Exhbit 10.1

	
  
 
  	
  
For Bank Use
Only                    Reviewed
by ______________
 
	
  
 
  	
  


  	
  


  
	
  
 
  	
  
Due     NOVEMBER 30, 2006
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
Customer#        0013601024
  	
  
Loan#        18/26
  




AMENDMENT TO LOAN AGREEMENT AND NOTE


This amendment (the “Amendment”), dated as of the date specified below, is by and between the borrower (the “Borrower”) and the bank (the “Bank”)identified below.


RECITALS


          A.          The Borrower and the Bank have executed a Loan Agreement (the “Agreement”) dated DECEMBER 2, 2004 and the Borrower has executed a Note (the “Note”), dated DECEMBER 2, 2004, either or both which may have been amended and replaced from time to time, and the Borrower (and if applicable, certain third parties) have executed the collateral documents which may or may not be identified in the Agreement and certain other related documents (collectively the “Loan Documents”), setting forth the terms and conditions upon which the Borrower may obtain loans from the Bank from time to time in the original amount of $ 750,000.00, as may be amended from time to time.


          B.          The Borrower has requested that the Bank permit certain modifications to the Agreement and Note as described below.


          C.          The Bank has agreed to such modifications, but only upon the terms and conditions outlined in this Amendment.


TERMS OF AGREEMENT


          In consideration of the mutual covenants contained herein, and for other good and valuable consideration, the Borrower and the Bank agree as follows:


          
x          Change in Maturity Date. If checked here, any references in the Agreement or Note to the maturity date or date of final payment are hereby deleted and replaced with “NOVEMBER 30, 2006”.


          
x          Change in Maximum Loan Amount. If checked here, all references in the Agreement and in the Note (whether or not numerically) to the maximum loan amount are hereby deleted and replaced with “$ 1,000,000.00”, which evidences an additional $ 500, 000.00 available to be advanced subject to the terms and conditions of the Agreement and Note.


          
o          Temporary Increase in Maximum Loan Amount. If checked here, notwithstanding the maximum principal amount that may be borrowed from time to time under the Agreement and Note, the maximum principal amount that may be borrowed thereunder shall increase from $                     to $                               effective through                                annually. On through annually, the maximum principal amount that may be borrowed
thereunder shall revert to $                     and any loans outstanding in excess of
that amount will be immediately due and payable without further demand by the Bank.


          
o          Change in Multiple Advance Termination Date. If checked here, all references in the Agreement and in the Note to the termination date for multiple advances are hereby deleted and replaced with “                              ”.


          Change in Financial Covenant(s).


	
  
 
  	
  
(i)          
o If checked here, all references to “$                                        ”   in the Agreement as the minimum Net Working Capital amount are hereby deleted   and replaced with “$                                        ”   for the period beginning                                            and

thereafter.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
(ii)         
o If checked here, all references to “$                                        ”   in the Agreement as the minimum Tangible Net Worth amount are hereby deleted   and replaced with “$                                        ”   for the period beginning                                           and
thereafter.
  
	
   
  	
  
 
  
	
  
 
  	
  
(iii)        
oIf checked here, all references to “                                       ”   in the Agreement as the maximum Debt to Worth Ratio are hereby deleted and   replaced with “                                       ”   for the period beginning                                          and thereafter.



	
  
 
  	
  
 
  
	
  
 
  	
  
(iv)        
o If checked here, all references to “                                       ”   in the Agreement as the minimum Current Ratio are hereby deleted and replaced   with “                                       ”   for the period beginning                                            and thereafter.


	
   
  	
  
 
  
	
  
 
  	
  
(v)         
o If checked here, all references to “$                                        ”   in the Agreement as the maximum Capital Expenditures amount are hereby   deleted and replaced with “$                                        ”   for the period beginning                                         
and thereafter.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
(vi)        
o If checked here, all references to “$                                        ”   in the Agreement as the minimum Cash Flow Coverage Ratio are hereby deleted   and replaced with “                                        ”   for the period beginning                                            and
thereafter.
  
	
   
  	
  
 
  
	
  
 
  	
  
(vii)       
o If checked here, all references to “$                                        ”   in the Agreement as the maximum Officers, Directors, Partners, and Management   Salaries and Other Compensation amount are hereby deleted and replaced with   “$                                        ”   for the period beginning 
                                           and thereafter.
  




          
o          Change in Payment Schedule. If checked here, effective upon the date of this Amendment, any payment terms are amended as follows:











          
o          Change in Late Payment Fee. If checked here, subject to applicable law, if any payment is not made on or before its due date, the Bank may collect a delinquency charge of            % of the unpaid amount. Collection of the late payment fee shall not be deemed to be a waiver of the Bank’s right to declare a default hereunder.


          
o           Change in Closing Fee. If checked here and subject to applicable law, the Borrower will pay the Bank a closing fee of $                                         (apart from any prior closing fee) contemporaneously with the execution of this Amendment. This fee is in addition to all other fees, expenses and other amounts due hereunder.


          
o          Change in Borrowing Base. If checked here, the Borrowing Base is hereby changed to an amount equal to the sum of (i) xxxxxxxxxxxx % of the face amount of Eligible Accounts, and (ii) the lesser of $ xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx or xxxxxxxxxxxxxxx  % of the Borrower’s cost of Eligible Inventory, as such cost may be diminished as a result of any event causing loss or depreciation in value of Eligible Inventory less (iii) the current outstanding loan balance on note(s) in the original amount(s) of $ xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx, and less (iv) undrawn amounts of outstanding letters of credit issued by Bank or any affiliate thereof. The Borrower will provide the Bank with information regarding the Borrowing Base in such form and at such times as the Bank may request. The terms used in this

section will have the meanings set forth in a supplement entitled “Financial Definitions,” a copy of which the Borrower acknowledges having received with this Amendment, which is incorporated herein by reference and which replaces any prior Financial Definitions supplement.


          
o          Change in Paid-In-Full Period. If checked here, all revolving loans under the Agreement and the Note must be paid in full for a period of at least            consecutive days during each fiscal year. Any previous Paid-in-Full provision is hereby replaced with this provision.


          Default Interest Rate. Notwithstanding any provision of this Note to the contrary, upon any default or at any time during the continuation thereof (including failure to pay upon maturity), the Bank may, at its option and subject to applicable law, increase the interest rate on this Note to a rate of 5% per annum plus the interest rate otherwise payable hereunder. Notwithstanding the foregoing and subject to applicable law, upon the occurrence of a default by the Borrower or any guarantor involving bankruptcy, insolvency, receivership proceedings or an assignment for the benefit of creditors, the interest rate on this Note shall automatically increase to a rate of 5% per annum plus the rate otherwise payable hereunder.


          Effectiveness of Prior Documents. Except as specifically amended hereby, the Agreement, the Note and the other Loan Documents shall remain in full force and effect in accordance with their respective terms. All warranties and representations contained in the Agreement and the other Loan Documents are hereby reconfirmed as of the date hereof. All collateral previously provided to secure the Agreement and/or Note continues as security, and all guaranties guaranteeing obligations under the Loan Documents remain in full force and effect. This is an amendment, not a novation.


          Preconditions to Effectiveness. This Amendment shall only become effective upon execution by the Borrower and the Bank, and approval by any other third parry required by the Bank.


          No Waiver of Defaults; Warranties. This Amendment shall not be construed as or be deemed to be a waiver by the Bank of existing defaults by the Borrower, whether known or undiscovered. All agreements, representations and warranties made herein shall survive the execution of this Amendment.


          Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be considered an original, but when taken together shall constitute one document.


          Authorization. The Borrower represents and warrants that the execution, delivery and performance of this Amendment and the documents referenced herein are within the authority of the Borrower and have been duly authorized by all necessary action.


          Transferable Record. The agreement and note, as amended, is a “transferable record” as defined in applicable law relating to electronic transactions. Therefore, the holder of the agreement and note, as amended, may, on behalf of Borrower, create a microfilm or optical disk or other electronic image of the agreement and note, as amended, that is an authoritative copy as defined in such law. The holder of the agreement and note, as amended, may store the authoritative copy of such agreement and note, as amended, in its electronic form and then destroy the paper original as part of the holder’s normal business practices. The holder, on its own behalf, may control and transfer such authoritative copy as permitted by such law.


          Attachments. All documents attached hereto, including any appendices, schedules, riders, and exhibits to this Amendment, are hereby expressly incorporated herein by reference.


[SIGNATURE(S) ON NEXT PAGE]


Page 2 of 3










	
  
Dated   as of: JANUARY 24, 2006
  	
  
 
  	
  
.
  
	
   
  	
  
 
  	
  
 
  
	
  
(Individual   Borrower)
  	
  
ITEX   Corporation
  
	
  
 
  	
  


  
	
  
 
  	
  
 
  	
  
Borrower   Name (Organization)
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
a   Nevada Corporation
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
Borrower   Name                         NA
  	
  
By:
  	
  
/s/   Steven White
  
	
   
  	
  
 
  	
  


  
	
  
 
  	
  
 
  	
  
Name   and Title:
  	
  
Steven   M. White
  
	
  
 
  	
  
 
  	
  
 
  	
  
Chairman   of the Board
  
	
  
 
  	
  
 
  	
  
 
  
	
  
Borrower   Name                         NA
  	
  
By:
  	
  
 
  
	
  
 
  	
  
 
  	
  


  
	
  
 
  	
  
Name   and Title:
  	
  
 
  
	
   
  	
  
 
  	
  
 
  	
  


  
	
  
 
  	
  
 
  	
  
 
  
	
  
Agreed   to:
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
U.S.   BANK N.A.
  	
  
 
  	
  
 
  
	
  


  	
  
 
  	
  
 
  
	
  
(Bank)
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
By:
  	
  
/s/   Timothy Flynn
  	
  
 
  	
  
 
  
	
  
 
  	
  


  	
  
 
  	
  
 
  
	
  
Name   and Title:
  	
  
Timothy   J. Flynn
  	
  
 
  	
  
 
  
	
  
 
  	
  
Vice   President
  	
  
 
  	
  
 
  



Page 3 of 3