**Exhibit 10(d)(xiii)**

**THIRD LOAN MODIFICATION AGREEMENT**

This Third LoanModification Agreement (this “Loan Modification Agreement’) is entered into asof November 16, 2006, by and between **SILICON VALLEY BANK**,a California-chartered bank, with its principal place of business at 3003Tasman Drive, Santa Clara, California 95054 and with a loan production officelocated at One Newton Executive Park, Suite 200, 2221 Washington Street,Newton, Massachusetts 02462 (“Bank”) and **AMERICAN SCIENCE ANDENGINEERING, INC**, a Massachusetts corporation with its chiefexecutive office located at 829 Middlesex Turnpike, Billerica, Massachusetts01821 (“Borrower”).

1.             DESCRIPTION OFEXISTING INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness andobligations which may be owing by Borrower to Bank, Borrower is indebted toBank 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 August11, 2003, between Borrower and Bank, as amended by a certain First LoanModification Agreement dated as of June 30, 2004, between Borrower and Bank,and as further amended by a certain Second Loan Modification Agreement dated asof November 30, 2004, between Borrower and Bank (as amended, the “Loan Agreement”).Capitalized terms used but not otherwise defined herein shall have the samemeaning as in the Loan Agreement.

2.             DESCRIPTION OFCOLLATERAL. Repayment of the Obligations is secured by the Collateral asdescribed in the Loan Agreement and the Intellectual Property Collateral asdescribed in a certain Intellectual Property Security Agreement dated as ofAugust 11, 2003, as amended by a certain First Amendment to IntellectualProperty Security Agreement dated as of August 23, 2004 (as amended, the “IPSecurity Agreement”) (together with any other collateral security granted toBank, the “Security Documents”).

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

3.             DESCRIPTION OFCHANGE IN TERMS.

1.             Modifications to LoanAgreement.

1.             The Loan Agreementshall be amended by deleting the following subsection (a) appearing in Section2.1.1 thereof:

“              (a)           Availability. Bank shall makeAdvances not exceeding (i) the lesser of (A) the Revolving Line or (B) theBorrowing Base minus (ii) the amount of all outstanding Letters of Credit(including drawn but unreimbursed Letters of Credit), minus (iii) the FXReserve, and minus (iv) the aggregate outstanding Advances hereunder (includingany Cash Management Services). Amounts borrowed under this Section may berepaid and reborrowed during the term of this Agreement.”

and inserting in lieuthereof the following:

“              (a)           Availability. Subject to the termsand conditions of this Agreement, Bank shall make Advances not exceeding theAvailability Amount. Amounts borrowed under the Revolving Line may be repaidand, prior to the Revolving Maturity Date, reborrowed, subject to theapplicable terms and conditions precedent herein.”

2.             TheLoan Agreement shall be amended by deleting the following subsection (a) appearingin Section 2.1.2 thereof:

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“              (a)           Bank shall issue or have issued Letters ofCredit for Borrower’s account not exceeding (i) the lesser of the Revolving Lineor the Borrowing Base minus (ii) the outstanding principal balance of anyAdvances (including any Cash Management Services), minus (iii) the amount ofall Letters of Credit (including drawn but unreimbursed Letters of Credit),plus an amount equal to any Letter of Credit Reserves. The face amount ofoutstanding Letters of Credit (including drawn but unreimbursed Letters ofCredit and any Letter of Credit Reserve) may not exceed $5,000,000.00. EachLetter of Credit shall have an expiry date no later than 180 days after theRevolving Maturity Date provided Borrower’s Letter of Credit reimbursementobligation shall be secured by cash on terms acceptable to Bank on and after(i) the Revolving Maturity Date of the Revolving Line if the Revolving MaturityDate of the Revolving Line is not extended by Bank, or (ii) the occurrence ofan Event of Default hereunder. All Letters of Credit shall be, in form andsubstance, acceptable to Bank in its sole discretion and shall be subject tothe terms and conditions of Bank’s form of standard Application and Letter ofCredit Agreement. Borrower agrees to execute any further documentation inconnection with the Letters of Credit as Bank may reasonably request”.

and inserting in lieuthereof the following:

“                (a)           As part of the Revolving Line, Bank shallissue or have issued Letters of Credit for Borrower’s account. The face amountof outstanding Letters of Credit (including drawn but unreimbursed Letters ofCredit and any Letter of Credit Reserve) may not exceed Twenty Million Dollars($20,000,000.00). Such aggregate amounts utilized hereunder shall at all timesreduce the amount otherwise available for Advances under the Revolving Line.If, on the Revolving Maturity Date, there are any outstanding Letters ofCredit, then on such date Borrower shall provide to Bank cash collateral in anamount equal to 105% of the face amount of all such Letters of Credit plus allinterest, fees, and costs due or to become due in connection therewith (asestimated by Bank in its good faith business judgment), to secure all of theObligations relating to said Letters of Credit. All Letters of Credit shall bein form and substance acceptable to Bank in its sole discretion and shall besubject to the terms and conditions of Bank’s standard Application and Letterof Credit Agreement (the “**Letter of CreditApplication**”). Borrower agrees to execute any further documentationin connection with the Letters of Credit as Bank may reasonably request.Borrower further agrees to be bound by the regulations and interpretations ofthe issuer of any Letters of Credit guarantied by Bank and opened for Borrower’saccount or by Bank’s interpretations of any Letter of Credit issued by Bank forBorrower’s account, and Borrower understands and agrees that Bank shall not beliable for any error, negligence, or mistake, whether of omission orcommission, in following Borrower’s instructions or those contained in theLetters of Credit or any modifications, amendments, or supplements thereto.”

3.             The Loan Agreementshall be amended by deleting Section 2.2 in its entirety, and inserting in lieuthereof the following:

“              **2.2****          Overadvances**. If, atany time Borrower’s Unrestricted Cash is less than Thirty Million Dollars($30,000,000.00) for a period of thirty (30) consecutive days, and the CreditExtensions 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 immediatelypay to Bank in cash such excess.”

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4.             TheLoan Agreement shall be amended by deleting the following appearing as Section2.4(b) thereof:

“              (b)           **Unused Line Fee**.In the event, in any calendar quarter, the average daily principal balance ofthe Credit Extensions outstanding during the quarter is less than$5,000,000.00, Borrower shall pay Bank an unused line fee in an amount equal to0.50% per annum on the difference between $5,000,000.00 and the average dailyprincipal balance of the Credit Extensions outstanding during the quarter,which unused line fee shall be computed and paid quarterly, in arrears, on thefirst day of the following quarter.

and inserting in lieuthereof:

“              (b)           **Unused Revolving LineFacility Fee**. A fee (the “**Unused Revolving LineFacility Fee**”), payable quarterly, in arrears, on a calendar yearbasis, in an amount equal to one-half of one percent (0.50%) per annum of theaverage unused portion of the Revolving Line, as determined by Bank. Forpurposes hereof, any Letter of Credit Reserve, any F/X Reserve, or CashManagement Services held or in place for any calendar year shall constitute autilization of the Revolving Line. Borrower shall not be entitled to anycredit, rebate or repayment of any Unused Revolving Line Facility Feepreviously earned by Bank pursuant to this Section notwithstanding anytermination of the Agreement or the suspension or termination of Bank’sobligation to make loans and advances hereunder.”

5.             The Loan Agreementshall be amended by deleting the following appearing as Section 6.2 thereof:

“              **6.2****          Financial Statements,Reports, Certificates.**

(a)           Borrower shall deliverto Bank: (i) as soon as available, but no later than thirty (30) days after thelast day of each month, a company prepared consolidated balance sheet andincome statement covering Borrower’s consolidated operations during the periodcertified by a Responsible Officer and in a form acceptable to Bank; (ii) assoon as available, but no later than ninety (90) days after the last day ofBorrower’s fiscal year, audited consolidated financial statements preparedunder GAAP, consistently applied, together with an unqualified opinion on thefinancial statements from an independent certified public accounting firmreasonably acceptable to Bank; (iii) within five (5) days of filing, copies ofall statements, reports and notices made available to Borrower’s securityholders 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 promptreport of any legal actions pending or threatened against Borrower or any Subsidiarythat is reasonably likely to result in damages or costs to Borrower or anySubsidiary of One Hundred Thousand Dollars ($100,000.00) or more; (v) promptnotice of any material change in the composition of the Intellectual Property,or the registration of any copyright, including any subsequent ownership rightof Borrower in or to any Copyright, Patent or Trademark not shown in anyintellectual property security agreement between Borrower and Bank or knowledgeof an event that materially adversely affects the value of the IntellectualProperty; and (vi) budgets, sales projections, operating plans or otherfinancial information reasonably requested by Bank.

(b)           Within thirty (30) daysafter the last day of each month, Borrower shall deliver to Bank a Borrowing BaseCertificate signed by a

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Responsible Officer in the form of **Exhibit C,** with aged listings ofaccounts receivable (by invoice date).

(c)           Within thirty (30) daysafter the last day of each month, Borrower shall deliver to Bank with themonthly financial statements a Compliance Certificate signed by a ResponsibleOfficer in the form of **Exhibit D**.

(d)           Within thirty (30) daysafter the last day of each month, Borrower shall deliver to Bank DeferredRevenue Schedules.

(e)           Allow Bank to auditBorrower’s Collateral at Borrower’s expense. Such audits shall be conducted nomore often than once every six (6) months unless an Event of Default hasoccurred and is continuing. Notwithstanding the foregoing, no Credit Extensionsshall be made prior to the completion of the initial audit (the “Initial Audit”).

Notwithstandingthe above financial reporting requirements, in the event that Borrower has noAdvances or Credit Extensions in an amount equal to or greater than FiveHundred Thousand Dollars ($500,000.00) outstanding during any month, themonthly financial reporting requirements set forth in subsections (a), (b), (c)and (d) above shall be delivered on a quarterly basis, within forty five (45)days after the end of each fiscal quarter of Borrower.”

and inserting in lieuthereof the following:

“**              6.2****          Financial Statements,Reports. Certificates**.

(a)           Borrower shall deliverto Bank: (i) as soon as available, but no later than forty-five (45) days afterthe last day of each quarter, a company prepared consolidated balance sheet andincome statement covering Borrower’s consolidated operations during the periodcertified by a Responsible Officer and in a form acceptable to Bank; (ii) assoon as available, but no later than ninety (90) days after the last day of Borrower’s fiscalyear, audited consolidated financial statements prepared under GAAP,consistently applied, together with an unqualified opinion on the financialstatements from an independent certified public accounting firm reasonablyacceptable to Bank; (iii) within five (5) days of filing, copies of allstatements, reports and notices made available to Borrower’s security holdersor to any holders of Subordinated Debt and all reports on Form 10-K, 10-Q and8-K filed with the Securities and Exchange Commission; (iv) a prompt report ofany legal actions pending or threatened against Borrower or any Subsidiary thatis reasonably likely to result in damages or costs to Borrower or anySubsidiary of One Hundred Thousand Dollars ($100,000.00) or more; (v) prompt noticeof any material change in the composition of the Intellectual Property, or theregistration of any copyright, including any subsequent ownership right ofBorrower in or to any Copyright, Patent or Trademark not shown in anyintellectual property security agreement between Borrower and Bank or knowledgeof an event that materially adversely affects the value of the IntellectualProperty; and (vi) budgets, sales projections, operating plans, listings ofaccounts payable, or other financial information reasonably requested by Bank.

(b)           Within forty-five (45)days after the last day of each quarter, Borrower shall deliver to Bank aBorrowing Base Certificate signed by

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a Responsible Officer in the form of **Exhibit C,** with aged listings ofaccounts receivable (by invoice date).

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

(d)           Allow Bank to auditBorrower’s Collateral at Borrower’s expense. Such audits shall be conducted nomore often than once every twelve (12) months unless an Event of Default hasoccurred and is continuing.”

7.             The Loan Agreementshall be amended by inserting the following to appear as subsection (b) ofSection 6.6 thereof:

“                              (b)           Provide Bank five (5)days prior written notice before establishing any Collateral Account at or withany bank or financial institution other than Bank or its Affiliates. Inaddition, for each Collateral Account that Borrower or Guarantor at any timemaintains, Borrower shall cause the applicable bank or financial institution(other than Bank) at or with which any Collateral Account is maintained toexecute and deliver a Control Agreement or other appropriate instrument withrespect to such Collateral Account to perfect Bank’s Lien in such CollateralAccount in accordance with the terms hereunder. The provisions of the previoussentence shall not apply to deposit accounts exclusively used for payroll,payroll taxes and other employee wage and benefit payments to or for thebenefit of Borrower’s employees and identified to Bank by Borrower as such.”

8.             The Loan Agreementshall be amended by deleting Section 6.7 thereof in its entirety and insertingin lieu thereof the following:

“**              6.7****          Financial Covenants**.

(a)           **AdjustedQuick Ratio**. Borrower shall maintain at all times, to be tested, asof the last day of each quarter, a ratio of Quick Assets to Current Liabilitiesminus Deferred Revenue and customer deposits of at least 2.0 to 1.0.

(b)           **Minimum EBIT**.Borrower shall have minimum quarterly EBIT of at least Three Million FiveHundred Thousand Dollars ($3,500,000.00).”

9.             The Loan Agreementshall be amended by deleting the following definitions appearing in Section 13.1thereof:

““**BorrowingBase**” is (i) 80.0% (the “Accounts Advance Rate”) of EligibleAccounts, which, at Bank’s discretion and upon written notice by Bank shall benet of any Deferred Revenue plus (ii) the lesser of (A) 10.0% (the “Inventory AdvanceRate”) of the value of Borrower’s Eligible Inventory (valued at the lower ofcost or wholesale fair market value) or (B) $750,000.00 (the “Inventory Cap”),all as determined by Bank from Borrower’s most recent Borrowing BaseCertificate; provided, however, after performing an audit of Borrower’sCollateral, Bank may, in its sole discretion, (i) lower the Inventory AdvanceRate, lower the Inventory Cap or lower the Accounts Advance Rate if the resultsare unsatisfactory to Bank or (ii) increase the Accounts Advance Rate to 85.0%if the results are satisfactory to Bank.”

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““**Current Liabilities**” are theaggregate amount of Borrower’s Total Liabilities which mature within one (1)year, which shall include, without limitation, all obligations and liabilitiesof Borrower to Bank.”

““**Quick Assets**”is, on any date, the Borrower’s consolidated, unrestricted cash (less customerdeposits), cash equivalents, net billed accounts receivable and investmentswith maturities of fewer than 12 months determined according to GAAP.

““**Revolving Line**” is an Advance orAdvances of up to Five Million Dollars ($5,000,000.00).”

““**RevolvingMaturity Date**” is November 29, 2006”

and inserting in lieuthereof the following:

““**Borrowing Base**” is eighty-fivepercent (85.0%) of Eligible Accounts, as determined by Bank from Borrower’smost recent Borrowing Base Certificate; provided, however, that Bank maydecrease the foregoing percentages in its good faith business judgment based onevents, conditions, contingencies, or risks which, as determined by Bank, mayadversely affect Collateral.”

““**Current Liabilities**” are allobligations and liabilities of Borrower to Bank (with the exception of Lettersof Credit issued by Bank which are specifically cash secured and segregated)plus, without duplication, the aggregate amount of Borrower’s Total Liabilitiesthat mature within one (1) year.”

““**Quick Assets**”is, on any date, the Borrower’s unrestricted cash (less customer deposits),plus net billed accounts receivable determined according to GAAP.”

““**Revolving Line**” is an Advance orAdvances of up to Twenty Million Dollars ($20,000,000.00).”

““**RevolvingMaturity Date**” is November 14, 2008.”

11.           The Loan Agreementshall be amended by inserting the following definitions to appear alphabeticallyin Section 13.1:

““**AvailabilityAmount**” is: (a) if Borrower’s Unrestricted Cash is greater than orequal to Thirty Million Dollars ($30,000,000.00), the Revolving Line, minus (i)the amount of all outstanding Letters of Credit (including drawn butunreimbursed Letters of Credit) plus an amount equal to the Letter of CreditReserves, minus (ii) the FX Reserve, and minus (iii) the outstanding principalbalance of any Advances (including any amounts used for Cash ManagementServices); or (b) if Borrower’s Unrestricted Cash is less than Thirty MillionDollars ($30,000,000.00) for a period of thirty (30) consecutive days, thelesser of (i) the Revolving Line or (ii) the Borrowing Base minus (x) theamount of all outstanding Letters of Credit (including drawn but unreimbursedLetters 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 anyAdvances (including any amounts used for Cash Management Services).”

““**CollateralAccount**” is any Deposit Account, Securities Account, or CommodityAccount.”

““**CommodityAccount**” is any “commodity account” as defined in the Code with suchadditions to such term as may hereafter be made.”

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““**Deposit Account**” is any “depositaccount” as defined in the Code with such additions to such term as mayhereafter be made.”

““**Letter ofCredit Application**” is defined in Section 2.1.2(a).”

““**Lockbox**”is defined in Section 6.9.”

““**Securities Account**” is any “securitiesaccount” as defined in the Code with such additions to such term as mayhereafter be made.”

““**UnrestrictedCash**” shall mean all cash maintained at Bank in Borrower’s name thatis unrestricted and not pledged to any other Person.”

““**UnusedRevolving Line Facility Fee**” is defined in Section 2.4(b).”

12.           The Borrowing BaseCertificate appearing as Exhibit C to the Loan Agreement is hereby replacedwith the Borrowing Base Certificate attached as Exhibit A hereto.

13.           The ComplianceCertificate appearing as Exhibit D to the Loan Agreement is hereby replacedwith the Compliance Certificate attached as Exhibit B hereto.

4.             FEES. A fullyearned, non-refundable facility fee of Two Hundred Fifty Thousand Dollars($250,000.00) is earned as of the date hereof and shall be payable as follows:(i) One Hundred Fifty Thousand Dollars ($150,000.00) is payable on the datehereof, and (ii) One Hundred Thousand Dollars ($100,000.00) is payable on theearlier to occur of (x) November 16, 2007, (y) the occurrence of an Event ofDefault, or (z) the early termination of the Loan Agreement. The Borrower shallalso reimburse Bank for all legal fees and expenses incurred in connection withthis amendment to the Existing Loan Documents.

5.             RATIFICATION OF IPSECURITY AGREEMENT. Borrower hereby ratifies, confirms and reaffirms, all andsingular, the terms and conditions of the IP Security Agreement andacknowledges, confirms and agrees that said IP Security Agreement contains anaccurate and complete listing of all Intellectual Property Collateral asdefined in said IP Security Agreement, and shall remain in full force andeffect. Notwithstanding the terms and conditions of the IP Security Agreement,the Borrower shall not register any Copyrights or Mask Works in the UnitedStates Copyright Office unless it: (i) has given at least five (5) days’ priorwritten notice to Bank of its intent to register such Copyrights or Mask Worksand has provided Bank with a copy of the application it intends to file withthe United States Copyright Office (excluding exhibits thereto); (ii) executesa security agreement or such other documents as Bank may reasonably request inorder to maintain the perfection and priority of Bank’s security interest inthe Copyrights proposed to be registered with the United States CopyrightOffice; and (iii) records such security documents with the United StatesCopyright Office contemporaneously with filing the Copyright application(s)with the United States Copyright Office. Borrower shall promptly provide toBank a copy of the Copyright application(s) filed with the United StatesCopyright Office, together with evidence of the recording of the securitydocuments necessary for Bank to maintain the perfection and priority of itssecurity interest in such Copyrights or Mask Works. In addition, the Borrowershall provide written notice to Bank, on a quarterly basis, regarding anyapplication filed by Borrower in the United States Patent and Trademark Officefor a patent or to register a trademark or service mark.

6.             RATIFICATION OFPERFECTION CERTIFICATE. Borrower hereby ratifies, confirms and reaffirms, alland singular, the terms and disclosures contained in a certain PerfectionCertificate dated as of August 11, 2003, between Borrower and Bank, andacknowledges, confirms and agrees the disclosures and information Borrowerprovided to Bank in the Perfection Certificate has not changed, as of the datehereof, except to the extent such disclosure is updated by the informationcontained in **Exhibit C**, attached hereto asa supplement to the Exhibit B previously delivered to the Bank.

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

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

9.             NO DEFENSES OFBORROWER. Borrower hereby acknowledges and agrees that Borrower has nooffsets, defenses, claims, or counterclaims against Bank with respect to theObligations, or otherwise, and that if Borrower now has, or ever did have, anyoffsets, defenses, claims, or counterclaims against Bank, whether known orunknown, at law or in equity, all of them are hereby expressly WAIVED andBorrower 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, asset forth in the Existing Loan Documents. Except as expressly modified pursuantto this Loan Modification Agreement, the terms of the Existing Loan Documentsremain unchanged and in full force and effect. Bank’s agreement tomodifications to the existing Obligations pursuant to this Loan ModificationAgreement in no way shall obligate Bank to make any future modifications to theObligations. Nothing in this Loan Modification Agreement shall constitute asatisfaction of the Obligations. It is the intention of Bank and Borrower toretain as liable parties all makers of Existing Loan Documents, unless theparty is expressly released by Bank in writing. No maker will be released byvirtue of this Loan Modification Agreement.

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

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This Loan Modification Agreement is executed as asealed instrument under the laws of the Commonwealth of Massachusetts as of thedate first written above.
| **BORROWER:**                               | ** **               | **BANK:**               |
|---------------------------------------------|--------------------------|-------------------------|
|                                        |                     |                    |
| **AMERICAN  SCIENCE AND ENGINEERING, INC.** | ** **               | **SILICON VALLEY BANK** |
|                                        |                     |                    |
| By:                                         | /s/ Kenneth J.  Goloznik |                    |   | By: | /s/ Mark Gallagher |   |
|                                        |                     |                    |
| Name:                                       | KENNETH J.  GOLOZNIK     |                    |   | Name: | MARK GALLAGHER |   |
|                                        |                     |                    |
| Title:                                      | CFO                      |                    |   | Title: | SVP |   |
|                                             |                          |                         |  |  |  |  |  |  |  |  |

 

The undersigned, AS&E GLOBAL, INC., aMassachusetts corporation (“Guarantor”) hereby: (i) ratifies, confirms andreaffirms, all and singular, the terms and conditions of a certain (A)Unlimited Guaranty dated August 11, 2003 (the “Guaranty”), and (B) a certainSecurity Agreement by Guarantor in favor of the Bank dated August 11, 2003 (the“Security Agreement”); and (ii) acknowledges, confirms and agrees that theGuaranty and Security Agreement shall remain in full force and effect and shallin no way be limited by the execution of this Loan Modification Agreement, orany other documents, instruments and/or agreements executed and/or delivered inconnection herewith; and (iii) acknowledges, confirms and agrees that theobligations of Borrower to Bank under the Guaranty include, without limitation,all Obligations of Borrower to Bank under the Loan Agreement, as amended bythis Loan Modification Agreement.
|        | **AS&E GLOBAL, INC.** |                   |
|--------|---------------------------|------------------------|
|   |                      |
|   | By:                       | /s/ Anthony R. Fabiano |   |
|   |                      |
|   | Name:                     | ANTHONY R. FABIANO     |   |
|   |                      |
|   | Title:                    | President & CEO    |   |
|        |                           |                        |  |  |  |  |

 

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**EXHIBIT****A**

**EXHIBIT****C**

**BORROWING****BASE CERTIFICATE**

Borrower: AmericanScience and Engineering, Inc.

Lender: Silicon ValleyBank

CommitmentAmount: $20,000,000.00
| 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 120 days due                       |   | $ |
|                                                 |   |                                            |   |   |
| (5)                                                  |   | Balance of 50% over 120 day accounts            |   | $ |
|                                                 |   |                                            |   |   |
| (6)                                                  |   | Credit balances over 120 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)                                                 |   | TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS            |   | $ |
| (16)                                                 |   | Eligible Accounts (#3 minus #15)                |   | $ |
| (17)                                                 |   | ELIGIBLE AMOUNT OF ACCOUNTS (85% of #16)        |   | $ |
|                                                 |   |                                            |   |   |
| BALANCES                                             |   |                                            |
| (18)                                                 |   | Maximum Loan Amount                             |   | $ |
| (19)                                                 |   | Total Funds Available (Lesser of #18 and #17)   |   | $ |
| (20)                                                 |   | Present balance owing on Line of Credit         |   | $ |
| (21)                                                 |   | Outstanding under Sublimits (L/C, Cash Mgt, Fx) |   | $ |
| (22)                                                 |   | RESERVE POSITION (#19 minus #20 and #21)        |   | $ |

 

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

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| COMMENTS: | **BANK  USE ONLY**             |
|-----------|--------------------------------|
|      | ** **                     | ** ** | ** ** |
|      | Received by:                   |   |   |
|      |                           | AUTHORIZED SIGNER  |   |
| By:       |                           |   | ** ** | ** ** |   |
|      |   Authorized  Signer |   | Date: | ** ** |   |
|      | Verified:                      |   |   |
| Date:     |                           |   |   | AUTHORIZED SIGNER  |   |
|      |                           |   |   |
|      | Date:                          |   |   |
|      | Compliance Status:             | Yes               No  |   |
|           |                                |  |  |  |  |  |  |  |  |  |  |

 

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**EXHIBIT B**

**EXHIBIT D**

**COMPLIANCE CERTIFICATE**

TO:         SILICON VALLEY BANK

FROM:AMERICAN SCIENCE AND ENGINEERING, INC.

Theundersigned authorized officer of AMERICAN SCIENCE AND ENGINEERING, INC.certifies that under the terms and conditions of the Loan and SecurityAgreement between Borrower and Bank (the “Agreement”), (i) Borrower is incomplete compliance for the periodending                              withall required covenants except as noted below and (ii) all representations andwarranties in the Agreement are true and correct in all material respects onthis date. Attached are the required documents supporting the certification.The Officer certifies that these are prepared in accordance with GenerallyAccepted Accounting Principles (GAAP) consistently applied from one period tothe next except as explained in an accompanying letter or footnotes. TheOfficer acknowledges that no borrowings may be requested at any time or date ofdetermination that Borrower is not in compliance with any of the terms of theAgreement, and that compliance is determined not just at the date thiscertificate is delivered.

**Please indicate compliance status by circlingYes/No under “Complies” column.**
| **Reporting  Covenant**                 | ** ** | **Required**                        | ** ** | **Complies** |
|-----------------------------------------|------------|-------------------------------------|------------|--------------|
|                                    |       |                                |       |         |
| Quarterly  financial statements with CC |       | Quarterly within 45 days            |       | Yes  No |
| Annual (CPA  Audited)                   |       | FYE within 90 days                  |       | Yes  No |
| 10-Q, 10-K and  8-K                     |       | Within 5 days after filing with SEC |       | Yes  No |
| BBC, A/R Agings,  and inventory report  |       | Quarterly within 45 days            |       | Yes  No |
| Deferred Revenue  Schedule              |       | Quarterly within 45 days            |       | Yes  No |
| Audit                                   |       | Annually                            |       | Yes  No |

 

**Notification of registration of IntellectualProperty**

Thefollowing Intellectual Property was registered after the Closing Date (ifblank, read “None”)
| **Financial Covenant**               | ** ** | **Required** | ** ** | **Actual** | ** ** | **Complies**  | ** **   |
|-------------------------------------------|------------|--------------|------------|------------|------------|---------------|--------------|
|                                      |       |         |       |       |       |          |         |
| Minimum Adjusted  Quick Ratio (Quarterly) |       | 2.0:1.0      |       | :1.0       |       | Yes   No |         |
| Minimum EBIT  (Quarterly)                 |       |         | *          | $          |       |          | Yes  No |   |
|                                           |            |              |            |            |            |               |              |  |

 

----

*SeeSection 6.7(b) of Agreement
|        | **Comments  Regarding Exceptions:** See Attached. | ** ** | **BANK  USE ONLY** | ** ** |
|--------|---------------------------------------------------|------------|--------------------|------------|
|   |                                              |       |               |       |   |
|   | Sincerely,                                        | ** ** | **Received By:**   | ** ** | ** ** |
|   |                                              |       | **Date:**          | ** ** | ** ** |
|   |                                              |       | Date:              |       |   | **Reviewed By:** | ** ** | ** ** |
|   | SIGNATURE                                         |       |               |       |   | **Compliance Status: Yes / No** | ** ** |
|   |                                              |       |               |       |   |   |   |   |   |
|   | TITLE                                             |       |               |       |   |   |   |   |   |
|        |                                                   |            |                    |            |  |  |  |  |  |  |  |  |  |  |  |  |

 

----

 

**EXHIBIT C**

----