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                                                                   Exhibit 10.40


                             SECOND AMENDMENT TO THE
                          LICENSE AND SUPPLY AGREEMENT

     This Second Amendment dated June 22, 1998 (this "AMENDMENT") to the License
and Supply Agreement dated as of July 22, 1994, as previously amended by the
First Amendment to the License and Supply Agreement dated January 29, 1996,
(collectively, the "LICENSE AGREEMENT"), between Krypton Isolation, Inc., a
California corporation ("KRYPTON") and the Smart Modular Technologies, Inc., a
California corporation ("SMART MODULAR"), is by and among Krypton and Smart
Modular.

     WHEREAS, Krypton and Smart Modular entered into the License Agreement,
pursuant to which Krypton agreed to supply Smart Modular with certain Krypton
Chip Sets at negotiated prices and Krypton granted Smart Modular (i) certain
rights and licenses to use Krypton Technology to develop and manufacture Smart
Modular Products, (ii) certain trademark licenses and (iii) licenses to use
Intellectual Property Rights owned or licensed by Krypton relating to the
Krypton Technology;

     WHEREAS, the License Agreement and the licenses granted by Krypton to Smart
Modular pursuant to Section 3.0 thereunder (the "Licenses") shall terminate
pursuant to the terms set forth in Section 11.2 thereof; and

     WHEREAS, Krypton and Smart Modular wish to amend Section 11.2 of the
License Agreement to provide for termination of the License Agreement and the
Licenses in the event of the occurrence of certain events, as set forth below in
this Amendment;

     NOW, THEREFORE, the parties hereto agree as follows:

     1.   Definitions. Unless specifically designated otherwise, capitalized
terms used herein shall have the same meanings given them in the License
Agreement.

     2.   Amendment of Section 11.2 - Termination. Section 11.2 of the License
Agreement is hereby amended to include the following new subsections in addition
to those already included as items 11.2 (a),(b) and (c):

               "(d) If pursuant to a firm underwritten commitment Krypton makes
          an initial public offering of its Common Stock pursuant to a
          registration statement on Form S-1 filed with the Securities and
          Exchange Commission, covering the offer and sale of Common Stock for
          the account of Krypton to the public in which the pre-public offering
          market capitalization of Krypton is at least $60 million (as
          determined by multiplying all capital stock of the corporation
          outstanding on a fully diluted basis prior to the public offering by
          the price per share offered to the public as of the closing date of
          the public offering) and resulting in aggregate gross proceeds to
          Krypton in excess of ten million dollars ($10,000,000), before
          deduction of underwriting discounts and commissions and registration
          expenses, the terms of this Agreement and the Licenses granted by
          Krypton to Smart Modular pursuant to Section 3.0 hereof will terminate
          as of the effective date of such registration statement.


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               (e) If Krypton undertakes a business transaction (whether in the
          form of a merger, reorganization or similar business combination) as a
          result of which Krypton's then current security holders own less than
          fifty percent (50%) of the surviving entity, the terms of this
          Agreement and the Licenses granted by Krypton to Smart Modular
          pursuant to Section 3.0 hereof will terminate as of the closing date
          of such transaction."

     3.   Effect of Amendment. As of the date of this Amendment the termination
provisions set forth in Section 11.2 of the License Agreement are amended to
include items 11.2(d) and (e) set forth above in this Amendment. Except as
specifically set forth herein, the terms and conditions contained in the License
Agreement shall continue in full force and effect.

     4.   Miscellaneous.

          4.1  Third Parties. Nothing in this Amendment, express or implied, is
intended to confer upon any party, other than the parties hereto, and their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Amendment, except as expressly provided
herein.

          4.2  Governing Law. This Amendment shall be governed by and construed
under the laws of the State of California, without reference to conflicts of
laws principles.

          4.3  Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

          4.4  Severability. If one or more provisions of this Amendment are
held to be unenforceable under applicable law, portions of such provisions, or
such provisions in their entirety, to the extent necessary, shall be severed
from this Amendment, and the balance of this Amendment shall be enforceable in
accordance with its terms.

                             SIGNATURE PAGES FOLLOW



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     IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.


                                       KRYPTON ISOLATION, INC.,
                                       a California corporation


                                       By: /s/  Gerald Yurgelites
                                           -------------------------------
                                       Name:    Gerald Yurgelites
                                            ------------------------------
                                       Title:   President
                                             -----------------------------
                                       Dated:   June 19, 1998
                                             -----------------------------


                                       SMART MODULAR TECHNOLOGIES, INC.,
                                       a California corporation


                                       By: /s/  Ajay Shah
                                           -------------------------------
                                       Name:    Ajay Shah
                                            ------------------------------
                                       Title:   President
                                             -----------------------------
                                       Dated:   June 19, 1998
                                             -----------------------------


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