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EVOL > SEC Filings for EVOL > Form 8-K on 25-Oct-2012All Recent SEC Filings

Show all filings for EVOLVING SYSTEMS INC



Creation of a Direct Financial Obligation or an Obligation under an Off-Bala

Item 2.03 Creation of a Direct Financial Obligation.

On October 22, 2012, Evolving Systems, Inc. ("Evolving Systems" or the "Company") entered into a Loan and Security Agreement with East West Bank for a revolving credit facility in the amount of $5.0 million (the "Revolving Facility") bearing interest at the greater of 2.75% or the Prime Rate minus one half of one percent (0.50%). The Revolving Facility is secured by substantially all of the assets of Evolving Systems, including a pledge, subject to certain limitations with respect to stock of foreign subsidiaries, of the stock of the existing and future direct subsidiaries of Evolving Systems. There is no mandated borrowing required against the Revolving Facility. To take an advance under the Revolving Facility, the Company must have a balance of $3.0 million in cash on deposit with East West Bank and have quarterly net income and a specified ratio of current assets to current liabilities, as defined in the Revolving Facility. The Revolving Facility requires the Company to pay an annual credit facility fee of $10,000 and monthly payments of interest, with the unpaid balance due on October 22, 2014.

The Revolving Facility includes Negative Covenants that place restrictions on the Company's ability to, among other things: incur additional indebtedness; create liens or other encumbrances on assets; make loans, enter into letters of credit, guarantees, investments and acquisitions; sell or otherwise dispose of assets; cause or permit a change of control; merge or consolidate with another entity; make negative pledges; enter into affiliate transactions; and change the nature of its business materially.

Outstanding amounts under the Revolving Facility may be accelerated by notice from East West Bank upon the occurrence and continuance of certain events of default, including without limitation: payment defaults, breach of covenants beyond applicable grace periods, breach of representations and warranties, bankruptcy and insolvency defaults, and the occurrence of a material adverse effect (as defined). Acceleration is automatic upon the occurrence of certain bankruptcy and insolvency defaults.

Text of Agreements. The full text of the Revolving Facility is attached as Exhibit 10.1(a) 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

Number                                  Description

10.1(a)    Loan and Security Agreement between Evolving Systems, Inc. and East
           West Bank

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