LINE OF CREDIT AGREEMENT
This Line of Credit Agreement ("Agreement") is made and entered into this 30th day of March 1998 by and
between SANWA BANK CALIFORNIA (the "Bank") and APPLIED SIGNAL TECHNOLOGY, INC. (the
1.01. Certain Defined Terms. Unless elsewhere defined in this Agreement the following terms shall have the
following meanings (such meanings to be generally applicable to the singular and plural forms of the terms
A. "Advance" shall mean an advance to the Borrower under any line of credit facility or similar facility provided
for in Section II of this Agreement which provides for draws by the Borrower against an established credit line.
B. "Business Day" shall mean a day, other than a Saturday or Sunday, on which commercial banks are open for
business in California.
C. "Collateral" shall mean any personal or real property in which the Bank may be granted a lien or security
interest to secure payment of the Obligations.
D. "Debt" shall mean all liabilities of the Borrower less Subordinated Debt.
E. "Effective Tangible Net Worth" shall mean the Borrower's stated net worth plus Subordinated Debt but less all
intangible assets of the Borrower (i.e., goodwill, trademarks, patents, copyrights, organization expense and
similar intangible items).
F. "Environmental Claims" shall mean all claims, however asserted, by any governmental authority or other person
alleging potential liability or responsibility for violation of any Environmental Law or for release or injury to the
environment or threat to public health, personal injury (including sickness, disease or death), property damage,
natural resources damage, or otherwise alleging liability or responsibility for damages (punitive or otherwise),
cleanup, removal, remedial or response costs, restitution, civil or criminal penalties, injunctive relief, or other type
of relief, resulting from or based upon (i) the presence, placement, discharge, emission or release (including