EXHIBIT 10.3


 


ACCOUNTS
RECEIVABLE PURCHASE MODIFICATION AGREEMENT


 


This Accounts
Receivable Purchase Modification Agreement is entered into as of
September 24, 2003, by and between AML Communications, Inc. (the “Seller”)
and Silicon Valley Bank (“Buyer”).


 


1.                                       DESCRIPTION
OF EXISTING INDEBTEDNESS: Among other indebtedness which may be owing by
Seller to Buyer, Seller is indebted to Buyer pursuant to, among other
documents, an Accounts Receivable Purchase Agreement, dated November 20,
2001 by and between Seller and Buyer, as may be amended from time to time, (the
“Accounts Receivable Purchase Agreement”). 
The Accounts Receivable Purchase Agreement provides for, among other
things, an aggregate amount of all Purchased Receivable in the original amount
of One Million Dollars ($1,000,000.00). 
Capitalized terms used without definition herein shall have the meanings
assigned to them in the Accounts Receivable Purchase Agreement.


 


Hereinafter, all indebtedness owing by Seller to Buyer shall be referred
to as the “Indebtedness”.


 


2.                                       DESCRIPTION
OF COLLATERAL.   The Collateral as
described in the Accounts Receivable Purchase Agreement and in the Intellectual
Property Security Agreement secures repayment of the Indebtedness.


 


Hereinafter, the
above-described security documents and guaranties, together with all other
documents securing repayment of the Indebtedness shall be referred to as
the  “Security Documents”.  Hereinafter, the Security Documents,
together with all other documents evidencing or securing the Indebtedness shall
be referred to as the “Existing Documents”.


 


3.                                       DESCRIPTION
OF CHANGE IN TERMS.


 


A.                                   Modification(s)
to Accounts Receivable Purchase Agreement:


 


1.                                       Section 2.2 entitled “Acceptance of
Receivables” is hereby amended in part to provide that in no event shall the
aggregate amount of all Purchased Receivables outstanding at any time exceed
Two Million Dollars ($2,000,000.00).


 


2.                                       Section 3.2 entitled “Finance Charges” is
hereby amended in part to provide that Seller shall pay to Buyer a minimum of
$6,500 (Six Thousand Five Hundred Dollars) in Finance Charge on each
Reconciliation Period.


 


3.                                       Section 3.3 entitled “Collateral Handling Fee”
is hereby amended in part to provide that on each Reconciliation Date, Seller
will pay to Buyer a collateral handling fee, equal 0.75% per month of the
average Daily Account Balance outstanding during the applicable Reconciliation
Period.


 


4.                                       Section 3.7 entitled “Early Termination Fee” is
hereby amended in its entirety to read as follows:


 


A fully earned, non-refundable
early termination fee of $50,000 is due upon voluntary full payment of the
Obligations and termination of the Accounts Receivable Purchase Agreement prior
to November 20, 2004 unless the Obligations are paid in full from an
initial advance from a loan agreement with Silicon Valley Bank.


 


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5.                                       Section 17 entitled “Term and Termination” is
hereby amended in part to provide that the term of the Loan Agreement shall be
through November 20, 2004 unless terminated in writing by Buyer or Seller.


 


 


B.                                     Modification
to the IP Agreement:


 


Item “(g)” under
Section 3 entitled “Covenants and Warranties” is hereby amended to read as
follows:


 


Grantor shall not register any Copyrights or Mask Works with the United
States Copyright Office unless it: (i) has given at least fifteen (15) days’
prior notice to Bank of its intent to register such Copyrights or Mask Works
and has provided Bank with a copy of the application it intends to file with
the United States Copyright Office (excluding exhibits thereto); (ii) executes
a security agreement or such other documents as Bank may reasonably request in
order to maintain the perfection and priority of Bank’s security interest in
the Copyrights proposed to be registered with the United States Copyright
Office; and (iii) records such security documents with the United States
Copyright Office contemporaneously with filing the Copyright application(s)
with the United States Copyright Office. 
Grantor shall promptly provide to Bank a copy of the Copyright
application(s) filed with the United States Copyright Office, together with
evidence of the recording of the security documents necessary for Bank to
maintain the perfection and priority of its security interest in such
Copyrights or Mask Works.  Grantor shall
provide written notice to Bank of any application filed by Grantor in the
United States Patent Trademark Office for a patent or to register a trademark
or service mark within 30 days of any such filing;


 


4.                                       CONSISTENT
CHANGES.  The Existing Documents are
each hereby amended wherever necessary to reflect the changes described above.


 


5.                                       NO
DEFENSES OF SELLER.  Seller agrees
that, as of this date, it has no defenses against the obligations to pay any
amounts under the Indebtedness.


 


6.                                       CONTINUING
VALIDITY.  Seller understands and
agrees that in modifying the existing Indebtedness, Buyer is relying upon
Seller’s representations, warranties, and agreements, as set forth in the
Existing Documents.  Except as expressly
modified pursuant to this Accounts Receivable Purchase Modification Agreement,
the terms of the Existing Documents remain unchanged and in full force and
effect.  Buyer’s agreement to
modifications to the existing Indebtedness pursuant to this Accounts Receivable
Purchase Modification Agreement in no way shall obligate Buyer to make any
future modifications to the Indebtedness. 
Nothing in this Accounts Receivable Purchase Modification Agreement
shall constitute a satisfaction of the Indebtedness.  It is the intention of Buyer and Seller to retain as liable
parties all makers and endorsers of Existing Documents, unless the party is
expressly released by Buyer in writing. 
No maker, endorser, or guarantor will be released by virtue of this Accounts
Receivable Purchase Modification Agreement. 
The terms of this paragraph apply not only to this Accounts Receivable
Purchase Modification Agreement, but also to any subsequent Accounts Receivable
Purchase modification agreements.


 


7.                                       COUNTERSIGNATURE.  This Accounts Receivable Purchase Modification
Agreement shall become effective only when executed by Seller and Buyer.


 


	
  SELLER:

  	
  BUYER:

  
	
   

  	
   

  
	
  AML COMMUNICATIONS,
  INC.

  	
  SILICON VALLEY BANK

  



 


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  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Name:

  	
  Jacob Inbar

  	
   

  	
  Name:

  	
  Robert Anderson

  	
   

  
	
  Title:

  	
  President and CEO

  	
   

  	
  Title:

  	
  Vice-President

  	
   

  
									



 


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