Amendment No. 3 to Loan and Security Agreement by and among Wells Fargo Foothill, Inc., Earl Scheib, Inc., and Earl Scheib Realty Corp.

Exhibit 10(R)

EXECUTION COPY

AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT

        THIS AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT (this "Amendment"), dated as of April. 6, 2004, is made and entered into by and among WELLS FARGO FOOTHILL, INC., a California corporation ("Lender"), EARL SCHEIB, INC., a Delaware corporation ("Parent"), and EARL SCHEIB REALTY CORP., a California corporation ("ES Realty") (Parent and ES Realty are referred to hereinafter collectively, jointly and severally, as the "Borrower"). Capitalized terms used herein and not otherwise defined shall have the respective meanings ascribed to them in that certain Loan and Security Agreement entered into as of August 4, 2003 between Lender and Borrower (the "Original Agreement"), as amended as of August 29, 2003 (the "First Amendment") and February 19, 2004 (the "Second Amendment").

        WHEREAS, Lender and Borrower desire to enter into this Amendment to amend the Original Agreement as set forth herein, all in accordance with Sections 15 and 16.6 of the Original Agreement

        NOW, THEREFORE, in consideration, of the foregoing and of the mutual promises contained herein and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Lender and Borrower hereby amend the Original Agreement as follows:

        1.     Minimum EBITDA. Section 7.15(a)(i) of the Original Agreement and Section 1 of the Second Amendment shall be deleted and replaced by the following:

        (i)    Minimum EBITDA. EBITDA, measured on, a quarter-end basis, of at least the required amount set forth in the following table for the applicable period set forth opposite thereto:

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        2.     Tangible Net Worth. Section 7.15(a)(ii) of the Original Agreement shall be deleted and replaced by the following:

        (ii)   Tangible Net Worth. Tangible Net Worth of at least the required amount set forth in the following table, measured as of the applicable date set forth opposite thereto:

        3.     Reference to and Effect Upon the Amended Original Agreement. All of the provisions of this Amendment shall be deemed to be incorporated in, and made a part of, the Original Agreement, the First Amendment and the Second Amendment; and the Original Agreement, as supplemented and amended by the First Amendment, the Second Amendment and this Amendment, shall be read, taken and construed as one and the same agreement. Except as expressly modified herein, the Original Agreement, the First Amendment and the Second Amendment shall remain in full force and effect and are hereby ratified.

        4.     Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of California without regard to its conflict of laws principles.

        5.     Counterparts. This Amendment may be executed in any number of counterparts, or facsimile counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.

        6.     Titles and Subtitles. The titles and subtitles used in this Amendment are used for convenience and are not to be considered in construing or interpreting this Amendment.

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        IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed effective as of the day and year first written above.

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