EXHIBIT
10.31


BUSINESSFINANCING
MODIFICATION AGREEMENT





This
Business Financing Modification Agreement is entered into as of August 28, 2008,
by and between AML Communications, Inc. (the "Borrower") and Bridge Bank,
National Association ("Lender").





1. DESCRIPTION OF EXISTING
INDEBTEDNESS: Among other indebtedness which may be owing by Borrower to
Lender, Borrower is indebted to Lender pursuant to, among other documents, a
Business Financing Agreement, dated July 8, 2004 by and between Borrower to
Lender, as may be amended from time to time, (the "Business Financing
Agreement"). Capitalized terms used without definition herein shall have the
meanings assigned to them in the Business Financing Agreement.





Hereinafter,
all indebtedness owing by Borrower to Lender shall be referred to as the
"Indebtedness" and the Business Financing Agreement and any and all other
documents executed by Borrower in favor of Lender shall be referred to as the
"Existing Documents."





2. DESCRIPTION OF CHANGE IN
TERMS.




A. Acknowledgement of Existing
Indebtedness:





Borrower
hereby acknowledges that, as of the date hereof, Borrower owes to Lender an
unpaid principal amount of (i) $28,168.17 from Equipment Loan 1 Advances (the
"Unpaid Equipment Loan 1 Advances"), (ii) $261,632.45 from Equipment Loan 3
Advances (the "Unpaid Equipment Loan 3 Advances"), and (iii) $398,112.48 (the
"Unpaid Equipment Loan 4 Advances"), Equipment Loan 2 Advances have been repaid
in full and no principal amount is currently owed from Formula
Advances.





Borrower
hereby also acknowledges that Equipment Loan 1 Advances, Equipment Loan 2
Advances, Equipment Loan 3 Advances, or Equipment Loan 4 Advances are no longer
available to Borrower.




B. Modification(s) to the
Business Financing Agreement.




1. The
following defined terms are hereby inserted into Section 1.1 entitled "Definitions" in the
appropriate alphabetical order:




Equipment Loan 5
Advance" has the meaning set forth in Section 2.3(f) hereof. "Equipment Loan 5 Credit
Limit" means $300,000.




Equipment Loan 5 Facility
Fee" means a fee of $2,500 paid upon execution of this Business Financing
Modification Agreement.




Equipment Loan 5 Maturity
Date" means January 27, 2012.




2. The following
defined terms in Section 1.1 entitled "Definitions"are
hereby amended as follows:




Credit Limit" means
the sum of (i) Formula Credit Limit, (ii) Unpaid Equipment Loan 1 Advances,
(iii) Unpaid Equipment Loan 3 Advances, (iv) Unpaid Equipment Loan 4 Advances,
and (v) Equipment Loan 5 Credit Limit.




Equipment Advance"
means an Equipment Loan 1 Advance, an Equipment Loan 3 Advance, an Equipment
Loan 4 Advance, or an Equipment Loan 5 Advance as set forth in Section
2.3.




Equipment Loan 3 Maturity
Date" means July 31, 2011.




Facility Fee" means a
fee equal to $2,500 due upon execution of this Business Financing Modification
Agreement, and annually thereafter.




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Finance Charge
Percentage" means a rate per year equal to (a) the Prime Rate plus 0.25%
with respect to Formula Advances, (b) the Prime Rate plus 1.00% with respect to
Equipment Loan 1 Advances, Equipment Loan 3 Advances, Equipment Loan 4 Advances,
and Equipment Loan 5 Advances.




Prime Rate" means the
greater of 5.00% or the Prime Rate published in the Money Rates section of the
Western Edition of The Wall Street Journal, or such other rate of interest
publicly announced from time to time by Lender as its Prime Rate. Lender may
price loans to its customers at, above or below the Prime Rate. Any change in
the Prime Rate shall take effect at the opening of business on the day specified
in the public announcement of a change in Prime Rate.




Overadvance" means,
(a) the amount, if any, by which the total amount of Formula Advances then
outstanding exceeds the lesser of the Formula Credit Limit or the Borrowing
Base; (b) the entire amount of any advances made on or after August 28, 2008 as
Equipment Loan 1 Advance, Equipment Loan 3 Advance, or Equipment Loan 4 Advance,
or (c) theamount, it any,bywhich the total amount ofEquipment Loan 5Advances exceeds
$300,000.




Revolving Maturity
Date" means August 15, 2010.




3. Subsection
(e) in Section 2.3 entitled "Equipment Advances"
is hereby amended so that:





The
Unpaid Equipment Loan 3 Advances as of the date hereof shall be repaid in 36
equal monthly installments of principal, plus all accrued Finance Charges,
beginning on August 31, 2008 and continuing on the last day of each month
thereafter until the earlier of the Equipment Loan 3 Maturity Date, or the date
on which all Equipment Loan 3 Advances and all accrued Finance Charges are paid
in full.




4. Section
2.3, entitled "Equipment Advances"
is hereby amended to include the following subsection:





(f) Subject to
the terms and conditions of this Agreement, from the date hereof, through and
including December 31, 2008, Borrower may request Equipment Advances of up to
the Equipment Loan 5 Credit Limit to finance the acquisition of Equipment (each
an "Equipment Loan 5
Advance"). Any amounts borrowed, even if repaid before the Equipment Loan
5 Maturity Date, permanently reduces the Equipment Loan 5 Credit Limit. Each
Equipment Loan 5 Advance shall not exceed 100% of the invoice price of Equipment
approved by Lender from time to time, and shall be in an amount of at least
$50,000. The Equipment Borrower submitted for financing under this Section shall
be purchased no earlier than 90 days prior to the date of this Business
Financing Modification Agreement. On the last day of each month beginning with
the month in which the initial Equipment Loan 5 Advance is made, Borrower shall
pay Lender all accrued Finance Charges on all outstanding Equipment Loan 5
Advances during such month. The principal amount of all Equipment Loan 5
Advances outstanding on December 31, 2008 shall be repaid in thirty-six (36)
equal monthly installments of principal, plus all accrued Finance Charges,
beginning on January 31, 2009 and continuing on the last day of each month
thereafter until the earlier of the Equipment Loan 5 Maturity Date, or the date
on which all Equipment Loan 5 Advances and all accrued Finance Charges are paid
in full.




5. The
following subsection is hereby inserted into Section 3, entitled
"Fees":





(e)           Equipment Loan 5 Facility
Fee. Borrower shall pay Lender the Equipment Loan 5 Facility Fee upon
execution of this Business Financing Modification Agreement.





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




6. I NTENTIONALLY
OMITTED.




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7. NO DEFENSES OF
BORROWER/GENERAL RELEASE. Borrower agrees that, as of this date, it has
no defenses against the obligations to pay any amounts under the Indebtedness.
Each of Borrower and Guarantor (each, a "Releasing Party") acknowledges that
Lender would not enter into this Business Financing Modification Agreement
without Releasing Party's assurance that it has no claims against Lender or any
of Lender's officers, directors, employees or agents. Except for the obligations
arising hereafter under this Business Financing Modification Agreement, each
Releasing Party releases Lender, and each of Lender's and entity's officers,
directors and employees from any known or unknown claims that Releasing Party
now has against Lender of any nature, including any claims that Releasing Party,
its successors, counsel, and advisors may in the future discover they would have
now had if they had known facts not now known to them, whether founded in
contract, in tort or pursuant to any other theory of liability, including but
not limited to any claims arising out of or related to the Agreement or the
transactions contemplated thereby. Releasing Party waives the provisions of
California Civil Code section 1542, which states:





"A
general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the
debtor."




The
provisions, waivers and releases set forth in this section are binding upon each
Releasing Party and its shareholders, agents, employees, assigns and successors
in interest. The provisions, waivers and releases of this section shall inure to
the benefit of Lender and its agents, employees, officers, directors, assigns
and successors in interest. The provisions of this section shall survive payment
in full of the Obligations, full performance of all the terms of this Business
Financing Modification Agreement and the Agreement, and/or Lender's actions to
exercise any remedy available under the Agreement or otherwise.




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




9. CONDITIONS. The
effectiveness of this Business Financing Modification Agreement is conditioned
upon the following: (i) payment of the Facility Fee ($2,500), (ii) payment of
the Equipment 5 Facility Fee ($2,500) and (iii) receipt of the revised
Unconditional Guaranty from Mica-Tech, Inc. securing all Obligations owed by
Borrower to Lender.




10. COUNTERSIGNATURE.
This Business Financing Modification Agreement shall become effective only when
executed by Lender, Borrower, and Guarantor.








BORROWER:
            LENDER:AML COMMUNICATIONS,
      INC.
            BRIDGE BANK,
      NATIONAL ASSOCIATIONBy:        /s/ Jacob
      Inbar
            By:        /s/
      James
      CrumptonName:   Jacob
      Inbar
            Name:   James
      CrumptonTitle:     President
            Title:     SVP







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Guarantor
consents to the modifications to the Indebtedness pursuant to this Business
Financing Modification Agreement, hereby ratifies the provisions of the Guaranty
and confirms that all provisions of that document are in full force and
effect.





GUARANTOR:




MICA-TECH,
INC.




By:        /s/ Jacob
Inbar




Name:   Jacob
Inbar




Title: President




Date:    9/16/08










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