Document:

Exhibit 10.38

 

UFP TECHNOLOGIES, INC.

 

1998 EMPLOYEE STOCK
PURCHASE PLAN

 

(Amended and Restated on December
14, 2005 to take effect January 1, 2006)

 

 

1. PURPOSE.

 

                The UFP Technologies, Inc. 1998 Employee Stock Purchase
Plan (the “Plan”) is intended to provide a method whereby employees of UFP
Technologies, Inc. (the “Company”) will have an opportunity to acquire a
proprietary interest in the Company through the purchase of shares of the
Company’s $.01 par value common stock (the “Common Stock”).  It is the intention of the Company to have
the Plan qualify as an “employee stock purchase plan” under Section 423 of the
Internal Revenue Code of 1986, as amended (the “Code”).  The provisions of the Plan shall,
accordingly, be construed so as to extend and limit participation in a manner
consistent with the requirements of that Section of the Code.

 

2. ELIGIBLE EMPLOYEES.

 

                (a)   All persons
who are employees of the Company or any of its participating subsidiaries on or
before the first day of the applicable Offering Period (as defined below) shall
be eligible to receive options under this Plan to purchase the Company’s Common
Stock.  In no event may an employee be
granted an option if such employee, immediately after the option is granted,
owns stock possessing five (5%) percent or more of the total combined voting
power or value of all classes of stock of the Company or of its parent
corporation or subsidiary corporation as the terms “parent corporation” and “subsidiary
corporation” are defined in Section 424(e) and (f) of the Code.  For purposes of determining stock ownership
under this paragraph, the rules of Section 424(d) of the Code shall apply and
stock which the employee may purchase under outstanding options shall be
treated as stock owned by the employee.

 

                (b)   For the
purpose of this Plan, the term employee shall not include an employee whose
customary employment is for not more than twenty (20) hours per week or is for
not more than five (5) months in any calendar year.

 

3. STOCK SUBJECT TO THE PLAN.

 

                The stock subject to the options granted hereunder shall
be shares of the Company’s authorized but unissued Common Stock or shares of
Common Stock reacquired by the Company, including shares purchased in the open
market.  The aggregate number of shares
which may be issued pursuant to the Plan is 400,000, subject to increase or
decrease by reason of stock split-ups, reclassifications, stock dividends,
changes in par value and the like.  If
the number of shares of Common Stock 

 

 

 

reserved and available for any Offering Period (as defined hereto) is
insufficient to satisfy all purchase requirements for that Offering Period, the
reserved and available shares for that Offering Period shall be apportioned among
participating employees in proportion to their options.

 

4. OFFERING PERIODS AND STOCK OPTIONS.

 

                (a)   Six month
periods during which payroll deductions will be accumulated under the Plan (“Offering
Periods”) will commence on January 1 and July 1 of each year and end on the
June 30 or December 31 next following the commencement date.  The first Offering Period shall commence on
July 1, 1998 and end on December 31, 1998. 
Each Offering Period includes only regular pay days falling within it.  The Offering Commencement Date is the first day
of each Offering Period.  The Exercise
Date is the applicable date on which an Offering Period ends under this
Section.

 

                (b)   On each
Offering Commencement Date, the Company will grant to each eligible employee
who is then a participant in the Plan an option to purchase on the Exercise
Date at the Option Exercise Price, as provided in this paragraph (b), that
number of full shares of Common Stock reserved for the purpose of the Plan as
his or her accumulated payroll deductions on the Exercise Date (including any
amount carried forward pursuant to Article 8 hereof) will pay for at the Option
Exercise Price; provided that such employee remains eligible to participate in
the Plan throughout such Offering Period. 
The Option Exercise Price for each Offering Period shall be an amount
equal to ninety-five percent (95%) of the fair market value of the Common Stock
on the Exercise Date.

 

                (c)   For purposes
of this Plan, the term “fair market value” on any date means, if the Common
Stock is listed on a national securities exchange or is on the National Market
List of the National Association of Securities Dealers Automated Quotation (“NASDAQ”)
system, the average of the high and low sales prices of the Common Stock on
such date on such exchange or as reported on NASDAQ or, if the Common Stock is
traded in the over-the-counter securities market, but not on the National
Market List of NASDAQ, the average of the high and low bid quotations for the
Common Stock on such date, each as published in the WALL STREET JOURNAL.  If no shares of Common Stock are traded on
the Exercise Date, the fair market value will be determined by taking the
average of the fair market values on the immediately preceding and the next
following business days on which shares of Common Stock are traded.

 

                (d)   For purposes
of this Plan the term “business day” as used herein means a day on which there
is trading on the NASDAQ or such other national securities exchange on which
the Common Stock is listed.

 

2

 

 

                (e)   No employee
shall be granted an option which permits his rights to purchase Common Stock
under the Plan and any similar plans of the Company or any parent or
participating subsidiary corporations to accrue at a rate which exceeds $25,000
of fair market value of such stock (determined at the time such option is
granted) for each calendar year in which such option is outstanding at any time.  The purpose of the limitation in the
preceding sentence is to comply with and shall be construed in accordance with
Section 423(b)(8) of the Code.

 

5. EXERCISE OF OPTION.

 

                Each eligible employee who continues to be a participant
in the Plan on the Exercise Date shall be deemed to have exercised his or her
option on such date and shall be deemed to have purchased from the Company such
number of full shares of Common Stock reserved for the purpose of the Plan as
his or her accumulated payroll deductions on such date, plus any amount carried
forward pursuant to Article 8 hereof, will pay for at the Option Exercise
Price, but in no event may an employee purchase shares of Common Stock in
excess of 1,500 shares of Common Stock on any Exercise Date.  If a participant is not an employee on the Exercise
Date and throughout an Offering Period, he or she shall not be entitled to
exercise his or her option.  All options issued
under the Plan shall, unless exercised as set forth herein, expire at the end
of the Exercise Date with respect to the Offering Period during which such
options were issued.

 

6. AUTHORIZATION FOR ENTERING PLAN.

 

                (a)   An eligible
employee may enter the Plan by filling out, signing and delivering to the Chief
Financial Officer of the Company or his designee an authorization (“Authorization”):

 

                                (i)            stating the amount to be deducted
regularly from his or her pay;

 

                                (ii)           authorizing the purchase of stock for him or her in each
Offering Period in accordance with the terms of the Plan;

 

                                (iii)          specifying the exact name in which Common Stock purchased
for him or her is to be issued in accordance with Article 11 hereof; and

 

                                (iv)          at the discretion of the employee in accordance with
Article 14, designating a beneficiary who is to receive any Common Stock and/or
cash in the event of his or her death.

 

3

 

                Such Authorization must be received by the Chief
Financial Officer of the Company or his designee at least ten (10) business
days before an Offering Commencement Date.

 

                (b)  The Company
will accumulate and hold for the employee’s account the amounts deducted from
his or her pay.  No interest will be paid
thereon.  Participating employees may not
make any separate cash payments into their account.

 

                (c)   Unless an
employee files a new Authorization or withdraws from the Plan, his or her
deductions and purchases under the Authorization he or she has on file under
the Plan will continue as long as the Plan remains in effect.  An employee may increase or decrease the
amount of his or her payroll deductions as of the next Offering Commencement
Date by filling out, signing and delivering to the Chief Financial Officer of
the Company or his designee a new Authorization.  Such new Authorization must be received by
the Chief Financial Officer of the Company or his designee at least ten (10)
business days before the date of such next Offering Commencement Date.

 

7. ALLOWABLE PAYROLL DEDUCTIONS.

 

                An employee may authorize payroll deductions in any even
dollar amount up to but not more than ten percent (10%) of his or her base pay;
provided, however, that the minimum deduction in respect of any payroll period
shall be one percent (1%) of his or her base pay but in no event less than five
dollars ($5); and provided further that the maximum percentage shall be reduced
to meet the requirements of Section 4(e) hereof.  Base pay means regular straight-time earnings
and, if applicable, commissions, but excluding payments for overtime, bonuses,
and other special payments.

 

8. UNUSED PAYROLL DEDUCTIONS.

 

                Only full shares of Common Stock may be purchased.  Any balance remaining in an employee’s
account after a purchase will be reported to the employee and will be carried
forward to the next Offering Period.  However,
in no event will the amount of the unused payroll deductions carried forward
from a payroll period exceed the Option Exercise Price per share for the
immediately preceding Offering Period.  If
for any Offering Period the amount of unused payroll deductions should exceed
the Option Exercise Price per share, the amount of the excess for any
participant shall be refunded to such participant, without interest.

 

9. CHANGE IN PAYROLL DEDUCTIONS.

 

                Deductions may not be increased or decreased during an
Offering Period.

 

10. WITHDRAWAL FROM THE PLAN.

 

4

 

                (a)   An employee
may withdraw from the Plan and withdraw all but not less than all of the
payroll deductions credited to his or her account under the Plan at any time
prior to the Exercise Date by delivering a notice to the Chief Financial
Officer of the Company or his designee (a “Withdrawal Notice”) in which event
the Company will promptly refund without interest the entire balance of such
employee’s deductions not theretofore used to purchase Common Stock under the
Plan.

 

                (b)
  If employee withdraws from the Plan,
the employee’s rights under the Plan will be terminated and no further payroll
deductions will be made.  To reenter,
such an employee must file a new Authorization at least ten (10) business days
before the next Offering Commencement Date. 
Such Authorization will become effective for the Offering Period that
commences on such Offering Commencement Date.

 

11. ISSUANCE OF STOCK.

 

                 Upon written
request, certificates for Common Stock will be issued and delivered to
participants as soon as practicable after each Offering Period.  Common Stock purchased under the Plan will be
issued only in the name of the employee, or if the employee’s Authorization so specifies,
in the name of the employee and another person of legal age as joint tenants
with rights of survivorship.

 

12. NO TRANSFER OR ASSIGNMENT OF EMPLOYEE’S RIGHTS.

 

                An employee’s rights under the Plan are his or hers alone
and may not be transferred or assigned to, or availed of by, any other person.  Any option granted to an employee may be
exercised only by him or her, except as provided in Article 13 in the event of
an employee’s death.

 

13. TERMINATION OF EMPLOYEE’S RIGHTS.

 

                (a)   Except as set
forth in the last paragraph of this Article 13, an employee’s rights under the
Plan will terminate when he or she ceases to be an employee because of
retirement, resignation, lay-off, discharge, death, change of status, failure
to remain in the customary employ of the Company for greater than twenty (20)
hours per week, or for any other reason. 
A Withdrawal Notice will be considered as having been received from the
employee on the day his or her employment ceases, and all payroll deductions
not used to purchase Common Stock will be refunded.

 

                (b)   If an
employee’s payroll deductions are interrupted by any legal process, a
Withdrawal Notice will be considered as having been received from him or her on
the day the interruption occurs.

 

5

 

                (c)   Upon termination
of the participating employee’s employment because of death, the employee’s
beneficiary (as defined in Article 14) shall have the right to elect, by
written notice given to the Chief Financial Officer of the Company or his
designee prior to the expiration of the thirty (30) day period commencing with
the date of the death of the employee, either (i) to withdraw, without
interest, all of the payroll deductions credited to the employee’s account
under the Plan, or (ii) to exercise the employee’s option for the purchase of
shares of Common Stock on the next Exercise Date following the date of the
employee’s death for the purchase of that number of full shares of Common Stock
reserved for the purpose of the Plan which the accumulated payroll deductions in
the employee’s account at the date of the employee’s death will purchase at the
applicable Option Exercise Price (subject to the maximum number set forth in
Article 5), and any excess in such account will be returned to said beneficiary.  In the event that no such written notice of
election shall be duly received by the Chief Financial Officer of the Company or
his designee, the beneficiary shall automatically be deemed to have elected to
withdraw the payroll deductions credited to the employee’s account at the date
of the employee’s death and the same will be paid promptly to said beneficiary,
without interest.

 

14. DESIGNATION OF BENEFICIARY.

 

                A participating employee may file a written designation
of a beneficiary who is to receive any Common Stock and/or cash in case of his
or her death.  Such designation of
beneficiary may be changed by the employee at any time by written notice.  Upon the death of a participating employee
and upon receipt by the Company of proof of the identity and existence at the
employee’s death of a beneficiary validly designated by him under the Plan, the
Company shall deliver such Common Stock and/or cash to such beneficiary.  In the event of the death of a participating
employee and in the absence of a beneficiary validly designated under the Plan
who is living at the time of such employee’s death, the Company shall deliver
such Common Stock and/or cash to the executor or administrator of the estate of
the employee, or if, to the knowledge of the Company, no such executor or administrator
has been appointed, the Company, in the discretion of the Committee, may
deliver such Common Stock and/or cash to the spouse or to any one or more
dependents of the employee as the Committee may designate.  No beneficiary shall, prior to the death of
the employee by whom he or she has been designated, acquire any interest in the
Common Stock or cash credited to the employee under the Plan.

 

15. TERMINATION AND AMENDMENTS TO PLAN.

 

                (a)   The Plan may
be terminated at any time by the Company’s Board of Directors, effective on the
next following Exercise Date.  Notwithstanding
the foregoing, it will terminate when all of the shares of Common Stock
reserved for the purposes of the Plan have been purchased.  Upon such termination or any other termination
of the 

 

6

 

Plan, all payroll deductions not used to purchase Common Stock will be
refunded without interest.

 

                (b)   The Board of
Directors reserves the right to amend the Plan from time to time in any
respect; provided, however, that no amendment shall be effective without
stockholder approval if the amendment would (a) except as provided in Articles
3, 4, 24 and 25, increase the aggregate number of shares of Common Stock to be
offered under the Plan, or (b) change the class of employees eligible to
receive options under the Plan.

 

16. LIMITATIONS OF SALE OF STOCK PURCHASED UNDER THE PLAN.

 

                Because of certain Federal tax requirements, all
employees will agree by entering the Plan, promptly to give the Company notice
of any such Common Stock disposed of within two years after the Offering
Commencement Date on which the related option was granted showing the number of
such shares disposed of.  The employee
assumes the risk of any market fluctuations in the price of such Common Stock.  Certificates representing shares of Common
Stock purchased under the Plan will bear a legend reflecting the restrictions
on transfer set forth herein.

 

17. COMPANY’S PAYMENT OF EXPENSES RELATED TO PLAN.

 

                The Company will bear all costs of administering and
carrying out the Plan.

 

18. PARTICIPATING SUBSIDIARIES.

 

                The term “participating subsidiaries” shall mean any
subsidiary of the Company which is designated by the Committee (as defined in
Article 19) to participate in the Plan.  The
Committee shall have the power to make such designation before or after the
Plan is approved by the stockholders.

 

19. ADMINISTRATION OF THE PLAN.

 

                (a)   The Plan
shall be administered by a committee of “Non-Employee” directors as that term
is defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended,
appointed by the Board of Directors of the Company, which shall be the Company’s
Compensation Committee (the “Committee”). 
The Committee shall consist of not less than two members of the Company’s
Board of Directors.  The Board of
Directors may from time to time remove members from, or add members to, the
Committee.  Vacancies on the Committee,
howsoever caused,  shall be filled by the
Board of Directors.  No member of the
Committee shall be eligible to participate in the Plan while serving as a
member of the Committee.

 

7

 

                (b)   The Committee
shall select one of its members as chairman, and shall hold meetings at such
times and places as it may determine.  Acts
by a majority of the Committee, or acts reduced to or approved in writing by a
majority of the members of the Committee, shall be the valid acts of the
Committee.

 

                (c)   The
interpretation and construction by the Committee of any provisions of the Plan
or of any option granted under it shall be final.  The Committee may from time to time adopt
such rules and regulations for carrying out the Plan as it may deem best.  With respect to persons subject to Section 16
of the Securities and Exchange Act of 1934, as amended, transactions under the
Plan are intended to comply with all applicable conditions of Rule 16b-3 or its
successors under said Act.  To the extent
any provision of the Plan or action by the Committee fails to so comply, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by that Committee.

 

                (d)   Promptly
after the end of each Offering Period, the Committee shall prepare and
distribute to each participating employee in the Plan a report containing the
amount of the participating employee’s accumulated payroll deductions as of the
Exercise Date, the Option Exercise Price for such Offering Period, the number
of shares of Common Stock purchased by the participating employee with the
participating employee’s accumulated payroll deductions, and the amount of any
unused payroll deductions either to be carried forward to the next Offering
Period, or returned to the participating employee without interest.

 

                (e)   No member of
the Board of Directors or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any option granted
under it.  The Company shall indemnify
each member of the Board of Directors and the Committee to the fullest extent
permitted by law with respect to any claim, loss, damage or expense (including
counsel fees) arising in connection with their responsibilities under this
Plan.

 

 

20. OPTIONEES NOT STOCKHOLDERS.

 

                Neither the granting of an option to an employee nor the
deductions from his or her pay shall constitute such employee a stockholder of
the Company with respect to the shares covered by such option until such shares
have been purchased by and issued to him or her.

 

21. APPLICATION OF FUNDS.

 

                The proceeds received by the Company from the sale of
Common Stock pursuant to options granted under the Plan may be used for any
corporate purposes, 

 

8

 

and the Company shall not be obligated to segregate participating
employees’ payroll deductions.

 

22. GOVERNMENTAL REGULATION.

 

                (a)   The Company’s obligation to sell and deliver
shares of the Company’s Common Stock under this Plan is subject to the approval
of any governmental authority required in connection with the authorization,
issuance or sale of such stock.

 

                (b)   In this
regard, the Board of Directors may, in its discretion, require as a condition
to the exercise of any option that a Registration Statement under the
Securities Act of 1933, as amended, with respect to the shares of Common Stock
reserved for issuance upon exercise of the option shall be effective.

 

23. TRANSFERABILITY.

                Neither payroll deductions credited to an employee’s
account nor any rights with regard to the exercise of an option or to receive
stock under the Plan may be assigned, transferred, pledged, or otherwise
disposed of in any way by the employee.  Any
such attempted assignment, transfer, pledge, or other disposition shall be
without effect, except that the Company may treat such act as an election to
withdraw funds in accordance with Article 10.

 

24. EFFECT OF CHANGES OF COMMON STOCK.

 

                If the Company should subdivide or reclassify the Common
Stock which has been or may be optioned under the Plan, or should declare
thereon any dividend payable in shares of such Common Stock, or should take any
other action of a similar nature affecting such Common Stock, then the number
and class of shares of Common Stock which may thereafter be optioned (in the
aggregate and to any individual participating employee) shall be adjusted
accordingly.

 

25. MERGER OR CONSOLIDATION.

 

                If the Company should at any time merge into or
consolidate with another corporation, the Board of Directors may, at its election,
either (i) terminate the Plan and refund without interest the entire balance of
each participating employee’s payroll deductions, or (ii) entitle each
participating employee to receive on the Exercise Date upon the exercise of
such option for each share of Common Stock as to which such option shall be
exercised the securities or property to which a holder of one share of the
Common Stock was entitled upon and at the time of such merger or consolidation,
and the Board of Directors shall take such steps in connection with such merger
or consolidation as the Board of Directors shall deem necessary to assure that
the provisions of this Article 25 shall thereafter be applicable, as nearly as
reasonably 

 

9

 

possible.  A sale of all or
substantially all of the assets of the Company shall be deemed a merger or
consolidation for the foregoing purposes.

 

26. WITHHOLDING OF ADDITIONAL FEDERAL INCOME TAX.

 

                The Company will
undertake such withholding in connection with the Plan as it determines is appropriate,
in its sole discretion.

 

* * *

 

10Exhibit 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

 

1

 

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:

 

2

 

“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

 

3

 

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

 

4

 

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.

 

5

 

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]

 

 

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

  
											

 

7

 

EXHIBIT D

 

LIBOR ADDENDUM

 

8

 

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.

 

1

 

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.

 

2

 

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

 

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

 

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

 

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

 

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

 

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:

  	
   

  

 

1

 

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.

 

2

 

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.

 

3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}]]