EVOL » Topics » Standstill Agreement

This excerpt taken from the EVOL DEF 14A filed Apr 20, 2009.

Standstill Agreement

 

On February 25, 2008 we entered into a Standstill Agreement (the “Standstill Agreement”) with Karen Singer, Trustee of the Singer Children’s Management Trust (the “Singer Trust”) in which the Board of Directors agreed to appoint two independent members to the Board of Directors and to waive the provisions of Section 203 of the Delaware General Corporation Law (“Section 203”), as it related to the Singer Trust’s acquisition of our stock, provided that the Singer Trust and its affiliates would beneficially own less than 20% of our outstanding shares.  In exchange, the Singer Trust agreed for a period of 18 months following the appointment of the Singer Nominees to the Board of Directors (the “Standstill Period”) (see Proposal 1 on page 4 of this proxy statement), not to seek or propose, among other things, an acquisition of the Company, a business combination or any other extraordinary transaction with respect to the Company.  The Singer Trust also agreed that during the Standstill Period it would not nominate any person as a director of the Company (other than the Singer Nominees) or propose any matter to be voted on by stockholders of the Company and it would vote its shares in favor of the Company’s nominees for directors.

 

This excerpt taken from the EVOL DEF 14A filed Apr 14, 2008.

Standstill Agreement

 

On February 25, 2008 we entered into a Standstill Agreement (the “Standstill Agreement”) with Karen Singer, Trustee of the Singer Children’s Management Trust (the “Singer Trust”) in which the Board of Directors agreed to appoint two independent members to the Board of Directors and to waive the provisions of Section 203 of the Delaware General Corporation Law (“Section 203”), as it related to the Singer Trust’s acquisition of our stock, provided that the Singer Trust and its affiliates would beneficially own less than 20% of our outstanding shares.  In exchange, the Singer Trust agreed for a period of 18 months following the appointment of the Singer Nominees to the Board of Directors (the “Standstill Period”) (see Proposal 1 on page 3 of this Proxy

 

 

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Statement), not to seek or propose, among other things, an acquisition of the Company, a business combination or any other extraordinary transaction with respect to the Company.  The Singer Trust also agreed that during the Standstill Period it would not nominate any person as a director of the Company (other than the Singer Nominees) or propose any matter to be voted on by stockholders of the Company and it would vote its shares in favor of the Company’s nominees for directors.

 

These excerpts taken from the EVOL 8-K filed Feb 27, 2008.

Standstill Agreement

 

This STANDSTILL AGREEMENT, dated February 25, 2008 (the “Agreement”), is by and between Evolving Systems, Inc., a Delaware corporation (the “Company”), and Karen Singer, as Trustee of the Singer Children’s Management Trust (the “Stockholder” and, together with the Stockholder’s Affiliates (as defined below) and Associates (as defined below) from time to time, the “Singer Group”).

 

WHEREAS, the Stockholder is the beneficial owner of 2,592,528 shares of common stock, par value $0.001 per share, of the Company (the “Common Stock”); and

 

WHEREAS, the Stockholder intends to acquire (such acquisition, the “Share Acquisition”) 500,000 shares of common stock resulting from the conversion of Series B Redeemable Convertible Preferred Stock of the Company owned by Apax WW Nominees Ltd a/c AE4 (“Apax”), which acquisition is expected to be consummated following the execution of this Agreement; and

 

WHEREAS, the Stockholder has requested that the Company approve the Share Acquisition and waive the applicability of Section 203 of the Delaware General Corporation Law, as amended (“Section 203”), and the Company wishes to grant such approval and waiver on the terms and conditions set forth in this Agreement; and

 

WHEREAS, the Stockholder wishes, and the Company has agreed to take such actions, to increase the number of directors constituting the board of directors of the Company (the “Board”) by two (2) independent directors to nine (9) directors.

 

NOW, THEREFORE, in consideration of the premises, mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Stockholder, on behalf of the Singer Group, and the Company hereby agree as follows:

 

Section 1.  Representations.

 

(a) Binding Agreement: Authority.   The Company hereby represents and warrants that this Agreement has been duly authorized, executed and delivered by the Company, and is a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.  The Stockholder represents and warrants that this Agreement has been duly authorized, executed and delivered by such Stockholder, and is a valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms.

 

(b) Share Ownership.   The Stockholder represents and warrants that, as of the date hereof, it and its Affiliates and Associates are the “beneficial owners” (as defined below) of the class and series of shares of capital stock of the Company in the amounts set forth above and that, after giving effect to the occurrence of the Share Acquisition it and its affiliates (as defined in Section 203) and associates (as defined in Section 203) and having been informed by the Company that there are 19,310,944 shares of Common Stock outstanding on the date hereof and based solely on such information, will be the “owners” (as defined in Section 203) of fifteen percent (15%) or more of the then outstanding shares of Common Stock but, also based on the aforesaid information from the Company, it and its Affiliates and Associates will beneficially own less than twenty percent (20%) the then outstanding shares of Common Stock.  None of the Singer Group nor any of their respective Affiliates and Associates beneficially own, or

 

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b.  Standstill Agreement.

 

On February 25, 2008, Evolving Systems entered into a Standstill Agreement (the “Standstill Agreement”) with Karen Singer, Trustee of the Singer Children’s Management Trust (the “Stockholder”).  The following is a brief description of the Standstill Agreement.  This description is not intended to be complete and is qualified in its entirety by the Standstill Agreement which is included as Exhibit 10.2 to this Form 8-K.

 

Pursuant to the Standstill Agreement, Evolving Systems and the Stockholder agreed that during a period commencing upon appointment of the Singer Nominees (as described below) and ending 18 months

 

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thereafter (the “Standstill Period”) no member of the Singer Group, as defined in the Standstill Agreement, shall, without the prior written consent of Evolving Systems, directly or indirectly, solicit, request, advise, assist or encourage others (other than exercising their rights to vote their respective Shares at an annual or special meeting of the stockholders of Evolving Systems, in each instance in compliance with the terms of the Standstill Agreement), to

 

(a) effect, seek or offer or propose (whether publicly or otherwise) to effect, or cause or participate in or in any way solicit or assist any other person to effect or seek, offer or propose (whether publicly or otherwise) to effect or participate in,

 

(i)                                     any acquisition of any assets of the Company or any of its subsidiaries;

(ii)                                  any tender or exchange offer, merger or other business combination involving the Company or any of its subsidiaries;

(iii)                               any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the Company or any of its subsidiaries; or

(iv)                              any “solicitation” of “proxies” (as such terms are used in the proxy rules promulgated by the SEC) or consent to vote any voting securities of the Company;

 

(b) form, join, encourage, influence, advise or in any way participate in a “group” (as defined under the Exchange Act);

 

(c) except as otherwise expressly provided in the Standstill Agreement, otherwise act, alone or in concert with others, to seek to control or influence the management, the Board or policies of the Company;

 

(d) except as provided in the Standstill Agreement, nominate any person as a director of the Company or propose any matter to be voted on by stockholders of the Company; or

 

(e) take any action which would reasonably be expected to force the Company to make a public announcement regarding any types of matters set forth in (a) above; or

 

(f) enter into any discussions or arrangements with any third party with respect to any of the foregoing.

 

Notwithstanding the foregoing provisions, if any third party or third parties (collectively, a “Third Party”) other than as a result of the direct or indirect solicitation, request, advice, assistance or encouragement of any member of the Singer Group, effects, seeks or offers or proposes to effect, seek or offers or participates in, or in any way assists any other person, to effect, seek, offer, propose or participate in, any of the acts or activities described in (i) through (iv) above (the “Activities”), then, so long as any member of the Singer Group provides at least 15 calendar days’ advance notice to the Chief Executive Officer of the Company of such member’s intention to communicate with the Third Party or the Board of the Company, such member of the Singer Group shall be free to communicate directly with the Board of Evolving Systems and/or such Third Party on a confidential, non-public basis in all respects about the Activities, including, without limitation, either in support of or in opposition to the Activities.

 

Share Acquisition.  Immediately following execution of the Standstill Agreement, the Stockholder purchased 500,000 shares of common stock resulting from the conversion of Series B Redeemable Convertible Preferred Stock of Evolving Systems (the “Share Acquisition”).

 

Waiver of Section 203 of the Delaware General Corporation Law.   Evolving Systems represented that its Board had taken all actions necessary to render inapplicable the provisions of Section 203 of the General Corporation Law of the State of Delaware (“Section 203”), as it related to the Share Acquisition, provided that the Singer Group would beneficially own less than 20% of the outstanding shares of Evolving Systems.  The waiver of Section 203 will no longer be applicable if, subsequent to becoming an “interested stockholder” (as defined in Section 203), the Singer Group no longer has beneficial ownership of 15% or more of the voting capital stock of Evolving Systems as a result of any sale or disposition of beneficial ownership of such stock.

 

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Voting Agreement.   The Singer Group agreed that during the Standstill Agreement the Singer Group would vote its shares in favor of the Company’s nominees for directors.

 

Expansion of Board; Appointment of Singer Nominees.  The Board of Directors of Evolving Systems agreed to expand the size of the Board from 7 to 9 members and to appoint two individuals nominated by the Singer Group (the “Singer Nominees”) to serve on the Board.  Subject to each Singer Nominee meeting the Board’s qualification requirements and meeting the NASDAQ requirements for independence, one of the Singer Nominees will be appointed to serve in the Class of Directors whose term expires at the 2008 Annual Meeting of Stockholders; the Board of Directors agreed to nominate this individual for re-election at the 2008 Annual Meeting of Stockholders.  The second Singer Nominee will be appointed to serve until the 2010 Annual Meeting of Stockholders.

 

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