Document:

Exhibit 10.35

Exhibit 10.35:

FOURTH AMENDMENT TO REVOLVING LOAN AGREEMENT, 

PROMISSORY NOTES AND OTHER LOAN DOCUMENTS

 

THIS AGREEMENT dated the 8th day of March 2006 between HUDSON TECHNOLOGIES COMPANY, a corporation organized and existing pursuant to the laws of the State of Tennessee having an address at 275 North Middletown Road, Pearl River, New York 10965 ("Borrower") and KELTIC FINANCIAL PARTNERS, LP, a Delaware limited partnership, with a place of business at 555 Theodore Fremd Avenue, Suite C-207, Rye, New York 10580 ("Lender").

 

W I T N E S S E T H:

WHEREAS:

A.Borrower entered into a revolving loan agreement with Lender on May 30, 2003, and pursuant to such revolving loan agreement, Borrower executed and delivered to Lender its promissory note in the original principal amount of FOUR MILLION SIX HUNDRED THOUSAND AND 00/100 (4,600,000.00) DOLLARS (the "Revolving Note") and its promissory note in the original principal amount of FOUR HUNDRED THOUSAND AND 00/100 (400,000.00) DOLLARS (the "Term Note"); 

	Borrower subsequently requested that Lender waive certain failures by Borrower to comply with the terms and conditions of the aforementioned revolving loan agreement and make certain other changes and modification to the terms and conditions of the aforementioned revolving loan agreement; 
	Lender agreed to waive certain failures by Borrower to comply with the terms and conditions of the aforementioned revolving loan agreement and to make certain other changes and modification to the terms and conditions of the aforementioned revolving loan agreement in accordance with the terms and conditions of a first amendment to revolving loan agreement, promissory notes and other loan documents dated as of November 12, 2003;
	Borrower again requested that Lender modify certain financial covenants and make certain other changes and modifications to the terms and conditions of the aforementioned revolving loan agreement;
	Lender agreed to again modify certain financial covenants contained in the aforementioned revolving loan agreement and to make certain other changes and modifications to the terms and conditions of the revolving loan agreement strictly in accordance with the terms and conditions of a second amendment to revolving loan agreement, promissory notes and other loan documents dated as of March 31, 2004;
	Borrower then requested that Lender modify the Term Loan by increasing the outstanding principal balance of the Term Loan from $226,666.58 to $400,000.00 in order to provide Borrower with additional funds to be used to purchase specified equipment totaling approximately $173,000.00 and to otherwise modify the terms and conditions of the aforementioned revolving loan agreement;
	Lender agreed to modify the Term Loan by increasing the outstanding principal balance of the Term Loan from $226,666.58 to $400,000.00 in order to provide Borrower with additional funds to be used to purchase specified equipment totaling approximately $173,000.00 and to otherwise modify the terms and conditions of the aforementioned revolving loan agreement strictly in accordance with the terms and conditions of a third amendment to revolving loan agreement, promissory notes and other loan documents dated as of August 30, 2005 (the revolving loan agreement dated May 30, 2003 as amended by the first amendment to revolving loan agreement, promissory notes and other loan documents dated as of November 12, 2003, the second amendment to revolving loan agreement, promissory notes and other loan documents dated as of March 31, 2004 and the third amendment to revolving loan agreement, promissory notes and other loan document dated as of August 30, 2005 are collectively referred to as, the "Loan Agreement")
	In connection with the third amendment, Borrower executed and delivered to Lender its promissory note in the original principal amount of $400,000.00 dated as of August 30, 2005 (the "Restated Term Note"); 
	Borrower has now requested that Lender extend the maturity date of the Loans, modify the Loan Interest Rate and otherwise modify the terms and conditions of the Loan Agreement; and 
	Lender has agreed to extend the maturity date of the Loans, modify the Loan Interest Rate and otherwise modify the terms and conditions of the Loan Agreement strictly in accordance with the terms and conditions set forth in this Agreement.

NOW THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereto agree as follows:

	Section 1.31 of the Loan Agreement is amended to read as follows:

"1.31  Loan Interest Rate" shall mean, at the option of Lender, the greater of: (a) the prime rate published in the "Money Rates" column of The Wall Street Journal from time to time, or in the event that The Wall Street Journal is not available at any time, such rate published in another publication as determined by Lender, plus two hundred (200) basis points per annum from May 30, 2003 through the date of the fourth amendment to this Agreement and thereafter at such prime rate plus one hundred (100) basis points per annum, or (b) six and one-half percent (6-1/2%) per annum."

	Section 1.49 of the Loan Agreement is amended to read as follows:

"1.49  Termination Date" shall mean the earlier of May 30, 2007 or the date on which Lender terminates this Agreement pursuant to Section 12.1 of this Agreement."

	Section 2.2 of the Loan Agreement is amended by changing the date of "May 30, 2006" to "May 30, 2007" in such section.
	In connection with Lender's agreement to extend the maturity date of the Term Loan, Borrower has executed and delivered to Lender its promissory note in the original principal amount of FOUR HUNDRED THOUSAND AND 00/100 (400,000.00) DOLLARS in the form of Schedule A annexed hereto (hereinafter, the "Second Restated Term Note") which note shall replace and supersede, but shall not be considered a repayment of, the Restated Term Note.  Any and all interest due and owing under the Restated Term Note and any further amounts evidenced by the Restated Term Note shall hereafter be evidenced by the Second Restated Term Note and any unpaid interest under the Restated Term Note shall be payable on the first payment date under the Second Restated Term Note.
	In order to induce Lender to enter into this Agreement, and pursuant to the existing terms and conditions of the Loan Agreement, Borrower acknowledges that it is responsible for all fees, disbursements and expenses incurred by Lender including, without limitation, all legal fees and disbursements incurred by Lender in connection with the preparation of this Agreement.
	Any reference in any document executed and/or delivered in connection with the Loan Agreement to the "Agreement" or the "Loan Agreement" shall mean the revolving loan agreement dated May 30, 2003 as amended by the first amendment to revolving loan agreement, promissory notes and other loan documents dated as of November 12, 2003, the second amendment to revolving loan agreement, promissory notes and other loan documents dated as of March 31, 2004, the third amendment to revolving loan agreement, promissory notes and other loan documents dated as of August 30, 2005 and this Agreement.  All of the provisions of the Revolving Note, the Second Restated Term Note, the Restated Term Note, the Loan Agreement and any other document executed and/or delivered in connection with the Revolving Note, the Second Restated Term Note, the Restated Term Note or the Loan Agreement (collectively, the "Loan Documents") are amended so that such terms shall be consistent with the provisions of this Agreement.  Notwithstanding the foregoing, and to the extent that there is any inconsistency between the provisions of those agreements and this Agreement, the provision which gives Lender the greatest rights or protection shall govern except as specifically modified by this Agreement.  Capitalized terms used herein and not otherwise defined shall have the meaning given such terms in the Loan Documents.
	Borrower and each Guarantor by executing this Agreement represent and warrant that since December 31, 2004 except as disclosed in filings made with the Securities and Exchange Commission there has been no (1) material adverse change in the Borrower's or any Guarantor's financial condition, assets, liabilities, business or operation (financial or otherwise) and (2) no damage, destruction or loss to the Borrower's or any guarantor's property, whether or not covered by insurance, which would materially and adversely affect Borrower's or any Guarantor's business or property.
	Lender's agreement to extend the maturity date of the Loans, to modify the Loan Interest Rate and to otherwise modify the terms and conditions of the Loan Agreement and the other Loan Documents is not and shall not be construed as a waiver of any current or future default under the Revolving Note, the Second Restated Term Note, the Restated Term Note, Loan Agreement or any other Loan Document, nor shall it preclude Lender from proceeding against Borrower on any such default.  This Agreement is

Page 2

also not a relinquishment of any rights or remedies Lender may have in connection with the Revolving Note, the Second Restated Term Note, the Restated Term Note, the Loan Agreement or any other Loan Document. 

	As a material condition to Lender entering into this Agreement, Borrower and each Guarantor by executing this Agreement voluntarily and expressly waives any and all rights to assert a claim, counterclaim or defense which now exists against Lender arising out of or in any way connected with the Revolving Note, the Second Restated Term Note, the Restated Term Note, the Loan Agreement, or any other Loan Document.  The foregoing waiver shall apply to any

action instituted by any of the undersigned and to any action or proceeding brought against any of the undersigned by Lender.

	Borrower and each Guarantor by executing this Agreement acknowledges that there is due and owing on the Revolving Note as of March 7, 2006 the principal sum of $1,708,789.93 and that there is due and owing on the Second Restated Term Note as of March 7, 2006 the principal sum of $353,333.31 which sums are not subject to any defense, counterclaim or set-off.
	Borrower and each Guarantor by executing this Agreement confirms that all of the representations and warranties set forth in the Loan Agreement are true and correct, and that all covenants of Borrower described therein have been performed.  There have been no changes to the information set forth in Schedules 5.2, 5.3, 5.8, 5.9, 5.13, 5.14, 5.15, 5.16, 5.17, 5.18, 5.21 and 5.23 of the Loan Agreement, copies of which are annexed hereto except as set forth in such schedule.  [Updated schedules will be submitted by Borrower to Lender not later than April 15, 2006.]
	BORROWER BY EXECUTING THIS AGREEMENT ACKNOWLEDGES THAT IT HAS HAD A FULL AND FAIR OPPORTUNITY TO REVIEW THIS AGREEMENT AND THE DOCUMENTS REFERRED TO HEREIN WITH COUNSEL OF ITS CHOICE AND THAT IT HAS BEEN ADVISED AS TO THEIR TERMS AND CONDITIONS, WHICH ARE ACCEPTABLE TO IT.  FURTHER, BORROWER CONFIRMS THAT IN DELIVERING THIS AGREEMENT TO LENDER, IT IS NOT RELYING ON ANY PROMISE, COMMITMENT, REPRESENTATION OR UNDERSTANDING, EITHER EXPRESS OR IMPLIED, MADE BY OR ON BEHALF OF LENDER THAT IS NOT EXPRESSLY SET FORTH HEREIN, OR IN THE LOAN AGREEMENT, THE REVOLVING NOTE, THE SECOND RESTATED TERM NOTE, THE RESTATED TERM NOTE OR ANY OTHER LOAN DOCUMENT.  BORROWER BY EXECUTING THIS AGREEMENT ACKNOWLEDGES AND UNDERSTANDS THAT ALL OBLIGATIONS UNDER THE REVOLVING NOTE ARE DUE AND PAYABLE ON THE TERMINATION DATE AND THAT ALL OBLIGATIONS UNDER THE SECOND RESTATED TERM NOTE ARE DUE AND PAYABLE ON MAY 30, 2007, UNLESS LENDER IN ITS SOLE AND ABSOLUTE DISCRETION EXTENDS THE MATURITY DATE OF ANY SUCH OBLIGATION AND THAT LENDER HAS NOT MADE ANY REPRESENTATION THAT IT WILL EXTEND THE MATURITY DATE OF ANY SUCH OBLIGATION.
	Borrower acknowledges that discussions may take place between itself and Lender concerning additional modifications of the Revolving Note, the Second Restated Term Note and the Loan Agreement after the date hereof.  Lender in its sole and absolute discretion may terminate any such discussions at any time and for any reason or no reason and Lender shall have no liability for failing to engage in or terminating any such discussions.  While the parties hereto may reach preliminary agreement as to the modification of one or more provisions of the Loan Agreement, the Revolving Note and/or the Second Restated Term Note, none of the undersigned shall be bound by any agreement on any individual point until agreement is reached on every issue and the agreement on all such issues has been reduced to a written agreement signed by Lender and Borrower.  Further, the Loan Agreement may only be amended by a written agreement executed by Borrower and Lender and no negotiations or other actions undertaken by Lender shall constitute a waiver of Lender's rights under the Loan Agreement, the Revolving Note and/or the Second Restated Term Note, except to the extent specifically set forth in a written agreement complying with the provisions of this paragraph.
	This document may be executed in one or more counterparts and all such documents taken together shall be 

considered one original document.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year first written above. 

	
WITNESS:
	 	
HUDSON TECHNOLOGIES COMPANY

	 	 	 
	
/s/Stephen P. Mandracchia
	 	
by /s/Brian F. Coleman

	
Stephen P. Mandracchia, Esq.
	 	
Name: Brian F. Coleman

	 	 	
Title: President and Chief Operating Officer

	 	 	 
	
WITNESS:
	 	
KELTIC FINANCIAL PARTNERS, LP

Page 3

	 	 	
By: KELTIC FINANCIAL SERVICES, LLC

	 	 	
its general partner

	 	 	 
	
/s/Oleh Szczupak
	 	
by /s/John P. Reilly

	
Oleh Szczupak
	 	
Name: John P. Reilly

	 	 	
Title: Managing Partner

	 	 	 

Page 4

 

Each of the Guarantors of performance and payment do hereby approve all of the terms of this agreement, do hereby approve the execution and delivery of this Agreement by Hudson Technologies Company and do hereby acknowledge and confirm their continuing joint and several liability and responsibility to Keltic Financial Partners, LP with respect to the debt referred to in this Agreement including, without limitation, advances in connection with the Second Restated Term Note.

	
WITNESS:
	 	
HUDSON TECHNOLOGIES, INC.

	 	 	 
	
/s/Stephen P. Mandracchia
	 	
by /s/Brian F. Coleman

	
Stephen P. Mandracchia, Esq.
	 	
Brian F. Coleman, President

	 	 	 
	
WITNESS:
	 	
HUDSON HOLDINGS, INC.

	 	 	 
	
/s/Stephen P. Mandracchia
	 	
by /s/Brian F. Coleman

	
Stephen P. Mandracchia, Esq.
	 	
Brian F. Coleman, President

Page 5

SCHEDULE A

SECOND RESTATED TERM NOTE

	
$400,000.00
	 	
March 8, 2006

	 	 	
Rye, New York

 

FOR VALUE RECEIVED, HUDSON TECHNOLOGIES COMPANY, a corporation organized and existing pursuant to the laws of the State of Tennessee having an address at 275 North Middletown Road, Pearl River, New York 10965 ("Borrower"), promises to pay to the order of KELTIC FINANCIAL PARTNERS, LP ("Lender") a Delaware limited partnership with a place of business at 555 Theodore Fremd Avenue, Suite C-207, Rye, New York 10580, or at such other place as Lender may from time to time in writing designate, the sum of FOUR HUNDRED THOUSAND DOLLARS AND 00/100 ($400,000.00) as follows:  equal monthly installments each in the amount of $6,666.67 commencing on July 1, 2003 and payable on the first day of each month thereafter through and including May 1, 2007, followed by one (1) final payment on May 30, 2007 ("Maturity Date"), on which date all sums payable hereunder are immediately due and payable.  

Borrower also promises to pay interest to Lender monthly, in arrears, on the first day of each month, commencing on June 1, 2003 on the average daily unpaid principal balance of this Note at a fluctuating rate which is equal to the Loan Interest Rate.

This Note, replaces and supersedes (but shall not be considered a repayment of) a note of Borrower dated May 30, 2003 in the original principal amount of $400,000.00 and note of Borrower dated as of August 30, 2005 in the original principal amount of $400,000.00 (collectively, the "Prior Note").  Any and all amounts evidenced by the Prior Note shall hereafter be evidenced by this Note and any accrued but unpaid interest due and owing under the Prior Note shall be payable on the first interest payment date hereunder.

Notwithstanding the foregoing, after the occurrence of an Event of Default, Borrower shall pay interest on the unpaid principal balance of this Note at a rate which is three and one-half percent (3.5%) per annum above the Loan Interest Rate, provided, however, in no event shall any interest to be paid hereunder exceed the maximum rate permitted by law.  

Any partial prepayments made by Borrower will be applied against the remaining unpaid payments due hereunder in the inverse order of the maturity of such payments.

This is a term note referred to in the revolving loan agreement between Borrower and Lender dated May 30, 2003 (the "Loan Agreement")(the Loan Agreement together with the other documents, instruments and agreements executed in connection therewith, as they have been or may from time to time be modified, amended, restated or replaced are hereinafter collectively referred to as, the "Loan Documents").  This Note is entitled to the benefits of all of the terms and conditions and the security of all of the security interests and liens granted by Borrower or any other person to Lender pursuant to the Loan Agreement or any of the other Loan Documents including, without limitation, supplemental provisions regarding mandatory and/or optional prepayment rights and premiums.  Capitalized terms used herein and not otherwise defined shall have the meaning given such terms in the Loan Documents.   

Whenever any payment to be made under this Note shall otherwise be due on a day that is not a Banking Day, such payment shall be made on the next succeeding Banking Day, and such extension of time shall be included in computing interest in connection with any such payment.

This Note shall be binding upon and shall insure to the benefits of the parties, their successors and assigns.  Lender shall have the right, without the necessity of any further consent or authorization by Borrower, to sell, assign, securitize or grant participations in all, or a portion of, Lender's interest in this Note, to other financial institutions of Lender's choice and on such terms as are acceptable to Lender in its sole discretion.

This Note shall be governed by and construed under the internal laws of the State of New York, as the same may from time to time be in effect, without regard to principles of conflicts of laws thereof. 

Borrower and all other Persons who, at any time, may be liable hereon in any capacity waive presentment, demand for payment, protest and notice of dishonor of this Note.  This Note may not be changed orally, but only by an agreement in writing which is signed by the holder and the Persons against whom enforcement of any waiver, change, modification or discharge is sought.

IN WITNESS WHEREOF, Borrower has executed this Note on the day and year first above written.

	
WITNESS:
	 	
HUDSON TECHNOLOGIES COMPANY

Page 6

	 	 	 
	
/s/Stephen P. Mandracchia
	 	
by /s/Brian F. Coleman

	
Stephen P. Mandracchia, Esq.
	 	
Name: Brian F. Coleman

	 	 	
Title: President and Chief Operating Officer

Page 7<PAGE>

EXHIBIT 10.1

                              AMENDMENT AND WAIVER

         This AMENDMENT AND WAIVER (this "AMENDMENT"), dated as of March 21,
2006, is entered into by and between ISLAND PACIFIC, INC., a Delaware
corporation (the "COMPANY"), and LAURUS MASTER FUND, LTD., a Cayman Islands
company ("LAURUS"), for the purpose of amending and amending and restating and
waiving certain terms of (i) the Secured Convertible Term Note, dated as of
November 17, 2005 (as amended and restated, amended, modified and/or
supplemented from time to time, the "NOVEMBER 2005 BRIDGE NOTE") issued by the
Company to Laurus, (ii) the Registration Rights Agreement by and between the
Company and Laurus dated November 17, 2005 (as amended, modified or supplemented
from time to time, the "NOVEMBER 2005 REG. RIGHTS AGREEMENT"), (iii) the
Securities Purchase Agreement, dated as of November 17, 2005 (as amended,
modified or supplemented from time to time, the "NOVEMBER 2005 PURCHASE
AGREEMENT") by and between the Company and Laurus, (iv) the Amended and Restated
Secured Convertible Term Note, dated as of July 12, 2004 (as amended and
restated, amended, modified and/or supplemented from time to time, the "JULY
2004 TERM NOTE") issued by the Company to Laurus, (v) the Securities Purchase
Agreement, dated as of July 12, 2004 (as amended, modified or supplemented from
time to time, the "JULY 2004 PURCHASE AGREEMENT") by and between the Company and
Laurus, (vi) the Registration Rights Agreement by and between the Company and
Laurus dated July 12, 2004 (as amended, modified or supplemented from time to
time, the "JULY 2004 REG. RIGHTS AGREEMENT"), (vii) the Secured Convertible Term
Note, dated as of June 15, 2005 (as amended, modified and/or supplemented from
time to time, the "JUNE 2005 TERM NOTE" and together with the July 2004 Term
Note, the "TERM NOTES" and each, a "TERM NOTE") issued by the Company to Laurus,
(viii) the Securities Purchase Agreement, dated as of June 15, 2005 (as amended,
modified or supplemented from time to time, the "JUNE 2005 PURCHASE AGREEMENT"
and together with the November 2005 Purchase Agreement and the July 2004
Purchase Agreement, the "PURCHASE AGREEMENTS" and each, a "PURCHASE AGREEMENT")
by and between the Company and Laurus and (ix) the Registration Rights Agreement
by and between the Company and Laurus dated June 15, 2005 (as amended, modified
and/or supplemented from time to time, the "JUNE 2005 REG. RIGHTS AGREEMENT" and
together with the November 2005 Reg. Rights Agreement and the July 2004 Reg.
Rights Agreement, the "REG. RIGHTS AGREEMENTS" and each, a "REG. RIGHTS
AGREEMENT"). Capitalized terms used herein without definition shall have the
meanings ascribed to such terms in the applicable November 2005 Bridge Note,
Term Note, Purchase Agreement or Reg. Rights Agreement.

         WHEREAS, the Company and Laurus have agreed to make certain changes to
the November 2005 Bridge Note, the Term Notes, the Purchase Agreements and the
Reg. Rights Agreements as set forth herein.

         NOW, THEREFORE, in consideration of the above, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

WAIVERS
-------

         1. Laurus and the Company hereby agree that the Company shall not be
required to pay the principal portion of any Monthly Amount (as defined in the
July 2004 Term Note) due on the first business day of March 2006, April 2006,
May 2006, June 2006, July 2006 and August 2006 on such dates (collectively, the

<PAGE>

"JULY 2004 POSTPONED PRINCIPAL"); PROVIDED THAT, the July 2004 Postponed
Principal shall each be paid in full on the Maturity Date (as defined in the
July 2004 Term Note), together with all other amounts due and payable on such
date under the July 2004 Purchase Agreement and the Related Agreements referred
to in the July 2004 Purchase Agreement.

         2. Laurus and the Company hereby agree that the Company shall not be
required to pay the principal portion of any Monthly Amount (as defined in the
June 2005 Term Note) due on the first business day of March 2006, April 2006,
May 2006, June 2006, July 2006 and August 2006 on such dates (collectively, the
"JUNE 2005 POSTPONED PRINCIPAL"); PROVIDED THAT, the June 2005 Postponed
Principal shall each be paid in full on the Maturity Date (as defined in the
June 2005 Term Note), together with all other amounts due and payable on such
date under the June 2005 Purchase Agreement and the Related Agreements referred
to in the June 2005 Purchase Agreement.

AMENDMENTS
----------

         3. The November 2005 Bridge Note is hereby amended and restated in the
form attached hereto as EXHIBIT A (the "AMENDED AND RESTATED BRIDGE NOTE"). For
the avoidance of doubt, the amendment and restatement of the November 2005
Bridge Note as set forth in this Section 1 shall be in substitution for and not
in satisfaction of the November 2005 Bridge Note. Upon the execution of this
Amendment and Waiver and prior to Company delivering an originally executed copy
of the Amended and Restated Bridge Note to Laurus, Laurus will return the
originally executed November 2005 Bridge Note to the Company.

         4. The definition of Maturity Date appearing in each of the Term Notes
is hereby amended to extend such Maturity Date to "August 31, 2006" in each
case.

         5. Laurus understands that the Company has an affirmative obligation to
make prompt public disclosure of material agreements and material amendments to
such agreements. The Company hereby covenants to report the terms and provisions
of this Amendment on a current report on Form 8-K within five (5) business days
of the date hereof.

         6. Section 6.4 in each of the Purchase Agreements is hereby deleted in
its entirety and, the following new Section 6.4 is hereby inserted in lieu
thereof:

                  "The Company shall timely file with the SEC all reports
                  required to be filed pursuant to the Exchange Act (other than
                  in respect of its Form 10-K for the year ended March 31, 2005
                  and the Forms 10-Q for quarters ended June 30, 2005, September
                  30, 2005 and December 31, 2005 (the "Late Reports"), which
                  Late Reports shall be filed by April 20, 2006) and refrain
                  from terminating its status as an issuer required by the
                  Exchange Act to file reports thereunder even if the Exchange
                  Act or the rules or regulations thereunder would permit such
                  termination. Promptly after (i) the filing thereof, copies of
                  the Company's most recent registration statements and annual,
                  quarterly, current or other regular reports which the Company
                  files with the Securities and Exchange Commission (the "SEC"),
                  and (ii) the issuance thereof, copies of such financial
                  statements, reports and proxy statements as the Company shall
                  send to its stockholders."

                                       2
<PAGE>

         7. The first sentence of Section 6.2 of the Purchase Agreements shall
be amended to state:

          "By May 1, 2006, the Company shall secure the listing of the shares of
          Common Stock issuable upon conversion of the Note, upon the exercise
          of the Warrant and upon exercise of the Option on the NASD OTC
          Bulletin Board (the "Principal Market") upon which shares of Common
          Stock are listed and shall maintain such listing so long as any other
          shares of Common Stock shall be so listed."

         8. Each of the Purchase Agreements and the Related Agreements referred
to therein are hereby amended to delete the text "NASDAQ SmallCap Market" in
each instance appearing therein and inserting the text "NASDAQ Capital Market"
in lieu thereof in each case.

         9. Effective as of the Amendment Effective Date, Laurus consents to the
Company (a) increasing the amount of the Secured Term Note issued to Midsummer
Investments, Ltd. ("MIDSUMMER") on or around November 17, 2005 (the "MIDSUMMER
TERM NOTE"), and issuing an Option to Midsummer, in each case on or around the
date hereof and on terms no more favorable to Midsummer than the terms of the
Amended and Restated Bridge Note and the Additional Option (as defined below)
are to Laurus and (b) amending the Securities Purchase Agreement dated March 15,
2004 between the Company and Midsummer and the 9% Convertible Debenture (the
"Debenture") issued thereby to extend the maturity date of the Debenture to
September 30, 2006, provide for the payment of monthly interest payments in the
amount of $35,613 for each such payment and issue Midsummer an option to
purchase 1,610,005 shares of the Company's common stock at $0.20 per share, in
substantially the form of the Additional Option.

         10. Effective as of the Amendment Effective Date and subject to the
full compliance by the Company with the terms hereof (including, without
limitation, Section 8 above), Laurus waives any and all rights to an adjustment
of the conversion price under the July 2004 Term Note or June 2005 Term Note
triggered by the increase in the principal amount of the Midsummer Term Note
and/or issuance of the Option to Midsummer dated as of the date hereof.

         11. The definition of Filing Date in Section 1 of the November 2005
Reg. Rights Agreement is deleted in its entirety and replaced as follows:

          "FILING DATE" means, with respect to (i) the Registration Statement
          required to be filed hereunder in respect of the shares of Common
          Stock issuable upon the exercise of the Option, a date no later than
          May 15, 2006 and (ii) with respect to shares of Common Stock issuable
          to the Holder as a result of adjustments to the Fixed Conversion Price
          made pursuant to the terms of the Option or otherwise, thirty (30)
          days after the occurrence of such event or the date of the such
          adjustment but in no event before May 15, 2006."

         12. The definition of Filing Date in Section 1 of the July 2004 Reg.
Rights Agreement is deleted in its entirety and replaced as follows:

          "FILING DATE" means, with respect to (i) the Registration Statement
          required to be filed hereunder, a date no later than May 15, 2006 and
          (ii) with respect to shares of Common Stock issuable to the Holder as
          a result of adjustments to the Fixed Conversion Price made pursuant to
          Section 3.4 of the Secured Convertible Term Note or Section 4 of the
          Warrant or otherwise, thirty (30) days after the occurrence of such
          event or the date of the such adjustment but in no event before May
          15, 2006."

                                       3
<PAGE>

         13. The definition of Filing Date in Section 1 of the June 2005 Reg.
Rights Agreement is deleted in its entirety and replaced as follows:

          "FILING DATE" means, with respect to (i) the Registration Statement
          required to be filed hereunder in respect of the shares of Common
          Stock issuable upon conversion of the Note, May 15, 2006 and (ii) with
          respect to shares of Common Stock issuable to the Holder as a result
          of adjustments to the Fixed Conversion Price made pursuant to Section
          3.4 of the Secured Convertible Term Note, Section 4 of the Warrant or
          Section 4 of the Option or otherwise, thirty (30) days after the
          occurrence of such event or the date of the adjustment of the Fixed
          Conversion Price but in no event before May 15, 2006."

MISCELLANEOUS
-------------

         14. The Company agrees that is shall issue on the date hereof an Option
(the "Additional Option") to Laurus to purchase up to 1,125,000 shares of the
Common Stock of the Company with an exercise price of $0.01 per share, such
Additional Option to be in the form attached hereto as EXHIBIT B. The Company
further agrees to file a Registration Statement (as defined in each of the Reg.
Rights Agreements), to register the shares of Common Stock that may be issued
upon exercise of the Additional Option no later than May 15, 2006 (the "FILING
DATE"). The Filing Date shall be deemed to be a "Filing Date" under, and as
defined in, each of the Reg. Rights Agreement. The Additional Option shall be
deemed to be an "Option" under, and as defined in, the November 2005 Reg. Rights
Agreement.

         15. Each amendment and waiver set forth herein shall be effective as of
the date first above written (the "AMENDMENT EFFECTIVE DATE") on the date when
(i) each of the Company and Laurus shall have executed and the Company shall
have delivered to Laurus its respective counterpart to this Amendment, (ii) the
Company shall have executed and delivered to Laurus each of the Additional
Option and the Amended and Restated Bridge Note, and (iii) Laurus shall have
received from the Company and its Subsidiaries a duly executed Reaffirmation
Agreement in the form attached hereto as EXHIBIT C.

         16. Except as specifically set forth in this Amendment, there are no
other amendments, modifications or waivers to the Term Notes, Purchase
Agreements or Reg. Rights Agreements, and all of the other forms, terms and
provisions of the Term Notes and the Purchase Agreements remain in full force
and effect.

         17. The Company hereby represents and warrants to Laurus that after
giving effect to this Amendment and the Amendment and Waiver between the Company
and Midsummer dated on or around the date hereof: (i) on the date hereof, all
representations, warranties and covenants made by the Company in connection with
the Amended and Restated Bridge Note, the Term Notes and the Purchase Agreements
are true, correct and complete except as qualified or limited in any manner by
the information set forth in the disclosure schedule delivered by the Company to
Laurus pursuant to Section 4 of the November 2005 Purchase Agreement or in the
SEC Reports and except that the Company did not file its reports on Form 10-Q

                                       4
<PAGE>

for the quarters ended September 30, 2005 and December 31, 2005; and (ii) on the
date hereof, all of the Company's and its Subsidiaries' covenant requirements
set forth in the Amended and Restated Bridge Note, the Term Notes, the Purchase
Agreements, the Reg. Rights Agreements and Related Agreements (as defined in the
respective Purchase Agreements) have been met.

         18. From and after the Amendment Effective Date, all references to the
Amended and Restated Bridge Note, the Term Notes, the Purchase Agreements and
the Reg. Rights Agreements shall be deemed to be references to the Amended and
Restated Bridge Note, the Term Notes, Purchase Agreements and Reg. Rights
Agreements as modified hereby.

         19. This Amendment shall be binding upon the parties hereto and their
respective successors and permitted assigns and shall inure to the benefit of
and be enforceable by each of the parties hereto and their respective successors
and permitted assigns. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. This Amendment
may be executed in any number of counterparts, each of which shall be an
original, but all of which shall constitute one instrument.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                       5
<PAGE>

         IN WITNESS WHEREOF, each of the Company and Laurus has caused this
Amendment to be signed in its name effective as of this 21st day of March 2006.

                                           ISLAND PACIFIC, INC.

                                           By:________________________________
                                           Name:  Barry Schechter
                                           Title:  Chief Executive Officer

                                           LAURUS MASTER FUND, LTD.

                                           By:________________________________
                                           Name:
                                           Title:

                                       6
<PAGE>

                                                                       EXHIBIT A
                                                                       ---------

                        AMENDED AND RESTATED BRIDGE NOTE

                                       7
<PAGE>

                                                                       EXHIBIT B
                                                                       ---------

                                ADDITIONAL OPTION

                                       8
<PAGE>

                                                                       EXHIBIT C
                                                                       ---------

                             REAFFIRMATION AGREEMENT

                                       9

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