Exhibit 10.1


 


FIRST LOAN MODIFICATION AGREEMENT


 


This First Loan
Modification Agreement (this “Loan Modification Agreement’) is entered into as
of June 30, 2004, by and between SILICON VALLEY BANK,
a California-chartered bank, 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, doing business under the name “Silicon
Valley East” (“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, 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.


 


A.                                   Modifications
to Loan Agreement.


 


1                                          The
Loan Agreement shall be amended by deleting the following, appearing in Section 13.1
of the definition of “Eligible Accounts”:


 


“(f)  Accounts for which the
account debtor is a federal, state or local government entity or any
department, agency, or instrumentality thereof except for Accounts of the
United States if the payee has assigned its payment rights to Bank and the
assignment has been acknowledged under the Assignment of Claims Act of 1940 (31
U.S.C. 3727);”


 


and inserting in lieu thereof the
following:


 


“(f) Accounts for which the
account debtor is a federal, state or local government entity or any
department, agency or instrumentality thereof except for Accounts of the United
States if the payee has assigned its payment rights to Bank and the assignment
has been acknowledged under the Assignment of Claims Act of 1940 (31 U.S.C.
3727) (with the exception of such Accounts approved by the Bank, on a case by a
case basis, in its sole and absolute discretion);”


 


2                                          The
Loan Agreement shall be amended by deleting Section 6.7(b) in its
entirety and the following shall be inserted in lieu thereof:


 


“(b)         Minimum EBIT.  The Borrower shall maintain, on a quarterly
basis: (i) (A) a net loss of no greater than Six Hundred Thousand Dollars
($600,000.00) for Borrower’s fiscal quarter beginning June 30, 2004, and
for each quarter thereafter; and (ii) a cumulative net loss for each twelve(12)
month period beginning June 30, 2004, of no greater than One Million Two
Hundred Thousand Dollars ($1,200,000.00).”


 

















 


4.             FEES.  Borrower shall pay to Bank a modification fee
equal to Five Thousand Dollars ($5,000.00), which fee shall be due on the date
hereof and shall be deemed fully earned 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.             RATIFICATION
OF INTELLECTUAL PROPERTY SECURITY AGREEMENT.  Borrower hereby ratifies, confirms and
reaffirms, all and singular, the terms and conditions of a certain Intellectual
Property Security Agreement dated as of August 11, 2003, between Borrower
and Bank, and acknowledges, confirms and agrees that said Intellectual Property
Security Agreement contains an accurate and complete listing of all
Intellectual Property Collateral as defined in said Intellectual Property
Security Agreement as updated by Exhibit B
Supplement attached hereto, shall
remain in full force and effect.  In
addition to the foregoing, the Borrower shall update the Bank, on a quarterly
basis, regarding any supplemental Copyrights, Copyright application(s) or
Mask works filed with the United States Copyright Office and any supplemental applications
filed by Borrower in the United States Patent Trademark Office for a patent or a
trademark or service mark.


 


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,
between Borrower and Bank, and acknowledges, confirms and agrees the
disclosures and information above 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 Exhibit B
Supplement 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 (provided,
however, in no event shall this Loan Modification Agreement become effective
until signed by an officer of Bank in California).


 

















 


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, doing business as

  SILICON VALLEY EAST 

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Anthony R. Fabiano

  	
   

  	
  By: 

  	
  /s/ Mark Gallagher

  
	
   

  	
   

  	
   

  
	
  Name: Anthony R. Fabiano

  	
   

  	
  Name: Mark Gallagher

  
	
   

  	
   

  	
   

  
	
  Title: President and
  Chief Executive Officer

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SILICON
  VALLEY BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
  (signed in Santa Clara
  County, California)

  
								



 


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
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 (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:

  	
  /s/ Anthony R. Fabiano

  
	
   

  	
   

  
	
   

  	
  Name: Anthony R. Fabiano

  
	
   

  	
   

  
	
   

  	
  Title:  President
  and Chief Executive Officer