Sonic Watch

from 8-K 4 pages B. Borrower Is Currently in Default of the Agreement for Failing to Comply With the Quick Ratio Covenant Set Forth in Section 6.7(a) of the Agreement for the Period Ending December 31, 2007 and for Failing to Comply With the Minimum EBITDA Covenant Set Forth in Section 6.7(c) of the Agreement for the Quarter Ending December 31, 2007 (The "Existing Defaults"). C. Borrower Has Requested That Bank Amend the Agreement to (I) Waive the Existing Defaults, and (II) Extend the Maturity Date for the Revolving Line. D. Although Bank Is Under No Obligation to Do So, Bank Is Willing to Waive the Existing Defaults on the Terms and Conditions Set Forth in This Amendment, So Long as Borrower Complies With the Terms, Covenants and Conditions Set Forth in This Amendment in a Timely Manner. F. Bank Has Agreed to So Amend Certain Provisions of the Agreement, but Only to the Extent, in Accordance With the Terms, Subject to the Conditions and in Reliance Upon the Representations and Warranties Set Forth Below and in the Agreement. Therefore, the Parties Hereto Agree as Follows: 1. Amendments to the Agreement. 1.1 Section 1.1 of the Agreement Is Hereby Amended by Adding or Revising the Following Defined Terms in Their Entirety to Read as Follows

from 10-Q 6 pages B. Borrower Is Currently in Default of the Agreement for Failing to Comply With the Leverage Ratio Financial Covenant Set Forth in Section 6.7(b) of the Agreement for the Quarter Ending June 30, 2007 and for Failing to Comply With the Minimum Net Profit Financial Covenant Set Forth in Section 6.7(c) of the Agreement for the Quarter Ending June 30, 2007 (The "Existing Defaults"). C. Borrower Has Requested That Bank Amend the Agreement to (I) Waive the Existing Defaults, (II) Extend the Maturity Date for the Revolving Line, (II) Extend the Revolving Maturity Date, and (III) Make Certain Other Revisions to the Agreement as More Fully Set Forth Herein. D. Although Bank Is Under No Obligation to Do So, Bank Is Willing to Waive the Existing Defaults on the Terms and Conditions Set Forth in This Amendment, So Long as Borrower Complies With the Terms, Covenants and Conditions Set Forth in This Amendment in a Timely Manner. F. Bank Has Agreed to So Amend Certain Provisions of the Agreement, but Only to the Extent, in Accordance With the Terms, Subject to the Conditions and in Reliance Upon the Representations and Warranties Set Forth Below and in the Agreement. Therefore, the Parties Hereto Agree as Follows: 1. Amendments to the Agreement. 1.1 Section 1.1 of the Agreement Is Hereby Amended by Adding or Revising the Following Defined Terms in Their Entirety to Read as Follows

from 8-K 34 pages Sonic Solutions Loan and Security Agreement

from S-3 ~50 pages Private Equity Line of Credit Agreement