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.