Exhibit 10.1

 

FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

This First Amendment to Loan and Security Agreement (this “Amendment”) is
entered into as of April 25, 2006, by and between COMERICA BANK (“Bank”) and
COMMODORE RESOURCES (NEVADA), INC., LYRIS TECHNOLOGIES INC. and UPTILT INC.
(each a “Borrower” and collectively, “Borrowers”)

 

RECITALS

 

Borrowers and Bank are parties to that certain Loan and Security Agreement dated
as of October 4, 2005, as amended from time to time (the “Agreement”). The
parties desire to amend the Agreement in accordance with the terms of this
Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1.                                       The following defined terms in
Section 1.1 of the Agreement hereby are amended or restated as follows:

 

“EBITDA” means with respect to any fiscal period an amount equal to the sum of
earnings before interest and taxes plus depreciation and amoratization plus
non-cash stock compensation expenses, less management fees but only if such
management fees are not included in operating profit, plus up to Two Hundred
Twenty Nine Thousand Three Hundred Fifty Two Dollars ($229,352) in one time cash
or non-cash acquisition expense to the extent applicable.

 

“Excess Cash Flow” means, as of the end of each fiscal quarter for the quarter
then ended, quarterly EBITDA, less working capital changes, cash taxes, capital
expenditures (including any capitalization of software), management fees and
required principal and interest payments on all Indebtedness to Bank hereunder
and on Subordinated Debt.

 

“Lyris” means Borrower LYRIS TECHNOLOGIES INC.

 

“Permitted Transfer” means the conveyance, sale, lease, transfer or disposition
by a Guarantor, a Borrower or any Subsidiary of:

 

(a)                                  Inventory in the ordinary course of
business;

 

(b)                                 licenses and similar arrangements for the
use of the property of a Guarantor or a Borrower or its Subsidiaries in the
ordinary course of business;

 

(c)                                  cash to any Guarantor to satisfy mandatory
tax payments with respect to a Borrower:

 

(d)                                 cash or other assets to Guarantors not to
exceed One Million Five Hundred Thousand Dollars ($1,500,000) in the aggregate
in the year 2006 and beginning on January 1, 2007, cash or other assets to
Guarantors not to exceed Two Million Dollars ($2,000,000) in the aggregate in
any subsequent year;

 

(e)                                  any property to a Borrower;

 

(f)                                    worn-out or obsolete Equipment; or

 

(g)                                 other assets of Borrowers and their
Subsidiaries that do not in the aggregate exceed Two Hundred Fifty Thousand
Dollars ($250,000) during any fiscal year.

 

“Revolving Line” means a Credit Extension of up to Thirteen Million Five Hundred
Thousand Dollars ($13,500,000); provided however that availability under the
Revolving Line shall be reduced on the last day of each month beginning on
April 30, 2006 by: (i) One Hundred Seventy Five Thousand Dollars ($175,000) per

 

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month from April 30, 2006 through May 31, 2007; (ii) Two Hundred Fifty Thousand
Dollars ($250,000) per month from June 30, 2007 through September 30, 2007; and
(iii) Three Hundred Forty Seven Thousand Two Hundred Twenty Two Dollars
($347,222) per month from October 31, 2007 through September 30, 2010.

 

“Revolving Maturity Date” means February 28, 2010.

 

“Uptilt” means Borrower UPTILT INC.

 

2.                                       A new Section 4.5 is hereby added to
the Agreement as follows:

 

“Lock Box Account. Within ninety (90) days of the Closing Date, Lyris and Uptilt
shall maintain an account at Bank (the “Lock Box Account”) into which all funds
received by Lyris, Uptilt or its Subsidiaries from any source shall promptly be
deposited; and each such Borrower shall direct all customers to mail or deliver
all checks or other forms of payment for amounts owing to such Borrower or its
Subsidiaries to a post office box designated by Bank, over which Bank shall have
exclusive and unrestricted access. Bank shall collect the mail delivered to such
post office box, open such mail, and endorse and credit all items to the Lock
Box Account on each Business Day. Each of Lyris and Uptilt shall direct all
customers or other persons owing money to such Borrower or its Subsidiaries who
make payments by electronic transfer of funds to wire such funds directly to the
Lock Box Account. Each of Lyris and Uptilt shall hold in trust for Bank all
amounts that such Borrower or its Subsidiaries receive despite the directions to
make payments to the post office box or Lock Box Account, and promptly deliver
such payments to Bank in their original form as received from the customer, with
proper endorsements for deposit into the Lock Box Account. Each of Lyris and
Uptilt irrevocably authorizes Bank to transfer to the Lock Box Account any funds
that have been deposited into any other accounts or that Bank has received by
wire transfer, check, cash, or otherwise. Except as otherwise provided in
Section 6.6 of this Agreement, each of Lyris and Uptilt and its Subsidiaries
shall not establish or maintain any accounts with any Person other than Bank
except for accounts opened in the ordinary course of business from which all
funds are transferred on a regular basis to the Lock Box Account. Bank shall
cause all amounts in the Lock Box Account to be swept daily (or as frequently as
possible) to one of Borrowers’ operating accounts with Bank; provided that Bank
may, in its reasonable discretion, apply amounts held in the Lock Box Account to
the outstanding balance of the Obligations on a daily basis.”

 

3.                                       Section 6.7 of the Agreement is hereby
amended and restated in its entirety to read as follows:

 

“Financial Covenants. Borrowers shall at all times maintain the following
financial ratios and covenants:

 

(a)                                  Fixed Charge Coverage. Measured on a
monthly basis, a ratio of trailing twelve-months EBITDA plus excess borrowing
availability under the Revolving Line at a Funded Indebtedness to EBITDA ratio
of 1.50:1.00, to the sum of Capitalized Expenditures, interest expense, income
tax expense, the required reductions to the Revolving Line in the upcoming
12-month period (to the extent funded) and Subordinated Debt payments owing in
the preceding 12-month period of at least 1.25 to 1.00.

 

(b)                                 EBITDA. Measured monthly on a rolling
three-month basis, an EBITDA of not less than (i) Two Million Dollars
($2,000,000) through the measuring period ending February 28, 2007, and (ii) Two
Million Five Hundred Thousand Dollars ($2,500,000) at all times thereafter.

 

(c)                                  Senior Debt to EBITDA. Measured on a
monthly basis, a ratio of all outstanding Obligations to EBITDA calculated on a
trailing twelve-month basis of not greater than: (i) 2.00 to 1.00 through the
measuring period ending November 30, 2007 and (ii) 1.50 to 1.00 at all times
thereafter.

 

4.                                       All references in the Loan Documents to
Bank’s address at 2321 Rosecrans Ave., Suite 5000, El Segundo, CA 90245 shall
mean and refer to 75 East Trimble Road, M/C 4770, San Jose, California 95131,
Attn: Manager, FAX: (408) 556-5091.

 

5.                                       Section 11 of the Agreement hereby is
amended and restated in its entirety to read as follows:

 

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“11.                           CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

 

This Agreement shall be governed by, and construed in accordance with, the
internal laws of the State of California, without regard to principles of
conflicts of law. Each Borrower and Bank hereby submits to the exclusive
jurisdiction of the state and Federal courts located in the County of Santa
Clara, State of California. THE UNDERSIGNED ACKNOWLEDGE THAT THE RIGHT TO TRIAL
BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED UNDER CERTAIN
CIRCUMSTANCES. TO THE EXTENT PERMITTED BY LAW, EACH PARTY, AFTER CONSULTING (OR
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER CHOICE,
KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, WAIVES ANY
RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT BETWEEN THE
UNDERSIGNED PARTIES.”

 

6.                                       Section 12 of the Agreement hereby is
amended and restated in its entirety to read as follows:

 

“12                              REFERENCE PROVISION.

 

In the event the Jury Trial Waiver set forth above is not enforceable, the
parties elect to proceed under this Judicial Reference Provision.

 

12.1                           Mechanics.

 

(a)                                  With the exception of the items specified
in clause (b), below, any controversy, dispute or claim (each, a “Claim”)
between the parties arising out of or relating to this Agreement or any other
document, instrument or agreement between the undersigned parties (collectively
in this Section, the “Comerica Documents”), will be resolved by a reference
proceeding in California in accordance with the provisions of Sections 638 et
seq. of the California Code of Civil Procedure (“CCP”), or their successor
sections, which shall constitute the exclusive remedy for the resolution of any
Claim, including whether the Claim is subject to the reference proceeding.
Except as otherwise provided in the Comerica Documents, venue for the reference
proceeding will be in the state or federal court in the county or district where
the real property involved in the action, if any, is located or in the state or
federal court in the county or district where venue is otherwise appropriate
under applicable law (the “Court”).

 

(b)                                 The matters that shall not be subject to a
reference are the following: (i) nonjudicial foreclosure of any security
interests in real or personal property, (ii) exercise of self-help remedies
(including, without limitation, set-off), (iii) appointment of a receiver and
(iv) temporary, provisional or ancillary remedies (including, without
limitation, writs of attachment, writs of possession, temporary restraining
orders or preliminary injunctions). This reference provision does not limit the
right of any party to exercise or oppose any of the rights and remedies
described in clauses (i) and (ii) or to seek or oppose from a court of competent
jurisdiction any of the items described in clauses (iii) and (iv). The exercise
of, or opposition to, any of those items does not waive the right of any party
to a reference pursuant to this reference provision as provided herein.

 

(c)                                  The referee shall be a retired judge or
justice selected by mutual written agreement of the parties. If the parties do
not agree within ten (10) days of a written request to do so by any party, then,
upon request of any party, the referee shall be selected by the Presiding Judge
of the Court (or his or her representative). A request for appointment of a
referee may be heard on an ex parte or expedited basis, and the parties agree
that irreparable harm would result if ex parte relief is not granted. Pursuant
to CCP § 170.6, each party shall have one peremptory challenge to the referee
selected by the Presiding Judge of the Court (or his or her representative).

 

(d)                                 The parties agree that time is of the
essence in conducting the reference proceedings. Accordingly, the referee shall
be requested, subject to change in the time periods specified herein for good
cause shown, to (i) set the matter for a status and trial-setting conference
within fifteen (15) days after the date of selection of the referee, (ii) if
practicable, try all issues of law or fact within one

 

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hundred twenty (120) days after the date of the conference and (iii) report a
statement of decision within twenty (20) days after the matter has been
submitted for decision.

 

(e)                                  The referee will have power to expand or
limit the amount and duration of discovery. The referee may set or extend
discovery deadlines or cutoffs for good cause, including a party’s failure to
provide requested discovery for any reason whatsoever. Unless otherwise ordered
based upon good cause shown, no party shall be entitled to “priority” in
conducting discovery, depositions may be taken by either party upon seven
(7) days written notice, and all other discovery shall be responded to within
fifteen (15) days after service. All disputes relating to discovery which cannot
be resolved by the parties shall be submitted to the referee whose decision
shall be final and binding.

 

12.2                           Procedures. Except as expressly set forth herein,
the referee shall determine the manner in which the reference proceeding is
conducted including the time and place of hearings, the order of presentation of
evidence, and all other questions that arise with respect to the course of the
reference proceeding. All proceedings and hearings conducted before the referee,
except for trial, shall be conducted without a court reporter, except that when
any party so requests, a court reporter will be used at any hearing conducted
before the referee, and the referee will be provided a courtesy copy of the
transcript. The party making such a request shall have the obligation to arrange
for and pay the court reporter. Subject to the referee’s power to award costs to
the prevailing party, the parties will equally share the cost of the referee and
the court reporter at trial.

 

12.3                           Application of Law. The referee shall be required
to determine all issues in accordance with existing case law and the statutory
laws of the State of California. The rules of evidence applicable to proceedings
at law in the State of California will be applicable to the reference
proceeding. The referee shall be empowered to enter equitable as well as legal
relief, enter equitable orders that will be binding on the parties and rule on
any motion which would be authorized in a court proceeding, including without
limitation motions for summary judgment or summary adjudication. The referee
shall issue a decision at the close of the reference proceeding which disposes
of all claims of the parties that are the subject of the reference. Pursuant to
CCP § 644, such decision shall be entered by the Court as a judgment or an order
in the same manner as if the action had been tried by the Court and any such
decision will be final, binding and conclusive. The parties reserve the right to
appeal from the final judgment or order or from any appealable decision or order
entered by the referee. The parties reserve the right to findings of fact,
conclusions of laws, a written statement of decision, and the right to move for
a new trial or a different judgment, which new trial, if granted, is also to be
a reference proceeding under this provision.

 

12.4                           Repeal. If the enabling legislation which
provides for appointment of a referee is repealed (and no successor statute is
enacted), any dispute between the parties that would otherwise be determined by
reference procedure will be resolved and determined by arbitration.   The
arbitration will be conducted by a retired judge or justice, in accordance with
the California Arbitration Act §1280 through §1294.2 of the CCP as amended from
time to time. The limitations with respect to discovery set forth above shall
apply to any such arbitration proceeding.

 

12.5                           THE PARTIES RECOGNIZE AND AGREE THAT ALL
CONTROVERSIES, DISPUTES AND CLAIMS RESOLVED UNDER THIS REFERENCE PROVISION WILL
BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING (OR HAVING HAD THE
OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER OWN CHOICE, EACH PARTY
KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, AGREES
THAT THIS REFERENCE PROVISION WILL APPLY TO ANY CONTROVERSY, DISPUTE OR CLAIM
BETWEEN OR AMONG THEM ARISING OUT OF OR IN ANY WAY RELATED TO, THIS AGREEMENT OR
THE OTHER COMERICA DOCUMENTS.”

 

7.                                       Exhibit D to the Agreement is hereby
replaced with Exhibit D attached hereto.

 

8.                                       No course of dealing on the part of
Bank or its officers, nor any failure or delay in the exercise of any right by
Bank, shall operate as a waiver thereof, and any single or partial exercise of
any such right shall not preclude any later exercise of any such right. Bank’s
failure at any time to require strict performance by Borrowers

 

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of any provision shall not affect any right of Bank thereafter to demand strict
compliance and performance. Any suspension or waiver of a right must be in
writing signed by an officer of Bank.

 

9.                                       Unless otherwise defined, all initially
capitalized terms in this Amendment shall be as defined in the Agreement. The
Agreement, as amended hereby, shall be and remain in full force and effect in
accordance with its respective terms and hereby is ratified and confirmed in all
respects. Except as expressly set forth herein, the execution, delivery, and
performance of this Amendment shall not operate as a waiver of, or as an
amendment of, any right, power, or remedy of Bank under the Agreement, as in
effect prior to the date hereof.

 

10.                                 Each Borrower represents and warrants that
the Representations and Warranties contained in the Agreement are true and
correct in all material respects as of the date of this Amendment, and that no
Event of Default has occurred and is continuing.

 

11.                                 As a condition to the effectiveness of this
Amendment, Bank shall have received, in form and substance satisfactory to Bank,
the following:

 

(a)                                  this Amendment, duly executed by each
Borrower;

 

(b)                                 a Certificate of the Secretary of each
Borrower with respect to incumbency and resolutions authorizing the execution
and delivery of this Amendment;

 

(c)                                  an Affirmation of Guaranty executed by each
Guarantor;

 

(d)                                 an executed LIBOR Addendum in the form of
Exhibit E;

 

(e)                                  all reasonable Bank Expenses incurred
through the date of this Amendment, which may be debited from any of Borrowers’
accounts; and

 

(f)                                    such other documents, and completion of
such other matters, as Bank may reasonably deem necessary or appropriate.

 

12.                                 This Amendment may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.

 

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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first
date above written.

 

 

COMMODORE RESOURCES (NEVADA), INC.

 

 

 

By::

 

 

 

 

Title:

 

 

 

 

 

 

LYRIS TECHNOLOGIES INC.

 

 

 

By:

 

 

 

 

Title:

 

 

 

 

 

 

UPTILT RESOURCES INC.

 

 

 

By:

 

 

 

 

Title:

 

 

 

 

 

 

COMERICA BANK

 

 

 

By:

 

 

 

 

Title:

 

 

[Signature Page to Amendment to Loan & Security Agreement]

 

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EXHIBIT C

 

COMPLIANCE CERTIFICATE

 

TO:                                                                         
COMERICA BANK

 

FROM:                                                       COMMODORE RESOURCES
(NEVADA), INC., for itself and on behalf of all Borrowers

 

The undersigned authorized officer of COMMODORE RESOURCES (NEVADA), INC., for
itself and on behalf of all Borrowers, hereby certifies that in accordance with
the terms and conditions of the Loan and Security Agreement between Borrowers
and Bank (the “Agreement”), (i) Each Borrower is in complete compliance for the
period ending                              with all required covenants except as
noted below and (ii) all representations and warranties of each Borrower stated
in the Agreement are true and correct in all material respects as of the date
hereof. Attached herewith are the required documents supporting the above
certification. The Officer further certifies that these are prepared in
accordance with Generally Accepted Accounting Principles (GAAP) and are
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes.

 

Please indicate compliance status by circling Yes/No under “Complies” column.

 

Reporting Covenant

 

Required

 

Complies

 

 

 

 

 

 

 

Monthly financial statements

 

Monthly within 30 days

 

Yes

 

No

10K

 

Within 90 days of fiscal year end

 

Yes

 

No

10Q

 

Within 45 days of quarter end

 

Yes

 

No

A/R & A/P Agings

 

Monthly within 30 days

 

Yes

 

No

Compliance Cert.

 

Monthly within 30 days

 

Yes

 

No

A/R Audit

 

Initial and Annual

 

Yes

 

No

IP Report

 

Quarterly within 45 days

 

Yes

 

No

Total amount of Borrowers’ cash and investments

 

Amount: $

 

Yes

 

No

Total amount of Borrowers’ cash and investments maintained with Bank

 

Amount: $

 

Yes

 

No

 

Financial Covenant

 

Required

 

Actual

 

Complies

 

 

 

 

 

 

 

 

 

Measured on a Monthly Basis:

 

 

 

 

 

 

 

 

Maximum Senior Debt to EBITDA

 

 

 

     : 1.00

 

Yes

 

No

4/  /06 through 11/30/07

 

2.00: 1.00

 

 

 

 

 

 

12/1/07 and thereafter

 

1.50: 1.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minimum EBITDA

 

 

 

$          

 

Yes

 

No

4/  /06 through 2/28/07

 

$2,000,000

 

 

 

 

 

 

3/1/07 and thereafter

 

$2,500,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minimum Fixed Charge Coverage

 

1.25 : 1.00

 

     : 1.00

 

Yes

 

No

 

Comments Regarding Exceptions: See Attached.

 

BANK USE ONLY

 

 

 

 

 

Sincerely,

 

Received by:

 

 

 

 

 

AUTHORIZED SIGNER

 

 

 

 

 

Date:

 

 

SIGNATURE

 

 

 

 

 

 

 

Verified:

 

 

TITLE

 

 

AUTHORIZED SIGNER

 

 

 

 

 

 

 

 

 

Date:

 

 

DATE

 

 

 

 

 

Compliance Status

Yes

No

 

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EXHIBIT D

 

LIBOR ADDENDUM

 

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Corporation Resolutions and Incumbency Certification
Authority to Procure Loans

 

I certify that I am the duly elected and qualified Secretary of COMMODORE
RESOURCES (NEVADA), INC.; that the following is a true and correct copy of
resolutions duly adopted by the Board of Directors of the Corporation in
accordance with its bylaws and applicable statutes.

 

Copy of Resolutions:

 

Be it Resolved, That:

 

13.                               Any one (1) of the
following                                                            (insert
titles only) of the

Corporation are/is authorized, for, on behalf of, and in the name of the
Corporation to:

 

(a)                                  Negotiate and procure loans, letters of
credit and other credit or financial accommodations from Comerica Bank (“Bank”),
a Michigan banking corporation, including, without limitation, that certain Loan
and Security Agreement dated as of October 4, 2005, as may subsequently be
amended from time to time, including but not limited to that certain First
Amendment to Loan and Security Agreement dated as of April 25, 2006.

 

(b)                                 Discount with the Bank, commercial or other
business paper belonging to the Corporation made or drawn by or upon third
parties, without limit as to amount;

 

(c)                                 Purchase, sell, exchange, assign, endorse
for transfer and/or deliver certificates and/or instruments representing stocks,
bonds, evidences of Indebtedness or other securities owned by the Corporation,
whether or not registered in the name of the Corporation;

 

(d)                                Give security for any liabilities of the
Corporation to the Bank by grant, security interest, assignment, lien, deed of
trust or mortgage upon any real or personal property, tangible or intangible of
the Corporation; and

 

(e)                                 Execute and deliver in form and content as
may be required by the Bank any and all notes, evidences of Indebtedness,
applications for letters of credit, guaranties, subordination agreements, loan
and security agreements, financing statements, assignments, liens, deeds of
trust, mortgages, trust receipts and other agreements, instruments or documents
to carry out the purposes of these Resolutions, any or all of which may relate
to all or to substantially all of the Corporation’s property and assets.

 

14.                               Said Bank be and it is authorized and directed
to pay the proceeds of any such loans or discounts as directed by the persons so
authorized to sign, whether so payable to the order of any of said persons in
their individual capacities or not, and whether such proceeds are deposited to
the individual credit of any of said persons or not;

 

15.                               Any and all agreements, instruments and
documents previously executed and acts and things previously done to carry out
the purposes of these Resolutions are ratified, confirmed and approved as the
act or acts of the Corporation.

 

16.                               These Resolutions shall continue in force, and
the Bank may consider the holders of said offices and their signatures to be and
continue to be as set forth in a certified copy of these Resolutions delivered
to the Bank, until notice to the contrary in writing is duly served on the Bank
(such notice to have no effect on any action previously taken by the Bank in
reliance on these Resolutions).

 

17.                               Any person, corporation or other legal entity
dealing with the Bank may rely upon a certificate signed by an officer of the
Bank to effect that these Resolutions and any agreement, instrument or document
executed pursuant to them are still in full force and effect and binding upon
the Corporation.

 

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18.                               The Bank may consider the holders of the
offices of the Corporation and their signatures, respectively, to be and
continue to be as set forth in the Certificate of the Secretary of the
Corporation until notice to the contrary in writing is duly served on the Bank.

 

I further certify that the above Resolutions are in full force and effect as of
the date of this Certificate; that these Resolutions and any borrowings or
financial accommodations under these Resolutions have been properly noted in the
corporate books and records, and have not been rescinded, annulled, revoked or
modified; that neither the foregoing Resolutions nor any actions to be taken
pursuant to them are or will be in contravention of any provision of the
articles of incorporation or bylaws of the Corporation or of any agreement,
indenture or other instrument to which the Corporation is a party or by which it
is bound; and that neither the articles of incorporation nor bylaws of the
Corporation nor any agreement, indenture or other instrument to which the
Corporation is a party or by which it is bound require the vote or consent of
shareholders of the Corporation to authorize any act, matter or thing described
in the foregoing Resolutions.

 

I further certify that the following named persons have been duly elected to the
offices set opposite their respective names, that they continue to hold these
offices at the present time, and that the signatures which appear below are the
genuine, original signatures of each respectively:

 

(PLEASE SUPPLY GENUINE SIGNATURES OF AUTHORIZED SIGNERS BELOW)

 

NAME (Type or Print)

 

TITLE

 

SIGNATURE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In Witness Whereof, I have affixed my name as Secretary and have caused the
corporate seal (where available) of said Corporation to be affixed on April 25,
2006.

 

 

 

 

Secretary

 

The Above Statements are Correct.

 

 

 

 

SIGNATURE OF OFFICER OR DIRECTOR OR, IF NONE. A
SHAREHOLDER OTHER THAN SECRETARY WHEN SECRETARY IS
AUTHORIZED TO SIGN ALONE.

 

Failure to complete the above when the Secretary is authorized to sign alone
shall constitute a certification by the Secretary that the Secretary is the sole
Shareholder, Director and Officer of the Corporation.

 

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Corporation Resolutions and Incumbency Certification
Authority to Procure Loans

 

I certify that I am the duly elected and qualified Secretary of LYRIS
TECHNOLOGIES INC.; that the following is a true and correct copy of resolutions
duly adopted by the Board of Directors of the Corporation in accordance with its
bylaws and applicable statutes.

 

Copy of Resolutions:

 

Be it Resolved, That:

 

1.                                       Any one (1) of the
following                                                            (insert
titles only) of the Corporation are/is authorized, for, on behalf of, and in the
name of the Corporation to:

 

(a)                                 Negotiate and procure loans, letters of
credit and other credit or financial accommodations from Comerica Bank (“Bank”),
a Michigan banking corporation, including, without limitation, that certain Loan
and Security Agreement dated as of October 4, 2005, as may subsequently be
amended from time to time, including but not limited to that certain First
Amendment to Loan and Security Agreement dated as of April 25, 2006.

 

(b)                                Discount with the Bank, commercial or other
business paper belonging to the Corporation made or drawn by or upon third
parties, without limit as to amount;

 

(c)                                 Purchase, sell, exchange, assign, endorse
for transfer and/or deliver certificates and/or instruments representing stocks,
bonds, evidences of Indebtedness or other securities owned by the Corporation,
whether or not registered in the name of the Corporation;

 

(d)                                Give security for any liabilities of the
Corporation to the Bank by grant, security interest, assignment, lien, deed of
trust or mortgage upon any real or personal property, tangible or intangible of
the Corporation; and

 

(e)                                 Execute and deliver in form and content as
may be required by the Bank any and

all notes, evidences of Indebtedness, applications for letters of credit,
guaranties, subordination agreements, loan and security agreements, financing
statements, assignments, liens, deeds of trust, mortgages, trust receipts and
other agreements, instruments or documents to carry out the purposes of these
Resolutions, any or all of which may relate to all or to substantially all of
the Corporation’s property and assets.

 

2.                                       Said Bank be and it is authorized and
directed to pay the proceeds of any such loans or discounts as directed by the
persons so authorized to sign, whether so payable to the order of any of said
persons in their individual capacities or not, and whether such proceeds are
deposited to the individual credit of any of said persons or not;

 

3.                                       Any and all agreements, instruments and
documents previously executed and acts and things previously done to carry out
the purposes of these Resolutions are ratified, confirmed and approved as the
act or acts of the Corporation.

 

4.                                       These Resolutions shall continue in
force, and the Bank may consider the holders of said offices and their
signatures to be and continue to be as set forth in a certified copy of these
Resolutions delivered to the Bank, until notice to the contrary in writing is
duly served on the Bank (such notice to have no effect on any action previously
taken by the Bank in reliance on these Resolutions).

 

5.                                       Any person, corporation or other legal
entity dealing with the Bank may rely upon a certificate signed by an officer of
the Bank to effect that these Resolutions and any agreement, instrument or
document executed pursuant to them are still in full force and effect and
binding upon the Corporation.

 

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

 

6.                                       The Bank may consider the holders of
the offices of the Corporation and their signatures, respectively, to be and
continue to be as set forth in the Certificate of the Secretary of the
Corporation until notice to the contrary in writing is duly served on the Bank.

 

I further certify that the above Resolutions are in full force and effect as of
the date of this Certificate; that these Resolutions and any borrowings or
financial accommodations under these Resolutions have been properly noted in the
corporate books and records, and have not been rescinded, annulled, revoked or
modified; that neither the foregoing Resolutions nor any actions to be taken
pursuant to them are or will be in contravention of any provision of the
articles of incorporation or bylaws of the Corporation or of any agreement,
indenture or other instrument to which the Corporation is a party or by which it
is bound; and that neither the articles of incorporation nor bylaws of the
Corporation nor any agreement, indenture or other instrument to which the
Corporation is a party or by which it is bound require the vote or consent of
shareholders of the Corporation to authorize any act, matter or thing described
in the foregoing Resolutions.

 

I further certify that the following named persons have been duly elected to the
offices set opposite their respective names, that they continue to hold these
offices at the present time, and that the signatures which appear below are the
genuine, original signatures of each respectively:

 

(PLEASE SUPPLY GENUINE SIGNATURES OF AUTHORIZED SIGNERS BELOW)

 

NAME (Type or Print)

 

TITLE

 

SIGNATURE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In Witness Whereof, I have affixed my name as Secretary and have caused the
corporate seal (where available) of said Corporation to be affixed on April 25,
2006.

 

 

 

 

Secretary

 

The Above Statements are Correct.

 

 

 

 

SIGNATURE OF OFFICER OR DIRECTOR OR, IF NONE. A
SHAREHOLDER OTHER THAN SECRETARY WHEN SECRETARY IS
AUTHORIZED TO SIGN ALONE.

 

Failure to complete the above when the Secretary is authorized to sign alone
shall constitute a certification by the Secretary that the Secretary is the sole
Shareholder, Director and Officer of the Corporation.

 

2

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Corporation Resolutions and Incumbency Certification
Authority to Procure Loans

 

I certify that I am the duly elected and qualified Secretary of UPTILT RESOURCES
INC.; that the following is a true and correct copy of resolutions duly adopted
by the Board of Directors of the Corporation in accordance with its bylaws and
applicable statutes.

 

Copy of Resolutions:

 

Be it Resolved, That:

 

1.                                       Any one (1) of the
following                                                            (insert
titles only) of the Corporation are/is authorized, for, on behalf of, and in the
name of the Corporation to:

 

(a)                                 Negotiate and procure loans, letters of
credit and other credit or financial accommodations from Comerica Bank (“Bank”),
a Michigan banking corporation, including, without limitation, that certain Loan
and Security Agreement dated as of October 4, 2005, as may subsequently be
amended from time to time, including but not limited to that certain First
Amendment to Loan and Security Agreement dated as of April 25, 2006.

 

(b)                                Discount with the Bank, commercial or other
business paper belonging to the Corporation made or drawn by or upon third
parties, without limit as to amount;

 

(c)                                 Purchase, sell, exchange, assign, endorse
for transfer and/or deliver certificates and/or instruments representing stocks,
bonds, evidences of Indebtedness or other securities owned by the Corporation,
whether or not registered in the name of the Corporation;

 

(d)                                Give security for any liabilities of the
Corporation to the Bank by grant, security interest, assignment, lien, deed of
trust or mortgage upon any real or personal property, tangible or intangible of
the Corporation; and

 

(e)                                 Execute and deliver in form and content as
may be required by the Bank any and all notes, evidences of Indebtedness,
applications for letters of credit, guaranties, subordination agreements, loan
and security agreements, financing statements, assignments, liens, deeds of
trust, mortgages, trust receipts and other agreements, instruments or documents
to carry out the purposes of these Resolutions, any or all of which may relate
to all or to substantially all of the Corporation’s property and assets.

 

2.                                       Said Bank be and it is authorized and
directed to pay the proceeds of any such loans or discounts as directed by the
persons so authorized to sign, whether so payable to the order of any of said
persons in their individual capacities or not, and whether such proceeds are
deposited to the individual credit of any of said persons or not;

 

3.                                       Any and all agreements, instruments and
documents previously executed and acts and things previously done to carry out
the purposes of these Resolutions are ratified, confirmed and approved as the
act or acts of the Corporation.

 

4.                                       These Resolutions shall continue in
force, and the Bank may consider the holders of said offices and their
signatures to be and continue to be as set forth in a certified copy of these
Resolutions delivered to the Bank, until notice to the contrary in writing is
duly served on the Bank (such notice to have no effect on any action previously
taken by the Bank in reliance on these Resolutions).

 

3

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5.                                       Any person, corporation or other legal
entity dealing with the Bank may rely upon a certificate signed by an officer of
the Bank to effect that these Resolutions and any agreement, instrument or
document executed pursuant to them are still in full force and effect and
binding upon the Corporation.

 

6.                                       The Bank may consider the holders of
the offices of the Corporation and their signatures, respectively, to be and
continue to be as set forth in the Certificate of the Secretary of the
Corporation until notice to the contrary in writing is duly served on the Bank.

 

I further certify that the above Resolutions are in full force and effect as of
the date of this Certificate; that these Resolutions and any borrowings or
financial accommodations under these Resolutions have been properly noted in the
corporate books and records, and have not been rescinded, annulled, revoked or
modified; that neither the foregoing Resolutions nor any actions to be taken
pursuant to them are or will be in contravention of any provision of the
articles of incorporation or bylaws of the Corporation or of any agreement,
indenture or other instrument to which the Corporation is a party or by which it
is bound; and that neither the articles of incorporation nor bylaws of the
Corporation nor any agreement, indenture or other instrument to which the
Corporation is a party or by which it is bound require the vote or consent of
shareholders of the Corporation to authorize any act, matter or thing described
in the foregoing Resolutions.

 

I further certify that the following named persons have been duly elected to the
offices set opposite their respective names, that they continue to hold these
offices at the present time, and that the signatures which appear below are the
genuine, original signatures of each respectively:

 

(PLEASE SUPPLY GENUINE SIGNATURES OF AUTHORIZED SIGNERS BELOW)

 

NAME (Type or Print)

 

TITLE

 

SIGNATURE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In Witness Whereof, I have affixed my name as Secretary and have caused the
corporate seal (where available) of said Corporation to be affixed on April 25,
2006.

 

 

 

 

Secretary

 

The Above Statements are Correct.

 

 

 

 

SIGNATURE OF OFFICER OR DIRECTOR OR, IF NONE. A
SHAREHOLDER OTHER THAN SECRETARY WHEN SECRETARY IS
AUTHORIZED TO SIGN ALONE.

 

Failure to complete the above when the Secretary is authorized to sign alone
shall constitute a certification by the Secretary that the Secretary is the sole
Shareholder, Director and Officer of the Corporation.

 

4

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

 

LIBOR Addendum To Loan and Security Agreement

 

This Addendum to Loan and Security Agreement (this “Addendum”) is entered into
as of April 25, 2006, by and between Comerica Bank (“Bank”) and COMMODORE
RESOURCES (NEVADA), INC., LYRIS TECHNOLOGIES INC. and UPTILT INC. (collectively,
“Borrower”). This Addendum supplements the terms of the Loan and Security
Agreement of even date herewith.

 

1.                                      Definitions.

 

a.                                       Advance. As used herein, “Advance”
means a borrowing requested by Borrower and made by Bank under the Note,
including a LIBOR Option Advance and/or a Base Rate Option Advance.

 

b.                                      Business Day. As used herein, “Business
Day” means any day except a Saturday, Sunday or any other day designated as a
holiday under Federal or California statute or regulation.

 

c.                                       LIBOR. As used herein, “LIBOR” means
the rate per annum (rounded upward if necessary, to the nearest whole 1/8 of 1%)
and determined pursuant to the following formula:

 

 

Base LIBOR

LIBOR =

100% - LIBOR Reserve Percentage

 

(1)                                  “Base LIBOR” means the rate per annum
determined by Bank at which deposits for the relevant LIBOR Period would be
offered to Bank in the approximate amount of the relevant LIBOR Option Advance
in the inter-bank LIBOR market selected by Bank, upon request of Bank at
10:00 a.m. California time, on the day that is the first day of such LIBOR
Period.

 

(2)                                  “LIBOR Reserve Percentage” means the
reserve percentage prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for “Eurocurrency Liabilities” (as defined in
Regulation D of the Federal Reserve Board, as amended), adjusted by Bank for
expected changes in such reserve percentage during the applicable LIBOR Period.

 

d.                                      LIBOR Business Day. As used herein,
“LIBOR Business Day” means a Business day on which dealings in Dollar deposits
may be carried out in the interbank LIBOR market.

 

e.                                       LIBOR Period. As used herein, “LIBOR
Period” means, with respect to a LIBOR Option Advance:

 

(1)                                  initially, the period commencing on, as the
case may be, the date the Advance is made or the date on which the Advance is
converted to a LIBOR Option Advance, and continuing for, in every case, a 30,
60, 90 or 180 day period thereafter so long as the LIBOR Option is quoted for
such period in the applicable interbank LIBOR market, as such period is selected
by Borrower in the notice of Advance as provided in the Note or in the notice of
conversion as provided in this Addendum; and

 

(2)                                  thereafter, each period commencing on the
last day of the next preceding LIBOR Period applicable to such LIBOR Option
Advance and continuing for, in every case, a 30, 60, 90 or 180 day period
thereafter so long as the LIBOR Option is quoted for such period in the
applicable interbank LIBOR market, as such period is selected by Borrower in the
notice of continuation as provided in this Addendum.

 

f.                                         Note. As used herein, “Note” means
the Loan and Security Agreement dated as of October 4, 2005 as amended by that
certain First Amendment to Loan and Security Agreement dated as of even date
herewith.

 

1

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

 

g.                                      Regulation D. As used herein,
“Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System as amended or supplemented from time to time.

 

h.                                      Regulatory Development. As used herein,
“Regulatory Development” means any or all of the following: (i) any change in
any law, regulation or interpretation thereof by any public authority (whether
or not having the force of law); (ii) the application of any existing law,
regulation or the interpretation thereof by any public authority (whether or not
having the force of law); and (iii) compliance by Bank with any request or
directive (whether or not having the force of law) of any public authority.

 

2.                                       Interest Rate Options. Borrower shall
have the following options regarding the interest rate to be paid by Borrower on
Advances under the Note as follows:

 

1)     If the Senior Debt/EBITDA ratio in section 6.7(c) of the Note is less
than or equal to 1.00 to 1.00 for the most recently ended measuring period then:

 

a.               A rate equal to two and three quarters percent (2.75%) above
Bank’s LIBOR, (the “LIBOR Option”), which LIBOR Option shall be in effect during
the relevant LIBOR Period; or

 

b.              A rate equal to the “Base Rate” as referenced in the Note and
quoted from time to time by Bank as such rate may change from time to time (the
“Base Rate Option”).

 

2)     If the Senior Debt/EBITDA ratio in section 6.7(c) of the Note is greater
than 1.00 to 1.00 but less than or equal to 1.50 to 1.00 for the most recently
ended measuring period then:

 

a.               A rate equal to three percent (3.00%) above Bank’s LIBOR, (the
“LIBOR Option”), which LIBOR Option shall be in effect during the relevant LIBOR
Period; or

 

b.              A rate equal to one eighth of one percent (0.125%) above the
“Base Rate” as referenced in the Note and quoted from time to time by Bank as
such rate may change from time to time (the “Base Rate Option”).; and

 

3)     If the Senior Debt/EBITDA ratio in section 6.7(c) of the Note is greater
than 1.50 to 1.00 but less than or equal to 2.00 to 1.00 for the most recently
ended measuring period then:

 

c.               A rate equal to three and one quarter percent (3.25%) above
Bank’s LIBOR, (the “LIBOR Option”), which LIBOR Option shall be in effect during
the relevant LIBOR Period; or

 

d.              A rate equal to one quarter of one percent (0.25%) above the
“Base Rate” as referenced in the Note and quoted from time to time by Bank as
such rate may change from time to time (the “Base Rate Option”).

 

2

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

 

3.                                       LIBOR Option Advance. The minimum LIBOR
Option Advance will not be less than One Million and 00/100 Dollars ($1,000,000)
for any LIBOR Option Advance.

 

4.                                       Payment of Interest on LIBOR Option
Advances. Interest on each LIBOR Option Advance shall be payable pursuant to the
terms of the Note. Interest on such LIBOR Option Advance shall be computed on
the basis of a 360-day year and shall be assessed for the actual number of days
elapsed from the first day of the LIBOR Period applicable thereto but not
including the last day thereof.

 

5.                                       Bank’s Records Re: LIBOR Option
Advances. With respect to each LIBOR Option Advance, Bank is hereby authorized
to note the date, principal amount, interest rate and LIBOR Period applicable
thereto and any payments made thereon on Bank’s books and records (either
manually or by electronic entry) and/or on any schedule attached to the Note,
which notations shall be prima facie evidence of the accuracy of the information
noted.

 

6.                                       Selection/Conversion of Interest Rate
Options. At the time any Advance is requested under the Note and/or Borrower
wishes to select the LIBOR Option for all or a portion of the outstanding
principal balance of the Note, and at the end of each LIBOR Period, Borrower
shall give Bank notice specifying (a) the interest rate option selected by
Borrower; (b) the principal amount subject thereto; and (c) if the LIBOR Option
is selected, the length of the applicable LIBOR Period. Any such notice may be
given by telephone so long as, with respect to each LIBOR Option selected by
Borrower, (i) Bank receives written confirmation from Borrower not later than
three (3) LIBOR Business Days after such telephone notice is given; and
(ii) such notice is given to Bank prior to 10:00 a.m., California time, on the
first day of the LIBOR Period. For each LIBOR Option requested hereunder, Bank
will quote the applicable fixed LIBOR Rate to Borrower at approximately
10:00 a.m., California time, on the first day of the LIBOR Period. If Borrower
does not immediately accept the rate quoted by Bank, any subsequent acceptance
by Borrower shall be subject to a redetermination of the rate by Bank; provided,
however, that if Borrower fails to accept any such quotation as given, then the
quoted rate shall expire and Bank shall have no obligation to permit a LIBOR
Option to be selected on such day. If no specific designation of interest is
made at the time any Advance is requested under the Note or at the end of any
LIBOR Period, Borrower shall be deemed to have selected the Base Rate Option for
such Advance or the principal amount to which such LIBOR Period applied. At any
time the LIBOR Option is in effect, Borrower may, at the end of the applicable
LIBOR Period, convert to the Base Rate Option. At any time the Base Rate Option
is in effect, Borrower may convert to the LIBOR OPTION, and shall designate a
LIBOR Period.

 

7.                                       Default Interest Rate. From and after
the maturity date of the Note, or such earlier date as all principal owing
hereunder becomes due and payable by acceleration or otherwise, the outstanding
principal balance of the Note shall bear interest until paid in full at an
increased rate per annum (computed on the basis of a 360-day year, actual days
elapsed) equal to five percent (5.00%) above the rate of interest from time to
time applicable to the Note.

 

8.                                       Prepayment. In the event that the LIBOR
Option is the applicable interest rate for all or any part of the outstanding
principal balance of the Note, and any payment or prepayment of any such
outstanding principal balance of the Note shall occur on any day other than the
last day of the applicable LIBOR Period (whether voluntarily, by acceleration,
required payment, or otherwise), or if Borrower elects the LIBOR Option as the
applicable interest rate for all or any part of the outstanding principal
balance of the Note in accordance with the terms and conditions hereof, and,
subsequent to such election, but prior to the commencement of the applicable
LIBOR Period, Borrower revokes such election for any reason whatsoever, or if
the applicable interest rate in respect of any outstanding principal balance of
the Note hereunder shall be changed, for any reason whatsoever, from the LIBOR
Option to the Base Rate Option prior to the last day of the applicable LIBOR
Period, or if Borrower shall fail to make any payment of principal or interest
hereunder at any time that the LIBOR Option is the applicable interest rate
hereunder in respect of such outstanding principal balance of the Note, Borrower
shall reimburse Bank, on demand, for any resulting loss, cost or expense
incurred by Bank as a result thereof, including, without limitation, any such
loss, cost or expense incurred in obtaining, liquidating, employing or
redeploying deposits from third parties. Such amount payable by Borrower to Bank
may include, without limitation, an amount equal to the excess, if any, of
(a) the amount of interest which would have accrued on the amount so prepaid, or
not so borrowed, refunded or converted, for the period from the date of such
prepayment or of such failure to borrow, refund or convert, through the last day
of the relevant LIBOR Period, at the applicable rate of interest for such
outstanding principal balance of the Note, as provided under this Note, over
(b) the amount of interest (as reasonably determined by Bank) which

 

3

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

 

would have accrued to Bank on such amount by placing such amount on deposit for
a comparable period with leading banks in the interbank eurodollar market.
Calculation of any amounts payable to Bank under this paragraph shall be made as
though Bank shall have actually funded or committed to fund the relevant
outstanding principal balance of the Note hereunder through the purchase of an
underlying deposit in an amount equal to the amount of such outstanding
principal balance of the Note and having a maturity comparable to the relevant
LIBOR Period; provided, however, that Bank may fund the outstanding principal
balance of the Note hereunder in any manner it deems fit and the foregoing
assumptions shall be utilized only for the purpose of the calculation of amounts
payable under this paragraph. Upon the written request of Borrower, Bank shall
deliver to Borrower a certificate setting forth the basis for determining such
losses, costs and expenses, which certificate shall be conclusively presumed
correct, absent manifest error. Any prepayment hereunder shall also be
accompanied by the payment of all accrued and unpaid interest on the amount so
prepaid. Any outstanding principal balance of the Note which is bearing interest
at such time at the Base Rate Option may be prepaid without penalty or premium.
Partial prepayments hereunder shall be applied to the installments hereunder in
the inverse order of their maturities.

 

BY INITIALING BELOW, BORROWER ACKNOWLEDGE(S) AND AGREE(S) THAT: (A) THERE IS NO
RIGHT TO PREPAY ANY LIBOR OPTION ADVANCE, IN WHOLE OR IN PART, WITHOUT PAYING
THE PREPAYMENT AMOUNT SET FORTH HEREIN (“PREPAYMENT AMOUNT”), EXCEPT AS
OTHERWISE REQUIRED UNDER APPLICABLE LAW; (B) BORROWER SHALL BE LIABLE FOR
PAYMENT OF THE PREPAYMENT AMOUNT IF BANK EXERCISES ITS RIGHT TO ACCELERATE
PAYMENT OF ANY LIBOR OPTION ADVANCE AS PART OR ALL OF THE OBLIGATIONS OWING
UNDER THE NOTE, INCLUDING WITHOUT LIMITATION, ACCELERATION UNDER A DUE-ON-SALE
PROVISION; (C) BORROWER WAIVES ANY RIGHTS UNDER SECTION 2954.10 OF THE
CALIFORNIA CIVIL CODE, OR ANY SUCCESSOR STATUTE; AND (D) BANK HAS MADE EACH
LIBOR OPTION ADVANCE PURSUANT TO THE NOTE IN RELIANCE ON THESE AGREEMENTS.

 

BORROWERS’ INITIALS

 

9.                                       Hold Harmless and Indemnification.
Borrower agrees to indemnify Bank and to hold Bank harmless from, and to
reimburse Bank on demand for, all losses and expenses which Bank sustains or
incurs as a result of (i) any payment of a LIBOR Option Advance prior to the
last day of the applicable LIBOR Period for any reason, including, without
limitation, termination of the Note, whether pursuant to this Addendum or the
occurrence of an Event of Default; (ii) any termination of a LIBOR Period prior
to the date it would otherwise end in accordance with this Addendum; or
(iii) any failure by Borrower, for any reason, to borrow any portion of a LIBOR
Option Advance.

 

10.                                 Funding Losses. The indemnification and hold
harmless provisions set forth in this Addendum shall include, without
limitation, all losses and expenses arising from interest and fees that Bank
pays to lenders of funds it obtains in order to fund the loans to Borrower on
the basis of the LIBOR Option(s) and all losses incurred in liquidating or
re-deploying deposits from which such funds were obtained and loss of profit for
the period after termination. A written statement by Bank to Borrower of such
losses and expenses shall be conclusive and binding, absent manifest error, for
all purposes. This obligation shall survive the termination of this Addendum and
the payment of the Note.

 

11.                                 Regulatory Developments Or Other
Circumstances Relating To Illegality or Impracticality of LIBOR. If any
Regulatory Development or other circumstances relating to the interbank
Euro-dollar markets shall, at any time, in Bank’s reasonable determination ,
make it unlawful or impractical for Bank to fund or maintain, during any LIBOR
Period, to determine or charge interest rates based upon LIBOR, Bank shall give
notice of such circumstances to Borrower and:

 

a.                                       In the case of a LIBOR Period in
progress, Borrower shall, if requested by Bank, promptly pay any interest which
had accrued prior to such request and the date of such request shall be deemed
to be the last day of the term of the LIBOR Period; and

 

b.                                      No LIBOR Period may be designated
thereafter until Bank determines that such would be practical.

 

4

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12.                                 Additional Costs. Borrower shall pay to Bank
from time to time, upon Bank’s request, such amounts as Bank determines are
needed to compensate Bank for any costs it incurred which are attributable to
Bank having made or maintained a LIBOR Option Advance or to Bank’s obligation to
make a LIBOR Option Advance, or any reduction in any amount receivable by Bank
hereunder with respect to any LIBOR Option or such obligation (such increases in
costs and reductions in amounts receivable being herein called “Additional
Costs”), resulting from any Regulatory Developments, which (i) change the basis
of taxation of any amounts payable to Bank hereunder with respect to taxation of
any amounts payable to Bank hereunder with respect to any LIBOR Option Advance
(other than taxes imposed on the overall net income of Bank for any LIBOR Option
Advance by the jurisdiction where Bank is headquartered or the jurisdiction
where Bank extends the LIBOR Option Advance; (ii) impose or modify any reserve,
special deposit, or similar requirements relating to any extensions of credit or
other assets of, or any deposits with or other liabilities of, Bank (including
any LIBOR Option Advance or any deposits referred to in the definition of
LIBOR); or (iii) impose any other condition affecting this Addendum (or any of
such extension of credit or liabilities). Bank shall notify Borrower of any
event occurring after the date hereof which entitles Bank to compensation
pursuant to this paragraph as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation. Determinations by Bank for
purposes of this paragraph, shall be conclusive, provided that such
determinations are made on a reasonable basis.

 

13.                                 Legal Effect. Except as specifically
modified hereby, all of the terms and conditions of the Note remain in full
force and effect.

 

5

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IN WITNESS WHEREOF, the parties have agreed to the foregoing as of the date
first set forth above.

 

COMMODORE RESOURCES (NEVADA), INC.

 

COMERICA BANK

 

 

 

By:

 

 

By:

 

 

 

 

Title:

 

 

Title:

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

LYRIS TECHNOLOGIES INC.

 

 

 

 

 

By:

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

UPTILT INC.

 

 

 

 

 

By:

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

Title:

 

 

 

 

6

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AFFIRMATION OF GUARANTY

 

This AFFIRMATION OF GUARANTY is made as of April 25, 2006, by the undersigned
(“Guarantor”) for the benefit of Comerica Bank (“Bank”).

 

RECITALS

 

Bank and COMMODORE RESOURCES (NEVADA), INC., LYRIS TECHNOLOGIES INC. and UPTILT
INC. (each a “Borrower” and collectively, “Borrowers”) are parties to that
certain Loan and Security Agreement dated as of October 4, 2005 (the “Loan
Agreement”).   Guarantor executed for the benefit of Bank an Unconditional
Guaranty dated as of even date with the Loan Agreement (the “Guaranty”),
guarantying all amounts owing by Borrowers to Bank. Borrowers and Bank propose
to enter into a First Amendment to Loan and Security Agreement of even date
herewith (the “Amendment”), which amends the Loan Agreement by, among other
things, restructuring certain financial covenants of Borrowers. Bank has agreed
to enter into the Amendment provided, among other things, that Guarantor
consents to the entry by Borrowers into the Amendment and related documents and
agrees that the Guaranty will remain effective.

 

AGREEMENT

 

NOW, THEREFORE, Guarantor agrees as follows:

 

1.                                       Guarantor consents to the execution,
delivery and performance by Borrowers of the Amendment and the documents and
instruments executed in connection therewith, as well as all other amendments
and modifications to the Loan Agreement.

 

2.                                       The Guaranty is and shall remain in
full force and effect with respect to all of Borrowers’ Obligations (as defined
in the Loan Agreement) as modified by the Amendment and otherwise. Guarantor
confirms that Guarantor has no defenses against its obligations under the
Guaranty.

 

3.                                       Guarantor represents and warrants that
the Representations and Warranties contained in the Guaranty are true and
correct as of the date of this Affirmation. Unless otherwise defined, all
capitalized terms in this Affirmation shall be as defined in the Guaranty.

 

IN WITNESS WHEREOF, the undersigned Guarantor has executed this Affirmation of
Guaranty as of the first date above written.

 

 

J.L. HALSEY CORPORATION

 

 

 

 

 

By:

 

 

 

 

Title:

 

 

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CORPORATE RESOLUTIONS TO GUARANTY

 

Grantor:                J.L. HALSEY CORPORATION

 

I, the undersigned Secretary or Assistant Secretary of J.L. HALSEY CORPORATION
(the “Corporation”), HEREBY CERTIFY that the Corporation is organized and
existing under and by virtue of the laws of

 

I FURTHER CERTIFY that the Certificate of Incorporation of the Corporation
attached hereto are in full force and effect on the date hereof and have not
been modified or amended as of the date hereof.

 

I FURTHER CERTIFY that at a meeting of the Directors of the Corporation duly
called and held, at which a quorum was present and voting (or by other duly
authorized corporate action in lieu of a meeting), the following resolutions
were adopted.

 

BE IT RESOLVED, that any one (1) of the following named officers, employees, or
agents of this Corporation, whose actual signatures are shown below:

 

NAMES

 

POSITIONS

 

ACTUAL SIGNATURES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

acting for an on behalf of this Corporation and as its act and deed be, and they
hereby are, authorized and empowered:

 

Guaranty Indebtedness. To guaranty amounts borrowed from time to time from
Comerica Bank (“Bank”) by COMMODORE RESOURCES (NEVADA), INC., LYRIS TECHNOLOGIES
INC. and UPTILT INC. (each a “Borrower” and collectively, “Borrowers”) pursuant
to that certain Loan and Security Agreement between Bank and Borrowers dated as
of October 4, 2005 as amended from time to time including by that certain First
Amendment to Loan and Security Agreement dated as of April 25, 2006 (the “Loan
Agreement”).

 

Execute Affirmation of Guaranty. To execute and deliver to Bank that certain
Affirmation of Guaranty dated as of April 25, 2006 and also to execute and
deliver to Bank one or more renewals, extensions, modifications, consolidations,
or substitutions therefor.

 

Further Acts. To do and perform such other acts and things, to pay any and all
fees and costs, and to execute and deliver such other documents and agreements
as they may in their discretion deem reasonably necessary or proper in order to
carry into effect the provisions of these Resolutions.

 

BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
resolutions and performed prior to the passage of these resolutions are hereby
ratified and approved, that these Resolutions shall remain in full force and
effect and Bank may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Bank. Any such notice
shall not affect any of the Corporation’s agreements or commitments in effect at
the time notice is given.

 

I FURTHER CERTIFY that the officers, employees, and agents named above are duly
elected, appointed, or employed by or for the Corporation, as the case may be,
and occupy the positions set opposite their respective names; that the foregoing
Resolutions now stand of record on the books of the Corporation; and that the
Resolutions are in full force and effect and have not been modified or revoked
in any manner whatsoever.

 

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IN WITNESS WHEREOF, I have hereunto set my hand on April 25, 2006, and attest
that the signatures set opposite the names listed above are their genuine
signatures.

 

 

CERTIFIED TO AND ATTESTED BY:

 

 

 

 

 

X

 

 

The above statements are correct.

 

 

 

By:

 

 

Printed Name:

 

 

Title:

 

 

SIGNATURE OF OFFICER OR DIRECTOR
OR, IF NONE, A SHAREHOLDER OTHER
THAN SECRETARY WHEN SECRETARY IS
AUTHORIZED TO SIGN ALONE.

 

 

Failure to complete the above when the Secretary is authorized to sign alone
shall constitute a certification by the Secretary that the Secretary is the sole
Shareholder, Director and Officer of the Corporation.

 

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