(LINE OF CREDIT)
This Agreement (the "Agreement") is made and entered into as of September 18 2000 , by and
between SANWA BANK CALIFORNIA (the "Bank") and APPLIED SIGNAL TECHNOLOGY, INC.
(the "Borrower"), on the terms and conditions that follow:
1.1 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 defined):
1.1.1 "Advance": shall mean an advance to the Borrower under the credit
facility (ies) described in Section 2.
1.1.2 "Business Day": shall mean a day, other than a Saturday or Sunday,
on which commercial banks are open for business in California.
1.1.3 "Close-Out Date": shall mean the Business Day on which the Bank
closes out and liquidates an FX Transaction.
1.1.4 "Closing Value": has the meaning given to it in Section 7.5(i) hereof.
1.1.5 "Closing Gain" and "Closing Loss": shall mean the amount
determined in accordance with Section 7.5(ii) hereof.
1.1.6 "Credit Percentage": shall mean 15%.
1.1.7 "Current Liabilities": shall mean current liabilities as determined in
accordance with generally accepted accounting principles, including any
negative cash balance on the Borrower's financial statement and
Indebtedness for borrowed money under lines of credit with the Bank used
by the Borrower for working capital purposes.
1.1.8 "Debt": shall mean all liabilities of the Borrower less Subordinated
Debt, if any.
1.1.9 "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 including, but not limited to,
investments in and all amounts due from affiliates, officers or employees).
1.1.10 "Environmental Claims": shall mean al