APPLIED SIGNAL TECHNOLOGY INC
EXHIBIT 10.20
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<FILENAME>exhibit10_20.htm
<DESCRIPTION>EXHIBIT 10.20
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<title>Exhibit 10.20</title>

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<p align="center"><b>SECOND AMENDMENT TO CREDIT AGREEMENT</b></p>
<p><font size="2">This SECOND Amendment to Credit Agreement (the &quot;Amendment&quot;)
  is made and entered into as of March 12, 2002, by and between UNITED CALIFORNIA
  BANK formerly known as SANWA BANK CALIFORNIA (the &quot;Bank&quot;) and APPLIED
  SIGNAL TECHNOLOGY, INC. (the &quot;Borrower&quot;) with respect to the following:</font></p>
<p><font size="2">This Amendment shall be deemed to be a part of and subject to
  that certain Credit Agreement dated as of September 18, 2000, as it may be amended
  from time to time, and any and all addenda and riders thereto (collectively
  the &quot;Agreement&quot;). Unless otherwise defined herein, all terms used
  in this Amendment shall have the same meanings as in the Agreement. To the extent
  that any of the terms or provisions of this Amendment conflict with those contained
  in the Agreement, the terms and provisions contained herein shall control.</font></p>
<p><font size="2">WHEREAS, the Borrower and the Bank mutually desire to extend
  and/or modify the Agreement.</font></p>
<p><font size="2">NOW THEREFORE, for value received and hereby acknowledged, the
  Borrower and the Bank agree as follows:</font></p>
<p><font size="2">1. <b>Modification of Expiration Date.</b> Section 1.1.15
  of the Agreement is modified and amended as follows: The date which is currently
  March 15, 2002 is hereby modified and amended to be March 15, 2003.</font></p>
<p><font size="2">2. <b>Modification of Financial Condition/Effective Tangible
  Net Worth.</b> Section 5.2(i) of the Agreement is modified and amended as follows:
  The dollar amount provided for in section 5.2(i) of the Agreement, which is
  currently $55,000,000.00, is hereby modified and amended to be $58,500,000.00.</font></p>
<p><font size="2">3. <b>Modification of Financial Condition/Quick Ratio.</b>
  Section 5.2(iii) of the Agreement is modified and amended as follows: The ratio
  provided for in section 5.2(iii) of the Agreement, which is currently 1.25 to
  1, is hereby modified and amended to be 2.00 to 1 .</font></p>
<p><font size="2">4. <b>Modification of Notice.</b> Section 5.13 of the Agreement
  is modified and amended as follows: The dollar amount provided for in section
  5.13 of the Agreement, which is currently $500,000.00, is hereby modified and
  amended to be $100,000.00.</font></p>
<p><font size="2">5. <b>Conditions Precedent.</b> As a condition precedent to
  the effectiveness of this Amendment, Borrower agrees to pay to Bank a fee of
  $6,500.00.</font></p>
<p><font size="2">6. <b>Representations and Warranties.</b> The Borrower hereby
  reaffirms the representations and warranties contained in the Agreement and
  represents that no event, which with notice or lapse of time, could become an
  Event of Default, has occurred or is continuing.</font></p>
<p><font size="2">7. <b>Confirmation of Other Terms and Conditions of the Agreement.</b>
  Except as specifically provided in this Amendment, all other terms, conditions
  and covenants of the Agreement unaffected by this Amendment shall remain unchanged
  and shall continue in full force and effect and the Borrower hereby covenants
  and agrees to perform and observe all terms, covenants and agreements provided
  for in the Agreement, as hereby amended.</font></p>
<p><font size="2">8. <b>Governing Law.</b> This Amendment shall be governed
  and construed in accordance with the laws of the State of California to which
  jurisdiction the parties hereto hereby consent and submit.</font></p>
<p><font size="2">9. <b>Counterparts.</b> This Amendment may be executed in
  one or more counterparts, each of which shall be deemed an original and all
  of which together shall constitute one and the same instrument.</font></p>
<p><font size="2">IN WITNESS WHEREOF, this Amendment has been executed by the
  parties hereto as of the date first hereinabove written.</font></p>
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