executed by Borrower;
(b) an updated Corporate Borrowing Certificate with respect to incumbency and resolutions authorizing the execution and delivery of this Amendment, substantially in the form attached hereto;
(c) a default waiver and amendment to the UK Facility Agreement duly executed by the parties thereto;
(d) Borrower’s repayment of principal due under the Term Loan in an amount equal to Three Hundred Thirty-Three Thousand Three Hundred Thirty-Three Dollars and Thirty-Three Cents ($333,333.33), which may be debited from any of Borrower’s accounts at Bank;
(e) all reasonable Bank Expenses incurred through the date of this Amendment, which may be debited from any of Borrower’s accounts at Bank; and
(f) such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate.
11. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.
[Balance of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.
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EVOLVING SYSTEMS, INC. | |
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By: |
/s/ MARK P. SZYNKOWSKI |
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Name: |
Mark P. Szynkowski |
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Title: |
Senior Vice President, Finance |
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EAST WEST BANK | |
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By: |
/s/ CHRIS HETTERLY |
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Name: |
Chris Hetterly |
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Title: |
Managing Director |
[Signature Page to Sixth Amendment to Loan and Security Agreement]
[EAST WEST BANK LETTERHEAD]
To: The Directors of
Evolving Systems, Inc. (incorporated in Delaware with registration number 02580274)
Evolving Systems Holdings Limited (company registration number 05272751)
Evolving Systems BLS Limited (company registration number 10723209)
Evolving Systems Limited (company registration number 02325854)
Lumata UK Limited (company registration number 03962393)
Date: October 4, 2019
Dear Sirs/Madams
EVOLVING SYSTEMS HOLDINGS LIMITED AND OTHERS - AMENDMENT AND WAIVER LETTER
1. Background
(a) We refer to a facilities agreement dated 16 August 2017 and made between (1) Evolving Systems, Inc. as Parent, (2) Evolving Systems Holdings Limited as Company and Original Borrower, (3) the companies listed in schedule 1 to it as Original Borrowers, (4) the companies listed in schedule 1 to it as Original Guarantors, and (5) East West Bank as Lender (the “Facilities Agreement”).
(b) This Letter is supplemental to and amends the Facilities Agreement.
(c) The Obligors have requested that the Lender agree certain amendments to and waivers in respect of the Facilities Agreement. The Lender has consented to the amendments to and waivers in respect of the Facilities Agreement contemplated by this Letter.
2. Definitions and Interpretation
2.1 Definitions
In this Letter terms defined in, or construed for the purposes of, the Facilities Agreement have the same meanings when used in this Letter (unless the same are otherwise defined in this Letter):
(a) “Amended Facilities Agreement” means the Facilities Agreement as amended pursuant to paragraph 5.1 (Amendments) of this Letter;
(b) “Documents” means this Letter and each other agreement referred to in paragraph 1 of schedule 1 (Conditions precedent); and
(c) “Effective Date” means the date on which the Lender gives written notice to the Parent that it has received each of the documents and other evidence listed in schedule 1 (Conditions precedent) in a form and substance satisfactory to the Lender.
2.2 Paragraphs
(a) In this Letter, any reference to a “paragraph” or “schedule” is, unless the context otherwise requires, a reference to a paragraph or schedule of this Letter.
(b) Paragraph and schedule headings are for ease of reference only.
2.3 Continuing obligations
Subject to the provisions of this Letter:
(a) the Facilities Agreement and all the other Finance Documents shall remain in full force and effect;
(b) as from the Effective Date, the Facilities Agreement shall be read and construed as one document with this Letter; and
(c) nothing in this Letter shall constitute or be construed as a waiver (save as specifically and expressly waived under paragraphs 3 (Formal waiver) and 4 (Grant of waiver) of this Letter) or release of any right or remedy of the Lender under the Finance Documents, nor otherwise prejudice any right or remedy of the Lender under the Facilities Agreement or any other Finance Document.
3. Formal waiver
The Parent has informed the Lender that as at the date of this Letter:
(a) the Parent is in breach of clause 20.2 (Financial covenants) of the Facilities Agreement by:
i. exceeding the Maximum Leverage Ratio for the measuring periods ended 31 March 2019 and 30 June 2019, as set out in clause 20.2(b) (Financial condition); and
ii. failing to maintain the minimum ratio of Fixed Charge Coverage for the measuring periods ended 31 December 2018, 31 March 2019 and 30 June 2019, as set out in clause 20.2(c) (Financial condition);
(b) the Parent’s breach of the financial covenants has resulted in a breach of clause 22.5.2 (Cross default); and
(c) the Company is in breach of clause 22.7 (Insolvency proceedings) of the Facilities Agreement by having a winding up petition presented against it on 4 February 2019 (case number CR-2019-000866) by Charles Russell Speechlys LLP,
(together the “Breaches”).
The Breaches represent breaches of the specified provisions of the Facilities Agreement and consequently certain Events of Default have occurred and are continuing.
The Parent has requested that the Lender waive the Events of Default which are continuing as a result of the Breaches.
4. Grant of waiver
The Lender agrees to formally waive the Events of Default which are continuing as a result of the Breaches.
Any waiver granted in accordance with this Letter shall apply only to the matters specifically referred to in this Letter and is given in reliance upon any information supplied to the Lender by the Parent being true, complete and accurate. Such consent shall be without prejudice to any rights which the Lender may now or hereafter have in relation to any other circumstances or matters other than as specifically referred to in this Letter (and whether subsisting at the date hereof or otherwise) or in relation to any such information being other than true, complete and accurate, which rights shall remain in full force and effect.
Any waiver granted in accordance with this Letter does not constitute an amendment, deletion or addition to the provisions of the Facilities Agreement, and it shall not operate as a waiver in respect of any other right or remedy.
5. Amendments and Further Assurance
5.1 Amendments
With effect from the Effective Date, the Facilities Agreement shall be amended in accordance with schedule 2 (Amendments) to this Letter.
5.2 Further assurance
Each Obligor shall (and the Parent shall procure that each Obligor shall), at the request of the Lender and at its own expense, do all such acts and things necessary or desirable to give effect to the amendments effected or to be effected pursuant to this Letter.
6. Lapse
(a) If the Effective Date does not occur on or before the date which falls 30 days after the date of this Letter, this Letter shall, subject to paragraph 6(b), terminate and cease to be of any effect.
(b) Paragraphs 2.3, 8 (Guarantee and Security Confirmations) and 10 (Fees, Costs and Expenses) shall continue in full force and effect notwithstanding the termination of this Letter pursuant to paragraph 6(a).
7. Representations and Reliance
7.1 Representations
(a) Each Obligor represents and warrants that:
(i) the board resolutions referred to in paragraph 1 of schedule 1 (Conditions precedent) were duly and properly passed after compliance with all appropriate formalities and remain in full force and effect;
(ii) it is authorised to execute this Letter and any other Documents to which it is a party; and
(iii) it is authorised to make the representations and warranties as provided in paragraph 5.1(a)(i) to 5.1(a)(ii).
(b) Subject to paragraph 4 of this Letter, each Obligor makes the Repeating Representations (as defined in the Amended Facilities Agreement) and the representations set out in paragraph 5.1(a) on the date of this Letter (whether or not the Effective Date shall have occurred by such date) and on the Effective Date, by reference to the facts and circumstances existing at such dates.
7.2 Reliance
Each Obligor acknowledges that the Lender has entered into this Letter in full reliance on the representations and warranties made by it in the terms stated in this paragraph 7.
8. Guarantee and Security Confirmations
Each Obligor reaffirms that (i) the guarantee and indemnity contained in clause 17 (Guarantee and indemnity) of the Facilities Agreement and (ii) the Security constituted by the Transaction Security Documents shall:
(a) continue in full force and effect and extend to, and in the case of the Security shall continue to secure, the obligations of the Obligors under the Facilities Agreement and the other Finance Documents, as amended from time to time including as varied, amended, supplemented or extended by this Letter, notwithstanding any term or provision of this Letter;
(b) not be released, reduced or impaired by (i) the execution, delivery and performance of this Letter or any other document or agreement entered into pursuant to or contemplated by this Letter; or (ii) any other Obligor not being bound by this Letter for any reason or by any Transaction Security provided to the Lender by any Obligor being avoided or released or not being effective Security for the variation in the liabilities of the Obligors or any of them effected by this Letter or such Transaction Security being limited or restricted in any way; and
(c) continue to secure the payment of liabilities and obligations of the Obligors under the Finance Documents and that the definition of “Finance Documents” in the Facilities Agreement extends to any amendment, supplementation, extension, novation, replacement, restatement and/or variation of any of them (however fundamental) and accordingly that such guarantee and indemnity, and any Transaction Security granted by it, is intended to apply to and secure any variation or increase in the liabilities or obligations of the Obligors at any time as a result (direct or indirect) of the execution, delivery or performance of this Letter or the Facilities Agreement as amended by this Letter.
9. Subordination agreement confirmation
Each Obligor as Intra-Group Creditor and Obligor under and as defined in the Subordination Agreement reaffirms that its and their obligations under the Subordination Agreement remain valid, legal and binding notwithstanding the amendments to the Facilities Agreement effected by this Letter.
10. Fees, Costs and Expenses
The Parent shall within three Business Days of demand pay the Finance Parties the amount of all costs and expenses (including legal fees) reasonably incurred by any of them in connection with the negotiation, preparation, printing and execution of this Letter and any other documents referred to in this Letter.
11. Miscellaneous
11.1 Counterparts
This Letter may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Letter.
11.2 Third party rights
(a) Unless expressly provided to the contrary in a Finance Document, a person (other than a Finance Party) who is not a party to this Letter has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the benefit of any term of this Letter.
(b) The consent of any person who is not a party to this Letter is not required to rescind or vary this Letter at any time.
11.3 Finance Document
The Lender and the Parent agree that this Letter is a Finance Document.
11.4 Governing law
This Letter and any non-contractual obligations arising out of or in connection with it shall be governed by English law.
Please confirm your agreement to the above by signing and returning the enclosed copy of this Letter.
Yours faithfully
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/s/ CHRIS HETTERLY |
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For and on behalf of |
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EAST WEST BANK as Lender |
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SCHEDULE 1: CONDITIONS PRECEDENT
1. OBLIGORS
A copy of a resolution of the board of directors of each Obligor:
(a) approving the terms of, and the transactions contemplated by, this Letter and resolving that it execute this Letter;
(b) authorising a specified person or persons to execute this Letter on its behalf; and
(c) authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices to be signed and/or despatched by it under or in connection with this Letter.
2. FINANCE DOCUMENTS
This Letter duly executed by the Parent and each of the other Obligors.
3. OTHER DOCUMENTS AND EVIDENCE
(a) Evidence that the fees, costs and expenses referred to in paragraph 10 (Fees, Costs and Expenses) have been paid.
(b) A copy of any other authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable in connection with the entry into and performance of the transactions contemplated by this Letter or for the validity and enforceability of this Letter.
(c) Evidence that the sum of $666,666.66 has been paid to the Lender in repayment of principal due under the Facilities Agreement.
SCHEDULE 2: AMENDMENTS
1. AMENDMENTS
The Facilities Agreement will be amended as follows:
(a) clause 19.2 shall be deleted and replaced with the following:
The Company and the Parent shall supply to the Lender:
(a) as soon as they are available, but in any event within 180 days after the end of each of its Financial Years, its audited consolidated and consolidating financial statements for the Financial Year; and
(b) as soon as they are available, but in any event within 270 days after the end of each of its Financial Years, its audited financial statements (consolidated if appropriate) of each Obligor for that Financial Year;
in each case, audited by the Company’s Auditors; and
(c) as soon as they are available, but in any event within 30 days after the end of each Month, the Parent’s financial statements on a consolidated and consolidating basis for that Month (to include cumulative management accounts for the Financial Year to date) in form and substance satisfactory to the Lender.
(b) clause 20.2(a) shall be deleted and replaced with the following:
Minimum Cash: the Company shall, together with the Parent, maintain at all times, tested as of the last day of each month, unrestricted consolidated cash in demand deposit and/or money market accounts, in an amount greater than the aggregate amount outstanding by the Obligors, the Parent, or any of their respective Subsidiaries, without duplication, to the Lender at any time.
(c) clause 20.2(b) shall be deleted and replaced with the following:
Minimum EBITDA: EBITDA, measured on a trailing three (3) month basis, tested as of the last day of each Month, shall be at least the following amounts for the respective measuring periods set forth below:
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Measuring period ending |
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Minimum EBITDA |
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31 July 2019 |
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$ |
0 |
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31 August 2019 |
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$ |
0 |
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30 September 2019 |
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$ |
0 |
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31 October 2019 |
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$ |
0 |
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30 November 2019 |
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$ |
150,000 |
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31 December 2019 |
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$ |
350,000 |
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31 January 2020 |
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$ |
350,000 |
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29 February 2020 |
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$ |
400,000 |
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31 March 2020 |
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$ |
500,000 |
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30 April 2020 |
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$ |
500,000 |
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31 May 2020 |
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$ |
550,000 |
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30 June 2020 |
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$ |
600,000 |
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30 June 2020, and at all times thereafter |
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$ |
600,000 |
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(d) clause 20.2(c) shall be deleted; and
(e) clause 20.3.2 shall be deleted.
[ON COPY]
To: EAST WEST BANK as Lender
We acknowledge, agree and accept the above terms:
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THE OBLIGORS |
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/s/ MARK P. SZYNKOWSKI |
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For and on behalf of |
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EVOLVING SYSTEMS, INC. |
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By: |
Mark P. Szynkowski |
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Sr. Vice President, Finance |
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/s/ MARK P. SZYNKOWSKI |
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For and on behalf of |
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EVOLVING SYSTEMS HOLDINGS LIMITED |
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By: |
Mark P. Szynkowski |
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Secretary |
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/s/ MARK P. SZYNKOWSKI |
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For and on behalf of |
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EVOLVING SYSTEMS LIMITED |
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By: |
Mark P. Szynkowski |
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Secretary |
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/s/ MARK P. SZYNKOWSKI |
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For and on behalf of |
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EVOLVING SYSTEMS BLS LIMITED |
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By: |
Mark P. Szynkowski |
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Managing Director |
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/s/ MARK P. SZYNKOWSKI |
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For and on behalf of |
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LUMATA UK LIMITED |
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By: |
Mark P. Szynkowski |
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Secretary |
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