Preview | Pledge Agreement |

THIS PLEDGE AGREEMENT (this Pledge Agreement), dated as of this 2nd day of November, 2004 by Evolving Systems, Inc., a Delaware corporation (Maker), in favor of Advent International Corporation, a Delaware corporation, as collateral agent (in such capacity, Collateral Agent) for the holders of the Notes (defined below) from time to time (each individually a Payee and collectively, the Payees).

WHEREAS, the Maker has executed and delivered the following notes in favor of Payees: (i) the Senior Secured Note dated of even date herewith in the original principal amount of $4,000,000 (as the same may be amended, restated, or modified from time to time, the Initial Short Term Note) and (ii) the Senior Secured Notes dated of even date herewith in the aggregate original principal amount of $11,950,000 (consisting of a non-escrow note in the original principal amount of $10,355,000 and an escrow note in the original principal amount of $1,595,000) (as the same may be amended, restated, modified or replaced in substitution from time to time, the Initial A Notes);

WHEREAS, the Maker may execute and deliver in the future the following notes in favor of Payees: (i) additional Senior Secured Notes to assignees of the holder of the Initial Short Term Note (as they may be amended, restated, modified or replaced in substitution from time to time, the Additional Short Term Notes and collectively with the Initial Short Term Note, the Short Term Notes); (ii) additional Senior Secured Notes to assignees of the holder of the Initial A Notes, including, without limitation, any additional payment in kind notes as of a later date in the same form (as they may be amended, restated, modified or replaced in substitution from time to time, the Additional A Notes and collectively with the Initial A Notes, the A Notes); (iii) additional Senior Secured Notes in exchange for the A Notes in an aggregate original principal amount to be determined in accordance with the A Notes (as they may be amended, restated, or modified from time to time, the B-1 Notes); and (iv) Senior Secured Convertible Notes in exchange for the A Notes in an aggregate original principal amount to be determined in accordance with the A Notes (as they may be amended, restated, or modified from time to time, the Convertible Notes, and together with the Short Term Notes, the A Notes and the B-1 Notes, each individually a Note and collectively the Notes); and

WHEREAS, to induce the Payees to incur the indebtedness under the Notes, the Maker wishes to grant a security interest in favor of the Collateral Agent for the benefit of the Payees as herein provided.

NOW THEREFORE, for good and valuable consideration and intending to be legally bound hereby, Maker agrees as follows:

Section 1. Definitions; Inconsistencies with Notes.

(a) All capitalized terms used herein without definitions shall have the respective meanings provided therefor in the Notes. If there is a conflict between the terms of this Pledge Agreement and those of the Notes, the terms of the Notes shall control.

(b) The term Aggregate Principal Indebtedness means, as of any date of determination, the sum of the principal amounts outstanding under the Notes in effect at such time.

(c) The term Code means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time.

(d) The term Event of Default means an Event of Default under (and as defined in) the Notes.

(e) The term Guaranty Agreement means the Guaranty Agreement dated of event date herewith by the guarantors party thereto in favor of Collateral Agent for the benefit of Payees, as it may be amended, restated or modified from time to time.

(f) The term Loan Documents means the Notes, this Pledge Agreement, the Security Agreement and the Guaranty Agreement and any other documents, agreements and instruments entered into in connection therewith, all as amended, restated or modified from time to time; provided, however, that the term Loan Documents shall not include the Stock Purchase Agreement or the Series B Designation (each as defined in the Notes) or the Investor Rights Agreement (as defined in the Stock Purchase Agreement) or any other document, agreement or instrument entered into in connection with the documents referred to in this proviso, all as amended, restated or modified from time to time.

(g) The term Notice Date means the date on which the Collateral Agent first receives instructions from the Requisite Payees to enforce rights under this Pledge Agreement.

(h) The term Obligations means any and all of the indebtedness, obligations and liabilities of any kind and description arising in any way of the Maker to the Payees, individual or collective, joint or several, direct or indirect, absolute or contingent, secured or unsecured, due or to become due, contractual or tortuous, arising by operation of law or otherwise, now existing or hereafter arising under or in respect of any of the Loan Documents, whether incurred by the Maker as principal, surety, endorser, guarantor, accommodation party or otherwise, including without limitation any future advances, whether obligatory or voluntary under, or refinancings, renewals or extensions of or substitutions for, any existing or future debt, principal, interest and fees, late fees and reasonable out-of-pocket expenses (including, reasonable attorneys fees and costs), or that have been or may hereafter be contracted or incurred and any and all reasonable out-of-pocket costs, expenses and liabilities which may be made or incurred by any Payee or the Collateral Agent in any way in connection with any of the obligations of the Maker under the Loan Documents, and all interest, fees, costs and expenses that may be owing to Payees after the commencement of bankruptcy proceedings with respect to the foregoing obligations of the Maker.

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