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Exhibit 10.17    
    

 
 

AMENDMENT NO. 1 AND FORBEARANCE
  TO
  LOAN AND SECURITY AGREEMENT    
    

        THIS AMENDMENT NO. 1 AND FORBEARANCE TO LOAN AND SECURITY AGREEMENT (this "First
Amendment") is entered into this 30th day of June, 2005, by and between IKANOS COMMUNICATIONS, a California
corporation ("Borrower"), and SILICON VALLEY BANK,
("Bank"). Capitalized terms used herein without definition shall have the same meanings given them in the Loan Agreement (as defined below). 

 
 

RECITALS    
    

        A.    Borrower and Bank have entered into that certain Loan and Security Agreement dated as of the Effective Date, (the
"Loan Agreement"), pursuant to which the Bank has agreed to extend and make available to Borrower certain advances of money. 

        B.    Borrower (a) is in default of the Loan Agreement due to its failure to comply with Section 6.7 (Financial
Covenants) of the Loan Agreement for the fiscal quarter ending March 31, 2005, and (b) desires that Bank forbear exercising its remedies with respect to the Existing Default (as defined
below) and amend the Loan Agreement upon the terms and conditions more fully set forth herein. 

        C.    Subject to the representations and warranties of Borrower herein and upon the terms and conditions set forth in this First
Amendment, Bank is willing to provide the forbearance contained herein and so amend the Loan Agreement. 

 
 

AGREEMENT    
    

        NOW, THEREFORE, in consideration of the foregoing Recitals and intending to be legally bound, the parties hereto agree as follows: 

        1.    EVENT OF DEFAULT.    Borrower acknowledges that there exists an Event of Default under the Loan Agreement due to
its failure to comply with the minimum profitability financial covenant in Section 6.7 for the fiscal quarter ending March 31, 2005 (the "Existing
Default"). 

        2.    FORBEARANCE.    Bank hereby agrees to forbear from exercising its remedies in respect of only the Existing
Default, subject to the terms of Section 6 hereof. 

        By
signing below, Borrower acknowledges that it is currently in default and as a result of such default, Bank is entitled to exercise remedies as provided in the Loan Documents and as
provided under applicable law. 

        3.    AMENDMENT TO LOAN AGREEMENT.    

        3.1    Section 6.7 (Financial
Covenants).    Section 6.7(b) of the Loan Agreement is amended in its entirety by replacing the text thereof
with the following: 

        (b)   For each date that is a quarter-end, Borrower's losses (exclusive of the effect of non-cash
charges for stock based compensation), for the quarter then-ended shall not exceed the amount set forth in opposite each time period set forth below: 

	Period
 
	 	Maximum Quarterly Losses

	For the quarter ending 6/30/04	 	$	4,000,000
	For the quarter ending 9/30/04	 	$	2,000,000
	For the quarter ending 12/31/04	 	$	1,000,000
	For the quarter ending 3/31/05 and each quarter thereafter	 	$	0

 

        3.2    Section 6.2 (Financial Statements, Reports,
Certificates).    Section 6.2(a) of the Loan Agreement is amended by replacing the text of clause (iii)
of the first paragraph thereof with the following: 

        (a)   Financial Statements, Reports, Certificates.

        (iii)  except
as otherwise provided below, as soon as available, but no later than one hundred twenty (120) days after the last day of Borrower's fiscal year (except
for fiscal year 2004, no later than September 30, 2005), audited consolidated financial statements prepared under GAAP, consistently applied, together with an opinion on the financial
statements from a nationally-recognized, independent, certified public accounting firm; 

        4.    BORROWER'S REPRESENTATIONS AND WARRANTIES.    Borrower represents and warrants that: 

        (a)   immediately upon giving effect to this First Amendment (i) the representations and warranties contained in the
Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they
are true and correct as of such date), and (ii) no Event of Default has occurred and is continuing; 

        (b)   Borrower has the corporate power and authority to execute and deliver this First Amendment and to perform its obligations
under the Loan Agreement, as amended by this First Amendment; 

        (c)   the certificate of incorporation, bylaws and other organizational documents of Borrower delivered to Bank on the
Effective Date remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect; 

        (d)   the execution and delivery by Borrower of this First Amendment and the performance by Borrower of its obligations under
the Loan Agreement, as amended by this First Amendment, have been duly authorized by all necessary corporate action on the part of Borrower; 

        (e)   this First Amendment has been duly executed and delivered by the Borrower and is the binding obligation of Borrower,
enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general
application and equitable principles relating to or affecting creditors' rights; and 

        (f)    as of the date hereof, it has no defenses against the obligations to pay any amounts under the Obligations. Borrower
acknowledges that Bank has acted in good faith and has conducted in a commercially reasonable manner its relationships with Borrower in connection with this First Amendment and in connection with the
Loan Documents. 

        Borrower
understands and acknowledges that Bank is entering into this First Amendment in reliance upon, and in partial consideration for, the above representations and warranties, and
agrees that such reliance is reasonable and appropriate. 

        5.    LIMITATION.    The forbearance and amendment set forth in this First Amendment shall be limited precisely as
written and shall not be deemed (a) to be a waiver or modification of any other term or condition of the Loan Agreement or of any other instrument or agreement referred to therein or to
prejudice any right or remedy which Bank may now have or may have in the future under or in connection with the Loan Agreement or any instrument or agreement referred to therein; or (b) to be a
consent to any future forbearance, amendment or modification or waiver to any instrument or agreement the execution and delivery of which is consented to hereby, or to any waiver of any of the 

2

 

provisions
thereof. Except as expressly amended hereby, the Loan Agreement shall continue in full force and effect. 

        6.    EFFECTIVENESS.    This First Amendment shall become effective upon the satisfaction of all the following
conditions precedent: 

        6.1    Amendment.    Borrower and Bank shall have duly executed and
delivered this First Amendment to Bank. 

        6.2    Payment of Amendment Fee.    Borrower shall have paid Bank an
amendment fee equal to $1,250.00. 

        6.3    Payment of Bank Expenses.    Borrower shall have paid all Bank
Expenses (including all reasonable attorneys' fees and reasonable expenses) incurred through the date of this First Amendment. 

        7.    COUNTERPARTS.    This First Amendment may be signed in any number of counterparts, and by different parties
hereto in separate counterparts, with the same effect as if the signatures to each such counterpart were upon a single instrument. All counterparts shall be deemed an original of this First Amendment. 

        8.    INTEGRATION.    This First Amendment and any documents executed in connection herewith or pursuant hereto
contain the entire agreement between the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, offers and negotiations, oral or written, with respect
thereto and no extrinsic evidence whatsoever may be introduced in any judicial or arbitration proceeding, if any, involving this First Amendment; except that any financing statements or other
agreements or instruments filed by Bank with respect to Borrowers shall remain in full force and effect. 

        9.    GOVERNING LAW; VENUE.    THIS FIRST AMENDMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. Borrower and Bank each submit to the exclusive jurisdiction of the State and Federal courts in Santa Clara County, California. 

3

        IN
WITNESS WHEREOF, the parties hereto have caused this First Amendment to be executed as of the date first written above. 

	BORROWER:	 	IKANOS COMMUNICATIONS
 a California corporation
	

 	
 	

By:	

/s/  BAQI KHAN      

	 	 	Printed Name:    Baqi Khan

Title:    CONTROLER
	
BANK:	
 	
SILICON VALLEY BANK
	

 	
 	
By:	

/s/  KEVIN ZEIDAN      

	 	 	Printed Name:    Kevin Zeidan

Title:    Relationship Manager

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Exhibit 10.17

AMENDMENT NO. 1 AND FORBEARANCE TO LOAN AND SECURITY AGREEMENT

RECITALS

AGREEMENTFiled by Automated Filing Services Inc. (604) 609-0244 - Sterling Group Ventures, Inc. - Exhibit 10.6

Exhibit 10.6 

 Letter of Intent between

  Beijing Mianping Salt Lake Research Institute

  And

  Sterling Group Ventures, Inc. 

  Regarding the development of Dangxiongcuo salt lake property at Nima
  county of

  Tibet of China 

 Party A: Beijing Mianping Salt Lake Research Institute (“Mianping”)

  Party B: Sterling Group Ventures, Inc. (“Sterling”) 

 Based on mutual benefit, through friendly consultation, both
  parties have reached following letter of intent regarding the development of
  Dangxiongcuo salt lake property (“DXC Salt Lake”) at Nima county
  of Naqu district of Tibet, China: 

      1. Parties

  Beijing Mianping Salt Lake Research Institute (“Mianping”) is registered
  in Beijing of China. The legal address is 10-302 No. 2 Building, No. 10 Garden;
  Minzu University Road South, Haidian District, Beijing. Tel: 010-6830-3209.
  Fax: 010-8838-2475. The legal representative is Ling Zheng. The title of Ling
  Zheng is chairman. Nationality is Chinese. His Chinese ID is 110105197203271519.

 Sterling Group Ventures, Inc. (“Sterling”) is
  registered in Nevada of USA. The legal address is 900-789 West Pender Street
  Vancouver, BC Canada V6C 1H2. The telephone number is 001-604-893-8891. The
  fax number is 001-604-408-8515. The legal representative is Xuxin Shao. The
  title of Xuxin Shao is President. The nationality is Canadian. His passport
  number is P CAN BC229968. 

 2. Both parties agree to set up a joint venture company (“Joint
  Venture”) in Tibet of China based on Sino-foreign joint venture enterprise
  law and related regulations through parent companies or their subsidiaries.
  The joint venture company is limited liability company. The liabilities of both
  parties are the amounts in registered capital contributed by both parties. Both
  parties will share the benefits, risks and losses according to the ownerships
  in the Joint Venture.

 3. The Joint Venture shall conduct the development and operation
  of DXC Salt Lake Property in the areas that Party A has exploration permit (No.
  5400000310026) and the areas that Party A is planning to apply the mining permits.
  The business ranges of the Joint Venture are comprehensive development of DXC
  Salt Lake lithium carbonate and borate etc, and purification and production
  of related products.

 4. After this letter of intent is signed, Party B shall send
  its employees and consultants to visit the site and collect related information
  for the evaluation of this project. Based on evaluation, both parties shall
  discuss about the value or price of Party A’s exploration and mining permits,
  the value of Party A’s Technology for the production of lithium carbonate,
  and ownerships of future Joint Venture. 

 5. Party B shall pay its own cost for the evaluation of the
  project.

6. There are two copies of this letter of Intent. Each party
  holds one copy.

7. This letter of intent is signed in Beijing of China on July
  11, 2005.

 Party A:

  Beijing Mianping Salt Lake Research Institute

  10-302 No. 2 Building, No. 10 Garden;

  Minzu University Road South,

  Haidian District, Beijing, China

  Tel: 010-6830-3209

  Fax: 010-8838-2475

  Representative: Ling Zheng “Signed”

  Date: July 11, 2005 

 Party B:

  Sterling Group Ventures, Inc.

  900-789 West Pender Street

  Vancouver, BC, Canada V6C 1H2

  Tel: 604-893-8891

  Fax: 604-408-8515

  Representative: Xuxin Shao “Signed”

  Date: July 11, 2005

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