FOURTH AMENDMENT TO AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT 

     This Fourth
Amendment to Amended and Restated Loan and Security Agreement (this “Amendment”)
is entered into as of October 23, 2009, 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 and that certain Third
Amendment to Amended and Restated Loan and Security Agreement dated as of June
19, 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: 

          “Applicable Term Loan Principal Payment Amount” means (i) One
Hundred Sixteen Thousand Sixty Hundred Sixty Seven and 67/100 Dollars
($116,667.67) for each month from January 2009 through December 2009 and (ii)
One Hundred Thirty Seven Thousand Five Hundred Dollars ($137,500) for each month
thereafter. 

          “Applicable Unused Fee Percentage” means (i) one quarter of
one percent (0.25%) if the Total Leverage Ratio calculated pursuant to Section
6.7(c) hereof is less than or equal to 1.00 to 1.00 for the most recently ended
measuring period and (ii) one half of one percent (0.50%) if the Total Leverage
Ratio calculated pursuant to Section 6.7(c) hereof is greater than 1.00 to 1.00
for the most recently ended measuring period.

          “EBITDA” means earnings of Borrowers before interest, taxes,
depreciation, amortization and non-cash stock compensation expense. 

          “Revolving Line” means a Credit Extension of up to Three
Million Nine Hundred Twenty-Five Thousand Dollars ($3,925,000) inclusive of any
amounts outstanding under the Letter of Credit Sublimit, the ACH Sublimit and
the Foreign Exchange Sublimit; provided however that availability under the
Revolving Line shall be reduced by an amount equal to Ninety One Thousand Six
Hundred Sixty Seven Dollars ($91,667) on the last day of each month commencing
on October 31, 2009 and continuing on the last day of each month thereafter
through the Revolving Maturity Date.

          “Revolving
Maturity Date” means April 30, 2011. 

          “Term
Loan Maturity Date” means April 30, 2011. 

     2. Section 2.1(c)(iii) of the Agreement hereby is amended and restated in
its entirety to read as follows: 

          “(iii) No later than February 15 of each calendar year during
which the Term Loan is outstanding, commencing with the calendar year 2011,
Borrowers shall pay to Bank an amount equal to seventy five percent (75%) of
their Excess Cash Flow for the immediately preceding calendar year.” 

     3. Bank hereby waives Borrowers’ failure to comply with Section 6.7(b) of
the Agreement, as in effect prior to the date of this Amendment, solely for the
measuring period ended September 30, 2009. 

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

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     “6.7
Financial Covenants. Borrower shall at all times maintain the following financial ratios and
covenants: 

          (a) Debt Service Coverage Ratio. Measured on a monthly basis,
a ratio of EBITDA (measured on an annualized trailing six (6) month basis) minus
cash taxes and non-financed Capitalized Expenditures to the sum of cash interest
expense (measured on an annualized trailing six (6) month basis) plus the
current portion of all Indebtedness of at least 1.25 to 1.00. 

          (b) Three Month
EBITDA. Measured monthly on a rolling three
(3) month basis, EBITDA of not less than Five Hundred Thousand Dollars
($500,000). 

           (c) Six Month
EBITDA. Measured monthly on a trailing sixth
(6) month basis, EBITDA of not less than One Million Six Hundred Thousand
Dollars ($1,600,000). 

          (d) Total Leverage
Ratio. Measured on a monthly basis, a ratio
of all Indebtedness to EBITDA (measured on an annualized trailing six (6) month
basis) of not greater than: (i) 2.25 to 1.00 for each monthly measuring period
through the measuring period ending May 31, 2010, (ii) 2.00 to 1.00 for each
subsequent monthly measuring period through the monthly measuring period ending
November 30, 2010; and (iii) 1.50 to 1.00 for each monthly measuring period
thereafter.” 

     5. As
of the date of this Amendment, Bank shall be deemed to have made an Advance to
Borrowers in the amount of Two Million Dollars ($2,000,000), which Advance shall
pay down an equal amount of principal outstanding under the Term
Loan.

     6. All references in the Loan Documents to
Bank's address at 75 East Trimble Road, M/C 4770, San Jose, California 95131, Attn: Manager
shall mean and refer to 39200 Six Mile Road,
M/C 7578, Livonia, Michigan 48152, Attn: National Documentation Services.


     7. Exhibit C to the Agreement hereby is
replaced with Exhibit C 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 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. 

     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 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; 

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

          (d)
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.

 

 

 


[Balance of Page Intentionally Left Blank]

 

 

 


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     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/ Luis Rivera  
	 
	Title:  	Assistant
      Secretary  
	 
	 
	COMERICA BANK  
	 
	By:  	/s/ Philip Koblis  
	 
	Title:  	Senior Vice
      President  




 

[Signature Page to Fourth 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 investments 		Amount:  $________ 			Yes 	 	No 
	Total amount of Borrowers' cash and investments  		Amount:  $________ 			Yes 	 	No 
	maintained with Bank 		 					
	    
	Financial Covenant
      	 	     	Required 	 	Actual 	 	     	Complies 	 	  
	Maximum
      Total Leverage 							
	     Through 5/31/10 		2.25:1.00 	____:1.00  		Yes 		No 
  
	     6/1/10 – 11/30/10 		2.00:1.00 	 		 		
	     12/1/10 and thereafter 		1.50:1.00 	 		 		
	 							
	Minimum
      3-Month EBITDA 							
			$500,000 	$___________ 		Yes 		No 
	 		 			 		
	Minimum 6-Month EBITDA 		 			 		
			$1,600,000
      	$___________ 		Yes 		No 
	 		 			 		
	Minimum
      Debt Service 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