FY2004 10K Exhibit 10.10


EXHIBIT 10.10


Silicon Valley Bank 

Amendment to Loan Documents




Borrower: Sigma Designs, Inc.

Address:   1221 California Circle

                 Milpitas, California  95035


Date:        October 31, 2003







            THIS AMENDMENT TO LOAN DOCUMENTS is entered into between
  Silicon Valley Bank ("Silicon") and the borrower named above ("Borrower").


            The Parties agree to amend the Loan and Security Agreement
  between them, dated September 7, 2001 (as previously amended from time to time,
  the "Loan Agreement"), as follows, effective as of the date hereof.
  (Capitalized terms used but not defined in this Amendment shall have the meanings
  set forth in the Loan Agreement.) 

 
            1.Amended Schedule. The Schedule to the Loan Agreement
  is hereby amended in its entirety to read as set forth in the Amended and Restated
  Schedule to Loan and Security Agreement of even date herewith.

            2.Certain Provisions Only Applicable on Event of Default.
  The provisions of Sections 4.3, 4.4 and 4.5 of the Loan Agreement shall only
  be applicable after the occurrence and during the continuance of an Event of
  Default.

            3.Modified Audit Provision. The first sentence of
  Section 5.4 of the Loan Agreement that currently reads as follows:

At reasonable times, and on one Business Day's notice,
          Silicon, or its agents, shall have the right to inspect the Collateral,
          and the right to audit and copy Borrower's books and records.

      
    
  

is hereby amended to read as follows:

At reasonable times, and on one Business Day's prior
          notice, Silicon, or its agents, shall have the right to inspect the
          Collateral, and the right to audit and copy Borrower's books and records.
          The parties contemplate that such audits will be performed as follows:
          (1) after Borrower's first request for a Loan after the date hereof
          but prior to such Loan, if any, being made by Silicon and (2) thereafter
          no more frequently than semiannually, provided, however, if Borrower
          does not request any Loans then no more frequently than annually. Notwithstanding
          the foregoing, nothing herein restricts Silicon's right to conduct such
          audits more frequently if (i) Silicon believes that it is advisable
          to do so in Silicon's good faith business judgment, or (ii) Silicon
          believes in good faith that an event of default or an event which, with
          notice or passage of time or both would constitute an event of default,
          has occurred and is continuing.

      
    
  

            4.Modified Audit Fee. The sentence of Section 5.4
  of the Loan Agreement that currently reads as follows:

The foregoing inspections and audits shall be at Borrower's
          expense and the charge therefor shall be $750 per person per day (or
          such higher amount as shall represent Silicon's then current standard
          charge for the same), plus reasonable out of pocket expenses.

      
    
  

is hereby amended to read as follows:

The foregoing inspections and audits shall be at Borrower's
          expense and the charge therefor shall be $700 per person per day (or
          such higher amount as shall represent Silicon's then current standard
          charge for the same), plus reasonable out of pocket expenses.

      
    
  

            5.Modified Definition of Insured Foreign Receivables.
  The definition of "Insured Foreign Receivable" set forth in Section
  8 of the Loan Agreement is hereby amended to read as follows: 

 
        "Insured Foreign Receivables" means Receivables
          owing from Account Debtors located outside the United States or Canada
          which are credit insured under a credit insurance policy which is in
          form and substance acceptable to Silicon in its good faith business
          judgment, and which is issued by an insurance company which is, and
          continues to be, acceptable to Silicon in its good faith business judgment
          (the "Credit Insurance Policy"), provided that Silicon is
          the exclusive loss payee under said policy. Insured Foreign Receivables
          shall be subject to the following additional provisions: 

      
    
  




  
          (a) Borrower agrees to comply with all requirements of the Credit Insurance
          Policy, to provide Silicon with copies of all claims thereunder and
          all reports made to the insurance company, to make timely claims thereunder
          in the event of any loss covered by such insurance, and to keep said
          insurance in full force and effect so long as any Receivables subject
          thereto are outstanding. 

        

        
          (b) To the extent Receivables owing from an Account Debtor exceed any
          limits set forth in the Credit Insurance Policy, they shall not be deemed
          to be Insured Foreign Receivables. In addition, to the extent total
          Receivables insured under the Credit Insurance Policy exceed the policy
          limit of the Credit Insurance Policy, they shall not be deemed Insured
          Foreign Receivables. 

        

        
        (c) Borrower shall assure that the terms of sale, products sold, and all
          other aspects of sales to Account Debtors named in the Credit Insurance
          Policy shall comply in all respects with the terms and requirements
          of the Credit Insurance Policy. 

        

        
        (d) Silicon may, in its good faith business judgment, establish reserves
          with respect to Insured Foreign Receivables to take into account deductibles,
          co-insurance, other provisions of the Credit Insurance Policy, and other
          factors and risks relating to the Insured Foreign Receivables. 

        

        
         (e) If more than 35% of the Receivables owing from an Account Debtor on
          Insured Foreign Receivables are outstanding more than 90 days
          from their invoice date (without regard to unapplied credits), then
          none of the Receivables owing from that Account Debtor will be deemed
          to be Insured Foreign Receivables; provided, however, such percentage
          will be 40% for Insured Foreign Receivables of Flextronics, Inc. and
          Solectron, Inc. 

        

        
        (f) [omitted].

        

        (g) In addition to the limitations set forth
                in Section 1 of the Schedule, Receivable Loans with respect to
                Insured Foreign Receivables shall be limited to $1,500,000 at
                any time outstanding.

            
          
        
      
    
  

            6.Additional Definitions.  The definitions on Exhibit
  A hereto are hereby added to Section 8 of the Loan Agreement in alphabetical
  order.

            7.Representations True.  Borrower represents and
  warrants to Silicon that all representations and warranties set forth in the
  Loan Agreement, as amended hereby, are true and correct. 

            8.General Provisions. This Amendment, the
  Loan Agreement, any prior written amendments to the Loan Agreement signed by
  Silicon and Borrower, and the other written documents and agreements between
  Silicon and Borrower set forth in full all of the representations and agreements
  of the parties with respect to the subject matter hereof and supersede all prior
  discussions, representations, agreements and understandings between the parties
  with respect to the subject hereof. Except as herein expressly amended, all
  of the terms and provisions of the Loan Agreement, and all other documents and
  agreements between Silicon and Borrower shall continue in full force and effect
  and the same are hereby ratified and confirmed. 


	Borrower:

SIGMA DESIGNS, INC.


 

By____________________________

President or Vice President



By____________________________

Secretary or Ass't Secretary

	Silicon:

SILICON VALLEY BANK


 

By____________________________

Title__________________________



 





 

 

Exhibit A

Additional Definitions

            "Closing Date" is the date of this Amendment.

            "Contingent Obligation" is, for any Person, any direct or indirect liability, contingent or not, of that Person for (i) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation directly or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (ii) any obligations for undrawn letters of credit for the account of that Person; and (iii) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; but "Contingent Obligation" does not include endorsements in the ordinary course of business.  The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under the guarantee or other support arrangement.

            "Indebtedness" is (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations and (d) Contingent Obligations.

            "Investment" is any beneficial ownership of (including stock, partnership interest or other securities) any Person, or any loan, advance or capital contribution to any Person.

            "Loan Documents" means, collectively, the Loan Agreement, the Representations, and all other present and future documents, instruments and agreements between Silicon and Borrower, including, but not limited to those relating to the Loan Agreement, and all amendments and modifications thereto and replacements therefor.

            "Permitted Indebtedness" is:  (a) Borrower's indebtedness to Silicon under this Agreement or any other Loan Document; (b) Indebtedness existing on the Closing Date and shown on the Schedule; (c) Subordinated Debt; (d) Indebtedness to trade creditors incurred in the ordinary course of business; and (e) Indebtedness secured by Permitted Liens.

            "Permitted Investments" are: (a) Investments shown on the Schedule and existing on the Closing Date; and (b)  (i) marketable direct obligations issued or unconditionally guaranteed by the United States or its agency or any State maturing within 1 year from its acquisition, (ii) commercial paper maturing no more than 1 year after its creation and having the highest rating from either Standard & Poor's Corporation or Moody's Investors Service, Inc., and (iii) Silicon's certificates of deposit issued maturing no more than 1 year after issue.

            "Representations" means the written Representations and Warranties provided by Borrower to Silicon referred to in the Schedule.

            "Subsidiary" is for any Person, or any other business entity of which more than 50% of the voting stock or other equity interests is owned or controlled, directly or indirectly, by the Person or one or more Affiliates of the Person.