EXHIBIT 10.1

                          LOAN MODIFICATION AGREEMENT

     This Loan Modification Agreement is entered into as of August 21, 1998, 
by and between Integrated Sensor Solutions, Inc. ("Borrower") and Silicon 
Valley Bank ("Bank").

1.     DESCRIPTION OF EXISTING INDEBTEDNESS:  Among other indebtedness which 
may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to, 
among other documents, a Loan and Security Agreement, dated July 10, 1996, 
as may be amended from time to time, (the "Loan Agreement").  The Loan 
Agreement provided for, among other things, a Committed Line in the original 
principal amount of One Million Dollars ($1,000,000)(the "Revolving 
Facility"). The Loan Agreement has been modified pursuant to, among other 
documents, a Amendment to Loan and Security Agreement dated August 22, 1997, 
pursuant to, among other things, the Committed Line was increased to Two 
Million Dollars ($2,000,000).  Defined terms used but not otherwise defined 
herein shall have the same meanings as in the Loan Agreement.  

Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to 
as the "Indebtedness."

2.     DESCRIPTION OF COLLATERAL AND GUARANTIES.  Repayment of the 
Indebtedness is secured by the Collateral as described in the Loan 
Agreement.  In addition, Borrower has agreed not to pledge any of its 
Patents, Copyrights and Trademarks to a third party, pursuant to a Negative 
Pledge Agreement, dated August 22, 1997, by and between Borrower and Bank.

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 Loan Documents".

3.     DESCRIPTION OF CHANGE IN TERMS.

       A.     Modification(s) to Loan Agreement
     
              1.     The following definitions are hereby amended and/or 
                     incorporated into Section 1.1 entitled "Definitions":
     
                     "Committed Equipment 2 Line" means One Million Five 
                     Hundred Thousand Dollars ($1,500,000).

                     "Committed Line" means Three Million Five Hundred 
                     Thousand Dollars ($3,500,000).

                     "Credit Extension" is each Advance, Equipment Advance, 
                     Equipment 2 Advance, Letter of Credit, Exchange 
                     Contract or any other extension of credit by Bank for 
                     Borrower's benefit.

                     Item "(e)" under "Eligible Accounts" shall read as: 
                     Accounts with respect to which the account debtor is an 
                     Affiliate of Borrower, except, up to 40% of inter-
                     company accounts shall be deemed Eligible Accounts;

                     Item "(i)" under "Eligible Accounts" shall read as: 
                     Accounts with respect to an account debtor, including 
                     Subsidiaries and Affiliates, whose total obligations to 
                     Borrower exceed twenty-five percent (25%) of all 
                     Accounts, to the extent such obligations exceed the 
                     aforementioned percentage, except, (i) Accounts with 
                     respect to BLD Products, Inc., Breed Technologies, 
                     Inc., IC Sensors, Inc. and Michelin N.A., for which the 
                     applicable percentage shall be thirty-five percent 
                     (35%), (ii) intercompany Accounts, for which the 


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                     applicable percentage shall be forty percent (40%), and 
                     (iii) as approved in writing by Bank;

                     "Eligible Foreign Accounts" means Accounts with respect 
                     to which the account debtor does not have its principal 
                     place of business in the United States and (i) that 
                     Bank approves on a case-by-case basis, or (ii) that are 
                     Accounts with respect to which the account debtor is 
                     Omron Corporation, Nagano Keiki Seisakusho and Nippon 
                     Precision Device Corporation.


                     "Equipment 2 Advance" is defined in Section 2.1.6.

                     "Equipment 2 Availability End Date" is defined in 
                     Section 2.1.6. 

                     "Equipment 2 Loan Maturity Date" is defined in Section 
                     2.1.6.

                    "Revolving Maturity Date" means August 20, 1999.

              2.     Section 2.1.1 entitled "Advances" is hereby amended to 
                     read as follows:

                     Subject to and upon the terms and conditions of this 
                     Agreement, Bank agrees to make Advances to Borrower in 
                     an aggregate amount not to exceed the Committed Line 
                     minus (a) the Cash Management Services minus (b) the 
                     amount of all outstanding Letters of Credit (including 
                     drawn but unreimbursed Letters of Credit), and minus 
                     (c) the Foreign Exchange Reserve, provided, however, 
                     that if the aggregate outstanding Advances plus (a) the 
                     Cash Management Services plus (b) the amount of all 
                     outstanding Letters of Credit (including drawn but 
                     unreimbursed Letters of Credit), and plus (c) the 
                     Foreign Exchange Reserve equal to or exceed $1,000,000, 
                     then the Aggregate outstanding Advances shall not 
                     exceed the lesser of either the Committed Line minus 
                     the Cash Management Services Sublimit or the Borrowing 
                     Base, whichever is less, minus (i) the amount of all 
                     outstanding Letters of Credit (including drawn but 
                     unreimbursed Letters of Credit), and minus (ii) the 
                     Foreign Exchange Reserve.  For purposes of this 
                     Agreement, "Borrowing Base" shall mean an amount equal 
                     to eighty percent (80%) of Eligible Accounts.  Amounts 
                     borrowed under this Section may be repaid and 
                     reborrowed during the term of this Agreement.


                     To Obtain an Advance, Borrower must notify Bank by 
                     facsimile or telephone by 3:00 p.m. Pacific time on the 
                     Business Day the Advance is to be made.  Borrower must 
                     promptly confirm the notification by delivering to Bank 
                     the Payment/Advance Form.  Bank will credit Advances to 
                     Borrower's deposit account.  Bank may make Advances 
                     under this Agreement based on instructions from a 
                     Responsible Officer or his or her designee or without 
                     instructions if the Advances are necessary to meet 
                     Obligations which have become due.  Bank may rely on 
                     any telephone notice given by a person whom Bank 
                     believes is a Responsible Officer or designee. Borrower 
                     will indemnify Bank for any loss Bank suffers due to 
                     that reliance.


                     The Committed Line terminates on the Revolving Maturity 
                     Date, when all Advances are immediately payable.


              3.     The reference to "Two Million Dollars ($2,000,000)" in 
                     Section 2.1.2 entitled "Letters of Credit" is hereby 
                     amended to read "Three Million Five Hundred Thousand 
                     Dollars ($3,500,000)".
 

              4.     The second sentence of Section 2.1.2 (a) entitled 
                     "Letters of Credit" is amended to read as follows:
     
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                     Each such Letter of Credit shall have an expiry date 
                     not later than the Revolving Maturity Date.

              5.     The following Sections are hereby incorporated into the 
                     Loan Agreement:
          
                     2.1.4     Foreign Exchange Contract; Foreign Exchange 
                     Settlements. 

                     Borrower may enter foreign exchange contracts (the 
                     "Exchange Contracts") not exceeding an aggregate amount 
                     of $3,500,000 (the "Contract Limit"), under which Bank 
                     will sell to or purchase from Borrower foreign currency 
                     on a spot or future basis.  Borrower may not request 
                     any Exchange Contracts if it is out of compliance with 
                     any provision of this Agreement.  Exchange Contracts 
                     must provide for delivery of settlement on or before 
                     the Revolving Maturity Date.  The amount available 
                     under the Committed Line is reduced by the following 
                     (the "Foreign Exchange Reserve") on any given day (the 
                     "Determination Date"):  (i) on all outstanding Exchange 
                     Contracts on which delivery is to be effected or 
                     settlement allowed more than two business days after 
                     the Determination Date, 10% of the gross amount of the 
                     Exchange Contracts; plus (ii) on all outstanding 
                     Exchange Contracts on which delivery is to be effected 
                     or settlement allowed within two business days after 
                     the Determination Date, 100% of the gross amount of the 
                     Exchange Contracts. 

                     Bank may terminate the Exchange Contracts if (a) an 
                     Event of Default occurs or (b) there is not sufficient 
                     availability under the Committed Line and Borrower does 
                     not have available funds in its deposit account for the 
                     Foreign Exchange Reserve.  If Bank terminates the 
                     Exchange Contracts, Borrower will reimburse Bank for 
                     all fees, costs and expenses in connection with the 
                     Exchange Contracts.

                     Borrower may not permit the total of all Exchange 
                     Contracts on which delivery is to be effected and 
                     settlement allowed in any two business day period to be 
                     more than $3,500,000 (the "Settlement Limit") nor may 
                     Borrower permit the total of all Exchange Contracts 
                     outstanding at any one time, to exceed the Contract 
                     Limit. However, the amount which may be settled in any 
                     2 business day period may be increased above the 
                     Settlement Limit if:

                          (i)  there is sufficient availability under the 
                     Committed Line in the amount of the Foreign Exchange 
                     Reserve for each Determination Date, provided that Bank 
                     in advance shall reserve the full amount of the Foreign 
                     Exchange Reserve against the Committed Line; or 


                          (ii)  there is insufficient availability under the
                     Committed Line for settlements within any 2 business 
                     day period, but Bank:  (A) verifies good funds overseas 
                     before crediting Borrower's deposit account (in the 
                     case of Borrower's sale of foreign currency); or (B) 
                     debits Borrower's deposit account before delivering 
                     foreign currency overseas (in the case of Borrower's 
                     purchase of foreign currency).

                     If Borrower purchases foreign currency, Borrower must 
                     in advance instruct Bank either to treat the settlement 
                     as an advance under the Committed Line, or to debit 
                     Borrower's account for the amount settled.
 
                     Borrower will execute all Bank's standard applications 
                     and agreements in connection with the Exchange 
                     Contracts and pay all Bank's standard fees and charges.

                     Borrower will indemnify Bank and hold it harmless from 
                     all claims, liabilities, demands, obligations, actions, 
                     costs and expenses (including reasonable attorneys' 
                     fees) which it

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                     incurs arising out of or in any way relating to any of
                     the Exchange Contracts or any contemplated
                     transactions.

                     2.1.5     Cash Management Sublimit.  Borrower may use 
                     up to $500,000 for Bank's Cash Management Services, 
                     which may include merchant services, direct deposit of 
                     payroll, business credit card, and check cashing 
                     services identified in the Cash Management Services 
                     Agreement (the "Cash Management Services").  All 
                     amounts Bank pays for any Cash Management Services will 
                     be treated as an Advance under the Line of Credit.

                     2.1.6     Equipment 2 Advances.          

                         (a)  Through September 28, 1999 (the "Equipment 2 
                         Availability End Date"), Bank will make advances 
                         ("Equipment 2 Advance" and, collectively,"Equipment 
                         2 Advances") not exceeding the Committed Equipment 
                         2 Line.  The Equipment 2 Advances may only be used 
                         to purchase Equipment, software licenses and 
                         leasehold improvements and may not exceed 100% of
                         the equipment, software and leaseholds, excluding 
                         taxes, shipping, warranty charges, freight 
                         discounts and installation expense. Notwithstanding 
                         the foregoing, up to $1,000,000 in Equipment 2 
                         Advances may be used to purchase Equipment and 
                         software licenses which will be domiciled outside 
                         the United States.

                         (b)  Except as set forth in Section 2.3(b), 
                         interest accrues from the date of each Equipment 2 
                         Advance at a floating rate equal to the Prime Rate 
                         plus one and one quarter (1.250) percentage points 
                         per annum and is payable monthly until the 
                         Equipment 2 Availability End Date occurs.  
                         Equipment 2 Advances outstanding on the Equipment 2 
                         Availability End Date are payable in 36 equal 
                         monthly installments of principal, plus accrued 
                         interest, beginning on the 21st of each month 
                         following the Equipment 2 Availability End Date and 
                         ending on September 28, 2002 (the "Equipment 2 Loan 
                         Maturity Date").  Equipment 2 Advances when repaid 
                         may not be reborrowed.

                         (c)  To obtain an Equipment 2 Advance, Borrower 
                         must notify Bank (the notice is irrevocable) by 
                         facsimile no later than 3:00 p.m. Pacific time 1 
                         Business Day before the day on which the Equipment 
                         2 Advance is to be made.  The notice in the form of 
                         a Payment/Advance Form and must be signed by a 
                         Responsible Officer or designee and include a copy 
                         of the invoice for the Equipment, or software 
                         licenses being financed or the leasehold 
                         improvements being made.

              6.     Section 2.2 entitled "Overadvances"  is hereby amended 
                     to read as follows:

                     If, at any time or for any reason, 

                    (A) the amount of Advances plus (a) the Cash Management 
                    Services plus (b) the amount of all outstanding Letters 
                    of Credit (including drawn but unreimbursed Letters of 
                    Credit), and plus (c) the Foreign Exchange Reserve owed 
                    by Borrower to Bank, is greater than the Committed Line, 
                    or; 

                    (B) the amount of Advances plus (i) the amount of all 
                    outstanding Letters of Credit (including drawn but 
                    unreimbursed Letters of Credit), and plus (ii) the 
                    Foreign Exchange Reserve owed by Borrower to Bank, is 
                    greater than the Borrowing Base (provided that the 
                    amount of Advances plus (a) the Cash Management Services 
                    plus (b) the amount of all outstanding Letters of Credit 
                    (including drawn but unreimbursed Letters of Credit), 
                    and plus (c) the Foreign Exchange Reserve owed by 
                    Borrower to Bank, is greater than $1,000,000), 

                    then Borrower shall immediately pay to Bank, in cash, 
                    the amount of such excess.


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              7.     Effective as of the date of this Loan Modification 
                     Agreement, Section 2.3(a) entitled "Interest Rate" is 
                     hereby amended to read as follows:

                     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 half of one (0.500) percentage point 
                     above the Prime Rate.     

              8.     Section 6.3 entitled "Financial Statements, Reports, 
                     Certificates" is hereby amended to read as follows:

                    (a)  Borrower will deliver to Bank:  (i) as soon as 
                    available, but no later than 30 days after the last day 
                    of each quarter, company prepared consolidating balance 
                    sheet and income statement covering Borrower's 
                    consolidated operations during the period, in a form 
                    acceptable to Bank and certified by a Responsible 
                    Officer; (ii) within 5 days of filing, copies of all 
                    statements, reports and notices made available to 
                    Borrower's security holders or to any holders of 
                    Subordinated Debt and all reports on Form 10-K, 10-Q and 
                    8-K filed with the Securities and Exchange Commission; 
                    (iii)  a prompt report of any legal actions pending or 
                    threatened against Borrower or any Subsidiary that could 
                    result in damages or costs to Borrower or any Subsidiary 
                    of $100,000 or more; and (iv)  budgets, sales 
                    projections, operating plans or other financial 
                    information Bank requests.

                    (b)  Immediately prior to Borrower's Obligations under 
                    the Committed Line exceeding $1,000,000 and within 20 
                    days after the last day of each month at such time as 
                    Borrower's Obligations under the Committed Line exceed 
                    $1,000,000, Borrower will deliver to Bank a Borrowing 
                    Base Certificate signed by a Responsible Officer, with 
                    aged listings of accounts receivable and accounts 
                    payable.

                    (c)  Within 30 days after the last day of each quarter, 
                    Borrower will deliver to Bank with the quarterly 
                    financial statements a Compliance Certificate signed by 
                    a Responsible Officer.

                    (d)  Bank has the right to audit Borrower's Accounts at 
                    Borrower's expense. Such audits will be conducted prior 
                    to Borrower's Obligations under the Committed Line 
                    exceeding $1,000,000 and no more often than once every 
                    year at such times as Borrower's Obligations under the 
                    Committed Line exceed $1,000,000 unless an Event of 
                    Default has occurred and is continuing.

              9.    Section 6.8 entitled "Quick Ratio" is hereby amended to 
                    read as follows:

                    Beginning with the fiscal quarter ending September 30, 
                    1998, Borrower shall maintain, as of the last day of  
                    each fiscal quarter, a ratio of Quick Assets to Current 
                    Liabilities of at least 2.00 to 1.00.
 
             10.    Section 6.9 entitled "Quick Ratio (Consolidated)" is 
                    hereby deleted and replaced with the term, 
                    "Intentionally left blank".

             11.    Section 6.10 entitled "Debt-Net Worth Ratio" is hereby 
                    amended to read as follows:

                    Beginning with the fiscal quarter ending September 30, 
                    1998, Borrower shall maintain, as of the last day of 
                    each fiscal quarter, a ratio of Total Liabilities to 
                    Tangible Net Worth plus Subordinated Debt of not more 
                    than 1.00 to 1.00.

             12.    Section 6.11 entitled "Tangible Net Worth" is hereby 
                    deleted and replaced with the term, "Intentionally left 
                    blank".

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             13.    Section 6.12 entitled "Profitability" is hereby amended 
                    to read as follows:

                    Borrower shall achieve minimum profitability of $1.00 
                    for each fiscal quarter, provided, however, Borrower 
                    shall be allowed a loss for the fiscal quarter ending 
                    September 30, 1998, provided that such loss shall not 
                    exceed $1,000,000.

             14.    Section 6.16 entitled "Debt Service Coverage" is hereby 
                    amended to read as follows:

                    Beginning with the fiscal quarter ending September 30, 
                    1998, Borrower shall maintain a minimum cash and cash 
                    equivalents equal to or greater than two (2) times of 
                    the aggregate outstanding Equipment Advances and 
                    Equipment 2 Advances (the "Liquidity Ratio").  Upon two 
                    (2) consecutive quarters of a Debt Service Coverage of 
                    1.50 to 1.00, the Liquidity Ratio shall be replaced with 
                    Borrower's requirement to maintain, as of the last day 
                    of each fiscal quarter, a Debt Service Coverage of at 
                    least 1.50 to 1.00.  "Debt Service Coverage" means net 
                    income plus depreciation and amortization plus interest 
                    expense for the preceding fiscal quarter, divided by the 
                    current portion of long term debt plus interest expense.

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

5.     PAYMENT OF LOAN FEE.  Borrower shall pay to Bank a fee in the amount 
of Twelve Thousand Five Hundred Dollars ($12,500) (the "Committed Line Loan 
Fee") plus Six Thousand Dollars ($6,000) (the "Equipment 2 Line Loan Fee") 
plus all out-of-pocket expenses.

6.     NO DEFENSES OF BORROWER.  Borrower (and each guarantor and pledgor 
signing below) agrees that, as of the date hereof, it has no defenses 
against the obligations to pay any amounts under the Indebtedness.

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

8.     CONDITIONS.  The effectiveness of this Loan Modification Agreement is 
conditioned upon Borrower's payment of the Committed Line Loan Fee and the 
Equipment 2 Line Loan Fee.

     This Loan Modification Agreement is executed as of the date first 
written above.

BORROWER:                                   BANK:

INTEGRATED SENSOR SOLUTIONS, INC.               SILICON VALLEY BANK

By:                                         By:     
   -----------------------------                ---------------------------
Name:                                       Name:     
     ---------------------------                 --------------------------
Title:                                      Title:     
      --------------------------                  -------------------------

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