Exhibit 10.1


 


FIFTH LOAN MODIFICATION AGREEMENT


 


This Fifth Loan Modification Agreement (this “Loan
Modification Agreement”) is entered into as of November 13, 2009, by and
between SILICON VALLEY BANK, a California
corporation with its principal place of business at 3003 Tasman Drive,
Santa Clara, California 95054 and with a loan production office located at One
Newton Executive Park, Suite 200, 2221 Washington Street, Newton,
Massachusetts 02462 (“Bank”) and AMERICAN SCIENCE AND
ENGINEERING, INC., a Massachusetts corporation with its chief
executive office located at 829 Middlesex Turnpike, Billerica,
Massachusetts  01821 (“Borrower”).


 


1.                                       DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS.  Among other indebtedness and
obligations which may be owing by Borrower to Bank, Borrower is indebted to
Bank pursuant to a loan arrangement dated as of August 11, 2003, evidenced
by, among other documents, a certain Loan and Security Agreement dated as of August 11,
2003, between Borrower and Bank, as amended by a certain First Loan
Modification Agreement dated as of June 30, 2004, between Borrower and
Bank, as amended by a certain Second Loan Modification Agreement dated as of November 30,
2004, between Borrower and Bank, as amended by a certain Third Loan Modification
Agreement dated as of November 16, 2006, between Borrower and Bank, and as
further amended by a certain Fourth Loan Modification Agreement dated as of November 14,
2008, between Borrower and Bank (as amended, the “Loan Agreement”).  Capitalized terms used but not otherwise
defined herein shall have the same meaning as in the Loan Agreement.


 


2.                                       DESCRIPTION OF COLLATERAL.  Repayment of the Obligations is secured by
the Collateral as described in the Loan Agreement (together with any other
collateral security granted to Bank, the “Security Documents”).


 


Hereinafter, the Security Documents, together with all
other documents evidencing or securing the Obligations shall be referred to as
the “Existing Loan Documents”.


 


3.                                       DESCRIPTION OF CHANGE IN TERMS.


 


1.                                       Modifications to Loan Agreement.


 


1.                                       The Loan Agreement shall be amended by deleting the following text,
appearing in Section 2.1.2(a) thereof:


 


“                                          (a)                                  As part
of the Revolving Line, Bank shall issue or have issued Letters of Credit for
Borrower’s account.  The face amount of
outstanding Letters of Credit (including drawn but unreimbursed Letters of
Credit and any Letter of Credit Reserve) may not exceed Forty Million Dollars
($40,000,000.00).”


 


and inserting in lieu thereof the following:


 


“                                          (a)                                  As part of the Revolving Line, Bank shall issue or
have issued Letters of Credit for Borrower’s account.  The face amount of outstanding Letters of
Credit (including drawn but unreimbursed Letters of Credit and any Letter of
Credit Reserve) may not exceed Thirty Million Dollars ($30,000,000.00).”


 


2.                                       The Loan Agreement shall be amended by deleting the following appearing
as Section 2.1.4 thereof:


 


“2.1.4               Cash Management Services Sublimit.  Borrower may use up to $10,000,000.00 for the
Bank’s Cash Management Services, which may include merchant services, direct
deposit of payroll, business credit card, and check cashing services identified
in the various cash management services agreements related to such Cash
Management Services (the “Cash Management Services”).  Such aggregate amounts utilized under the
Cash Management Services Sublimit shall at all times reduce the amount
otherwise available for Credit Extensions under the Revolving Line.  Any amounts Bank pays on behalf of Borrower
or any amounts that are not paid by Borrower for any Cash Management Services
will be treated as Advances under the Revolving Line and will accrue interest
at the interest rate applicable to Advances.”


 


and inserting in lieu
thereof the following:


 

















 


 


“2.1.4               Cash Management Services Sublimit.  Borrower may use up to $30,000,000.00 for the
Bank’s Cash Management Services, which may include merchant services, direct
deposit of payroll, business credit card, and check cashing services identified
in the various cash management services agreements related to such Cash
Management Services (the “Cash Management Services”).  Such aggregate amounts utilized under the
Cash Management Services Sublimit shall at all times reduce the amount
otherwise available for Credit Extensions under the Revolving Line.  Any amounts Bank pays on behalf of Borrower
or any amounts that are not paid by Borrower for any Cash Management Services
will be treated as Advances under the Revolving Line and will accrue interest
at the interest rate applicable to Advances.”


 


3.                                       The Loan Agreement shall be amended by deleting the following appearing
as Section 2.2 thereof:


 


“2.2                         Overadvances.  If, at any time Borrower’s Unrestricted Cash,
Cash Equivalents, and short-term investments maintained with Bank or Bank’s
Affiliates are less than Sixty Million Dollars ($60,000,000.00) for a period of
thirty (30) consecutive days, and the Credit Extensions under Sections 2.1.1,
2.1.2, 2.1.3 and 2.1.4 exceed the lesser of either (a) the Revolving Line
or (b) the Borrowing Base, Borrower shall immediately pay to Bank in cash
such excess.”


 


and inserting in lieu thereof the following:


 


“2.2                         Overadvances. 
If, at any time Borrower’s Unrestricted Cash, Cash Equivalents, and
short-term investments maintained with Bank or Bank’s Affiliates are less than
Forty Million Dollars ($40,000,000.00) for a period of thirty (30) consecutive
days, and the Credit Extensions under Sections 2.1.1, 2.1.2, 2.1.3 and 2.1.4
exceed the lesser of either (a) the Revolving Line or (b) the
Borrowing Base, Borrower shall immediately pay to Bank in cash such excess.”


 


4.                                       The Loan Agreement shall be amended by deleting the following appearing
as Sections 2.4(b) thereof:


 


“                                          (b)                                 Unused Revolving Line Facility Fee.  A fee (the “Unused Revolving Line Facility Fee”), payable quarterly, in arrears, on a calendar year basis, in an amount
equal to one-half of one percent (0.50%) per annum of the average unused
portion of the Revolving Line, as determined by Bank.   For purposes hereof, any Letter of Credit
Reserve, any F/X Reserve, or Cash Management Services held or in place for any
calendar year shall constitute a utilization of the Revolving Line. Borrower
shall not be entitled to any credit, rebate or repayment of any Unused
Revolving Line Facility Fee previously earned by Bank pursuant to this Section notwithstanding
any termination of the Agreement or the suspension or termination of Bank’s
obligation to make loans and advances hereunder.  Notwithstanding the foregoing, such Unused
Revolving Line Facility Fee shall be waived for any quarter in which Credit
Extensions have been made in an aggregate average amount equal to or greater
than Twenty-Five Million Dollars ($25,000,000.00) for such quarter.”


 


and inserting in lieu thereof the following:


 


“                                          (b)                                 Intentionally Deleted.”


 

















 


5.                                       The Loan Agreement shall be amended by
deleting the following appearing as Section 6.2(a) thereof:


 


“                                          (a)                                  Borrower shall
deliver to Bank:  (i) as soon as
available, but no later than thirty (30) days after the last day of each month,
a company prepared consolidated balance sheet and income statement covering
Borrower’s consolidated operations during the period certified by a Responsible
Officer and in a form acceptable to Bank; (ii) as soon as available, but
no later than ninety (90) days after the last day of Borrower’s fiscal year,
audited consolidated financial statements prepared under GAAP, consistently
applied, together with an unqualified opinion on the financial statements from
an independent certified public accounting firm reasonably acceptable to Bank; (iii) within
five (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; (iv) a prompt report of any legal actions pending
or threatened against Borrower or any Subsidiary that is reasonably likely to
result in damages or costs to Borrower or any Subsidiary of One Hundred
Thousand Dollars ($100,000.00) or more; (v) prompt notice of any material
change in the composition of the Intellectual Property, or the registration of
any copyright, including any subsequent ownership right of Borrower in or to
any Copyright, Patent or Trademark not shown in any intellectual property
security agreement between Borrower and Bank or knowledge of an event that
materially adversely affects the value of the Intellectual Property; and (vi) budgets,
sales projections, operating plans or other financial information reasonably
requested by Bank.”


 


and inserting in lieu
thereof the following:


 


“                                          (a)                                  Borrower shall
deliver to Bank (or, in the case of the items in clause (i) below, make
available by posting on www.sec.gov):  (i) within
five (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; (ii) a prompt report of any legal actions pending
or threatened against Borrower or any Subsidiary that is reasonably likely to
result in damages or costs to Borrower or any Subsidiary of One Hundred
Thousand Dollars ($100,000.00) or more; and (iii) budgets, sales
projections, operating plans or other financial information reasonably
requested by Bank.”


 


6.                                       The Loan Agreement shall be amended by deleting the following text
appearing as Section 6.2(c) thereof:


 


“                                          (c)                                  Within
forty-five (45) days after the last day of each quarter, Borrower shall deliver
to Bank with the monthly financial statements a Compliance Certificate signed
by a Responsible Officer in the form of Exhibit D.”


 


and inserting in lieu
thereof the following:


 


“                                          (c)                                  Within
forty-five (45) days after the last day of each quarter in which Advances made pursuant to Section 2.1.1
were outstanding or requested, Borrower
shall deliver to Bank with the quarterly financial statements a Compliance
Certificate signed by a Responsible Officer in the form of Exhibit D.”


 


7.                                       The Loan Agreement shall be amended by deleting the following text
appearing as Section 6.2(d) thereof:


 


“                                          (d)                                 Allow Bank to audit
Borrower’s Collateral at Borrower’s expense. 
Such audits shall be conducted no more often than once every twelve (12)
months unless an Event of Default has occurred and is continuing.”


 


and inserting in lieu thereof the following:


 


“                                          (d)                                 Allow Bank to
audit Borrower’s Collateral at Borrower’s expense.  Such audits shall be conducted no more often
than once every twelve (12) months unless an Event of Default has occurred and
is continuing.  The foregoing inspections and audits
shall be at Borrower’s expense, and the charge therefor shall be $850 per
person per day (or such higher amount as shall represent Bank’s then-current
standard charge for the same), plus reasonable out-of-pocket expenses.”


 

















 


8.                                       The Loan Agreement shall be amended by
inserting the following new provisions to appear as subsections 6.2(e) and
(f) thereof:


 


“                                          (e)                                  Within forty-five (45) days after the last day of each
quarter, Borrower shall deliver to Bank: (i) future billings schedule; and
(ii) Deferred Revenue report.


 


(f)                                    Annually, within thirty (30) days prior
to the last day of Borrower’s fiscal year, Board of Director’s approved
projections and any subsequent amendments thereto.”


 


9.                                       The Loan Agreement shall be amended by deleting the following text,
appearing at the end of Section 6.2 thereof:


 


“                                          Notwithstanding the above financial
reporting requirements, in the event that Borrower maintains cash with Bank in
an amount equal to or greater than Sixty Million Dollars ($60,000,000) at all
times during any quarter, the financial reporting requirements set forth in
subsections (b) and (d) above shall not be required in connection
with such quarter.”


 


and inserting in lieu thereof the following:


 


“                                          Notwithstanding the above financial
reporting requirements, in the event that Borrower maintains Unrestricted Cash,
Cash Equivalents, and short-term investments with Bank or Bank’s Affiliates in
an amount equal to or greater than Forty Million Dollars ($40,000,000) at all
times during any quarter, the financial reporting requirements set forth in
subsections (b), (d), and (e) above shall not be required in connection
with such quarter.”


 


10.                                 The Loan Agreement shall be amended by deleting the following appearing
as Section 7.1 thereof:


 


“7.1                         Dispositions. 
Convey, sell, lease, transfer or otherwise dispose of (collectively a
“Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of
its business or property, except for Transfers (i) of Inventory in the
ordinary course of business; (ii) of non-exclusive licenses and similar
arrangements for the use of the property of Borrower or its Subsidiaries in the
ordinary course of business; (iii) of worn-out or obsolete Equipment, or (iv) other
assets not exceeding One Hundred Thousand Dollars ($100,000.00), in the
aggregate, during any fiscal year.”


 


and inserting in lieu
thereof the following:


 


“7.1                         Dispositions. 
Convey, sell, lease, transfer or otherwise dispose of (collectively, a
“Transfer”), or permit any of its Subsidiaries to transfer, all or any part of
its business or property, except for Transfers (i) of Inventory in the
ordinary course of business; (ii) of non-exclusive licenses, sublicenses,
collaboration agreements, cross licensing and similar arrangements for the use
of the property of Borrower or its Subsidiaries in the ordinary course of its
business and other licenses, sublicenses, collaborations, cross licenses and
arrangements that do not result in a legal transfer of Borrower’s title in the
licensed property, in good faith and in a manner that the board of directors of
Borrower reasonably believes is in, or is not opposed to, the best interests of
Borrower; (iii) of worn-out or obsolete Equipment; or (iv) other
assets not exceeding One Hundred Thousand Dollars ($100,000.00), in the
aggregate, during any fiscal year.”


 


11.                                 The Loan Agreement shall be amended by deleting the following appearing
as Section 7.5 thereof:


 


“7.5                         Encumbrance. 
Create, incur, or allow any Lien on any of its property, or assign or
convey any right to receive income, including the sale of any Accounts, or
permit any of its Subsidiaries to do so, except for Permitted Liens, or permit
any Collateral not to be subject to the first priority security interest
granted herein.  The Collateral may also
be subject to Permitted Liens.”


 


and inserting in lieu
thereof the following:


 

















 


“7.5                         Encumbrance.  Create, incur, allow, or suffer any Lien on
any of its property, or assign or convey any right to receive income, including
the sale of any Accounts, or permit any of its Subsidiaries to do so, except
for Permitted Liens, permit any Collateral not to be subject to the first
priority security interest granted herein, or enter into any agreement,
document, instrument or other arrangement (except with or in favor of Bank)
with any Person which directly or indirectly prohibits or has the effect of
prohibiting Borrower or any Subsidiary from assigning, mortgaging, pledging,
granting a security interest in or upon, or encumbering any of Borrower’s or
any Subsidiary’s Intellectual Property, except as is otherwise permitted in Section 7.1
hereof and the definition of “Permitted Liens” herein.”


 


12.                                 The Loan Agreement shall be amended by deleting the following appearing
as Section 7.6 thereof:


 


“7.6                         Distributions; Investments.  (i) Directly
or indirectly acquire or own any Person, or make any Investment in any Person,
other than Permitted Investments, or permit any of its Subsidiaries to do so;
or (ii) pay any dividends in an amount not to exceed ten million dollars
($10,000,000.00) in the aggregate, per fiscal year, or make any distribution or
payment or redeem, retire or purchase any capital stock, except for repurchases
of stock from former employees or directors of Borrower under the terms of applicable
repurchase agreements in an aggregate amount not to exceed One Hundred Thousand
Dollars ($100,000.00) in the aggregate in any fiscal year, provided that no
Event of Default has occurred, is continuing or would exist after giving effect
to the repurchases.”


 


and
inserting in lieu thereof the following:


 


“7.6                         Distributions; Investments.  (i) Directly
or indirectly acquire or own any Person, or make any Investment in any Person,
other than Permitted Investments, or permit any of its Subsidiaries to do so;
or (ii) pay any dividends in an amount exceeding ten million dollars
($10,000,000.00) in the aggregate, per fiscal year, or make any distribution or
payment or redeem, retire or purchase any capital stock, except for (a) repurchases
of shares of Borrower’s common stock in accordance with Borrower’s stock
repurchase program commenced in May 2008 of up to Thirty-Five Million
Dollars ($35,000,000.00) in the aggregate, of such common stock, and (b) repurchases
of stock from former employees or directors of Borrower under the terms of
applicable repurchase agreements in an aggregate amount not to exceed One
Hundred Thousand Dollars ($100,000.00) in the aggregate in any fiscal year,
provided that no Event of Default has occurred, is continuing or would exist
after giving effect to the repurchases.”


 


13.                                 The Loan Agreement shall be amended by deleting the following definitions
appearing in Section 13.1 thereof:


 


“                                          “Availability
Amount” is: (a) if Borrower’s Unrestricted
Cash, Cash Equivalents, and short-term investments maintained at Bank or Bank’s
Affiliates are greater than or equal to Sixty Million Dollars ($60,000,000.00),
the Revolving Line, minus (i) the amount of all outstanding Letters of
Credit (including drawn but unreimbursed Letters of Credit) plus an amount
equal to the Letter of Credit Reserves, minus (ii) the FX Reserve, and
minus (iii) the outstanding principal balance of any Advances (including
any amounts used for Cash Management Services); or (b) if Borrower’s
Unrestricted Cash, Cash Equivalents, and short-term investments are maintained
at Bank or Bank’s Affiliates are less than Sixty Million Dollars
($60,000,000.00) for a period of thirty (30) consecutive days, the lesser of (i) the
Revolving Line or (ii) the Borrowing Base minus (x) the amount of all
outstanding Letters of Credit (including drawn but unreimbursed Letters of
Credit) plus an amount equal to the Letter of Credit Reserves, minus (y) the
FX Reserve, and minus (z) the outstanding principal balance of any
Advances (including any amounts used for Cash Management Services).”


 

















 


“                                          “Intellectual  Property” is


 


(i)                                     Copyrights, Trademarks,
Patents, and Mask Works including amendments, renewals, extensions and all
licenses or other rights to use and all license fees and royalties from the use;


 


(ii)                                  Any trade secrets and any
Intellectual Property rights in computer software and computer software
products now or later existing, created, acquired or held;


 


(iii)                               All design rights which
may be available to Borrower now or later created, acquired or held; and


 


(iv)                              Any claims for damages
(past, present or future) for infringement of any of the rights above, with the
right, but not the obligation, to sue and collect damages for use or
infringement of the intellectual property rights above.


 


All proceeds
and products of the foregoing, including all insurance, indemnity or warranty
payments.”


 


“                                          “Loan
Documents” are, collectively, this Agreement, the Exim Agreement,
the IP Agreement, any note, or notes or guaranties executed by Borrower or
Guarantor, and any other present or future agreement between Borrower and/or
for the benefit of Bank in connection with this Agreement, all as amended,
extended or restated.”


 


“                                          “Revolving Line”
is an Advance or Advances of up to Forty Million Dollars ($40,000,000.00).”


 


“                                          “Revolving Maturity Date”
is November 13, 2009.”


 


and inserting in lieu thereof the following:


 


“                                          “Availability Amount”
is: (a) if Borrower’s Unrestricted Cash, Cash Equivalents, and short-term
investments maintained at Bank or Bank’s Affiliates are greater than or equal
to Forty Million Dollars ($40,000,000.00), the Revolving Line, minus (i) the
amount of all outstanding Letters of Credit (including drawn but unreimbursed
Letters of Credit) plus an amount equal to the Letter of Credit Reserves, minus
(ii) the FX Reserve, and minus (iii) the outstanding principal
balance of any Advances (including any amounts used for Cash Management
Services); or (b) if Borrower’s Unrestricted Cash, Cash Equivalents, and
short-term investments are maintained at Bank or Bank’s Affiliates are less
than Forty Million Dollars ($40,000,000.00) for a period of thirty (30)
consecutive days, the lesser of (i) the Revolving Line or (ii) the
Borrowing Base minus (x) the amount of all outstanding Letters of Credit
(including drawn but unreimbursed Letters of Credit) plus an amount equal to
the Letter of Credit Reserves, minus (y) the FX Reserve, and minus (z) the
outstanding principal balance of any Advances (including any amounts used for
Cash Management Services).”


 

















 


“                                          “Intellectual Property”
means all right, title, and interest in and to the following:


 


(i)                                                                                     its Copyrights, Trademarks and Patents;


 


(ii)                                  any and all trade secrets and trade
secret rights, including, without limitation, any rights to unpatented
inventions, know-how, operating manuals;


 


(iii)                               any and all source code;


 


(iv)                              any and all design rights which may be
available to a Borrower;


 


(v)                                 any and all claims for damages by way of
past, present and future infringement of any of the foregoing, with the right,
but not the obligation, to sue for and collect such damages for said use or
infringement of the Intellectual Property rights identified above; and


 


(iv)                              all amendments, renewals and extensions
of any of the Copyrights, Trademarks or Patents.”


 


“                                          “Loan
Documents” are, collectively, this Agreement, any note, or notes or
guaranties executed by Borrower or Guarantor, and any other present or future
agreement between Borrower and/or for the benefit of Bank in connection with
this Agreement, all as amended, extended or restated.”


 


“                                          “Revolving Line”
is an Advance or Advances of up to Thirty Million Dollars ($30,000,000.00).”


 


“                                          “Revolving Maturity Date”
is November 12, 2010 [364 days from the date of this Loan Modification
Agreement].”


 


14.                                 The Loan Agreement shall be amended by deleting the definitions of “IP Agreement” and “Unused Revolving Line Facility Fee” appearing in Section 13.1 thereof and deleting every reference to
such term, respectively, in the Loan Agreement and each other document that
references such terms as defined in the Loan Agreement.


 


15.                                 The Loan Agreement shall be amended by substituting Exhibit A
thereto in its entirety and inserting in lieu thereof Schedule 1
hereto.  Borrower hereby grants Bank, to
secure the payment and performance in full of all Obligations and the
performance of each of Borrower’s duties under the Existing Loan Documents, a
continued security interest in and pledges and assigns to Bank, the Collateral
wherever located, whether now owned or hereafter acquired or arising and all
proceeds and products thereof.


 


16.                                 The Borrowing Base Certificate appearing as Exhibit C to the
Loan Agreement is hereby replaced with the Borrowing Base Certificate attached
as Schedule 2 hereto.


 


17.                                 The Compliance Certificate appearing as Exhibit D to the Loan
Agreement is hereby replaced with the Compliance Certificate attached as Schedule
3 hereto.


 


4.                                       FEES. 
A fully earned, non-refundable facility fee of One Hundred Fifty
Thousand Dollars ($150,000.00) is earned and payable as of the date
hereof.  The Borrower shall also
reimburse Bank for all legal fees and expenses incurred in connection with this
amendment to the Existing Loan Documents.


 


5.                                       TERMINATION OF IP AGREEMENT.  The IP Agreement is hereby terminated.


 


6.                                       RATIFICATION OF PERFECTION CERTIFICATE. 
Borrower hereby ratifies, confirms and reaffirms, all and singular, the
terms and disclosures contained in a certain Perfection Certificate dated as of
August 11, 2003, as updated from time to time, between Borrower and Bank,
and acknowledges, confirms and agrees the disclosures and information Borrower
provided to Bank in the Perfection Certificate has not changed, as of the date
hereof, except to the extent such disclosure is updated by the information
contained in Schedule 4 attached hereto.


 

















 


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


 


8.                                       RATIFICATION OF LOAN DOCUMENTS.  Borrower hereby ratifies, confirms, and
reaffirms all terms and conditions of all security or other collateral granted
to the Bank, and confirms that the indebtedness secured thereby includes,
without limitation, the Obligations.


 


9.                                       NO DEFENSES OF BORROWER.  Borrower hereby acknowledges and agrees that
Borrower has no offsets, defenses, claims, or counterclaims against Bank with
respect to the Obligations, or otherwise, and that if Borrower now has, or ever
did have, any offsets, defenses, claims, or counterclaims against Bank, whether
known or unknown, at law or in equity, all of them are hereby expressly WAIVED
and Borrower hereby RELEASES Bank from any liability thereunder.


 


10.                                 CONTINUING VALIDITY.  Borrower understands and agrees that in
modifying the existing Obligations, 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 Obligations pursuant to this Loan Modification Agreement in no way
shall obligate Bank to make any future modifications to the Obligations.  Nothing in this Loan Modification Agreement
shall constitute a satisfaction of the Obligations.  It is the intention of Bank and Borrower to
retain as liable parties all makers of Existing Loan Documents, unless the
party is expressly released by Bank in writing. 
No maker will be released by virtue of this Loan Modification Agreement.


 


11.                                 COUNTERSIGNATURE.  This Loan Modification Agreement shall become
effective only when it shall have been executed by Borrower and Bank.


 
















 


This Loan Modification Agreement is executed as a
sealed instrument under the laws of the Commonwealth of Massachusetts as of the
date first written above.


 


	
  BORROWER:

  	
   

  	
  BANK:

  
	
   

  	
   

  	
   

  
	
  AMERICAN
  SCIENCE AND ENGINEERING, INC.

  	
   

  	
  SILICON
  VALLEY BANK

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  



 


The undersigned, AS&E
GLOBAL, INC.,  a Massachusetts
corporation (“Guarantor”) hereby: (i) ratifies, confirms and reaffirms,
all and singular, the terms and conditions of a certain (A) Unlimited
Guaranty dated August 11, 2003 (the “Guaranty”), and (B) a certain
Security Agreement by Guarantor in favor of the Bank dated August 11,
2003, as amended by that certain First Amendment to Security Agreement dated as
of even date herewith (as amended, the “Security Agreement”); and (ii) acknowledges,
confirms and agrees that the Guaranty and Security Agreement shall remain in
full force and effect and shall in no way be limited by the execution of this
Loan Modification Agreement, or any other documents, instruments and/or
agreements executed and/or delivered in connection herewith; and (iii) acknowledges, confirms and agrees that
the obligations of Borrower to Bank under the Guaranty include, without
limitation, all Obligations of Borrower to Bank under the Loan Agreement, as
amended by this Loan Modification Agreement.


 


	
   

  	
  AS&E
  GLOBAL, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  



 

















 


SCHEDULE
1


 


EXHIBIT
A


 


The
Collateral consists of all of Borrower’s right, title and interest in and to
the following personal property:


 


All goods,
Accounts (including health-care receivables), Equipment, Inventory, contract
rights or rights to payment of money, leases, license agreements, franchise
agreements, General Intangibles (except as provided below), commercial tort
claims, documents, instruments (including any promissory notes), chattel paper
(whether tangible or electronic), cash, deposit accounts, all certificates of
deposit, fixtures, letters of credit rights (whether or not the letter of
credit is evidenced by a writing), securities, and all other investment
property, supporting obligations, and financial assets, whether now owned or
hereafter acquired, wherever located; and


 


all
Borrower’s Books relating to the foregoing, and any and all claims, rights and
interests in any of the above and all substitutions for, additions,
attachments, accessories, accessions and improvements to and replacements,
products, proceeds and insurance proceeds of any or all of the foregoing.


 


Notwithstanding the foregoing, the Collateral does not
include any Intellectual Property; provided, however, the Collateral shall include
all Accounts and all proceeds of Intellectual Property.


 


Pursuant to the terms of a certain negative pledge
arrangement with Bank, Borrower has agreed not to encumber any of its Intellectual
Property without Bank’s prior written consent.


 

















 


SCHEDULE
2


 


EXHIBIT
C


 


BORROWING
BASE CERTIFICATE


 


Borrower: American Science and Engineering, Inc.

Lender:  Silicon Valley Bank

Commitment Amount:      $30,000,000.00


 


	
  ACCOUNTS
  RECEIVABLE

  	
   

  	
   

  	
   

  
	
  (1) 
  Accounts Receivable Book Value as of

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (2) 
  Additions (please explain on reverse)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (3) 
  TOTAL ACCOUNTS RECEIVABLE

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ACCOUNTS
  RECEIVABLE DEDUCTIONS (without duplication)

  	
   

  	
   

  	
   

  
	
  (4) 
  Amounts over 90 days due

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (5) 
  Balance of 50% over 90 day accounts

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (6) 
  Credit balances over 90 days

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (7) 
  Concentration Limits

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (8) 
  Foreign Accounts

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (9) 
  Governmental Accounts

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (10) 
  Contra Accounts

  	
   

  	
  $

  	
   

  
	
  (11) 
  Promotion or Demo Accounts

  	
   

  	
  $

  	
   

  
	
  (12) 
  Intercompany/Employee Accounts

  	
   

  	
  $

  	
   

  
	
  (13) 
  Disputed Accounts

  	
   

  	
  $

  	
   

  
	
  (14) 
  Other (please explain on reverse)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (15) 
  Deferred Revenue

  	
   

  	
  $

  	
   

  
	
  (16) 
  TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS

  	
   

  	
  $

  	
   

  
	
  (17) 
  Eligible Accounts (#3 minus #16)

  	
   

  	
  $

  	
   

  
	
  (18) 
  ELIGIBLE AMOUNT OF ACCOUNTS (80% of #17)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BALANCES

  	
   

  	
   

  	
   

  
	
  (19) 
  Maximum Loan Amount

  	
   

  	
  $

  	
   

  
	
  (20) 
  Total Funds Available (Lesser of #19 and #18)

  	
   

  	
  $

  	
   

  
	
  (21) 
  Present balance owing on Line of Credit

  	
   

  	
  $

  	
   

  
	
  (22) 
  Outstanding under Sublimits (L/C, Cash Mgt, Fx)

  	
   

  	
  $

  	
   

  
	
  (23) 
  RESERVE POSITION (#20 minus #21 and #22)

  	
   

  	
  $

  	
   

  



 


The undersigned represents and warrants that this
is true, complete and correct, and that the information in this Borrowing Base
Certificate complies with the representations and warranties in the Loan and
Security Agreement between the undersigned and Silicon Valley Bank.


 

















 




	
   

  	
   

  	
  BANK USE ONLY

  	
   

  
	
  COMMENTS:

  	
  Received by:

  	
   

  
	
   

  	
  AUTHORIZED
  SIGNER

  
	
  By:

  	
   

  	
   

  	
  Date:

  	
   

  
	
  Authorized
  Signer

  	
  Verified:

  	
   

  
	
  Date:

  	
   

  	
   

  	
  AUTHORIZED
  SIGNER

  
	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
  Compliance Status:           Yes              No

  	
   

  






 

















 


SCHEDULE
3


 


EXHIBIT
D


 


COMPLIANCE
CERTIFICATE


 


TO:         SILICON VALLEY BANK


 


FROM:   AMERICAN SCIENCE AND ENGINEERING, INC.


 


The undersigned
authorized officer of AMERICAN SCIENCE AND ENGINEERING, INC. certifies that
under the terms and conditions of the Loan and Security Agreement between
Borrower and Bank (the “Agreement”), (i) Borrower is in complete
compliance for the period ending
                              
with all required covenants except as noted below and (ii) all
representations and warranties in the Agreement are true and correct in all
material respects on this date.  Attached
are the required documents supporting the certification.  The Officer certifies that these are prepared
in accordance with Generally Accepted Accounting Principles (GAAP) consistently
applied from one period to the next except as explained in an accompanying
letter or footnotes.  The Officer
acknowledges that no borrowings may be requested at any time or date of
determination that Borrower is not in compliance with any of the terms of the
Agreement, and that compliance is determined not just at the date this
certificate is delivered.


 


Please
indicate compliance status by circling Yes/No under “Complies” column.


 


	
  Reporting Covenant

  	
   

  	
  Required

  	
   

  	
  Complies

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Compliance Certificate

  	
   

  	
  Quarterly (for each
  quarter Advances were outstanding or requested)

  	
   

  	
  Yes

  	
   

  	
  No

  
	
  10-Q, 10-K and 8-K

  	
   

  	
  Within 5 days after
  filing with SEC

  	
   

  	
  Yes

  	
   

  	
  No

  
	
  BBC, A/R Agings*

  	
   

  	
  Quarterly within 45
  days

  	
   

  	
  Yes

  	
   

  	
  No

  
	
  Deferred Revenue
  Schedule* and

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Future Billing
  Schedule*

  	
   

  	
  Quarterly within 45
  days

  	
   

  	
  Yes

  	
   

  	
  No

  
	
  Audit*

  	
   

  	
  Annually

  	
   

  	
  Yes

  	
   

  	
  No

  
	
  Board Approved
  Projections

  	
   

  	
  Annually, 30 prior to
  FYE

  	
   

  	
  Yes

  	
   

  	
  No

  



 






* When cash at Bank is
less than $40,000,000.00 (See Section 6.2 of the Loan Agreement)


 


	
  Financial Covenant

  	
   

  	
  Required

  	
   

  	
  Actual

  	
   

  	
  Complies

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minimum Adjusted Quick
  Ratio (Quarterly)

  	
   

  	
  2.0:1.0

  	
   

  	
                  :1.0

  	
   

  	
  Yes

  	
   

  	
  No

  
	
  Minimum EBIT (Quarterly)

  	
   

  	
  $

  	
  3,000,000

  	
   

  	
  $

  	
   

  	
  Yes

  	
   

  	
  No

  
										



 


 




	
  Comments
  Regarding Exceptions: See Attached.

  	
   

  	
   

  	
  BANK
  USE ONLY

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sincerely,

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  	
   

  	
  Received
  By:

  	
   

  
	
  SIGNATURE

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  	
  Reviewed
  By:

  	
   

  
	
  TITLE

  	
   

  	
   

  	
  Compliance
  Status:   Yes / No

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
							






 

















 


SCHEDULE 4


 


UPDATES TO PERFECTION CERTIFICATE