SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

Exhibit 10.1

SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

      This Second Amendment to Amended and Restated Loan and Security Agreement (this “Amendment”) is entered into as of December 31, 2008, by and between COMERICA BANK (“Bank”) and LYRIS, INC., LYRIS TECHNOLOGIES INC., and COMMODORE RESOURCES (NEVADA), INC. (each a “Borrower” and collectively, “Borrowers”).

RECITALS

      Borrowers and Bank are parties to that certain Amended and Restated Loan and Security Agreement dated as of March 6, 2008, as amended from time to time including by that certain First Amendment to Amended and Restated Loan and Security Agreement dated as of July 30, 2008 (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 are hereby added to Section 1.1 of the Agreement or amended and restated in their entirety as follows:

           “Applicable Term Loan Principal Payment Amount” means (i) One Hundred Sixteen Thousand Sixty Hundred Sixty Seven and 67/100 Dollars ($116,667.67) for each month from January 2009 through December 2009 and (ii) One Hundred Sixty Three Thousand Eight Hundred Eighty Eight and 89/100 Dollars ($163,888.89) for each month thereafter.

           “Applicable Unused Fee Percentage” means (i) one quarter one percent (0.25%) if the Total Leverage Ratio calculated pursuant to Section 6.7(c) hereof is less than or equal to 2.00 to 1.00 for the most recently ended measuring period and (ii) one half of one percent (0.50%) if the Total Leverage Ratio calculated pursuant to Section 6.7(c) hereof is greater than 2.00 to 1.00 for the most recently ended measuring period.

           “Borrowing Base” means an amount equal to eighty percent (80%) of Eligible Accounts, as determined by Bank with reference to the most recent Borrowing Base Certificate delivered by Borrowers.

           “Credit Extension” means each Advance, the Term Loan or any other extension of credit by Bank to or for the benefit of Borrowers hereunder.

           “Eligible Accounts” means those Accounts that arise in the ordinary course of Borrowers’ business that comply with all of Borrowers’ representations and warranties to Bank set forth in Section 5.3; provided, that Bank may change the standards of eligibility by giving Parent thirty (30) days prior written notice. Unless otherwise agreed to by Bank, Eligible Accounts shall not include the following:

           (a) Accounts that the account debtor has failed to pay in full within ninety (90) days of invoice date;

           (b) Credit balances over ninety (90) days;

           (c) Accounts with respect to an account debtor, twenty-five percent (25%) of whose Accounts the account debtor has failed to pay within ninety (90) days of invoice date;

           (d) Accounts with respect to an account debtor, including Subsidiaries and Affiliates, whose total obligations to a Borrower exceed twenty five percent (25%) of all Accounts, to the extent such obligations exceed the aforementioned percentage, except as approved in writing by Bank;

           (e) Accounts with respect to which the account debtor does not have its principal place of business in the United States, except for Eligible Foreign Accounts;

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           (f) Accounts with respect to which the account debtor is the United States or any department, agency, or instrumentality of the United States, except for Accounts of the United States if the payee has assigned its payment rights to Bank and the assignment has been acknowledged under the Assignment of Claims Act of 1940 (31 U.S.C. 3727);

           (g) Accounts with respect to which a Borrower is liable to the account debtor for goods sold or services rendered by the account debtor to a Borrower, but only to the extent of any amounts owing to the account debtor against amounts owed to a Borrower;

           (h) Accounts with respect to which goods are placed on consignment, guaranteed sale, sale or return, sale on approval, bill and hold, demo or promotional, or other terms by reason of which the payment by the account debtor may be conditional;

           (i) Accounts with respect to which the account debtor is an officer, employee, agent or Affiliate of a Borrower;

           (j) Accounts that have not yet been billed to the account debtor or that relate to deposits (such as good faith deposits) or other property of the account debtor held by a Borrower for the performance of services or delivery of goods which such Borrower has not yet performed or delivered;

           (k) Accounts with respect to which the account debtor disputes liability or makes any claim with respect thereto as to which Bank believes, in its sole discretion, that there may be a basis for dispute (but only to the extent of the amount subject to such dispute or claim), or is subject to any Insolvency Proceeding, or becomes insolvent, or goes out of business;

           (l) Accounts the collection of which Bank reasonably determines after inquiry and consultation with Parent to be doubtful; and

           (m) Retentions and hold-backs.

           “Eligible Foreign Accounts” means Accounts with respect to which the account debtor does not have its principal place of business in the United States and that are (i) supported by one or more letters of credit in an amount and of a tenor, and issued by a financial institution, acceptable to Bank, (ii) insured by the Export Import Bank of the United States, (iii) generated by an account debtor with its principal place of business in Canada, provided that the Bank has perfected its security interest in the appropriate Canadian province, or (iv) approved by Bank on a case-by-case basis. All Eligible Foreign Accounts must be calculated in U.S. Dollars.

           “Excess Cash Flow” means EBITDA less working capital changes, capital expenditures, cash taxes paid and required principal payments on all Indebtedness to Bank.

           “Revolving Line” means a Credit Extension of up to Four Million Dollars ($4,000,000) inclusive of any amounts outstanding under the Letter of Credit Sublimit, the ACH Sublimit and the Foreign Exchange Sublimit; provided however that availability under the Revolving Line shall be reduced by an amount equal to Ninety One Thousand Six Hundred Sixty Seven Dollars ($91,667) on the last day of each month commencing on January 31, 2009 and continuing on the last day of each month thereafter through the Revolving Maturity Date.

           “Revolving Maturity Date” means July 31, 2010.

           “Term Loan” has the meaning set forth in Section 2.1(c).

           “Term Loan Maturity Date” means July 31, 2010.

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

           “(i) Amount . Subject to and upon the terms and conditions of this Agreement (1) Borrowers may request one or more Advances in an aggregate outstanding amount not to exceed the lesser of (A) the Revolving Line or (B) the Borrowing Base, less, in either case any amounts outstanding under the Letter of Credit Sublimit, the Foreign Exchange Sublimit and the ACH Sublimit and (2) amounts borrowed pursuant to this Section 2.1(b) may be repaid and reborrowed at any time prior to the Revolving Maturity Date, at which time all Advances under this Section 2.1(b) shall be immediately due and payable. Borrowers may prepay and reborrow any Advances without penalty or premium.”

      3. Section 2.1(b)(ii) of the Agreement is hereby amended and restated in its entirety to read as follows:

           (ii) Intentionally Omitted .”

      4. New Section 2.1(c) is hereby added to the Agreement as follows:

            “(c) Term Loan .

               (i) Subject to and upon the terms and conditions of this Agreement, on December 31, 2008, Bank shall be deemed to have made a term loan to Borrowers in the amount of Seven Million Three Hundred Thousand Dollars ($7,300,000) (the “Term Loan”), which amount shall refinance existing Indebtedness to Bank.

               (ii) Interest shall accrue from the date the Term Loan is made at the rate specified in Section 2.3(a), and shall be payable monthly on the last day of each month. The Term Loan shall be repaid consecutive installments of principal equal to the Applicable Term Loan Principal Payment Amount plus accrued but unpaid interest, commencing on January 31, 2009 and continuing on the last day of each month thereafter through the Term Loan Maturity Date, at which time all amounts owing under this Section 2.1(c) shall be immediately due and payable. The Term Loan, once repaid, may not be reborrowed. Borrowers may prepay the Term Loan without penalty or premium.

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

      5. Section 2.2 of the Agreement is hereby amended and restated in its entirety to read as follows:

           “2.2 Overadvances . If the aggregate amount of the outstanding Advances exceeds the lesser of the Revolving Line or the Borrowing Base at any time, Borrowers shall immediately pay to Bank, in cash, the amount of such excess.”

      6. Section 2.3(a) of the Agreement is hereby amended and restated in its entirety to read as follows:

           “(a) Interest Rates for Credit Extensions . Except as set forth in Section 2.3(b), the Credit Extensions shall bear interest, on the outstanding daily balance thereof, as set forth in the LIBOR Addendum to Amended and Restated Loan & Security Agreement attached as Exhibit D .”

      7. New Section 2.5(d) is hereby added to the agreement as follows:

           “(d) Facility Fee . On March 31, 2009, a facility fee in the amount of Forty Five Thousand Dollars ($45,000).”

      8. Section 5.3 of the Agreement is hereby amended and restated in its entirety to read as follows:

           “5.3 Collateral . Borrower has rights in or the power to transfer the Collateral, and its title to the Collateral is free and clear of Liens, adverse claims, and restrictions on transfer or pledge except for Permitted Liens. All Collateral is located solely in the Collateral States. The Eligible Accounts are bona fide existing obligations. The property or services giving rise to such Eligible Accounts has been delivered or rendered to the account debtor or its agent for immediate shipment to and unconditional acceptance by the account debtor. Borrower has not received notice of actual or imminent Insolvency Proceeding of any account debtor whose accounts are included in any Borrowing Base Certificate as an Eligible Account. All Inventory is in all material respects of good and merchantable quality, free from all material defects, except for Inventory for which adequate reserves have been made. Except as set forth in the Schedule, none of the Collateral is maintained or invested with a Person other than Bank or Bank’s Affiliates.”

     9. Section 6.2(a) of the Agreement is hereby amended and restated in its entirety to read as follows:

           “(a) Within thirty (30) days after the last day of each month, Parent shall deliver to Bank a Borrowing Base Certificate signed by a Responsible Officer in substantially the form of Exhibit E hereto, together with aged listings by invoice date of accounts receivable and accounts payable.”

      10. Section 6.2(d) of the Agreement is hereby amended and restated in its entirety to read as follows:

           “(d) Bank shall have a right from time to time hereafter to audit each Borrower’s Accounts and appraise Collateral at Borrowers’ expense, provided that such audits will be conducted no more often than every six (6) months unless an Event of Default has occurred and is continuing.”

      11. Section 6.7(b) of the Agreement is hereby amended and restated in its entirety to read as follows:

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

               (a) Debt Service Coverage Ratio . Measured on a monthly basis, a ratio of EBITDA (measured on an annualized trailing three-month basis) minus cash taxes and non-financed Capitalized Expenditures to the sum of cash interest expense (measured on an annualized trailing three-month basis) plus the current portion of all Indebtedness of at least (i) 1.15 to 1.00 for each monthly measuring period through the monthly measuring period ending July 31, 2009, and (ii) 1.25 to 1.00 for each monthly measuring period thereafter.

               (b) EBITDA . Measured monthly on a rolling three-month basis, EBITDA of not less than follows (i) Eight Hundred Thousand Dollars ($800,000) for each monthly measuring period through the monthly measuring period ending August 31, 2009, (ii) One Million Two Hundred Fifty Thousand Dollars ($1,250,000) for each subsequent monthly measuring period through the monthly measuring period ending November 30, 2009; and (ii) One Million Seven Hundred Fifty Thousand Dollars ($1,750,000) for each monthly measuring period thereafter.

               (c) Total Leverage Ratio . Measured on a monthly basis, a ratio of all Indebtedness to EBITDA (measured on an annualized trailing three (3) month basis) of not greater than: (i) 3.00 to 1.00 for each monthly measuring period through the measuring period ending August 31, 2009, (ii) 2.50 to 1.00 for each subsequent monthly measuring period through the monthly measuring period ending November 30, 2009; and (iii) 2.00 to 1.00 for each monthly measuring period thereafter.

      12. Exhibit C to the Agreement is hereby replaced with Exhibit C attached hereto.

      13. Exhibit D to the Agreement is hereby replaced with Exhibit D attached hereto.

      14. Exhibit E is hereby added to the Agreement in the form attached hereto.

     15. [Bank hereby waives Borrowers’ violation of Section 6.7(a), 6.7(b), 6.7(c) and 6.7(d) of the Agreement for the November 2008 measuring period.]

      16. No course of dealing on the part of Bank or its officers, nor any failure or delay in the exercise of any right by Bank, shall operate as a waiver thereof, and any single or partial exercise of any such right shall not preclude any later exercise of any such right. Bank’s failure at any time to require strict performance by a Borrower of any provision shall not affect any right of Bank thereafter to demand strict compliance and performance. Any suspension or waiver of a right must be in writing signed by an officer of Bank.

      17. 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.

      18. Each Borrower represents and warrants that the Representations and Warranties contained in the Agreement are true and correct as of the date of this Amendment, and that except as waived hereby, no Event of Default has occurred and is continuing.

      19. 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 facility fee in the amount of Forty Five Thousand Dollars ($45,000), which may be debited from any of Borrowers’ accounts;

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

           (d) such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate.

      20. 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.

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

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

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EXHIBIT C

COMPLIANCE CERTIFICATE

      The undersigned authorized officer of LYRIS, INC., for itself and on behalf of all Borrowers, hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement between Borrowers and Bank (the "Agreement"), (i) Each Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below and (ii) all representations and warranties of each Borrower stated in the Agreement are true and correct as of the date hereof. Attached herewith are the required documents supporting the above certification. The Officer further certifies that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes.

Please indicate compliance status by circling Yes/No under "Complies" column.

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EXHIBIT D

LIBOR Addendum To Amended and Restated Loan and Security Agreement

n      This LIBOR Addendum to Amended and Restated Loan and Security Agreement (this “Addendum”) is entered into as of December 31, 2008, by and between Comerica Bank (“Bank”) and LYRIS, INC., LYRIS TECHNOLOGIES INC., and COMMODORE RESOURCES (NEVADA), INC. (each a “Borrower” and collectively, “Borrowers”). This Addendum supplements the terms of the Amended and Restated Loan and Security Agreement dated as of March 6, 2008, as may subsequently be amended from time to time including by that certain First Amendment to Amended and Restated Loan and Security Agreement dated as of July 30, 2008 and that certain Second Amendment to Amended and Restated Loan and Security Agreement dated as of the date hereof (the “Agreement”).

Definitions . As used in this Addendum, the following terms shall have the following meanings. Initially capitalized terms used and not defined in this Addendum shall have the meanings ascribed thereto in the Agreement.

      "Advance" means a borrowing requested by a Borrower and made by Bank under the Agreement, including any refunding of an outstanding Advance as the same type of Advance or the conversion of any such outstanding Advance to another type of Advance, and shall include a LIBOR-based Advance, a Daily Adjusting LIBOR Rate Advance and (subject to the terms of this Addendum) a Prime-based Advance.

      "Applicable Interest Rate" means the LIBOR-based Rate or the Daily Adjusting LIBOR Rate (as selected by Parent from time to time or as otherwise determined) or the Prime-based Rate, during any period when the Obligations is required to bear interest at the Prime-based Rate in accordance with the terms and conditions of this Addendum.

      “Applicable Margin” means a rate per annum based upon Borrowers’ most recently reported Total Leverage Ratio in accordance with Section 6.7(c) of the Agreement as follows:

      “Business Day” means any day, other than a Saturday, Sunday or any other day designated as a holiday under Federal or applicable State statute or regulation, on which Bank is open for all or substantially all of its domestic and international business (including dealings in foreign exchange) in Detroit, Michigan and San Jose, California, and, in respect of notices and determinations relating to LIBOR-based Advances, Daily Adjusting LIBOR Rate Advances, the LIBOR-based Rate, LIBOR Periods, and the Daily Adjusting LIBOR Rate, also a day on which dealings in dollar deposits are also carried on in the London interbank market and on which banks are open for business in London, England.

      “Daily Adjusting LIBOR Rate” means, for any day, a per annum interest rate which is equal to the Applicable Margin, plus the quotient of the following:

(1) for any day, the per annum rate of interest determined on the basis of the rate for deposits in United States Dollars for a period equal to one (1) month appearing on Page BBAM of the Bloomberg Financial Markets Information Service as of 8:00 a.m. (California time) (or as soon thereafter as practical) on such day, or if such day is not a Business Day, on the immediately preceding Business Day. In the event that such rate does not appear on Page BBAM of the Bloomberg Financial Markets Information Service (or otherwise on such Service) on any day, the “Daily Adjusting LIBOR Rate” for such day shall be determined by reference to such other publicly available service for displaying eurodollar rates as may be reasonably selected by Bank, or in the absence of such other service, the “Daily Adjusting LIBOR Rate” for such day shall, instead, be determined based upon the average of the rates at which Bank is offered dollar deposits at or about 8:00 a.m. (California time) (or as soon thereafter as practical), on such day, or if such day is not a Business Day, on the immediately preceding Business Day, in the interbank eurodollar market in an amount comparable to the principal amount of the Obligations which is to bear interest at such Daily Adjusting LIBOR Rate and for a period equal to one (1) month;

§ divided by

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(2) a percentage (expressed as a decimal) equal to 1.00 minus the maximum rate on such day at which Bank is required to maintain reserves on "Euro-currency Liabilities" as defined in and pursuant to Regulation D of the Board of Governors of the Federal Reserve System or, if such regulation or definition is modified, and as long as Bank is required to maintain reserves against a category of liabilities which includes eurodollar deposits or includes a category of assets which includes eurodollar loans, the rate at which such reserves are required to be maintained on such category.

      “Daily Adjusting LIBOR Rate Advance” means an Advance which bears interest at the Daily Adjusting LIBOR Rate.

      "LIBOR-based Advance" means an Advance which bears interest at the LIBOR-based Rate.

      "LIBOR-based Rate" means a per annum interest rate which is equal to the sum of the Applicable Margin, plus the quotient of the following:

(1) the LIBOR Rate;

§ divided by

(2) a percentage (expressed as a decimal) equal to 1.00 minus the maximum rate during such LIBOR Period at which Bank is required to maintain reserves on "Euro-currency Liabilities" as defined in and pursuant to Regulation D of the Board of Governors of the Federal Reserve System or, if such regulation or definition is modified, and as long as Bank is required to maintain reserves against a category of liabilities which includes eurodollar deposits or includes a category of assets which includes eurodollar loans, the rate at which such reserves are required to be maintained on such category.

      “LIBOR Lending Office” means Bank’s office located in the Cayman Islands, British West Indies, or such other branch of Bank, domestic or foreign, as it may hereafter designate as its LIBOR Lending Office by notice to Borrowers.

      "LIBOR Period" means, with respect to a LIBOR-based Advance, a period of one (1) month, two (2) months, or three (3) months, as selected by Parent (and which period is acceptable to Bank in its sole discretion), or as otherwise determined pursuant to and in accordance with the terms of this Addendum, commencing on the day a LIBOR-based Advance is made or the day an Advance is converted to a LIBOR-based Advance or the day an outstanding LIBOR-based Advance is refunded or continued as another LIBOR-based Advance for an applicable LIBOR Period, provided that any LIBOR Period which would otherwise end on a day which is not a Business Day shall be extended to the next succeeding Business Day, except that if the next succeeding Business Day falls in another calendar month, the LIBOR Period shall end on the next preceding Business Day, and when a LIBOR Period begins on a day which has no numerically corresponding day in the calendar month during which such LIBOR Period is to end, it shall end on the last Business Day of such calendar month. In the event that any LIBOR-based Advance is at any time refunded or continued as another LIBOR-based Advance for an additional LIBOR Period, such LIBOR Period shall commence on the last day of the preceding LIBOR Period then ending.

      "LIBOR Rate" means, with respect to any Obligations outstanding under the Agreement at the LIBOR-based Rate, the per annum rate of interest determined on the basis of the rate for deposits in United States Dollars for a period equal to the relevant LIBOR Period for such Obligations, commencing on the first day of such LIBOR Period, appearing on Page BBAM of the Bloomberg Financial Markets Information Service as of 8:00 a.m. (California time) (or as soon thereafter as practical), two (2) Business Days prior to the first day of such LIBOR Period. In the event that such rate does not appear on Page BBAM of the Bloomberg Financial Markets Information Service (or otherwise on such Service), the "LIBOR Rate" shall be determined by reference to such other publicly available service for displaying eurodollar rates as may be agreed upon by Bank and Borrowers, or, in the absence of such agreement, the "LIBOR Rate" shall, instead, be the per annum rate equal to the average of the rates at which Bank is offered dollar deposits at or about 8:00 a.m. (California time) (or as soon thereafter as practical), two (2) Business Days prior to the first day of such LIBOR Period in the interbank eurodollar market in an amount comparable to the principal amount of the respective LIBOR-based Advance which is to bear interest at such LIBOR-based Rate and for a period equal to the relevant LIBOR Period.

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      "Prime Rate" means the per annum interest rate established by Bank as its prime rate for its borrowers, as such rate may vary from time to time, which rate is not necessarily the lowest rate on loans made by Bank at any such time.

      "Prime-based Advance" means an Advance which bears interest at the Prime-based Rate.

      "Prime-based Rate" means a per annum interest rate which is equal to the sum of the Applicable Margin plus the greater of (i) the Prime Rate; or (ii) the rate of interest equal to the sum of (a) one percent (1%), and (b) the rate of interest equal to the average of the rates on overnight Federal funds transactions with members of the Federal Reserve System