Today, ALJ Regional Holdings, Inc. (Pink Sheets: ALJJ) (“ALJ”) announced that its operating subsidiary KES Acquisition Company (“KES”) has amended the terms of its senior credit facility (“Senior Debt”) and the junior indebtedness evidenced by its 8% subordinated secured notes (“Junior Debt”).

On July 20, 2009, KES entered into the Third Amendment to the Financing Agreement and First Amendment to Security Agreement (the “Amendment”) by and among KES and its lenders, Ableco Finance and PNC Bank, National Association. The Amendment provides for the following modifications to the Senior Debt, among others:

• The final maturity date was extended for one year to February 22, 2011 and as a result the quarterly principal payments under the term loan were reduced from $750,000 to $500,000;
• Certain financial covenants and metrics, including the EBITDAM covenant were reduced and the borrowing base multiplier was increased;
• The interest rate was increased by one percentage point; and
• Subject to certain limitations, KES is now permitted to create two acquisition subsidiaries that will not be encumbered pursuant to the terms of the Senior Debt.

Discussing the transaction, John Scheel, Chief Executive Officer of KES and ALJ said, “We are happy that we were able to work with our lenders to modify our debt in a manner that benefits everyone. The extended maturity date and new financial covenants provide us with additional flexibility as we are starting to see a slight improvement in demand. Further, our new ability to create subsidiaries outside of the Senior Debt will better position us to explore strategic opportunities.”

In addition, KES made certain modifications to the terms of its Junior Debt. The lenders with respect to KES’ Junior Debt include, among others: Ableco, ALJ and Jess Ravich, Hal Byer and Scott Fritz, all of whom serve on ALJ’s board.

This press release contains forward-looking statements. Such statements include information regarding a possible market recovery or improvement in demand and ALJ's ability to take advantage of any market recovery or possible strategic opportunities. Forward-looking statements involve certain risks and uncertainties and actual results may differ materially from those discussed in any such statement. Among the factors that could cause actual results to differ materially are changes in ALJ's stock price, liquidity needs, market fluctuations or the occurrence of an "ownership change." Additional factors that could cause actual results to differ are discussed in ALJ's Annual Report for the fiscal year ended September 30, 2008 and in its other periodic reports issued through the Pink Sheets News Service and available at www.pinksheets.com. All forward-looking statements in this release are made as of the date hereof and ALJ assumes no obligation to update any forward-looking statement.

ALJ Regional Holdings, Inc.
Jess Ravich, 310-312-5605