EXHIBIT 10.1
 
FIFTH AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
 
     This Fifth Amendment to Amended and Restated Loan and Security Agreement
(this “Amendment”) is entered into as of May 6, 2010, by and between COMERICA
BANK (“Bank”) and LYRIS, INC., LYRIS TECHNOLOGIES INC. and COMMODORE RESOURCES
(NEVADA), INC. (each a “Borrower” and collectively, “Borrowers”).
 
RECITALS
 
     Borrowers and Bank are parties to that certain Amended and Restated Loan
and Security Agreement dated as of March 6, 2008, as amended from time to time,
including by that certain First Amendment to Amended and Restated Loan and
Security Agreement dated as of July 30, 2008, that certain Second Amendment to
Amended and Restated Loan and Security Agreement dated as of December 31, 2008,
that certain Third Amendment to Amended and Restated Loan and Security Agreement
dated as of June 19, 2009 and that certain Fourth Amendment to Amended and
Restated Loan and Security Agreement dated as of October 23, 2009 (collectively,
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
added, amended or restated as follows:
 
          “Joint Venture Cap” means an aggregate amount equal to One Million
Five Hundred Thousand Dollars ($1,500,000) minus any cash expenditures made by
Borrowers under the M&A Cap.
 
          “Liquidity” means the sum of (i) unrestricted cash at Bank plus (ii)
unused availability under the Revolving Line.
 
          “M&A Cap” means an aggregate amount equal to One Million Five Hundred
Thousand Dollars ($1,500,000) minus any cash expenditures made by Borrowers
under the Joint Venture Cap.
 
          “Revolving Line” means a Credit Extension of up to Five Million
Dollars ($5,000,000).
 
          “Revolving Maturity Date” means April 30, 2012.
 
     2. Subsection (c) of the defined term “Permitted Indebtedness” in Section
1.1 of the Agreement hereby is amended and restated in its entirety to read as
follows:
 
          “(c) Indebtedness not to exceed One Million Dollars ($1,000,000) in
the aggregate in the aggregate in any fiscal year of Borrowers secured by a lien
described in clause (c) of the defined term “ Permitted Liens;” provided such
Indebtedness does not exceed the lesser of the cost or fair market value of the
equipment financed with such Indebtedness at the time of financing;”
 
     3. Subsection (c) of the defined term “Permitted Liens” in Section 1.1 of
the Agreement hereby is amended and restated in its entirety to read as follows:
 
           “(c) Liens not to exceed One Million Dollars ($1,000,000) in the
aggregate (i) upon or in any Equipment acquired or held by a Borrower or any of
its Subsidiaries to secure the purchase price of such Equipment or indebtedness
incurred solely for the purpose of financing the acquisition or lease of such
Equipment, or (ii) existing on such Equipment at the time of its acquisition,
provided that the Lien is confined solely to the property so acquired and
improvements thereon, and the proceeds of such Equipment;”
 
-1-
 

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

     4. Subsection (i) of the defined term “Permitted Investments” in Section
1.1 of the Agreement hereby is amended and restated in its entirety to read as
follows:
 
          “(i) Joint ventures or strategic alliances in the ordinary course of a
Borrower’s business consisting of the non-exclusive licensing of technology, the
development of technology or the providing of technical support, provided that
any cash Investments by Borrowers do not, in the aggregate, exceed the Joint
Venture Cap.”
 
     5. Section 2.1(c) of the Agreement hereby is amended and restated in its
entirety to read as follows:
 
          “(c) Intentionally Omitted.”
 
     6. Section 2.5(b) of the Agreement hereby is amended and restated in its
entirety to read as follows:
 
          “(b) Unused Fee. A fee equal to one half of one percent (0.50%) of the
difference between the amount then available under the Revolving Line pursuant
to Section 2.1(b)(i) and the average daily balance outstanding thereunder during
the term hereof, paid quarterly in arrears on an annualized basis, which shall
be nonrefundable; and”
 
     7. Section 6.7 of the Agreement hereby is amended and restated in its
entirety to read as follows:
 
          “6.7 Financial Covenants. Borrowers shall at all times maintain the
following financial ratios and covenants:
 
               (a) Liquidity. Liquidity of not less than One Million Dollars
($1,000,000).
 
               (b) Six Month EBITDA. Measured monthly on a trailing sixth (6)
month basis, EBITDA of not less than the following for the applicable periods:
 

Measuring Period Ending Minimum Trailing Six (6) month EBITDA 4/30/10 $1,000,000
5/31/10 $1,000,000 6/30/10 $750,000 7/31/10 $500,000 8/31/10 $1.00 9/30/10
($500,000) 10/31/10 ($750,000) 11/30/10 ($1,000,000) 12/31/10 ($1,000,000)
1/31/11 ($750,000) 2/28/11 ($500,000) 3/31/11 $1.00

- 2 -
 

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

     Bank shall be entitled to modify the foregoing covenant for the 2011
calendar year in Bank’s sole discretion upon receipt of Borrowers’ 2011 board
approved plan.”
 
     8. Section 7.3 of the Agreement hereby is amended and restated in its
entirety to read as follows:
 
          “7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of
its Subsidiaries to merge or consolidate, with or into any other business
organization (other than mergers or consolidations of a Subsidiary into another
Subsidiary or into Borrower), or acquire, or permit any of its Subsidiaries to
acquire, all or substantially all of the capital stock or property of another
Person except where (i) cash consideration paid by Borrowers in connection with
such transactions does not in the aggregate exceed the M&A Cap, (ii) no Event of
Default has occurred, is continuing or would exist after giving effect to such
transactions, (iii) such transactions do not result in a Change in Control, and
(iv) Borrower is the surviving entity.”
 
     9. Exhibit C to the Agreement hereby is replaced with Exhibit C attached
hereto.
 
     10. The following defined term in Exhibit D to the Agreement (Prime
Referenced Rate Addendum) is hereby amended and restated in its entirety to read
as follows:
 
          “Applicable Margin” means two and one quarter percent (2.25%) per
annum.
 
     11. Exhibit E to the Agreement hereby is replaced with Exhibit E attached
hereto.
 
     12. 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 a Borrower 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.
 
     13. 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.
 
     14. Each Borrower represents and warrants that the Representations and
Warranties contained in the Agreement are true and correct as of the date of
this Amendment, and that no Event of Default has occurred and is continuing.
 
     15. 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) repayment of all amounts owing from Borrowers to Bank in
connection with the Term Loan;
 
               (d) evidence that Borrowers have received net cash proceeds of at
least Six Million Dollars ($6,000,000) from the sale of Borrowers’ equity
securities to investors and on terms and conditions reasonably acceptable to
Bank;
 
               (e) a facility fee in the amount of Twenty Five Thousand Dollars
($25,000);
 
- 3 -
 

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

               (f) all reasonable Bank Expenses incurred through the date of
this Amendment, which may be debited from any of Borrowers’ accounts; and
 
               (g) such other documents, and completion of such other matters,
as Bank may reasonably deem necessary or appropriate.
 
     16. 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.
 
 
 
 
 
[Balance of Page Intentionally Left Blank]
 
- 4 -
 

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

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

LYRIS, INC. By: /s/ Luis Rivera Title: Chief Executive Officer     LYRIS
TECHNOLOGIES INC. By: /s/ Luis Rivera Title: Chief Executive Officer    
COMMODORE RESOURCES (NEVADA), INC. By: /s/ Richard A. McDonald Title: President
    COMERICA BANK By: /s/ Philip Koblis Title:   First Vice President

 
 
 
 
[Signature Page to Fifth Amendment to Amended and Restated Loan and Security
Agreement]
 

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

EXHIBIT C
 
COMPLIANCE CERTIFICATE
 

TO: COMERICA BANK FROM:       LYRIS INC., for itself and on behalf of all
Borrowers

     The undersigned authorized officer of LYRIS, 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 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 Borrowing Base Cert, A/R & A/P Agings
Monthly within 30 days   Yes No Compliance Cert. Monthly within 30 days Yes No
A/R Audit   Semi-Annual Yes   No IP Report Quarterly within 45 days Yes No Total
amount of Borrowers' cash and   Amount:  $________ Yes No investments Total
amount of Borrowers' cash and Amount:  $________ Yes No investments maintained
with Bank

Financial Covenant   Required   Actual Complies Minimum Liquidity      
$1,000,000       $___________       Yes       No Minimum 6-Month EBITDA See
attached chart $___________   Yes No

Comments Regarding Exceptions: See Attached.   BANK USE ONLY     Sincerely,  
Received by:            AUTHORIZED SIGNER   SIGNATURE     Date:           
Verified: TITLE AUTHORIZED SIGNER   Date:       DATE   Compliance Status Yes
      No

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

Minimum Trailing 6 month EBITDA Requirements
 

Measuring Period Ending Minimum Trailing Six (6) month EBITDA 4/30/10 $1,000,000
5/31/10 $1,000,000 6/30/10 $750,000 7/31/10 $500,000 8/31/10 $1.00 9/30/10
($500,000) 10/31/10 ($750,000) 11/30/10 ($1,000,000) 12/31/10 ($1,000,000)
1/31/11 ($750,000) 2/28/11 ($500,000) 3/31/11 $1.00

     Bank shall be entitled to modify the foregoing covenant for the 2011
calendar year in Bank’s sole discretion upon receipt of Borrowers’ 2011 board
approved plan.
 

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

EXHIBIT E
 
BORROWING BASE CERTIFICATE
 

Borrower: LYRIS, INC., for itself and on behalf of all Borrowers Lender:
Comerica Bank     Commitment Amount: $5,000,000  

ACCOUNTS RECEIVABLE       1.       Accounts Receivable Book Value as of ___
$___________ 2. Additions (please explain on reverse) $___________ 3. TOTAL
ACCOUNTS RECEIVABLE $___________   ACCOUNTS RECEIVABLE DEDUCTIONS (without
duplication) 4. Amounts over 90 days due $___________ 5. Balance of 25% over 90
day accounts $___________ 6. Concentration Limits $___________ 7. Foreign
Accounts $___________ 8. Governmental Accounts $___________ 9. Contra Accounts
$___________   10. Demo Accounts $___________   11. Intercompany/Employee
Accounts $___________ 12. Other (please explain on reverse) $___________ 13.
TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS $___________ 14. Eligible Accounts (#3
minus #13)   $___________ 15. LOAN VALUE OF ACCOUNTS (80% of #14) $___________  
BALANCES 16. Maximum Loan Amount   $5,000,000 17. Total Funds Available [Lesser
of #16 or #15] $___________ 18. Present balance owing on Line of Credit
$___________ 19. Outstanding under Sublimits (e.g., Letters of Credit)
$___________ 20. RESERVE POSITION (#17 minus #18 and #19) $___________

The undersigned represents and warrants that the foregoing is true, complete and
correct, and that the information reflected in this Borrowing Base Certificate
complies with the representations and warranties set forth in the Loan and
Security Agreement between the undersigned and Comerica Bank.
 

LYRIS, INC., for itself and on behalf of all Borrowers
 

By:            Authorized Signer

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