Exhibit 10.20
 AMENDMENT NO. 10
TO LOAN AND SECURITY AGREEMENT
 This Amendment No. 10 to Loan and Security Agreement  Amendment Rae
Systems Inc., Borrower Silicon Valley Bank (Bank).
 Recitals
 A. Loan Agreement),
 B.
 C.
 AGREEMENT
 NOW, THEREFORE, in consideration of the foregoing Recitals and intending to be legally
bound, the parties hereto agree as follows:
 1. Amendments to Loan Agreement.
 1.1 Section 6.8 (Financial Covenants).
 (a) Quick Ratio.
 1.2 Exhibit D, Compliance Certificate, Exhibit A
 2. Borrowers
Representations And Warranties.
 (a)




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(b)
 (c)
 (d)
 (e)
 (f)
  3. Limitation
 4. Effectiveness .
 4.1 Amendment.
 4.2 Payment of Bank Expenses.
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5. Counterparts
 6. Integration .
 7. Governing
Law; Venue.
  Borrower:
    

Rae
Systems Inc.a Delaware corporation
 By:
    
    /s/ Randall K. Gausman
 Printed Name:
    
    Randall K. GausmanTitle: CFOBank:
    
    Silicon Valley Bank
 By:
    
    /s/ Ray Aguilar
 Printed Name:
    
    Ray AguilarTitle: RM
 3




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EXHIBIT A
 EXHIBIT D
 COMPLIANCE CERTIFICATE
 TO: SILICON VALLEY BANK
    
    Date:FROM: RAE SYSTEMS INC.
 
 Please indicate compliance status by circling Yes/No under
Complies column.
 Reporting Covenant
    
    Required
    
    CompliesQuarterly financial statements (along with 
Borrower prepared consolidating financial 
statements) with Compliance Certificate
    
    Quarterly within earlier of 5 days
of filing 10Q or 50 days of
quarter end
    
    Yes    NoAnnual financial statement (CPA Audited) + CC
    
    within earlier of 5 days of filing
10K or 90 days of FYE
    
    Yes    No8-K
    
    Within 5 days after filing with SEC
    
    Yes    NoBorrowing Base Certificate A/R & A/P Agings
and deferred revenue report
    
    within 30 days of each month
    
    Yes    NoProjections
    
    Within 45 days of FYE
    
    Yes    NoCash balance report
    
    Within 30 days of end of month
    
    Yes    No
 Financial Covenant
    
    Required
    
    Actual
    
    CompliesMaintain at all times:Minimum Quick Ratio, tested as
of the last day of each fiscal
quarter.
    
    1.0:1.0
    
    _______:1.0
    
    Yes    No




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Financial Covenant
    
    Required
    
    Actual
    
    CompliesMinimum EBITDA, tested as
of the
last day of each fiscal
quarter indicated
    
    Fiscal Quarter Ending 03/31/10:
EBITDA > $(1,000,000)
    
    $________
    
    Yes    NoFiscal Quarter Ending 06/30/10:Combined EBITDA for fiscal quarters ending03/31/10 and 06/30/10 > $(1,900,000)Fiscal Quarter Ending 09/30/10:Combined EBITDA for fiscal quarters ending06/30/10 and 09/30/10 > $(1,800,000)Fiscal Quarter Ending 12/31/10:Combined EBITDA for fiscal quarters ending09/30/10 and 12/31/10 > $(1,000,000)
   
 
 
 RAE SYSTEMS INC.
    
    
    
    BANK USE ONLYBy:
    
    
    
    
    
    Received by:AUTHORIZED SIGNERName:
    
    
    
    
    
    Date:Title:Verified:AUTHORIZED SIGNERDate:Compliance Status:                   Yes  No
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Schedule 1 to Compliance Certificate
 Financial Covenants of Borrower
 
 I.
    
    Quick Ratio(Section 6.8(a))
   A.
    
    Aggregate value of Borrowers consolidated unrestricted cash and cash equivalents
    
    $B.
    
    Aggregate value of Borrowers consolidated net billed accounts receivable
    
    $C.
    
    Aggregate value of Borrowers consolidated short and long term investments
    
    $D.
    
    Quick Assets (the sum of lines A through C)
    
    $E.
    
    Aggregate value of Obligations to Bank
    
    $F.
    
    Aggregate value of Total Liabilities that mature within one year
    
    $G.
    
    Current Liabilities (the sum of lines E and F)
    
    $H.
    
    Quick Ratio (line D divided by line G)
  No, not in compliance
    
    Yes, in compliance




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II.
    
    Minimum EBITDA(Section 6.8(b))
  Fiscal
    
    Measurement
    
    MinimumQuarter
    
    Period
    
    EBITDASeptember 30, 2010
    
    Fiscal quarters ending
    
    Combined Quarters:June 30, 2010, and
    
    $
    (1,800,000
    )September 30, 2010December 31, 2010
    
    Fiscal quarters ending
    
    Combined Quarters:September 30, 2010, and
    
    $(1,000,000)December 31, 2010
  A.
    
    Net Income
    
    
    $B.
    
    To the extent included in the determination of Net Income1 .
    
    The provision for income taxes
    
    
    $2.
    
    Depreciation expense
    
    
    $3.
    
    Amortization expense
    
    
    $4.
    
    Net interest expense
    
    
    $5.
    
    non-cash stock compensation expense.
    
    
    $6.
    
    The sum of lines 1 through 5
    
    
    $C.
    
    EBITDA (line A plus line B.6)
  No, not in compliance
    
    Yes, in compliance
 2