Document:

Exhibit 10.1

Silicon Valley Bank 

Limited Waiver and

Amendment to Loan Documents

Borrower:

Catalyst International, Inc.

Date:

August 16, 2004

THIS LIMITED WAIVER AND AMENDMENT TO LOAN DOCUMENTS is entered into between Silicon Valley Bank (“Silicon”) and the borrower named above (“Borrower”).

The Parties agree to amend the Loan and Security Agreement between them, dated February 17, 2004 (as otherwise amended, if at all, the “Loan Agreement”), as follows, effective as of the date hereof.  (Capitalized terms used but not defined in this Amendment, shall have the meanings set forth in the Loan Agreement.)

Borrower has informed Silicon that pursuant to the terms and conditions of that certain Agreement and Plan of Merger dated as of June 28, 2004 (the “Merger Agreement”) among Borrower, CAT Acquisition Corp. (“CAT”) and Comvest Investment Partners II LLC (“Comvest”), CAT will merge with and into Borrower (the “Merger”).  Upon consummation of the Merger, the separate corporate existence of CAT shall cease and Borrower shall be the surviving corporation of the Merger.  As a result of the Merger, Borrower will become a direct subsidiary of Comvest.  As part of the Merger, the holders of Borrower’s outstanding and unpaid 12% Secured Promissory Notes issued in 2003 in the aggregate principal amount of $2,125,000 (the “2003 Notes”) will be paid in full or the debt represented thereby will be converted into equity shares of the surviving corporation (the “2003 Note Repayment/Conversion”).  

Borrower is prohibited from entering into the Merger pursuant to the terms of Sections 5.5(i) and (iii) and Section 7.1(m) of the Loan Agreement, absent compliance with the terms thereof.

NOW, THEREFOR, the parties hereto agree as follows:

1.

Limited Waiver re Merger and 2003 Note Repayment/Conversion.  Silicon and Borrower agree that the prohibitions set forth in Sections 5.5(i) and (iii) and Section 7.1(m) of the Loan Agreement are hereby waived with respect to the Merger and 2003 Note Repayment/Conversion only, and that Silicon hereby consents to the Merger and 2003 Note Repayment/Conversion in accordance with the terms previously disclosed to Silicon.  It is understood by the parties hereto, however, that such a waiver does not constitute a waiver of any other provision or term of the Loan Agreement or any related document, nor an agreement to waive in the future this covenant or any other provision or term of the Loan Agreement or any related document.

2.

Waiver of Defaults.  Borrower has advised Silicon that Borrower has failed to comply with the Minimum Tangible Net Worth Financial Covenant set forth in Section 5 of the Schedule to Loan and Security Agreement for the months ending May 31, 2004 and June 30, 2004 (the “Covenant Defaults”).  Silicon and Borrower agree that the Borrower's Covenant Defaults (as defined above) are hereby waived.  It is understood by the parties hereto, however, that such waiver does not constitute a waiver of any other provision or term of the Loan Agreement or any related document, nor an agreement to waive in the future this covenant or any other provision or term of the Loan Agreement or any related document.

3.

Modified Credit Limit.  The Credit Limit set forth in Section 1 of the Schedule to Loan and Security Agreement is hereby amended to read as follows:

1.  CREDIT LIMIT 

(Section 1.1):

An amount not to exceed the lesser of (i) a total of $3,000,000 at any one time outstanding (the “Maximum Credit Limit”) or (ii) 75% (an “Advance Rate”) of the amount of Borrower’s Eligible Accounts (as defined in Section 8 above); provided, however, until the Merger closes (as provided for in the Merger Agreement) and evidence thereof provided to Silicon (satisfactory to Silicon in its sole discretion), the Maximum Credit Limit shall be $2,500,000.  

Silicon may, from time to time, modify the Advance Rate, in its good faith business judgment, upon notice to the Borrower, based on changes in collection experience with respect to Accounts, its evaluation of the Inventory or other issues or factors relating to the Accounts, Inventory or other Collateral.

Cash Management

Services and 

Reserves:  

Borrower may use up to $250,000 of Loans available hereunder for Silicon’s Cash Management Services (as defined below), including, merchant services, business credit card, ACH and other services identified in the cash management services agreement related to such service (the “Cash Management Services”).  Silicon may, in its sole discretion, reserve against Loans which would otherwise be available hereunder such sums as Silicon shall determine in its good faith business judgment in connection with the Cash Management Services, and Silicon may charge to Borrower’s Loan account, any amounts that may become due or owing to Silicon in connection with the Cash Management Services.  Borrower agrees to execute and deliver to Silicon all standard form applications and agreements of Silicon in connection with the Cash Management Services, and, without limiting any of the terms of such applications and agreements, Borrower will pay all standard fees and charges of Silicon in connection with the Cash Management Services.  The Cash Management Services shall terminate on the Maturity Date.

4.

Modified Tangible Net Worth Financial Covenant.  The Minimum Tangible Net Worth Financial Covenant set forth in that portion of the Schedule to Loan and Security Agreement entitled “5. FINANCIAL COVENANTS (Section 5.1)” is hereby amended to read as follows: 

Minimum Tangible

Net Worth:

Borrower shall maintain a Tangible Net Worth of not less than the following:

For the month ending July 31, 2004:  <$5,250,000>;

For the month ending August 31, 2004:  <$5,250,000>; and

For the month ending September 30, 2004:  <$5,000,000>.

On or before October 31, 2004, the Minimum Tangible Net Worth Financial Covenant will be reset for the compliance periods ending after September 30, 2004 by Silicon based on Borrower’s projected financial statements, such projected financial statements to have been approved by the Borrower’s Board of Directors and accepted by Silicon in its discretion.

5.

Streamline Facility Agreement No Longer in Effect.  Reference is made to that certain Streamline Facility Agreement between Borrower and Silicon and dated May 19, 2004 (the “Streamline Agreement”).  Due to the Covenant Defaults and Borrower’s failure to comply with the EBITDA Requirement (as defined in the Streamline Agreement), the Streamline Agreement is no longer in effect.  On or before October 31, 2004, the terms, conditions and requirements for the Streamline Agreement will be reset by Silicon based on Borrower’s projected financial statements, such projected financial statements to have been approved by the Borrower’s Board of Directors and accepted by Silicon in its discretion.

6.

Modified Reporting/Proceeds Requirements.  Borrower shall comply with the standard terms and conditions of the Loan Agreement with respect to reporting requirements and delivery of proceeds, except that:  (i) Within 15 days after the end of each month, Borrower shall deliver to Silicon a Borrowing Base Certificate signed by the Chief Executive Officer, President, Chief Financial Officer or Controller of Borrower on Silicon’s standard form, together with an aged listing of accounts payable, and transaction reports including sales, credit memoranda and collection journals and all other monthly reporting requirements set forth in the Loan Agreement; (ii) Delivery to Silicon of transaction reports, schedules and assignments of Accounts, and schedules of collections, as called for by Section 4.3 of the Loan Agreement will not be required, but rather shall be provided as set forth above, (iii) Borrower shall not be required to deliver the proceeds of Accounts to Silicon upon receipt as provided for in Section 4.4 of the Loan Agreement; provided that if any Event of Default has occurred and is continuing, without limiting its other rights and remedies, Silicon shall have the right to require that all proceeds of all Accounts be delivered to Silicon upon receipt and in the form received; and (iv) Borrower shall provide Silicon with a weekly accounts receivable aging, aged by invoice date, within one Business Day after the end of each week.  Notwithstanding the foregoing, in the event the Merger does not close (as provided for in the Merger Agreement with evidence thereof, acceptable to Silicon, submitted to Silicon) by September 30, 2004, then the foregoing modifications to the standard terms and conditions of the Loan Agreement shall no longer apply and Borrower shall comply with all of the standard terms and conditions of the Loan Agreement with respect to reporting requirements and delivery of proceeds. 

7.

Fee.  In consideration for Silicon entering into this Amendment, Borrower shall concurrently pay Silicon a fee in the amount of $12,500, which shall be non-refundable and in addition to all interest and other fees payable to Silicon under the Loan Documents; provided, however, if the Merger does not close by October 1, 2004, Borrower shall pay Silicon an additional fee in an amount equal to 0.25% of the Maximum Credit Limit, which shall also be non-refundable and in addition to all interest and other fees payable to Silicon under the Loan Documents.  Silicon is authorized to charge said fee(s) to Borrower’s loan account. 

8.

Representations True.  Borrower represents and warrants to Silicon that all representations and warranties set forth in the Loan Agreement, as amended hereby, are true and correct.  

9.

General Provisions.  This Amendment, the Loan Agreement, any prior written amendments to the Loan Agreement signed by Silicon and Borrower, and the other written documents and agreements between Silicon and Borrower set forth in full all of the representations and agreements of the parties with respect to the subject matter hereof and supersede all prior discussions, representations, agreements and under­standings between the parties with respect to the subject hereof.  Except as herein expressly amended, all of the terms and provisions of the Loan Agreement, and all other documents and agreements between Silicon and Borrower shall continue in full force and effect and the same are hereby ratified and confirmed.  

	Borrower:

CATALYST INTERNATIONAL, INC.

By  /s/ James B. Treleaven       

President or Vice President

By  /s/ Mark T. Ehrmann        

Secretary or Ass't Secretary

	Silicon:

SILICON VALLEY BANK

By /s/  [illegible]                

Title  Sr. Vice PresidentExhibit 10.1

              $1.25 MILLION UNSECURED SUBORDINATED PROMISSORY NOTE

FOR VALUE RECEIVED, Environmental Solutions Worldwide, Inc., a Florida
corporation (hereinafter called "Borrower"), hereby promises to pay to AB Odnia,
[address][facsimile] (the "Holder") or order, the sum of One Million Two Hundred
and Fifty ($1,250,000) dollars, with interest accruing at the annual rate of 6%,
on August 27, 2005 (the "Maturity Date"). The following terms shall apply to
this Unsecured Promissory Note (the "Note"):

                                    ARTICLE I

                               GENERAL PROVISIONS

         1.1 PAYMENT GRACE PERIOD. The Borrower shall have a ten (10) day grace
period to pay the principal and interest due under this Note. In the event of a
default in payment, Borrower agrees to pay a default interest rate of twelve
(12%) percent per annum to the amount due hereunder.

         1.2 PAYMENT TERMS. The Note principal and accrued interest shall be
payable on August 27, 2005 the Maturity Date. Interest will begin to accrue on
the note beginning September 15,2004.

         1.3 INTEREST RATE. Interest payable on this Note shall accrue at the
annual rate of six percent (6%) per annum and is payable on the Maturity Date.

                                   ARTICLE II

                                EVENT OF DEFAULT

The occurrence of any of the following events of default ("Event of Default")
shall, at the option of the Holder hereof, make all sums of principal and
interest then remaining unpaid hereon and all other amounts payable hereunder
immediately due and payable, upon demand, without presentment, or grace period,
all of which hereby are expressly waived, except as set forth below:

         2.1 FAILURE TO PAY PRINCIPAL OR INTEREST. The Borrower fails to pay any
installment of principal, interest when due and such failure continues for a
period of ten (10) days after the due date as stated in Section 1.2 hereof.

         2.2 BREACH OF COVENANT. The Borrower breaches any material covenant or
other term or condition of this Note in any material respect and such breach, if
subject to cure, continues for a period of ten (10) days after written notice to
the Borrower from the Holder.

         2.3 BREACH OF REPRESENTATIONS AND WARRANTIES. Any material
representation or warranty of the Borrower made herein, or in any agreement,
statement or certificate given in writing pursuant hereto or in connection
therewith shall be false or misleading in any material respect as of the date
made.

         2.4 RECEIVER OR TRUSTEE. The Borrower shall make an assignment for the
benefit of creditors, or apply for or consent to the appointment of a receiver
or trustee for it or for a substantial part of its property or business; or such
a receiver or trustee shall otherwise be appointed.

<PAGE>

         2.5 JUDGMENTS. Any money judgment, writ or similar final process shall
be entered or filed against Borrower or any of its property or other assets for
more than $100,000, and shall remain unvacated, unbonded or unstayed for a
period of forty-five (45) days.

         2.6 BANKRUPTCY. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings or relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Borrower and if
instituted against Borrower are not dismissed within 45 days of initiation.

         2.7      FAILURE TO DELIVER REPLACEMENT NOTE.  Borrower's failure to
timely deliver if required a replacement Note.

         2.8 CROSS DEFAULT. A default by the Borrower of a material term,
covenant, warranty or undertaking of any other agreement to which the Borrower
and Holder are parties, or the occurrence of a material event of default under
any such other agreement, in each case, which is not cured after any required
notice and/or cure period

                                   ARTICLE III

                                  MISCELLANEOUS

         3.1 FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part
of Holder hereof in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege. All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

         3.2 NOTICES. All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be: (i) if to the Borrower to: Environmental Solutions
Worldwide, Inc., 132 Penn Avenue, Telford PA, 18969 with a copy by telecopier
only to: Baratta & Goldstein 597 Fifth Avenue, New York, NY 10017, Attn: Joseph
A. Baratta, Esq., telecopier number: (212) 750-8297, and (ii) if to the Holder,
to the name, address and telecopy number set forth on the front page of this
Note, with a copy by telecopier only to AB ODNIA telecopier number: [faxsimile]

         3.3 AMENDMENT PROVISION. The term "Note" and all reference thereto, as
used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented.

<PAGE>

         3.4 ASSIGNABILITY. This Note shall be binding upon the Borrower and its
successors and assigns, and shall inure to the benefit of the Holder and its
successors and assigns.

         3.5 COST OF COLLECTION. If default is made in the payment of this Note,
Borrower shall pay the Holder hereof reasonable costs of collection, including
reasonable attorneys' fees.

         3.6 GOVERNING LAW. This Note shall be governed by and construed in
accordance with the laws of the State of New York. Any action brought by either
party against the other concerning the transactions contemplated by this
Agreement shall be brought only in the state courts of New York or in the
federal courts located in the state of New York. Both parties and the individual
signing this Agreement on behalf of the Borrower agree to submit to the
jurisdiction of such courts. The prevailing party shall be entitled to recover
from the other party its reasonable attorney's fees and costs.

         3.7 MAXIMUM PAYMENTS. Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law. In the event that the rate of
interest required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Borrower to the Holder and thus refunded to the
Borrower.

         3.8      SUBORDINATION.  This Note is subordinate to the Borrower's
outstanding secured obligations.

         3.9 LEGAL REPRESENTATION. Both Borrower and Holder warrant and
         represent that they have been represented by their own legal counsel
         and financial advisors in connection with the transaction evidenced by
         this Note.

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an
authorized officer on this 27, day of August, 2004.

                                         ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.

                                          By:________________________________
                                               Name: David J. Johnson
                                               Title: Interim President and CEO

WITNESS:

-------------------------------

AGREED TO:

-------------------------------
AB Odnia

<PAGE>

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