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EXHIBIT 10.40
AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
This Amendment to Loan and Security Agreement is entered into as of
August 1, 1997, by and between Silicon Valley Bank ("Bank") and AG Associates,
Inc. ("Borrower").
RECITALS
Borrower and Bank are parties to that certain Loan and Security
Agreement dated as of August 2, 1996, as amended, (the "Agreement"). Borrower
has asked Bank to amend certain provisions of the Agreement.
Bank has agreed to do so, in accordance with the terms of this Amendment.
NOW, THEREFORE, the parties agree as follows:
1. The definition in Section 1.1 of "Maturity Date" is amended to
read "July 31, 1998."
2. Bank approves Accounts owing to Borrower by Lucky Goldstar as
"Eligible Foreign Accounts".
3. Section 2.3(a) is amended to read as follows:
(a) Interest Rate. Except as set forth in Section 2.3(b), any
Advances shall bear interest, on the average Daily Balance, at a rate
equal to One Percent (1.0%) above the Prime Rate; provided the interest
rate shall be One Half of One Percent (0.5%) above the Prime Rate,
effective as of the first day of the fiscal quarter following the fiscal
quarter in which Borrower is profitable.
4. Section 6.3 is amended by adding a new paragraph at the end of
Section 6.3, as follows:
Notwithstanding the foregoing, beginning the fiscal quarter
following the fiscal quarter in which Borrower is first profitable, the
financial statements and backlog and xxxx-to-book report required under
clause (a) of the first paragraph of this Section 6.3 shall be due
within twenty (20) days of the last day of each fiscal quarter.
5. Section 6.11 is amended to read as follows (and Exhibit D is
amended to reflect such change to be in the form of Exhibit D attached
hereto):
6.11 Profitability. Borrower shall not suffer a loss in excess
of $500,000 for the fiscal quarter ending September 30, 1997. Borrower
shall be profitable for each fiscal quarter thereafter.
6. Unless otherwise defined, all capitalized terms in this
Amendment shall be as defined in the Agreement. Except as amended, the
Agreement remains in full force and effect.
7. 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 no Event of Default has occurred and
is continuing.
8. 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.
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9. As a condition to the effectiveness of this Amendment, Borrower shall
pay a fee equal to Twenty Five Thousand Dollars ($25,000) and shall reimburse
Bank for the Bank Expenses incurred in connection with this Amendment.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the first date above written.
AG ASSOCIATES, INC.
By
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SILICON VALLEY BANK
By
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Title
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