Amendment to Credit Agreement between ESW Canada Inc. and Royal Bank of Canada (September 2, 2008)

Summary

This agreement amends a previous credit agreement between ESW Canada Inc. and Royal Bank of Canada. The changes reduce the credit facility amount from $2,500,000 to $750,000, extend the availability period to June 30, 2009, and update the minimum tangible net worth requirement to $1,100,000. The amendment is effective once both parties sign it, and all other terms of the original agreement remain unchanged. The agreement must be accepted by October 2, 2008, or it becomes void.

EX-10.1 2 exh10-1.txt LETTER AGREEMENT 9/2/08 RBC LOGO ROYAL BANK OF CANADA COMMERCIAL FINANCIAL SERVICES 6880 FINANCIAL DRIVE 2ND FLOOR MISSISSAUGA, ONTARIO L5N 7Y5 TEL.: (905) 286-7277 FAX: (905) 286-7279 September 2, 2008 PRIVATE AND CONFIDENTIAL ESW CANADA INC. 335 Connie Crescent Concord, Ontario L4K 5R2 We refer to the agreement dated March 2, 2007 between ESW Canada Inc., as the Borrower, and Royal Bank of Canada, as the Bank, (the "AGREEMENT"). All capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement. The Agreement is amended as follows: 1. Under the Credit Facilities section, the amount of Facility #1 is amended by deleting "$2,500,000" and by substituting "$750,000". 2. Under the Availability section, Facility #1 is amended by deleting "June 30, 2008" and by substituting "June 30, 2009". 3. Under the Financial Covenants section, subparagraphs a) ii. Is amended and restated as follows: ii. Tangible Net Work of at least $1,100,000. 4. Schedule "D" Compliance Certificate is amended and replaced as attached. CONDITIONS PRECEDENT The effectiveness of this amendment is conditional upon receipt of a duly executed copy of this amending agreement. COUNTERPART EXECUTION This amending agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together constitute one and the same instrument. All other terms and conditions outlined in the Agreement remain unchanged and in full force and effect. This amending agreement is open for acceptance until October 2, 2008, after which date it will be null and void, unless extended in writing by the Bank. - -------------------------------------------------------------------------------- (R) Registered Trademark of Royal Bank of Canada SRF #194 377 925 ESW Canada Inc. -2- September 2, 2008 - -------------------------------------------------------------------------------- ROYAL BANK OF CANADA PER:____________________ Name: Jeff Patterson Title: Account Manager Agreed to and accepted this ______ day of ____________, 2008. ESW CANADA INC. PER:____________________ Name: Title: PER:____________________ Name: Title: I/We have the authority to bind the Borrower SCHEDULE D - -------------------------------------------------------------------------------- Schedule "D" to the Agreement dated March 2, 2007 between ESW Canada Inc., as Borrower, and Royal Bank of Canada, as the Bank. COMPLIANCE CERTIFICATE I, ___________________________________, representing the Borrower hereby certify as of month ending___________________________: 1. I am familiar with and have examined the provisions of the Agreement dated March 2, 2007 and any amendments thereto, between ESW Canada Inc., as Borrower, and Royal Bank of Canada as the Bank, and have made reasonable investigations of corporate records and inquiries of other officers and senior personnel of the Borrower and any Guarantor if applicable. Terms defined in the Agreement have the same meanings where used in this certificate. 2. The representations and warranties contained in the Agreement are true and correct. 3. No event or circumstance has occurred which constitutes or which, with the giving of notice, lapse of time, or both, would constitute an Event of Default and there is no reason to believe that during the next month, any such event or circumstance will occur. 4. The ratio of Current Assets to Current Liabilities is _______:1, being not less than the required ratio of 1.5:1. 5. Tangible Net Worth is $____________, being not less than the minimum required amount of $1,100,000. 6. The detailed calculations of the foregoing ratios and covenants is set forth in the addendum annexed hereto and are true and correct in all respects. Dated this _____ day of _____________, 20___. Per: ______________________________ Name: ______________________________ Title: _____________________________ Per: ______________________________ Name: ______________________________ Title: ______________________________