<SUBMISSION>
<ACCESSION-NUMBER>0001047469-08-006393
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>6
<PERIOD>20080331
<FILING-DATE>20080512
<DATE-OF-FILING-DATE-CHANGE>20080512
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>AXCELIS TECHNOLOGIES INC
<CIK>0001113232
<ASSIGNED-SIC>3559
<IRS-NUMBER>341818596
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>000-30941
<FILM-NUMBER>08823369
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>108 CHERRY HILL DRIVE
<CITY>BEVERLY
<STATE>MA
<ZIP>01915
<PHONE>978 232 4001
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>108 CHERRY HILL DRIVE
<CITY>BEVERLY
<STATE>MA
<ZIP>01915
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>EATON SEMICONDUCTOR EQUIPMENT INC
<DATE-CHANGED>20000501
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>a2185666z10-q.htm
<DESCRIPTION>10-Q
<TEXT>
<HTML>
<HEAD>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
<BR>
<FONT SIZE=3 ><A HREF="#08ZBI40201_1">QuickLinks</A></FONT>
<font size=3> -- Click here to rapidly navigate through this document</font>

<P style="font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_BASECOLOR,"Black" -->




<!-- COMMAND=ADD_DEFAULTFONT,"font-family:times;" -->


 </FONT> <FONT SIZE=2>
<hr noshade width=100% align=left size=4>
<hr noshade width=100% align=left size=1> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=5><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>  </B></FONT><FONT SIZE=2><B>Washington, D.C. 20549  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=5><B>FORM 10-Q  </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TD WIDTH="11%" ALIGN="CENTER" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><B>(Mark One)</B></FONT></TD>
<TD WIDTH="89%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="11%" ALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=3><FONT FACE="WINGDINGS">&#253;</FONT></FONT></TD>
<TD WIDTH="89%" style="font-family:times;"><BR><FONT SIZE=3><B>QUARTERLY REPORT PURSUANT TO SECTION&nbsp;13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF&nbsp;1934</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2><B>For the quarterly period ended March&nbsp;31, 2008</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B><BR>
or</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="11%" ALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=3><FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="89%" style="font-family:times;"><BR><FONT SIZE=3><B>TRANSITION REPORT PURSUANT TO SECTION&nbsp;13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF&nbsp;1934</B></FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 ALIGN="CENTER" VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2><B>For the transition period
from&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B> Commission file number&nbsp;000-30941  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=5><B>AXCELIS TECHNOLOGIES,&nbsp;INC.<BR>  </B></FONT><FONT SIZE=2>(Exact name of registrant as specified in its charter) </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="49%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>Delaware</B></FONT><FONT SIZE=2><BR>
(State or other jurisdiction of<BR>
incorporation or organization)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>34-1818596</B></FONT><FONT SIZE=2><BR>
(IRS Employer<BR>
Identification No.)</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=3 ALIGN="CENTER" VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2><B>108 Cherry Hill Drive</B></FONT><BR>
<FONT SIZE=2><B>Beverly, Massachusetts 01915</B></FONT><FONT SIZE=2><BR>
(Address of principal executive offices, including zip code)</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=3 ALIGN="CENTER" VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2><B>(978)&nbsp;787-4000<BR> </B></FONT><FONT SIZE=2>(Registrant's telephone number, including area code)</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate
by check mark whether the registrant (1)&nbsp;has filed all reports required to be filed by Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12&nbsp;months (or for such shorter period that the registrant was required to file such reports), and (2)&nbsp;has been subject to such filing requirements for the past
90&nbsp;days.&nbsp;Yes&nbsp;<FONT FACE="WINGDINGS">&#253;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT>. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule&nbsp;12b-2 of the Exchange Act. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="19%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Large&nbsp;accelerated&nbsp;filer&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Accelerated&nbsp;filer&nbsp;<FONT FACE="WINGDINGS">&#253;</FONT></FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="27%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Non-accelerated&nbsp;filer&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT><BR></FONT> <FONT SIZE=1>(Do not check if a smaller<BR>
reporting company)</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Smaller&nbsp;reporting&nbsp;company&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate
by check mark whether the registrant is a shell company (as defined in Rule&nbsp;12b-2 of the Exchange
Act)&nbsp;Yes&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;<FONT FACE="WINGDINGS">&#253;</FONT> </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of May&nbsp;9, 2008 there were 102,440,712 shares of the registrant's common stock outstanding. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><hr
noshade width=100% align=left size=1>
<hr noshade width=100% align=left size=4> </FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=1,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=819769,FOLIO='blank',FILE='DISK132:[08ZBI1.08ZBI40201]BA40201A.;14',USER='MSULLIV',CD='12-MAY-2008;10:52' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="page_bg40201_1_2"> </A>


<!-- COMMAND=ADD_BASECOLOR,"Black" -->




<!-- COMMAND=ADD_DEFAULTFONT,"font-family:times;" -->


 </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="bg40201_part_i_#151;financial_information"> </A>
<A NAME="toc_bg40201_1"> </A>
<BR></FONT><FONT SIZE=2><B>PART I&#151;FINANCIAL INFORMATION    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2><B>Item&nbsp;1.</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%" style="font-family:times;"><FONT SIZE=2><B>Financial Statements.</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%" style="font-family:times;"><FONT SIZE=2>Consolidated Statements of Operations for the three months ended March&nbsp;31, 2008 and 2007</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%" style="font-family:times;"><FONT SIZE=2>Consolidated Balance Sheets as of March&nbsp;31, 2008 and December&nbsp;31, 2007</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%" style="font-family:times;"><FONT SIZE=2>Consolidated Statements of Cash Flows for the three months ended March&nbsp;31, 2008 and 2007</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%" style="font-family:times;"><FONT SIZE=2>Notes to Consolidated Financial Statements</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2><B>Item&nbsp;2.</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%" style="font-family:times;"><FONT SIZE=2><B>Management's Discussion and Analysis of Financial Condition and Results of Operations.</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%" style="font-family:times;"><FONT SIZE=2>Overview</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%" style="font-family:times;"><FONT SIZE=2>Critical Accounting Estimates</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>14</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%" style="font-family:times;"><FONT SIZE=2>Results of Operations</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>15</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%" style="font-family:times;"><FONT SIZE=2>Liquidity and Capital Resources</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>18</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%" style="font-family:times;"><FONT SIZE=2>Outlook</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>19</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2><B>Item&nbsp;3.</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%" style="font-family:times;"><FONT SIZE=2><B>Quantitative and Qualitative Disclosures About Market Risk.</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>20</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2><B>Item&nbsp;4.</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%" style="font-family:times;"><FONT SIZE=2><B>Controls and Procedures.</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>20</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2><B>PART II&#151;OTHER INFORMATION</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2><B>Item&nbsp;1.</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%" style="font-family:times;"><FONT SIZE=2><B>Legal Proceedings.</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>21</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2><B>Item&nbsp;1A.</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%" style="font-family:times;"><FONT SIZE=2><B>Risk Factors.</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>21</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2><B>Item&nbsp;2.</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%" style="font-family:times;"><FONT SIZE=2><B>Unregistered Sales of Equity Securities and Use of Proceeds.</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>21</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2><B>Item&nbsp;3.</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%" style="font-family:times;"><FONT SIZE=2><B>Defaults Upon Senior Securities.</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>21</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2><B>Item&nbsp;4.</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%" style="font-family:times;"><FONT SIZE=2><B>Submission of Matters to a Vote of Security Holders.</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>22</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2><B>Item&nbsp;5.</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%" style="font-family:times;"><FONT SIZE=2><B>Other Information.</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>22</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2><B>Item&nbsp;6.</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%" style="font-family:times;"><FONT SIZE=2><B>Exhibits.</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>23</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2><B>SIGNATURES</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>24</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>2</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=2,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=792664,FOLIO='2',FILE='DISK132:[08ZBI1.08ZBI40201]BG40201A.;13',USER='LPALLES',CD='12-MAY-2008;10:43' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="page_de40201_1_3"> </A>


<!-- COMMAND=ADD_BASECOLOR,"Black" -->




<!-- COMMAND=ADD_DEFAULTFONT,"font-family:times;" -->


 </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="de40201_part_1_#151;financial_information"> </A>
<A NAME="toc_de40201_1"> </A>
<BR></FONT><FONT SIZE=2><B>PART 1&#151;FINANCIAL INFORMATION    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Item&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements.  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="de40201_axcelis_technologies,_inc._con__axc04388"> </A>
<A NAME="toc_de40201_2"> </A>
<BR></FONT><FONT SIZE=2><B>Axcelis Technologies,&nbsp;Inc.<BR>  Consolidated Statements of Operations<BR>  (In thousands, except per share amounts)<BR>  (Unaudited)    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Three months ended<BR>
March&nbsp;31,</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>2008</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>2007</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Revenue</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=2>Product</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>69,784</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>80,726</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=2>Service</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>13,993</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>14,741</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=2>Royalties, primarily from SEN</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,117</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,059</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>84,894</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>97,526</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Cost of revenue</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=2>Product</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>47,988</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>47,701</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=2>Service</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,690</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>8,575</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>55,678</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>56,276</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Gross profit</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>29,216</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>41,250</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2><BR>
Operating expenses</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=2>Research and development</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>16,853</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>18,228</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=2>Sales and marketing</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>11,905</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>12,938</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=2>General and administrative</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9,814</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,476</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=2>Amortization of intangible assets</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>656</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>656</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=2>Restructuring charges</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>51</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>39,279</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>42,298</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Loss from operations</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(10,063</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,048</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Other income (expense)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=2>Equity income of SEN</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,667</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=2>Interest income</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>690</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,454</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=2>Interest expense</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,601</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,668</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=2>Other&#151;net</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>318</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(24</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(592</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,429</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Income (loss) before income taxes</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(10,655</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,381</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Income taxes</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>426</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>709</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Net income (loss)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(11,081</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,672</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Net income (loss) per share</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=2>Basic</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(0.11</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.03</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=2>Diluted</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(0.11</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.03</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Shares used in computing basic and diluted income (loss) per share</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=2>Basic</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>102,447</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>101,492</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=2>Diluted</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>102,447</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>102,421</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>See
accompanying Notes to Consolidated Financial Statements </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>3</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=3,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=309321,FOLIO='3',FILE='DISK132:[08ZBI1.08ZBI40201]DE40201A.;8',USER='MSULLIV',CD='12-MAY-2008;10:53' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="page_dg40201_1_4"> </A>


<!-- COMMAND=ADD_BASECOLOR,"Black" -->




<!-- COMMAND=ADD_DEFAULTFONT,"font-family:times;" -->


 </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dg40201_axcelis_technologies,_inc._con__axc02888"> </A>
<A NAME="toc_dg40201_1"> </A>
<BR></FONT><FONT SIZE=2><B>Axcelis Technologies,&nbsp;Inc.<BR>  Consolidated Balance Sheets<BR>  (In thousands)<BR>  (Unaudited)    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>March&nbsp;31,<BR>
2008</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;31,<BR>
2007</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2><B>ASSETS</B></FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Current assets</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="63%" style="font-family:times;"><FONT SIZE=2>Cash and cash equivalents</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>68,192</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>83,877</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="63%" style="font-family:times;"><FONT SIZE=2>Restricted cash</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>18,300</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>17,018</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="63%" style="font-family:times;"><FONT SIZE=2>Accounts receivable, net</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>55,093</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>76,067</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="63%" style="font-family:times;"><FONT SIZE=2>Inventories, net</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="63%" style="font-family:times;"><FONT SIZE=2>Prepaid expenses and other current assets</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>23,492</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>32,442</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Total current assets</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>351,080</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>378,682</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Property, plant and equipment, net</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>67,309</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>68,101</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Investment in SEN</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>148,481</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>132,911</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Goodwill</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>42,115</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>42,115</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Intangible assets</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,269</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,925</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Other assets</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>35,859</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>37,195</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>655,113</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>669,929</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2><B>LIABILITIES AND STOCKHOLDERS' EQUITY</B></FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Current liabilities</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="63%" style="font-family:times;"><FONT SIZE=2>Accounts payable</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>23,521</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>27,054</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="63%" style="font-family:times;"><FONT SIZE=2>Accrued compensation</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>12,457</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>17,003</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="63%" style="font-family:times;"><FONT SIZE=2>Warranty</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,513</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,011</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="63%" style="font-family:times;"><FONT SIZE=2>Income taxes</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>763</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>531</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="63%" style="font-family:times;"><FONT SIZE=2>Deferred revenue</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>21,389</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>35,827</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="63%" style="font-family:times;"><FONT SIZE=2>Other current liabilities</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,907</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>8,577</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="63%" style="font-family:times;"><FONT SIZE=2>Current portion of convertible subordinated debt</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>80,721</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Total current liabilities</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>151,271</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>94,003</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Convertible subordinated debt</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>79,923</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Long-term deferred revenue</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,383</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,704</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Other long-term liabilities</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,340</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,293</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2><BR>
Stockholders' equity</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="63%" style="font-family:times;"><FONT SIZE=2>Preferred stock</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="63%" style="font-family:times;"><FONT SIZE=2>Common stock</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>103</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>103</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="63%" style="font-family:times;"><FONT SIZE=2>Additional paid-in capital</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>479,604</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>478,726</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="63%" style="font-family:times;"><FONT SIZE=2>Treasury stock</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,218</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,218</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="63%" style="font-family:times;"><FONT SIZE=2>Accumulated deficit</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(12,896</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,815</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="63%" style="font-family:times;"><FONT SIZE=2>Accumulated other comprehensive income</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>28,526</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,210</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>494,119</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>486,006</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>655,113</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>669,929</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>See
accompanying Notes to Consolidated Financial Statements </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>4</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=4,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=159371,FOLIO='4',FILE='DISK132:[08ZBI1.08ZBI40201]DG40201A.;8',USER='MSULLIV',CD='12-MAY-2008;10:53' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="page_di40201_1_5"> </A>


<!-- COMMAND=ADD_BASECOLOR,"Black" -->




<!-- COMMAND=ADD_DEFAULTFONT,"font-family:times;" -->


 </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="di40201_axcelis_technologies,_inc._con__axc03345"> </A>
<A NAME="toc_di40201_1"> </A>
<BR></FONT><FONT SIZE=2><B>Axcelis Technologies,&nbsp;Inc.<BR>  Consolidated Statements of Cash Flows<BR>  (In thousands)<BR>  (Unaudited)    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=5 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Three months ended<BR>
March&nbsp;31,</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=5 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>2008</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>2007</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><FONT SIZE=2>Operating activities</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><FONT SIZE=2>Net income (loss)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(11,081</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,672</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><FONT SIZE=2>Adjustments required to reconcile net income to net cash used for operating activities</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2>Depreciation and amortization</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,008</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,460</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2>Amortization of intangible assets</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>656</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>656</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2>Accretion of premium on convertible subordinated debt</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>798</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>737</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2>Stock-based compensation expense</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>941</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,081</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2>Undistributed income of SEN</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(4,667</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2>Changes in operating assets and liabilities</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Accounts receivable</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>21,838</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(6,346</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Inventories</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(13,686</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(13,587</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Other current assets</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9,550</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(6,624</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Accounts payable and other current liabilities</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(10,197</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(29,342</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Deferred revenue</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(14,760</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,490</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Income taxes</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>226</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(2,426</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Cash dividend from SEN</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,677</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Other assets and liabilities</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,587</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(3,501</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="62%" style="font-family:times;"><FONT SIZE=2>Net cash used for operating activities</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(12,295</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(46,720</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><FONT SIZE=2>Investing activities</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><FONT SIZE=2>Sales and maturities of marketable securities</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>29,200</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><FONT SIZE=2>Expenditures for property, plant and equipment</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,212</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(3,649</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><FONT SIZE=2>Increase in restricted cash</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(39</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="62%" style="font-family:times;"><FONT SIZE=2>Net cash (used for) provided by investing activities</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,212</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>25,512</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><FONT SIZE=2>Financing activities</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><FONT SIZE=2>Repayment of convertible subordinated debt</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(74,217</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><FONT SIZE=2>Proceeds from the exercise of stock options</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>20</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>394</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><FONT SIZE=2>Proceeds from employee stock purchase plan</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>424</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>585</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="62%" style="font-family:times;"><FONT SIZE=2>Net cash (used for) provided by financing activities</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>444</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(73,238</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><FONT SIZE=2>Effect of exchange rate changes on cash</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(2,622</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(593</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><FONT SIZE=2>Net increase (decrease) in cash and cash equivalents</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(15,685</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(95,039</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><FONT SIZE=2>Cash and cash equivalents at beginning of period</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>83,877</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>140,451</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><FONT SIZE=2>Cash and cash equivalents at end of period</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>68,192</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>45,412</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>See
accompanying Notes to Consolidated Financial Statements </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>5</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=5,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=453550,FOLIO='5',FILE='DISK132:[08ZBI1.08ZBI40201]DI40201A.;5',USER='MSULLIV',CD='12-MAY-2008;10:53' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="page_dk40201_1_6"> </A>


<!-- COMMAND=ADD_BASECOLOR,"Black" -->




<!-- COMMAND=ADD_DEFAULTFONT,"font-family:times;" -->


 </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dk40201_axcelis_technologies,_inc._not__axc05386"> </A>
<A NAME="toc_dk40201_1"> </A>
<BR></FONT><FONT SIZE=2><B>Axcelis Technologies,&nbsp;Inc.    <BR>    <BR>    Notes To Consolidated Financial Statements (Unaudited)    <BR>    <BR>    (All tabular amounts in thousands, except per share amounts)    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Note&nbsp;1.&nbsp;&nbsp;Nature of Business and Basis of Presentation  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Axcelis Technologies,&nbsp;Inc. ("Axcelis" or the "Company"), is a worldwide producer of ion implantation, dry strip and other processing equipment used in the
fabrication of semiconductor chips in the United States, Europe and Asia. In addition, the Company provides extensive aftermarket service and support, including spare parts, equipment upgrades, and
maintenance services to the semiconductor industry. The Company owns 50% of the equity of a joint venture with Sumitomo Heavy Industries,&nbsp;Ltd. in Japan. This joint venture, which is known as
SEN Corporation, an SHI and Axcelis Company ("SEN"), licenses technology from the Company relating to the manufacture of specified ion implantation
products and has exclusive rights to manufacture and sell these products in the territory of Japan. SEN is the leading producer of ion implantation equipment in Japan. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of March&nbsp;31, 2008, the Company had approximately $68.2&nbsp;million of cash and cash equivalents. During the first quarter of 2008, the Company experienced negative cash
flows from operations and anticipates continued cash outflows in the second quarter of 2008. Furthermore, as of March&nbsp;31, 2008, the Company's New Notes (see Note&nbsp;8), due
January&nbsp;15, 2009, were reclassified to current liabilities. On April&nbsp;23, 2008, the Company entered into a revolving credit facility (the "facility") with a bank that provides for
borrowings up to the lesser of (A)&nbsp;$50&nbsp;million or (B)&nbsp;specified percentages of the amounts of qualifying accounts receivable and inventory (approximately $28&nbsp;million on the
date of execution). Presently, the Company's 2008 forecast does not anticipate drawing down on the facility. The underlying agreement contains financial covenants that limit the amounts of net loss
the Company can incur in the second and third quarters of 2008 and specify that the Company must report net income in the fourth quarter of 2008 and thereafter. The Company's current forecast for the
second quarter of 2008 indicates that it will not meet the financial covenant. The Company does expect to achieve compliance in the fourth quarter of 2008. Should the Company not be able to meet these
financial covenants, it may not be able to borrow against the facility. The Company is also negotiating a sale-leaseback of the Company's headquarters and manufacturing facility located in
Beverly, Massachusetts. However, there can be no assurance that the sale-leaseback transaction will be completed. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company expects that existing cash and cash equivalents and expected positive cash flow for the remainder of 2008, based primarily on current expectations of customer ordering
patterns, coupled with planned financing events, will be sufficient to satisfy the Company's anticipated cash requirements for the remainder of 2008 and beyond. Should the Company not be able to
obtain financing with acceptable terms and/or current estimates for anticipated cash flow in 2008 prove incorrect, the Company's management may seek alternative strategies intended to improve the
Company's cash position. These strategies could include initiating further cost reduction efforts, seeking improvements in working capital management such as seeking additional financing, and reducing
or delaying capital expenditures. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the
instructions to Form&nbsp;10-Q and Article&nbsp;10 of Regulation&nbsp;S-X. Accordingly, they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion of management all adjustments, which are of a normal recurring nature, considered necessary for a fair presentation
have been included. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for other interim periods or for the year as a whole. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>6</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=6,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=916979,FOLIO='6',FILE='DISK132:[08ZBI1.08ZBI40201]DK40201A.;11',USER='MSULLIV',CD='12-MAY-2008;14:12' -->
<A NAME="page_dk40201_1_7"> </A>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
balance sheet at December&nbsp;31, 2007 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Axcelis
Technologies,&nbsp;Inc.'s Annual Report on Form&nbsp;10-K for the year ended December&nbsp;31, 2007. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Note&nbsp;2.&nbsp;&nbsp;Stock-Based Compensation  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company maintains the Axcelis Technologies,&nbsp;Inc. 2000 Stock Plan (the "2000 Plan"), a stock award and incentive plan which permits the issuance of
options, restricted stock, restricted stock units and performance awards to selected employees, directors and consultants of the Company. The Company also maintains the Axcelis
Technologies,&nbsp;Inc. Employee Stock Purchase Plan (the "ESPP"), an Internal Revenue Code Section&nbsp;423 plan. The 2000 Plan and the ESPP are more fully described in Note&nbsp;15 to the
consolidated financial statements in our 2007 Annual Report on Form&nbsp;10-K. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
SFAS No.&nbsp;123R, the Company recognized stock-based compensation expense of $0.9&nbsp;million and $1.1&nbsp;million for the three months ended March&nbsp;31, 2008 and
2007, respectively. These amounts include the impact of recognizing compensation expense related to restricted stock units, restricted stock, non-qualified stock options and stock offered
under the ESPP. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Note&nbsp;3.&nbsp;&nbsp;Net Income Per Share  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SFAS No.&nbsp;128, "Earnings Per Share," requires two presentations of earnings per share, "basic" and "diluted." Basic earnings per share is computed by
dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period. The computation of diluted earnings per
share is similar to basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive
common shares had been issued. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of computing diluted earnings per share, weighted average common shares outstanding do not include stock options and restricted stock awards with an exercise price inclusive
of unrecognized compensation expense which exceeded the average fair market value of the Company's common stock for the period, as the effect would be anti-dilutive. The Company has
excluded 0.1&nbsp;million incremental shares attributable to restricted stock, restricted stock units and outstanding stock options for the three months ended March&nbsp;31, 2008 as their effect
would be anti-dilutive. In addition, 4.0&nbsp;million and 3.9&nbsp;million shares of common stock for the assumed conversion of the Company's convertible debt for the three months
ended March&nbsp;31, 2008 and 2007, respectively, computed using the if converted method, were excluded from the computation of
diluted earnings per share as the effect of conversion would be anti-dilutive. These stock options, restricted stock awards, and conversions could, however, become dilutive in future
periods. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>7</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=7,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=654310,FOLIO='7',FILE='DISK132:[08ZBI1.08ZBI40201]DK40201A.;11',USER='MSULLIV',CD='12-MAY-2008;14:12' -->
<A NAME="page_dk40201_1_8"> </A>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
reconciliation of net income and shares used in computing basic and diluted earnings per share follows: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="63%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Three months ended<BR>
March&nbsp;31,</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>2008</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>2007</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(In thousands, except per share data)<BR> </B></FONT><BR></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Income (loss) available to common stockholders</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(11,081</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,672</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Weighted average common shares outstanding used in computing basic net income (loss) per share</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>102,447</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>101,492</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Incremental shares</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>929</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Weighted average common shares outstanding used in computing diluted net income (loss) per share</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>102,447</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>102,421</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Net income (loss) per share</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="57%" style="font-family:times;"><FONT SIZE=2>Basic</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(0.11</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.03</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="57%" style="font-family:times;"><FONT SIZE=2>Diluted</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(0.11</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.03</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P style="font-family:times;"><FONT SIZE=2><B>Note&nbsp;4.&nbsp;&nbsp;Comprehensive Income  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The components of comprehensive income follow: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="70%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="69%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Three months ended<BR>
March&nbsp;31,</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="69%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>2008</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>2007</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="69%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(in thousands)<BR> </B></FONT><BR></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="69%" style="font-family:times;"><FONT SIZE=2>Net income (loss)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(11,081</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,672</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="69%" style="font-family:times;"><FONT SIZE=2>Other comprehensive income</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="69%" style="font-family:times;"><FONT SIZE=2>Foreign currency translation adjustments</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>18,316</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,125</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="69%" style="font-family:times;"><FONT SIZE=2>Unrealized gain on marketable securities</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="69%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="69%" style="font-family:times;"><FONT SIZE=2>Comprehensive income</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,235</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,799</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="69%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P style="font-family:times;"><FONT SIZE=2><B>Note&nbsp;5.&nbsp;&nbsp;Inventories  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The components of inventories follow: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="68%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="57%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>March&nbsp;31,<BR>
2008</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;31,<BR>
2007</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="57%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(in thousands)<BR> </B></FONT><BR></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="57%" style="font-family:times;"><FONT SIZE=2>Raw materials</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>99,009</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>95,289</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="57%" style="font-family:times;"><FONT SIZE=2>Work-in-process</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>53,716</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>41,018</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="57%" style="font-family:times;"><FONT SIZE=2>Finished goods (completed systems)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>33,278</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>32,971</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="57%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="57%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>186,003</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>169,278</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="57%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Approximately
$89.3&nbsp;million and $75.9&nbsp;million of inventory as of March&nbsp;31, 2008 and December&nbsp;31, 2007, respectively, relates to the Optima product family. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>8</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=8,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=408674,FOLIO='8',FILE='DISK132:[08ZBI1.08ZBI40201]DK40201A.;11',USER='MSULLIV',CD='12-MAY-2008;14:12' -->
<A NAME="page_dk40201_1_9"> </A>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective
January&nbsp;1, 2008, the Company refined it's methodology to more accurately estimate excess inventory amounts on a global basis. Under the previous methodology, the Company
would have been required to reserve approximately $1.1&nbsp;million in excess amounts. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Note&nbsp;6.&nbsp;&nbsp;Restructuring Charges  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In October 2007, the Company implemented a reduction in force related to planned actions taken by management to control costs and improve the focus of its
operations in order to sustain future profitability and conserve cash. This reduction in force is expected to result in a total charge to expense of approximately $2.9&nbsp;million related to
separation and outplacement costs, of which $2.5&nbsp;million was
recorded in 2007 and $0.1&nbsp;million was recorded in the period ended March&nbsp;31, 2008. The remaining $0.3&nbsp;million will be recorded in the remainder of 2008. A total of
$2.3&nbsp;million has been paid through March&nbsp;31, 2008. Substantially all payments related to these actions are expected to be completed in 2008. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes
in the Company's restructuring liability, which consists primarily of severance and related costs, included in amounts reported as other current liabilities, follows: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="67%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="79%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(in thousands)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="79%" style="font-family:times;"><FONT SIZE=2>Balance at December&nbsp;31, 2007</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>916</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="79%" style="font-family:times;"><FONT SIZE=2>Restructuring expense</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>51</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="79%" style="font-family:times;"><FONT SIZE=2>Cash payments</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(742</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="79%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="79%" style="font-family:times;"><FONT SIZE=2>Balance at March&nbsp;31, 2008</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>225</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="79%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P style="font-family:times;"><FONT SIZE=2><B>Note&nbsp;7.&nbsp;&nbsp;Product Warranty  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company offers a one to three year warranty for all of its products, the terms and conditions of which vary depending upon the product sold. For all systems
sold, the Company accrues a liability for the estimated cost of standard warranty at the time of system shipment and defers the portion of systems revenue attributable to the fair value of
non-standard warranty. Revenue for non-standard warranty is recognized ratably over the applicable warranty period. Costs for non-standard warranty are expensed as
incurred. Factors that affect the Company's warranty liability include the number of installed units, historical and anticipated product failure rates, material usage and service labor costs. The
Company periodically assesses the adequacy of its recorded liability and adjusts the amount as necessary. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>9</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=9,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=86510,FOLIO='9',FILE='DISK132:[08ZBI1.08ZBI40201]DK40201A.;11',USER='MSULLIV',CD='12-MAY-2008;14:12' -->
<A NAME="page_dk40201_1_10"> </A>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes
in the Company's product warranty liability are as follows: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="71%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="69%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Three months ended<BR>
March&nbsp;31,</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="69%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>2008</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>2007</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="69%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(in thousands)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="69%" style="font-family:times;"><FONT SIZE=2>Balance at December&nbsp;31</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,245</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,472</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="69%" style="font-family:times;"><FONT SIZE=2>Warranties issued during the period</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>858</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,136</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="69%" style="font-family:times;"><FONT SIZE=2>Settlements made during the period</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,689</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,447</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="69%" style="font-family:times;"><FONT SIZE=2>Changes in liability for pre-existing warranties during the period</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>12</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(297</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="69%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="69%" style="font-family:times;"><FONT SIZE=2>Balance at March&nbsp;31</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,426</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,864</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="69%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="69%" style="font-family:times;"><FONT SIZE=2>Amount classified as current</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,513</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,609</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="69%" style="font-family:times;"><FONT SIZE=2>Amount classified as long-term</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>913</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,255</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="69%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="69%" style="font-family:times;"><FONT SIZE=2>Balance at March&nbsp;31</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,426</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,864</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="69%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P style="font-family:times;"><FONT SIZE=2><B>Note&nbsp;8.&nbsp;&nbsp;Convertible Subordinated Debt  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In January 2002, the Company completed an offering of $125&nbsp;million of 4.25% Convertible Subordinated Notes due January&nbsp;15, 2007 (the "Old Notes"). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
May&nbsp;2, 2006, the Company entered into an exchange and purchase agreement pursuant to which the holder of an aggregate of approximately $50.8&nbsp;million of the Old Notes
agreed to exchange its Old Notes for $50.8&nbsp;million in aggregate principal amount of the Company's newly issued 4.25% Convertible Senior Subordinated Notes due January&nbsp;15, 2009 (the "New
Notes"), plus accrued and unpaid interest on the Old Notes through but excluding May&nbsp;2, 2006, the closing date of the exchange. In addition, the Company issued an additional
$24.2&nbsp;million of New Notes, resulting in an aggregate of $75&nbsp;million of New Notes outstanding. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
New Notes are unsecured senior indebtedness of the Company and bear interest at the rate of 4.25% per annum. Interest is payable on January&nbsp;15 and July&nbsp;15 of each year,
commencing July&nbsp;15, 2006. The New Notes mature on January&nbsp;15, 2009. At maturity, the Company is required to repay the outstanding principal of the New Notes, plus a maturity premium of
11.125% of such principal, resulting in an effective annual yield to maturity of approximately 8.0%. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
principal amount of the New Notes, together with the accreted portion of the maturity premium, which increases over the term of the notes, as of the conversion date, are convertible
at the option of the holder, at any time on or prior to maturity, into shares of the Company's common stock at a conversion price equal to $20.00 per share, which also was the conversion price of the
Old Notes, subject to adjustment in certain circumstances. In addition, debt issuance costs of approximately $0.2&nbsp;million related to the New Notes are being amortized to interest expense over
the term of the New Notes. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
January&nbsp;15, 2007, the Company paid $74.2&nbsp;million to redeem the remaining Old Notes. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
Note&nbsp;1 and Note&nbsp;12 for discussion of liquidity and financing alternatives. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>10</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=10,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=989332,FOLIO='10',FILE='DISK132:[08ZBI1.08ZBI40201]DK40201A.;11',USER='MSULLIV',CD='12-MAY-2008;14:12' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->

<P style="font-family:times;"><FONT SIZE=2><A
NAME="page_dm40201_1_11"> </A>


<!-- COMMAND=ADD_BASECOLOR,"Black" -->




<!-- COMMAND=ADD_DEFAULTFONT,"font-family:times;" -->


 </FONT> <FONT SIZE=2><B>Note&nbsp;9.&nbsp;&nbsp;Income Taxes  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax expense relates principally to operating results of foreign entities in jurisdictions, primarily in Asia, where the company earns taxable income. The
Company has significant net operating losses in the United States and certain foreign tax jurisdictions and, as a result, does not pay significant income taxes in those jurisdictions. Accordingly, our
effective income tax rate is not meaningful. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Note&nbsp;10.&nbsp;&nbsp;Significant Customers  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the three months ended March&nbsp;31, 2008, one customer accounted for approximately 24% of revenue. In the three months ended March&nbsp;31, 2007, two
customers accounted for approximately 19% and 14% of revenue, respectively. For the three months ended March&nbsp;31, 2008 and 2007, no other customer accounted for more than 10% of revenue. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B>Note&nbsp;11.&nbsp;&nbsp;Contingencies  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Litigation  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company is not presently a party to any litigation that it believes might have a material adverse effect on its business operations. The Company is, from time
to time, a party to litigation that arises in the normal course of its business operations. Pending matters that arose outside of the ordinary course of business and which had developments since
January&nbsp;1, 2008 are: </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Two
purported class actions were filed against the Company in connection with proposals made by Sumitomo Heavy Industries,&nbsp;Ltd. in 2008 to acquire the outstanding common stock of
the Company. We believe each of these cases is without merit and continue to defend against them vigorously. </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>On
or about February&nbsp;11, 2008, Martin Meltzer filed a purported shareholder class action complaint in Massachusetts Superior Court (Civil Action
No.&nbsp;08-0692-E), naming as defendants the Company, its current Directors and a former Director. The complaint alleges that the Company and its Board of Directors breached
their fiduciary duties to Axcelis shareholders by failing to properly consider the February&nbsp;11, 2008 unsolicited offer by Sumitomo Heavy Industries&nbsp;Ltd. to purchase all of the
outstanding stock of the Company for $5.20 per share. The complaint seeks an order from the Court directing the Company and its Board of Directors to "give due consideration to any proposed business
combination" to maximize shareholder value, while ensuring that no conflicts of interest exist. The litigation is in a preliminary stage.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>On
or about February&nbsp;28, 2008, Shirley Simon filed a purported shareholder class action complaint in Delaware Chancery Court (Case No.&nbsp;3582), naming as
defendants the Company and its current Directors. The complaint alleges that the Company and its Board of Directors breached their fiduciary duties to Axcelis shareholders by failing to properly
consider the February&nbsp;11, 2008 unsolicited offer by Sumitomo Heavy Industries&nbsp;Ltd. to purchase all of the outstanding stock of the Company for $5.20 per share, and subsequently rejecting
that offer. The complaint seeks an order from the Court directing the Company and its Board of Directors to cooperate with any person or entity, including Sumitomo that proposes a merger, acquisition
or other transaction that would maximize shareholder value, while ensuring that no conflicts of interest exist. The complaint also seeks to have the defendants other than the Company, pay damages
suffered to the class as a result of their alleged breaches of fiduciary duty. A motion to dismiss and accompanying brief were filed by Axcelis on March&nbsp;26, 2008. On April&nbsp;30, 2008, the
plaintiffs amended their complaint to cover the proposal made by Sumitomo on March&nbsp;10, 2008 and other matters relating to the annual meeting of stockholders held on May&nbsp;1, 2008. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
April&nbsp;23, 2008, Varian Semiconductor Associates,&nbsp;Inc. filed a complaint in Federal District Court in Massachusetts claiming that Axcelis' "Optima products" infringe a
Varian patent that was </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>11</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=11,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=374923,FOLIO='11',FILE='DISK132:[08ZBI1.08ZBI40201]DM40201A.;15',USER='LPALLES',CD='12-MAY-2008;14:15' -->
<A NAME="page_dm40201_1_12"> </A>
<BR>

<P style="font-family:times;"><FONT SIZE=2>re-issued
in January 2008. The complaint was served on April&nbsp;28, 2008. Axcelis deems this lawsuit to be without merit and intends to defend its position to the fullest extent
necessary. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Indemnifications  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company's system sales agreements typically include provisions under which the Company agrees to take certain actions, provide certain remedies and defend its
customers against third-party claims of intellectual property infringement under specified conditions and to indemnify customers against any damage and costs awarded in connection with such claims.
The Company has not incurred any material costs as a result of such indemnifications and has not accrued any liabilities related to such obligations in the accompanying consolidated financial
statements. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Note&nbsp;12.&nbsp;&nbsp;Subsequent Events  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April&nbsp;23, 2008, the Company entered into a revolving credit facility (the "Facility") with a bank that provides for borrowings up to the lesser of
(A)&nbsp;$50&nbsp;million or (B)&nbsp;specified percentages of the amounts of qualifying accounts receivable and inventory (approximately $28&nbsp;million at the date of execution). The
underlying agreement contains financial covenants which limit the amounts of net loss the Company can incur in the second and third quarters of 2008 and specify that the Company must report net income
in the fourth quarter of 2008 and thereafter. The Company's current forecast for the second quarter of 2008 indicates that it will not meet the financial covenant. The Company does expect to achieve
compliance in the fourth quarter of 2008. If the Company is not able to meet the financial covenants, it may not be able to borrow against the facility. Axcelis expects to use the credit facility for
working capital and for general corporate purposes. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
connection with the credit facility, the Company also entered into a receivables purchase facility with Silicon Valley Bank. Silicon Valley Bank may purchase up to $20&nbsp;million
of receivables from Axcelis; provided that the total amount outstanding under the receivables purchase facility and credit facility does not exceed $50&nbsp;million. The receivables purchase
facility is secured by the same collateral as the credit facility. Axcelis expects to use the receivables purchase facility for working capital and for general corporate purposes. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
credit facility matures on April&nbsp;23, 2010, when all amounts will be due and payable in full. The receivables purchase facility also terminates on April&nbsp;23, 2010. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
Note&nbsp;1 for discussion of liquidity. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Note&nbsp;13.&nbsp;&nbsp;Recent Accounting Pronouncements  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No.&nbsp;157, </FONT><FONT SIZE=2><I>Fair Value
Measurement</I></FONT><FONT SIZE=2>. SFAS No.&nbsp;157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and establishes a hierarchy
that categorizes and prioritizes the sources to be used to estimate fair value. SFAS No.&nbsp;157 also expands financial statement disclosures about fair value measurements. On February&nbsp;6,
2008, the FASB issued FASB Staff Position (FSP) 157-b, which delayed the effective date of SFAS No.&nbsp;157 for one year for all nonfinancial assets and nonfinancial liabilities, except
those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). SFAS No.&nbsp;157 and FSP 157-b are effective for financial
statements issued for fiscal years beginning after November&nbsp;15, 2007. We have elected a partial deferral of SFAS No.&nbsp;157 under the provisions of FSP 157-b related to the
measurement of fair value used when evaluating goodwill, other intangible assets and other long-lived assets for impairment and valuing asset retirement obligations and liabilities for
exit or disposal activities. The impact of partially adopting SFAS No.&nbsp;157 effective January&nbsp;1, 2008 was not material to our consolidated financial statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>12</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=12,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=331666,FOLIO='12',FILE='DISK132:[08ZBI1.08ZBI40201]DM40201A.;15',USER='LPALLES',CD='12-MAY-2008;14:15' -->
<A NAME="page_dm40201_1_13"> </A>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
February 2007, the FASB issued SFAS No.&nbsp;159, </FONT><FONT SIZE=2><I>The Fair Value Option for Financial Assets and Financial Liabilities&#151;Including an Amendment of
SFAS&nbsp;115</I></FONT><FONT SIZE=2>, which permits but does not require us to measure financial instruments and certain other items at fair value. Unrealized gains and losses on items for which
the fair value option has been elected are reported in earnings. This statement is effective for financial statements issued for fiscal years beginning after November&nbsp;15, 2007. As we have not
elected to fair value any of our financial instruments under the provisions of SFAS No.&nbsp;159, the adoption of this statement will not have any impact to our consolidated financial statements. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
December 2007, the FASB issued SFAS No.&nbsp;141(R) </FONT><FONT SIZE=2><I>Business Combinations</I></FONT><FONT SIZE=2>. This statement applies to all transactions or other events
in which an entity (the acquirer) obtains control of one or more businesses (the acquiree), including those sometimes referred to as "true mergers" or "mergers of equals" and combinations achieved
without the transfer of consideration, for example, by contract alone or through the lapse of minority veto rights. This statement applies to all business entities, including mutual entities that
previously used the pooling-of-interests method of accounting for some business combinations. It does not apply to 1)&nbsp;the formation of a joint venture; 2)&nbsp;the
acquisition of an asset or a group of assets that does not constitute a business; 3)&nbsp;a combination between entities or businesses under common control; 4)&nbsp;a combination between
not-for-profit organizations or the acquisition of a for-profit business by a not-for-profit organization. This statement applies
prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December&nbsp;15, 2008. An entity may
not apply it before that date. The effective date of this statement is the same as that of the related SFAS No.&nbsp;160, </FONT><FONT SIZE=2><I>Noncontrolling Interests in Consolidated Financial
Statements</I></FONT><FONT SIZE=2>. The adoption of SFAS No.&nbsp;141(R) is not expected to have a material impact on the Company's financial position, results of operations or liquidity. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
December 2007, the FASB issued SFAS No.&nbsp;160, </FONT><FONT SIZE=2><I>Noncontrolling Interests in Consolidated Financial Statements, an Amendment to ARB
No.&nbsp;51</I></FONT><FONT SIZE=2>. This statement applies to all entities that prepare consolidated financial statements, except not-for-profit organizations, but will
affect only those entities that have an outstanding noncontrolling interest in one or more subsidiaries or that deconsolidate a subsidiary. This statement is effective for fiscal years, and interim
periods within those fiscal years, beginning on or after December&nbsp;15, 2008 (that is, January&nbsp;1, 2009, for entities with calendar year-ends). Earlier adoption is prohibited.
The effective date of this statement is the same as that of the related SFAS No.&nbsp;141(R). The adoption of SFAS No.&nbsp;160 is not expected to have a material impact on the Company's financial
position, results of operations or liquidity. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Item&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;Management's Discussion and Analysis of Financial Condition and Results of Operations.  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain statements in "Management's Discussion and Analysis of Financial Condition and Results of Operations" are forward-looking statements that involve risks
and uncertainties. Words such as may, will, should, would, anticipates, expects, intends, plans, believes, seeks, estimates and similar expressions identify such forward-looking statements. The
forward-looking statements contained herein are based on current expectations and entail various risks and uncertainties that could cause actual results to differ materially from those expressed in
such forward-looking statements. Factors that might cause such a difference include, among other things, those set forth or referred to under "Liquidity and Capital Resources" and "Risk Factors" and
those appearing elsewhere in this Form&nbsp;10-Q. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of
the date hereof. We assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting forward-looking statements. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Overview  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Axcelis Technologies,&nbsp;Inc. ("Axcelis," "we," "us," or "our"), is a producer of ion implantation and dry strip equipment used in the fabrication of
semiconductors in the United States, Europe and Asia. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>13</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=13,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=292924,FOLIO='13',FILE='DISK132:[08ZBI1.08ZBI40201]DM40201A.;15',USER='LPALLES',CD='12-MAY-2008;14:15' -->
<A NAME="page_dm40201_1_14"> </A>
<BR>

<P style="font-family:times;"><FONT SIZE=2>In
addition, we provide extensive aftermarket service and support, including spare parts, equipment upgrades, and maintenance services. We own 50% of the equity of a joint venture known as SEN
Corporation, an SHI and Axcelis Company, or "SEN," with Sumitomo Heavy Industries,&nbsp;Ltd. ("SHI") in Japan. SEN licenses technology from us relating to the manufacture of specified ion
implantation products and has exclusive rights to manufacture and sell these products in the territory of Japan. SEN is the leading producer of ion implantation equipment in Japan. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
semiconductor capital equipment industry is subject to significant cyclical swings in capital spending by semiconductor manufacturers. Capital spending is influenced by demand for
semiconductors and the products using them, the utilization rate and capacity of existing semiconductor manufacturing facilities and changes in semiconductor technology, all of which are outside of
our control. As a result, our revenues and gross margins, to the extent affected by increases or decreases in volume, could fluctuate from year to year and period to period. The industry experienced a
downturn beginning in the second half of 2007, which continued into 2008. Our gross margins are also affected by the introduction of new products. We typically become more efficient in manufacturing
products as they mature. Our operating expense base is largely fixed and does not vary significantly with changes in volume. Therefore, we could experience fluctuations in operating results and cash
flows depending on our revenues as driven by the level of capital expenditures by semiconductor manufacturers. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
sizable expense of building, upgrading or expanding a semiconductor fabrication facility is increasingly causing semiconductor companies to contract with foundries to manufacture
their semiconductors. In addition, consolidation and partnering within the semiconductor manufacturing industry is increasing. We expect these trends to continue to reduce the number of our potential
customers. This growing concentration of Axcelis' customers may increase competitive pricing as higher percentages of our total revenues are tied to the buying decisions of a particular customer or a
small number of customers. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning
in 2004, most customers shifted from multi wafer tools to single wafer tools for high current ion implant applications. Because we did not have a single wafer high current
product, we have experienced a significant loss of market share which we have yet to regain. We introduced our single wafer Optima HD (for high current applications) product in 2006 and have begun to
gain traction with this tool at a number of customers through evaluation arrangements. During the three months ended March&nbsp;31, 2008, we recognized approximately $9.9&nbsp;million to revenue
on sales of the Optima HD. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
single wafer tool for high energy ion implant applications, the Optima XE, was released in the fourth quarter of 2007. We shipped the first Optima XE in May 2008. We expect the
Optima XE to allow us to maintain a leading market share in high energy applications moving forward. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of March&nbsp;31, 2008, total amounts included in inventory, evaluation tools (classified as a component of inventory on the balance sheet) and other assets related to our
investment in the Optima product line were approximately $116.8&nbsp;million. As Optima tools shipped in 2007 continue to convert into revenue in 2008, we expect a reduction in these amounts. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating
results for the current periods presented are not necessarily indicative of the results that may be expected for subsequent interim periods or for the year as a whole. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Critical Accounting Estimates  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management's discussion and analysis of our financial condition and results of operations are based upon Axcelis' consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates,
including those related to revenue recognition, income </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>14</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=14,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=758354,FOLIO='14',FILE='DISK132:[08ZBI1.08ZBI40201]DM40201A.;15',USER='LPALLES',CD='12-MAY-2008;14:15' -->
<A NAME="page_dm40201_1_15"> </A>
<BR>

<P style="font-family:times;"><FONT SIZE=2>taxes,
intangibles, accounts receivable, inventory and warranty obligations. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results
may differ from these estimates under different assumptions or conditions. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
critical accounting estimates are those that we believe are the more significant judgments and estimates used in the preparation of our condensed consolidated financial statements.
As of March&nbsp;31, 2008 there have been no material changes to the critical accounting estimates as described in our Management's Discussion and Analysis of Financial Condition and Results of
Operations and in the Notes to the consolidated financial statements included in our Annual Report on Form&nbsp;10-K for the year ended December&nbsp;31, 2007. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Results of Operations  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth our results of operations as a percentage of revenue for the periods indicated: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Three months ended<BR>
March&nbsp;31,</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>2008</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>2007</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Revenue</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="75%" style="font-family:times;"><FONT SIZE=2>Product</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>82.2</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>82.8</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="75%" style="font-family:times;"><FONT SIZE=2>Service</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>16.5</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15.1</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="75%" style="font-family:times;"><FONT SIZE=2>Royalties, primarily from SEN</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.3</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2.1</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>100.0</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>100.0</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Cost of revenue</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="75%" style="font-family:times;"><FONT SIZE=2>Product</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>56.5</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>48.9</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="75%" style="font-family:times;"><FONT SIZE=2>Service</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9.1</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>8.8</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>65.6</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>57.7</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Gross profit</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>34.4</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>42.3</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Other costs and expenses</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="75%" style="font-family:times;"><FONT SIZE=2>Research and development</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19.9</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>18.7</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="75%" style="font-family:times;"><FONT SIZE=2>Sales and marketing</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>14.0</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>13.3</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="75%" style="font-family:times;"><FONT SIZE=2>General and administrative</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>11.6</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10.7</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="75%" style="font-family:times;"><FONT SIZE=2>Amortization of intangible assets</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.8</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.7</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="75%" style="font-family:times;"><FONT SIZE=2>Restructuring charges</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>46.3</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>43.4</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Loss from operations</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(11.9</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1.1</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Other income (expense)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="75%" style="font-family:times;"><FONT SIZE=2>Equity income of SEN</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.0</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4.8</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="75%" style="font-family:times;"><FONT SIZE=2>Interest income</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.8</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.5</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="75%" style="font-family:times;"><FONT SIZE=2>Interest expense</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1.9</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1.7</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="75%" style="font-family:times;"><FONT SIZE=2>Other-net</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.4</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.7</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4.6</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Income (loss) before income taxes</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(12.6</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3.5</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Income taxes</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.5</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.8</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Net income (loss)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(13.1</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2.7</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>15</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=15,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=192964,FOLIO='15',FILE='DISK132:[08ZBI1.08ZBI40201]DM40201A.;15',USER='LPALLES',CD='12-MAY-2008;14:15' -->
<A NAME="page_dm40201_1_16"> </A>

<P style="font-family:times;"><FONT SIZE=2><B>Three months ended March&nbsp;31, 2008 in comparison to the three months ended March&nbsp;31, 2007  </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B>Revenue  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>Product  </I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Product revenue, which includes systems sales, sales of spare parts and product upgrades was $69.8&nbsp;million, or 82.2% of revenue for the three months ended
March&nbsp;31, 2008, compared with $80.7&nbsp;million, or 82.8% of revenue for the three months ended March&nbsp;31, 2007. Product revenue levels in 2007 and 2008 have been impacted by the
Company's loss of high current market share. The decline in product revenue in the three month period ended March&nbsp;31, 2008 is attributable to a weakening semiconductor market and a related
decrease in capital spending by semiconductor manufacturers. In addition a decrease in capacity expansion at 200mm manufacturing facilities (a portion of which relates to the overall decline in the
semiconductor capital equipment market) has decreased revenue from system sales by $3.0&nbsp;million for the three month period ended March&nbsp;31, 2008. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
portion of the Company's revenue from system sales is deferred until installation and other services related to future deliverables are performed. The total amount of deferred revenue
at March&nbsp;31, 2008 and 2007 was $25.8&nbsp;million and $38.4&nbsp;million, respectively. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>Service  </I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Service revenue, which includes the labor component of maintenance and service contracts and service hours provided by on-site service personnel, was
$14.0&nbsp;million, or 16.5% of revenue for the three months ended March&nbsp;31, 2008, compared with $14.7&nbsp;million, or 15.1% of revenue, for the three months ended March&nbsp;31, 2007.
The decline in service revenue is a result of lower capacity utilization at customer manufacturing facilities, which affects the need for equipment service. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>Ion Implant  </I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The largest portion of the Company's product and service revenues are derived from ion implantation products and services, which typically average from 70% to 80%
of total revenues. During the three months ended March&nbsp;31, 2008, revenue from sales of ion implantation products and service accounted for $68.8&nbsp;million, or 81.5% of total revenue,
compared with $74.1&nbsp;million, or 76.0%, of total revenue in the three months ended March&nbsp;31, 2007. The remainder of the Company's revenue derives from the sale of products and services
relating to dry strip and other processing equipment. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>Aftermarket  </I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company's product revenues include sales of spare parts and product upgrades as well as complete systems. We refer to the business of selling spare parts and
product upgrades, combined with the sale of maintenance labor and service contracts and service hours as the "aftermarket" business. The revenue from our aftermarket business was $40.6&nbsp;million
for the three month period ended March&nbsp;31, 2008, compared to $44.4&nbsp;million for the corresponding period of the preceding year. Aftermarket revenue generally increases with expansion of
the installed base of systems but can fluctuate period to period based on capacity utilization at customers' manufacturing facilities which affects the sale of spare parts and demand for equipment
service. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>Royalties  </I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Royalty revenue was $1.1&nbsp;million, or 1.3% of revenue for the three months ended March&nbsp;31, 2008, compared with $2.1&nbsp;million, or 2.1% of
revenue for the three months ended March&nbsp;31, 2007. Royalties are primarily earned under the terms of our license agreement with SEN. Revenue changes are mainly attributable to fluctuations in
SEN sales volume based on demand for equipment by Japanese semiconductor manufacturers and the timing of shipments in Japan. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>16</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=16,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=402242,FOLIO='16',FILE='DISK132:[08ZBI1.08ZBI40201]DM40201A.;15',USER='LPALLES',CD='12-MAY-2008;14:15' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->

<P style="font-family:times;"><FONT SIZE=2><A
NAME="page_do40201_1_17"> </A>


<!-- COMMAND=ADD_BASECOLOR,"Black" -->




<!-- COMMAND=ADD_DEFAULTFONT,"font-family:times;" -->


 </FONT> <FONT SIZE=2><B>Gross Profit  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>Product  </I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit from product revenue was 31.2% for the three months ended March&nbsp;31, 2008, compared to 40.9% for the three months ended March&nbsp;31, 2007.
The decrease in gross profit from product revenues is attributable to lower margins on new product revenue recognized in the quarter (approximately 8.4%) along with lower margins and an unfavorable
mix of parts and upgrade revenues (approximately 1.3%). Revenue recognized on new products generally carries lower margins than mature products due to higher initial material costs and labor
inefficiencies. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>Service  </I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit from service revenue was 45.0% for the three months ended March&nbsp;31, 2008, compared to 41.8% for the three months ended March&nbsp;31, 2007.
The increase in gross profit for the three month period ended March&nbsp;31, 2008 is attributable to a higher mix of billable service labor. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Research and Development  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research and development expense was $16.9&nbsp;million in the three months ended March&nbsp;31, 2008, a decrease of $1.3&nbsp;million, or 7.1%, compared
with $18.2&nbsp;million in the three months ended March&nbsp;31, 2007. The decrease was driven primarily by decreased professional fee expenses ($1.1&nbsp;million) and decreased payroll costs
($0.9&nbsp;million) partially offset by increased development asset amortization and depreciation costs ($0.4&nbsp;million) and development material costs ($0.2&nbsp;million). We expect research
and
development spending to decline slightly throughout 2008 as development costs for new products drop off and are replaced by a lower level of spending for continuous improvement. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research
and development expense was attributable to the following activities through the first quarter of 2008: 41% for new product development, 42% for improvement of existing
products, and 17% for product testing. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Sales and Marketing  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales and Marketing expense was $11.9&nbsp;million in the three months ended March&nbsp;31, 2008, a decrease of $1.0&nbsp;million, or 7.8%, compared with
$12.9&nbsp;million in the three months ended March&nbsp;31, 2007. The decrease was driven primarily by an anticipated decrease in costs related to evaluation system support for our Optima platform
($0.4&nbsp;million), decreased travel costs ($0.4&nbsp;million) and lower commissions expense ($0.2&nbsp;million). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>General and Administrative  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expense was $9.8&nbsp;million in the three months ended March&nbsp;31, 2008, a decrease of $0.7&nbsp;million, or 6.7%, compared
with $10.5&nbsp;million in the three months ended March&nbsp;31, 2007. The decrease was driven primarily by lower lease, travel, utilities, sales tax and insurance expense ($0.2&nbsp;million),
lower payroll related costs ($0.2&nbsp;million) and lower stock compensation costs ($0.1&nbsp;million). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Other Income (Expense)  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No equity income was attributable to SEN for the three months ended March&nbsp;31, 2008. This is compared to equity income attributable to SEN of
$4.7&nbsp;million for the three months ended March&nbsp;31, 2007. Fluctuations in equity income from SEN reflect changes in its sales volume and net income resulting from demand changes in the
Japanese semiconductor market, and the timing of shipments in Japan. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>17</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=17,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=7526,FOLIO='17',FILE='DISK132:[08ZBI1.08ZBI40201]DO40201A.;8',USER='MSULLIV',CD='12-MAY-2008;14:13' -->
<A NAME="page_do40201_1_18"> </A>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest
income of $0.7&nbsp;million for the three months ended March&nbsp;31, 2008 primarily relates to interest earned on cash, cash equivalents and short-term
investments. Interest income decreased by $0.8&nbsp;million from the three months ended March&nbsp;31, 2007 due primarily to lower average cash balances. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest
expense of $1.6&nbsp;million for the three months ended March&nbsp;31, 2008, a decrease of $0.1&nbsp;million from the three months ended March&nbsp;31, 2007, relates
primarily to outstanding convertible senior subordinated notes, which have an effective yield to maturity of 8%. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Income Taxes  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax expense was $0.4&nbsp;million and $0.7&nbsp;million for the three months ended March&nbsp;31, 2008 and 2007, respectively. Income tax expense
relates principally to operating results of foreign entities in jurisdictions, principally in Asia, where we earn taxable income. We have significant net operating loss carryforwards in the United
States and certain foreign jurisdictions, principally Europe, and, as a result, we do not currently pay significant income taxes in those jurisdictions and we do not recognize the tax benefit for such
losses. Accordingly, our effective income tax rate is not meaningful. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Liquidity and Capital Resources  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash, cash equivalents, and marketable securities at March&nbsp;31, 2008 were $68.2&nbsp;million, compared with $83.9&nbsp;million at December&nbsp;31,
2007. The $15.7&nbsp;million decrease in cash, cash equivalents, and short-term investments is mainly attributable to cash used by operations ($12.3&nbsp;million) and capital
expenditures ($1.2&nbsp;million). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital
expenditures were $1.2&nbsp;million and $3.6&nbsp;million for the three months ended March&nbsp;31, 2008 and 2007, respectively. We have no significant capital projects
planned for 2008 and total capital expenditures for 2008 are projected to be less than $5.0&nbsp;million. Future capital expenditures beyond 2008 will depend on a number of factors, including the
timing and rate of expansion of our business. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have net operating loss and tax credit carryforwards the tax effect of which aggregate $86.7&nbsp;million at December&nbsp;31, 2007. These carryforwards, which expire principally
between 2021 and 2027, are available to reduce future income tax liabilities in the United States and certain foreign jurisdictions. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
2006, Axcelis and SHI agreed upon an annual dividend relating to SEN's fiscal year ended March&nbsp;31, 2006. The two shareholders instructed SEN to dividend 40% of SEN's net
earnings for that year. On January&nbsp;31, 2007, Axcelis received a payment of approximately $5.7&nbsp;million representing its 50% share of the dividend. In 2007 the Company entered into an
agreement with SHI pursuant to which SEN will be instructed to dividend 40% of its net income annually. On July&nbsp;31, 2007 the Company received a dividend of $6.7&nbsp;million for SEN's fiscal
year ended March&nbsp;31, 2007. The Company expects to receive a dividend of approximately $2&nbsp;million in July 2008 for SEN's fiscal year ended March&nbsp;31, 2008. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
discussed in Note&nbsp;8 to the consolidated financial statements accompanying this Form&nbsp;10-Q, on May&nbsp;2, 2006, we entered into an exchange and purchase
agreement pursuant to which the holder of an aggregate of approximately $50.8&nbsp;million of our existing 4.25% Convertible Subordinated Notes due January&nbsp;15, 2007 (the "Old Notes"), agreed
to exchange its Old Notes for $50.8&nbsp;million in aggregate principal amount of our newly issued 4.25% Convertible Senior Subordinated Notes due January&nbsp;15, 2009 (the "New Notes"), plus
accrued and unpaid interest on the Old Notes through but excluding May&nbsp;2, 2006, the closing date of the exchange. At maturity, the Company is required to repay the outstanding principal of the
New Notes, plus a maturity premium of 11.125% of such principal, resulting in an effective annual yield to maturity of approximately 8.0%. In addition, we issued an additional $24.2&nbsp;million of
New Notes, resulting in an aggregate of $75&nbsp;million of New Notes </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>18</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=18,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=857588,FOLIO='18',FILE='DISK132:[08ZBI1.08ZBI40201]DO40201A.;8',USER='MSULLIV',CD='12-MAY-2008;14:13' -->
<A NAME="page_do40201_1_19"> </A>
<BR>

<P style="font-family:times;"><FONT SIZE=2>outstanding.
We repaid the remaining $74.2&nbsp;million of outstanding Old Notes in January 2007. Depending on cash flows for the remainder of 2008, the Company may look for alternatives to
refinance the New Notes when they become payable in January 2009. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Axcelis'
liquidity is affected by many factors. Some of these factors are based on normal operations of the business, including acceptance of the Optima product line, and others relate
to the uncertainties of global economies and the semiconductor equipment industry. As of March&nbsp;31, 2008, the Company had approximately $68.2&nbsp;million of cash and cash equivalents. During
the first quarter of 2008, the Company experienced negative cash flows from operations and anticipates continued cash outflows in the second quarter of 2008. Furthermore, as of March&nbsp;31, 2008,
the Company's New Notes (see Note&nbsp;8), due January&nbsp;15, 2009, were reclassified to current liabilities. On April&nbsp;23, 2008, the Company entered into a revolving credit facility (the
"facility") with a bank that provides for borrowings up to the lesser of (A)&nbsp;$50&nbsp;million or (B)&nbsp;specified percentages of the amounts of qualifying accounts receivable and
inventory (approximately $28&nbsp;million on the date of execution). Presently, the Company's 2008 forecast does not anticipate drawing down on the facility. The underlying agreement contains
financial covenants that limit the amounts of net loss the Company can incur in the second and third quarters of 2008 and specify that the Company must report net income in the fourth quarter of 2008
and thereafter. The Company's current forecast for the second quarter of 2008 indicates that it will not meet the financial covenant. The Company does expect to achieve compliance in the fourth
quarter of 2008. Should the Company not be able to meet these financial covenants, it may not be able to borrow against the facility. The Company is also negotiating a sale-leaseback of
the Company's headquarters and manufacturing facility located in Beverly, Massachusetts. However, there can be no assurance that the sale-leaseback transaction will be completed. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company expects that existing cash and cash equivalents and expected positive cash flow for the remainder of 2008, based primarily on current expectations of customer ordering
patterns, coupled with planned financing events, will be sufficient to satisfy the Company's anticipated cash requirements for the remainder of 2008 and beyond. Should the Company not be able to
obtain financing with acceptable terms and/or current estimates for anticipated cash flow in 2008 prove incorrect, the Company's management may seek alternative strategies intended to improve the
Company's cash position. These strategies could include initiating further cost reduction efforts, seeking improvements in working capital management such as seeking additional financing, and reducing
or delaying capital expenditures. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have outstanding standby letters of credit, bank guarantees and surety bonds in the amount of $24.4&nbsp;million to support certain operating lease obligations, workers'
compensation insurance, and certain value added tax claims in Europe. At March&nbsp;31, 2008, $18.3&nbsp;million of cash was pledged as collateral for certain outstanding standby letters of credit
and bank guarantees, and is reflected as restricted cash on the consolidated balance sheet. We also have foreign exchange contracts used to hedge amounts receivable from SEN ($1.3&nbsp;million at
March&nbsp;31, 2008). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Outlook  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our performance is directly related to semiconductor manufacturers' levels of capital expenditures to open new fabrication facilities and expand existing ones,
our successful introduction of new products (such as the Optima HD), as well as operational improvements we have implemented over the past several years. The level of capital expenditures by these
manufacturers depends upon the current and anticipated market demand for semiconductors and the products utilizing them, the available manufacturing capacity in manufacturers' fabrication facilities,
and the ability of manufacturers to increase productivity in existing facilities without incurring additional capital expenditures. However, we expect continued market weakness during the balance of
2008. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>19</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=19,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=418218,FOLIO='19',FILE='DISK132:[08ZBI1.08ZBI40201]DO40201A.;8',USER='MSULLIV',CD='12-MAY-2008;14:13' -->
<A NAME="page_do40201_1_20"> </A>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
May&nbsp;7, 2008, we announced that Axcelis' revenues for the second quarter of 2008 are forecast in the range of $75&nbsp;million to $90&nbsp;million. We expect results of
operations will be a loss per share of approximately $0.11 to $0.15. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It
is difficult to predict our customers' capital spending plans because they can change very quickly. At our current sales level, each sale, or failure to make a sale, could have a
material effect on our results of operations in a particular quarter. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Item&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;Quantitative and Qualitative Disclosures about Market Risk.  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of March&nbsp;31, 2008, there have been no material changes to the quantitative and qualitative information about market risk disclosed in Item&nbsp;7A to
our Annual Report on Form&nbsp;10-K for the year ended December&nbsp;31, 2007. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Item&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;Controls and Procedures.  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Evaluation of Disclosure Controls and Procedures  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure
controls and procedures (as defined in Rule&nbsp;13a -15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this
quarterly report (the "Evaluation Date"). Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of the Evaluation Date, these disclosure controls
and procedures are effective. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Changes in Internal Control over Financial Reporting  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There was no change in our internal control over financial reporting (as defined in Rule&nbsp;13a -15(f) under the Exchange Act) identified in
connection with the evaluation of our internal control that occurred during our first quarter of 2008 that has materially affected, or is reasonably likely to materially affect, our internal control
over financial reporting. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>20</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=20,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=235025,FOLIO='20',FILE='DISK132:[08ZBI1.08ZBI40201]DO40201A.;8',USER='MSULLIV',CD='12-MAY-2008;14:13' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="page_ja40201_1_21"> </A>


<!-- COMMAND=ADD_BASECOLOR,"Black" -->




<!-- COMMAND=ADD_DEFAULTFONT,"font-family:times;" -->


 </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ja40201_part_ii_#151;other_information"> </A>
<A NAME="toc_ja40201_1"> </A>
<BR></FONT><FONT SIZE=2><B>PART II&#151;OTHER INFORMATION    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Item&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;Legal Proceedings.  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company is not presently a party to any litigation that it believes might have a material adverse effect on its business operations. The Company is, from time
to time, a party to litigation that arises in the normal course of its business operations. Pending matters that arose outside of the ordinary course of business and which had developments since
January&nbsp;1, 2008 are: </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Two
purported class actions were filed against the Company in connection with proposals made by Sumitomo Heavy Industries,&nbsp;Ltd. in 2008 to acquire the outstanding common stock of
the Company. We believe each of these cases is without merit and continue to defend against them vigorously. </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>On
or about February&nbsp;11, 2008, Martin Meltzer filed a purported shareholder class action complaint in Massachusetts Superior Court (Civil Action
No.&nbsp;08-0692-E), naming as defendants the Company, its current Directors and a former Director. The complaint alleges that the Company and its Board of Directors breached
their fiduciary duties to Axcelis shareholders by failing to properly consider the February&nbsp;11, 2008 unsolicited offer by Sumitomo Heavy Industries&nbsp;Ltd. to purchase all of the
outstanding stock of the Company for $5.20 per share. The complaint seeks an order from the Court directing the Company and its Board of Directors to "give due consideration to any proposed business
combination" to maximize shareholder value, while ensuring that no conflicts of interest exist. The litigation is in a preliminary stage.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>On
or about February&nbsp;28, 2008, Shirley Simon filed a purported shareholder class action complaint in Delaware Chancery Court (Case No.&nbsp;3582), naming as
defendants the Company and its current Directors. The complaint alleges that the Company and its Board of Directors breached their
fiduciary duties to Axcelis shareholders by failing to properly consider the February&nbsp;11, 2008 unsolicited offer by Sumitomo Heavy Industries&nbsp;Ltd. to purchase all of the outstanding
stock of the Company for $5.20 per share, and subsequently rejecting that offer. The complaint seeks an order from the Court directing the Company and its Board of Directors to cooperate with any
person or entity, including Sumitomo that proposes a merger, acquisition or other transaction that would maximize shareholder value, while ensuring that no conflicts of interest exist. The complaint
also seeks to have the defendants other than the Company, pay damages suffered to the class as a result of their alleged breaches of fiduciary duty. A motion to dismiss and accompanying brief were
filed by Axcelis on March&nbsp;26, 2008. On April&nbsp;30, 2008, the plaintiffs amended their complaint to cover the proposal made by Sumitomo on March&nbsp;10, 2008 and other matters relating
to the annual meeting of stockholders held on May&nbsp;1, 2008. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
April&nbsp;23, 2008, Varian Semiconductor Associates,&nbsp;Inc. filed a complaint in Federal District Court in Massachusetts claiming that Axcelis' "Optima products" infringe a
Varian patent that was re-issued in January 2008. The complaint was served on April&nbsp;28, 2008. Axcelis deems this lawsuit to be without merit and intends to defend its position to
the fullest extent necessary. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Item&nbsp;1A.&nbsp;&nbsp;&nbsp;&nbsp;Risk Factors.  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of March&nbsp;31, 2008, there have been no material changes to the risk factors disclosed in Item&nbsp;1A to our annual report on
Form&nbsp;10-K for the year ended December&nbsp;31, 2007. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Item&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;Unregistered Sales of Equity Securities and Use of Proceeds.  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Item&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;Defaults Upon Senior Securities.  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>21</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=21,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=222250,FOLIO='21',FILE='DISK132:[08ZBI1.08ZBI40201]JA40201A.;11',USER='CDESORM',CD='12-MAY-2008;11:08' -->
<A NAME="page_ja40201_1_22"> </A>

<P style="font-family:times;"><FONT SIZE=2><B>Item&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;Submission of Matters to a Vote of Security Holders.  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Item&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;Other Information.  </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>22</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=22,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=921681,FOLIO='22',FILE='DISK132:[08ZBI1.08ZBI40201]JA40201A.;11',USER='CDESORM',CD='12-MAY-2008;11:08' -->
<A NAME="page_ja40201_1_23"> </A>

<P style="font-family:times;"><FONT SIZE=2><B>Item&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;Exhibits.  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibits are numbered in accordance with the Exhibit Table of Item&nbsp;601 of Regulation&nbsp;S-K: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="77%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Exhibit<BR>
No</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="89%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Description</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>3.1</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="89%" style="font-family:times;"><FONT SIZE=2>Amended and Restated Certificate of Incorporation of the Company. Incorporated by reference to Exhibit&nbsp;3.1 of the Company's Registration Statement on Form&nbsp;S-1 (Registration No.&nbsp;333-36330).</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
3.2</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="89%" style="font-family:times;"><FONT SIZE=2><BR>
Bylaws of the Company, as amended as of August&nbsp;8, 2007. Incorporated by reference to Exhibit&nbsp;3.2 of the Company's Form&nbsp;10-Q for the quarter ended June&nbsp;30, 2007, filed with the Commission on August&nbsp;9, 2007.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
3.3</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="89%" style="font-family:times;"><FONT SIZE=2><BR>
Certificate of Designation of Series&nbsp;A Participating Preferred Stock, filed with the Secretary of State of Delaware on July&nbsp;5, 2000. Incorporated by reference to Exhibit&nbsp;3.3 of the Company's Form&nbsp;10-K for the year ended
December&nbsp;31, 2000, filed with the Commission on March&nbsp;30, 2001.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
10.1</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="89%" style="font-family:times;"><FONT SIZE=2><BR>
Loan and Security Agreement dated as of April&nbsp;23, 2008 between Axcelis Technologies,&nbsp;Inc. and Silicon Valley Bank. Filed herewith.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
31.1</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="89%" style="font-family:times;"><FONT SIZE=2><BR>
Certification of the Principal Executive Officer under Exchange Act Rule&nbsp;13a-14(a)/15d-14(a) (Section&nbsp;302 of the Sarbanes-Oxley Act), dated May&nbsp;12, 2008. Filed herewith.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
31.2</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="89%" style="font-family:times;"><FONT SIZE=2><BR>
Certification of the Principal Financial Officer under Exchange Act Rule&nbsp;13a-14(a)/15d-14(a) (Section&nbsp;302 of the Sarbanes-Oxley Act), dated May&nbsp;12, 2008. Filed herewith.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
32.1</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="89%" style="font-family:times;"><FONT SIZE=2><BR>
Certification of the Principal Executive Officer pursuant to Section&nbsp;1350 of Chapter&nbsp;63 of title 18 of the United States Code (Section&nbsp;906 of the Sarbanes-Oxley Act), dated May&nbsp;12, 2008. Filed herewith.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
32.2</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="89%" style="font-family:times;"><FONT SIZE=2><BR>
Certification of the Principal Financial Officer pursuant to Section&nbsp;1350 of Chapter&nbsp;63 of title 18 of the United States Code (Section&nbsp;906 of the Sarbanes-Oxley Act), dated May&nbsp;12, 2008. Filed herewith.</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>23</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=23,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=845993,FOLIO='23',FILE='DISK132:[08ZBI1.08ZBI40201]JA40201A.;11',USER='CDESORM',CD='12-MAY-2008;11:08' -->
<A NAME="page_ja40201_1_24"> </A>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ja40201_signatures"> </A>
<A NAME="toc_ja40201_2"> </A>
<BR></FONT><FONT SIZE=2><B>SIGNATURES    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="39%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>AXCELIS TECHNOLOGIES,&nbsp;INC.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%" style="font-family:times;"><FONT SIZE=2><BR>
DATED: May&nbsp;12, 2008</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="54%" style="font-family:times;"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>STEPHEN G. BASSETT</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2>By:</FONT></TD>
<TD WIDTH="54%" style="font-family:times;"><FONT SIZE=2>Stephen G. Bassett<BR>
Executive Vice President and Chief Financial Officer<BR>
Duly Authorized Officer and Principal Financial Officer</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>24</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=24,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1",CHK=441322,FOLIO='24',FILE='DISK132:[08ZBI1.08ZBI40201]JA40201A.;11',USER='CDESORM',CD='12-MAY-2008;11:08' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<BR>
<P><br><A NAME="08ZBI40201_1">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_bg40201_1">PART I&#151;FINANCIAL INFORMATION</A></FONT><BR>

<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_de40201_1">PART 1&#151;FINANCIAL INFORMATION</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_de40201_2">Axcelis Technologies, Inc. Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited)</A></FONT><BR>

<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dg40201_1">Axcelis Technologies, Inc. Consolidated Balance Sheets (In thousands) (Unaudited)</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_di40201_1">Axcelis Technologies, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited)</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dk40201_1">Axcelis Technologies, Inc. Notes To Consolidated Financial Statements (Unaudited) (All tabular amounts in thousands, except per share amounts)</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_ja40201_1">PART II&#151;OTHER INFORMATION</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_ja40201_2">SIGNATURES</A></FONT><BR>

<!-- SEQ=,FILE='QUICKLINK',USER=LPALLES,SEQ=,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="1" -->
<!-- TOCEXISTFLAG -->
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>a2185666zex-10_1.htm
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
<HTML>
<HEAD>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
<BR>

<div style="font-family:Times New Roman;">

<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Exhibit&nbsp;10.1</font></b></p>

<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">EXECUTION VERSION</font></b></p>

<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-weight:bold;margin:0in 0in .0001pt;text-align:center;text-transform:uppercase;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;text-transform:none;">LOAN
AND SECURITY AGREEMENT</font></b></p>

<p style="font-size:10.0pt;font-weight:bold;margin:0in 0in .0001pt;text-align:center;text-transform:uppercase;">&nbsp;</p>

<p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">THIS LOAN AND SECURITY AGREEMENT</font></b>
(this &#147;<b>Agreement</b>&#148;) dated as of the Effective
Date between <b>SILICON VALLEY BANK</b>, a California
corporation, 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&nbsp;200, 2221 Washington Street, Newton, Massachusetts
02462 (&#147;<b>Bank</b>&#148;), and <b>AXCELIS
TECHNOLOGIES, INC.</b> and <b>AXCELIS TECHNOLOGIES CCS
CORPORATION</b>, each a Delaware corporation with offices located at 108
Cherry Hill Drive, Beverly, Massachusetts 01915 (individually and collectively,
jointly and severally &#147;<b>Borrower</b>&#148;),
provides the terms on which Bank shall lend to Borrower and Borrower shall
repay Bank.&#160; The parties agree as
follows:</p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>ACCOUNTING
AND OTHER TERMS</u></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Accounting terms not defined in this Agreement shall
be construed following GAAP.&#160;
Calculations and determinations must be made following GAAP.&#160; Capitalized terms not otherwise defined in
this Agreement shall have the meanings set forth in Section&nbsp;13.&#160; All other terms contained in this Agreement,
unless otherwise indicated, shall have the meaning provided by the Code to the
extent such terms are defined therein.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">2</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>LOAN
AND TERMS OF PAYMENT</u></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">2.1</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Promise
to Pay</b>.&#160; Borrower hereby
unconditionally promises to pay Bank the outstanding principal amount of all
Credit Extensions and accrued and unpaid interest thereon as and when due in
accordance with this Agreement.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h3 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">2.1.1</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Revolving
Advances</b>.</h3>

<h3 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h3>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Availability</u>.&#160; Subject to the terms and conditions of this
Agreement and to deduction of Reserves, Bank shall make Advances not exceeding the Availability Amount.&#160; Amounts borrowed hereunder may be
repaid and, prior to the Revolving Line Maturity Date, reborrowed, subject to
the applicable terms and conditions precedent herein.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Termination;
Repayment</u>.&#160; The Revolving Line
terminates on the Revolving Line Maturity Date, when the principal amount of
all Advances, the unpaid interest thereon, and all other Obligations relating
to the Revolving Line shall be immediately due and payable.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h3 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">2.1.2</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Letters of
Credit Sublimit</b>.</h3>

<h3 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h3>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>As
part of the Revolving Line, Bank shall issue or have issued Letters of Credit
for Borrower&#146;s account.&#160; Such aggregate
amounts utilized hereunder shall at all times reduce the amount otherwise
available for Advances under the Revolving Line. The face amount of outstanding
Letters of Credit (including drawn but unreimbursed Letters of Credit and any
Letter of Credit Reserve) may not exceed Ten Million Dollars ($10,000,000.00) <u>minus</u>
the aggregate amount of all Credit Extensions outstanding from time to time
under Sections 2.1.3 and 2.1.4 hereof.&#160;
If, on the Revolving Line Maturity Date, there are any outstanding
Letters of Credit, then on such date Borrower shall provide to Bank cash
collateral in an amount equal to 105% of the face amount of all such Letters of
Credit plus all interest, fees, and costs due or to become due in connection
therewith (as estimated by Bank in its good faith business judgment), to secure
all of the Obligations relating to said Letters of Credit.&#160; All Letters of Credit shall be in form and
substance acceptable to Bank in its sole discretion and shall be subject to the
terms and conditions of Bank&#146;s standard Application and Letter of Credit
Agreement (the &#147;<b>Letter of Credit Application</b>&#148;).&#160; Borrower agrees to execute any further
documentation in connection with the Letters of Credit as Bank may reasonably
request.&#160; Borrower
further agrees to be bound by the regulations and interpretations of the issuer
of any Letters of Credit guarantied by Bank and opened for Borrower&#146;s account
or by Bank&#146;s interpretations of any Letter of Credit issued by Bank for
Borrower&#146;s account, and Borrower understands and agrees except in the case of
gross negligence or willful misconduct by Bank that Bank shall not be liable
for any error, negligence, or</h4>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=1,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=889036,FOLIO='',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-01_ZBI40202.CHC",USER="LPALLES",CD='May 10 23:54 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">mistake, whether of omission or
commission, in following Borrower&#146;s instructions or those contained in the
Letters of Credit or any modifications, amendments, or supplements thereto.</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The
obligation of Borrower to immediately reimburse Bank for drawings made under
Letters of Credit shall be absolute, unconditional, and irrevocable, and shall
be performed strictly in accordance with the terms of this Agreement, such
Letters of Credit, and the Letter of Credit Application.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Borrower
may request that Bank issue a Letter of Credit payable in a Foreign
Currency.&#160; If a demand for payment is
made under any such Letter of Credit, Bank shall treat such demand as an
Advance to Borrower of the equivalent of the amount thereof (plus fees and
charges in connection therewith such as wire, cable, SWIFT or similar charges)
in Dollars at the then-prevailing rate of exchange in San Francisco,
California, for sales of the Foreign Currency for transfer to the country
issuing such Foreign Currency.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>To
guard against fluctuations in currency exchange rates, upon the issuance of any
Letter of Credit payable in a Foreign Currency, Bank shall create a reserve (the
&#147;<b>Letter of Credit Reserve</b>&#148;) under the
Revolving Line in an amount equal to ten percent (10%) of the face amount of
such Letter of Credit.&#160; The amount of the
Letter of Credit Reserve may be adjusted by Bank from time to time to account
for fluctuations in the exchange rate.&#160;
The availability of funds under the Revolving Line shall be reduced by
the amount of such Letter of Credit Reserve for as long as such Letter of
Credit remains outstanding.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h3 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">2.1.3</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Foreign
Exchange Sublimit</b>.&#160; As part of the
Revolving Line, Borrower may enter into foreign exchange contracts with Bank
under which Borrower commits to purchase from or sell to Bank a specific amount
of Foreign Currency (each, a &#147;<b>FX Forward Contract</b>&#148;)
on a specified date (the &#147;<b>Settlement Date</b>&#148;).&#160; FX Forward Contracts shall have a Settlement
Date of at least one (1)&nbsp;FX Business Day after the contract date and shall
be subject to a reserve of ten percent (10%) of each outstanding FX Forward
Contract in a maximum aggregate amount equal to One Million Dollars ($1,000,000.00)
(the &#147;<b>FX Reserve</b>&#148;). The aggregate amount of
FX Forward Contracts at any one time shall not exceed ten (10)&nbsp;times the
amount of the FX Reserve <u>minus</u> the aggregate amount of all Credit
Extensions outstanding from time to time under Sections 2.1.2 and 2.1.4
hereof.&#160; Any amounts needed to fully
reimburse Bank will be treated as Advances under the Revolving Line and will
accrue interest at the interest rate applicable to Advances.</h3>

<h3 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h3>

<h3 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">2.1.4</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Cash
Management Services Sublimit</b>.&#160;
Borrower may use up to Ten Million Dollars ($10,000,000.00) of the
Revolving Line <u>minus</u> the aggregate amount of all Credit Extensions
outstanding from time to time under Sections 2.1.2 and 2.1.3 hereof, for Bank&#146;s
cash management services which may include merchant services, direct deposit of
payroll, business credit card, and check cashing services identified in Bank&#146;s
various cash management services agreements (collectively, the &#147;<b>Cash Management Services</b>&#148;).&#160;
Any amounts Bank pays on behalf of Borrower for any Cash Management
Services and not immediately reimbursed will be treated as Advances under the
Revolving Line and will accrue interest at the interest rate applicable to
Advances.</h3>

<h3 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h3>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">2.2</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Overadvances.</b>
If, at any time, (i)&nbsp;the sum of (a)&nbsp;the outstanding principal amount
of any Advances (including any amounts used for Cash Management Services), <u>plus</u>
(b)&nbsp;the face amount of any outstanding Letters of Credit (including drawn
but unreimbursed Letters of Credit and any Letter of Credit Reserve), <u>plus</u>
(c)&nbsp;the aggregate amount of any outstanding FX Forward Contract exceeds (ii)&nbsp;the
lesser of either the Revolving Line or the Borrowing Base (the amount by which (i)&nbsp;exceeds
(ii)&nbsp;being an &#147;<b>Overadvance</b>&#148;),
Borrower shall immediately pay to Bank in cash such Overadvance.&#160; Without limiting Borrower&#146;s obligation to
repay Bank any amount of the Overadvance, Borrower agrees to pay Bank interest
on the outstanding amount of any Overadvance, on demand, at the Default Rate.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">2.3</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Payment
of Interest on the Credit Extensions</b>.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Interest
Rate</u>; <u>Advances</u>.&#160; Each Advance
shall bear interest on the outstanding principal amount thereof from the date
when made, continued or converted until paid in full at a rate per annum equal
to either (i)&nbsp;the Prime Rate <u>plus</u> the Prime Rate Margin (as such
term is defined in the LIBOR Supplement) or (ii)&nbsp;the LIBOR Rate <u>plus</u>
the LIBOR Rate Margin (as such term is defined in the LIBOR Supplement).&#160; On and after the expiration of any Interest
Period (as such term is defined in the LIBOR Supplement) applicable to any
LIBOR Advance outstanding on the date of occurrence of an Event of Default or
acceleration of the Obligations, the Effective Amount of such LIBOR Advance
shall, during the continuance of such Event of Default or after acceleration,
bear</h4>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=2,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=193100,FOLIO='2',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-01_ZBI40202.CHC",USER="LPALLES",CD='May 10 23:54 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">interest at a rate per annum equal to aggregate of the
Prime Rate plus the Prime Rate Margin plus the Default Rate.&#160; Pursuant to the terms hereof, interest on
each Advance shall be paid in arrears on each Interest Payment Date (as such term
is defined in the LIBOR Supplement).&#160;
Interest shall also be paid on the date of any prepayment of any Advance
pursuant to the Loan Agreement for the portion of any Advance so prepaid and
upon payment (including prepayment) in full thereof.&#160; All accrued but unpaid interest on the
Advances shall be due and payable on the Revolving Line Maturity Date.</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Default
Rate</u>.&#160; Immediately upon the
occurrence and during the continuance of an Event of Default, Obligations shall
bear interest at a rate per annum which is three and one-half of one percent
(3.50%) above the rate that is otherwise applicable thereto (the &#147;<b>Default Rate</b>&#148;).&#160;
Payment or acceptance of the increased interest rate provided in this Section&nbsp;2.3(b)&nbsp;is
not a permitted alternative to timely payment and shall not constitute a waiver
of any Event of Default or otherwise prejudice or limit any rights or remedies
of Bank.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Prime
Rate Advances</u>.&#160; Each change in the
interest rate of the Prime Rate Advances based on changes in the Prime Rate
shall be effective on the effective date of such change and to the extent of
such change.&#160; Bank shall use its best
efforts to give Borrower prompt notice of any such change in the Prime Rate;
provided, however, that any failure by Bank to provide Borrower with notice
hereunder shall not affect Bank&#146;s right to make changes in the interest rate of
the Prime Rate Advances based on changes in the Prime Rate.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>LIBOR
Advances</u>. The interest rate applicable to each LIBOR Advance shall be
determined in accordance with Section&nbsp;5.1 of the LIBOR Supplement.&#160; Subject to Sections 5 and 6 of the LIBOR
Supplement, such rate shall apply during the entire Interest Period applicable
to such LIBOR Advance, and interest calculated thereon shall be payable on the
Interest Payment Date applicable to such LIBOR Advance.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(e)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Computation
of Interest</u>.&#160; Interest on the Credit
Extensions and all fees payable hereunder shall be computed on the basis of a
360-day year and the actual number of days elapsed in the period during which
such interest accrues.&#160; In computing
interest on any Credit Extension, the date of the making of such Credit
Extension shall be included and the date of payment shall be excluded;
provided, however, that if any Credit Extension is repaid on the same day on
which it is made, such day shall be included in computing interest on such
Credit Extension.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(f)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Debit
of Accounts</u>.&#160; Bank may debit any of
Borrower&#146;s deposit accounts, including the Designated Deposit Account, for
principal and interest payments or any other amounts Borrower owes Bank when
due.&#160; These debits shall not constitute a
set-off. The provisions of the previous sentence shall not apply to deposit
accounts designated as, and exclusively used for, payroll, payroll taxes and
other employee wage and benefit payments to or for the benefit of Borrower&#146;s
employees.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(g)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Payments</u>.
Payments of principal and/or interest received after 12:00 noon Eastern time
are considered received at the opening of business on the next Business
Day.&#160; When a payment is due on a day that
is not a Business Day, the payment is due the next Business Day and additional
fees or interest, as applicable, shall continue to accrue..</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">2.4</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Fees</b>.&#160; Borrower shall pay to Bank:</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Commitment
Fee</u>.&#160; A fully earned, non refundable
commitment fee of $500,000.00 (receipt of which Bank hereby acknowledges); and</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Letter
of Credit Fees</u>.&#160; Bank&#146;s customary
fees and expenses for the issuance, modification or renewal of Letters of
Credit, including, without limitation, its customary fees upon the issuance, each
anniversary of the issuance, modification and the renewal of such Letter of
Credit by Bank; and</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Termination
Fee</u>.&#160; In accordance with the terms of
Section&nbsp;12.1, a termination fee; and</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Unused
Revolving Line Facility Fee</u>.&#160; A fee
(the &#147;<b>Unused Revolving Line Facility Fee</b>&#148;),
payable monthly, in arrears, on a calendar year basis, in an amount per annum
equal to the Unused Line Fee Percentage of the average unused portion of the
Total Commitment, as reasonably determined by Bank.&#160; The
unused portion of the Total Commitment, for the purposes of this calculation,
shall include amounts reserved under the Cash Management</h4>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=3,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=165927,FOLIO='3',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-01_ZBI40202.CHC",USER="LPALLES",CD='May 10 23:54 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Services Sublimit for products provided and
under the Foreign Exchange Sublimit for FX Forward Contracts. Borrower shall
not be entitled to any credit, rebate or repayment of any Unused Revolving Line
Facility Fee previously earned by Bank pursuant to this Section&nbsp;notwithstanding
any termination of the Agreement, or suspension or termination of Bank&#146;s
obligation to make loans and advances hereunder; and</font></p>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(e)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Bank
Expenses</u>.&#160; All Bank Expenses
(including reasonable attorneys&#146; fees and expenses, plus expenses, for
documentation and negotiation of this Agreement) incurred through and after the
Effective Date, when due.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>CONDITIONS
OF LOANS</u></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.1</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Conditions
Precedent to Initial Credit Extension</b>.&#160;
Bank&#146;s obligation to make the initial Credit Extension is subject to the
condition precedent that Borrower shall consent to or have delivered, in form
and substance satisfactory to Bank, such documents, and completion of such
other matters, as Bank may reasonably deem necessary or appropriate, including,
without limitation:</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>duly
executed original signatures to the Loan Documents to which it is a party;</h4>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>its
Operating Documents and a good standing certificate of Borrower certified by
the Secretary of State of the State of Delaware as of a date no earlier than
thirty (30) days prior to the Effective Date;</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>completed
Borrowing Resolutions for Borrower;</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>either
(i)&nbsp;an Acknowledgement/Ratification duly executed by the Trustee under the
Indenture in favor of Bank confirming that the Obligations constitute &#147;Designated
Senior Indebtedness&#148; as defined in the Indenture or (ii)&nbsp;evidence that
Borrower&#146;s indebtedness under the Convertible Senior Subordinated Notes has
been or, upon the application of the proceeds of the initial Credit Extension
to be made hereunder will be, satisfied in full and that the Indenture has been
terminated; <u>provided</u>  <u>that</u>, in order to satisfy this subsection
3.1(d)&nbsp;by compliance with clause (ii)&nbsp;hereof then, after giving
effect to such initial Credit Extension (x)&nbsp;no Default or Event of Default
shall then exist and (y)&nbsp;Borrower shall have provided evidence
satisfactory to Bank that it shall remain in pro forma compliance with the
financial covenants set forth in Section&nbsp;6.9 at all times during the
ninety (90) day period following the date of the initial Credit Extension;</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(e)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>a
payoff letter or some other evidence of the termination of that certain
Revolving Credit Agreement, dated as of October&nbsp;3, 2003, by and among
Axcelis Technologies,&nbsp;Inc. the financial institutions party thereto and
ABN Amro Bank, N.V., as agent;</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(f)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>evidence
that (i)&nbsp;the Liens securing Indebtedness owed by Borrower to ABN Amro
Bank, N.V., as agent and The Equitable-Crow Braker Center Austin Company have
been or will be terminated and (ii)&nbsp;the documents and/or filings
evidencing the perfection of such Liens, including without limitation any
financing statements and/or control agreements, have or will, concurrently with
the initial Credit Extension, be terminated.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(g)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>certified
copies, dated as of a recent date, of financing statement searches, as Bank
shall request, accompanied by written evidence (including any UCC termination
statements) that the Liens indicated in any such financing statements either
constitute Permitted Liens or have been or, in connection with the initial
Credit Extension, will be terminated or released;</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(h)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the
Perfection Certificates executed by Borrower and each Guarantor;</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(i)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>a
landlords&#146; consent executed by the landlords of Borrower&#146;s 33 Cherry Hill
Drive, Beverly, Massachusetts and 54 Cherry Hill Drive, Beverly, Massachusetts
locations in favor of Bank;</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(j)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>a
legal opinion of Borrower&#146;s counsel dated as of the Effective Date together
with the duly executed original signatures thereto;</h4>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=4,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=747891,FOLIO='4',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-01_ZBI40202.CHC",USER="LPALLES",CD='May 10 23:54 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(k)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the
duly executed original signatures to each Guaranty, each Guarantor Security
Agreement, the Pledge Agreements, and the Negative Pledge, together with the
completed Borrowing Resolutions for Guarantor;</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(l)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>evidence
satisfactory to Bank that the insurance policies required by Section&nbsp;6.7
hereof are in full force and effect, together with appropriate evidence showing
loss payable and/or additional insured clauses or endorsements in favor of
Bank; and</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(m)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>payment
of the fees and Bank Expenses then due as specified in Section&nbsp;2.4 hereof.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.2</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Conditions
Precedent to all Credit Extensions</b>.&#160;
Bank&#146;s obligations to make each Credit Extension, including the initial
Credit Extension, is subject to the following:</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>except
as otherwise provided in Section&nbsp;3 of the LIBOR Supplement, (i)&nbsp;for
Advances, timely receipt of a completed and executed Notice of Borrowing and, (ii)&nbsp;for
any other Credit Extension, timely receipt of a completed and executed
Transaction Report; and</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the
representations and warranties in Section&nbsp;5 shall be true, accurate and
complete in all material respects on the date of the Transaction Report and
Notice of Borrowing and on the Funding Date of each Credit Extension; provided,
however, that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof; and provided, further that those
representations and warranties expressly referring to a specific date shall be
true, accurate and complete in all material respects as of such date, and no
Default or Event of Default shall have occurred and be continuing or result
from the Credit Extension.&#160; Each Credit
Extension is Borrower&#146;s representation and warranty on that date that the
representations and warranties in Section&nbsp;5 remain true, accurate and
complete in all material respects; provided, however, that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof; and
provided, further that those representations and warranties expressly referring
to a specific date shall be true, accurate and complete in all material
respects as of such date; and</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>as
determined in Bank&#146;s reasonable business judgment, there has not been a
Material Adverse Change.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.3</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Covenant
to Deliver</b>.&#160; Borrower agrees to
deliver to Bank each item required to be delivered to Bank under this Agreement
as a condition to any Credit Extension.&#160;
Borrower expressly agrees that a Credit Extension made prior to the
receipt by Bank of any such item shall not constitute a waiver by Bank of
Borrower&#146;s obligation to deliver such item, and any such Credit Extension in
the absence of a required item shall be made in Bank&#146;s sole discretion.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.4</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Procedures
for Borrowing</b>.&#160; In addition to and
supplemental of the requirements set forth in Section&nbsp;3 of the LIBOR
Supplement, subject to the prior satisfaction of all other applicable
conditions to the making of an Advance set forth in this Agreement, to obtain
an Advance (other than Advances under Sections 2.1.2 or 2.1.4), Borrower shall
notify Bank (which notice shall be irrevocable) by electronic mail, facsimile,
or telephone by 12:00&nbsp;p.m. Pacific time on the Funding Date of the
Advance.&#160; Together with such
notification, Borrower must promptly deliver to Bank by electronic mail or
facsimile a completed Transaction Report executed by a Responsible Officer or
his or her designee.&#160; Bank shall credit
Advances to the Designated Deposit Account.&#160;
Bank may make Advances under this Agreement based on instructions from a
Responsible Officer or his or her designee or without instructions if the
Advances are necessary to meet Obligations which have become due.&#160; Bank may rely on any telephone notice given
by a person whom Bank believes is a Responsible Officer or designee.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">4</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>CREATION
OF SECURITY INTEREST</u></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">4.1</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Grant
of Security Interest</b>.&#160; Borrower
hereby grants Bank, to secure the payment and performance in full of all of the
Obligations, a continuing security interest in, and pledges to Bank, the
Collateral, wherever located, whether now owned or hereafter acquired or
arising, and all proceeds and products thereof.&#160;
Borrower represents, warrants, and covenants that the security interest
granted herein is and shall at all times continue to be a first priority perfected
security interest in the Collateral (subject only to Permitted Liens that may
have superior priority to Bank&#146;s Lien under this Agreement).&#160; If Borrower shall acquire a commercial tort
claim,</h2>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=5,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=534137,FOLIO='5',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-01_ZBI40202.CHC",USER="LPALLES",CD='May 10 23:54 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Borrower shall promptly notify Bank in a writing signed
by Borrower of the general details thereof and upon request of Bank grant to
Bank in such writing a security interest therein and in the proceeds thereof,
all upon the terms of this Agreement, with such writing to be in form and
substance reasonably satisfactory to Bank.</font></h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Bank&#146;s lien and
security interest in the Collateral shall continue until Borrower fully
satisfies its Obligations in cash.&#160; Upon
payment in full in cash of the Obligations (except for contingent
indemnification obligations for which no claim has been made) and at such time as Bank&#146;s obligation to make Credit Extensions
has terminated, Bank shall, at Borrower&#146;s sole cost and expense, release its
Liens in the Collateral and all rights therein shall revert to Borrower.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">4.2</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Authorization
to File Financing Statements</b>.&#160;
Borrower hereby authorizes Bank to file financing statements, without
notice to Borrower, with all appropriate jurisdictions to perfect or protect
Bank&#146;s interest or rights hereunder.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>REPRESENTATIONS
AND WARRANTIES</u></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Borrower
represents and warrants as follows:</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5.1</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Due
Organization, Authorization; Power and Authority</b>.&#160; Borrower and each of its Domestic
Subsidiaries is validly existing and in good standing as a Registered
Organization in its jurisdiction of formation and is qualified and licensed to
do business and is in good standing in any jurisdiction in which the conduct of
its business or its ownership of property requires that it be qualified except
where the failure to do so could not reasonably be expected to have a material
adverse effect on Borrower&#146;s business.&#160;
In connection with this Agreement, Borrower has delivered to Bank
completed certificates each signed by Borrower and Guarantor, respectively,
entitled &#147;Perfection Certificate&#148;.&#160;
Borrower represents and warrants to Bank that (a)&nbsp;Borrower&#146;s exact
legal name is that indicated on the Perfection Certificate and on the signature
page&nbsp;hereof; (b)&nbsp;Borrower is an organization of the type and is
organized in the jurisdiction set forth in the Perfection Certificate; (c)&nbsp;the
Perfection Certificate accurately sets forth Borrower&#146;s organizational
identification number or accurately states that Borrower has none; (d)&nbsp;the
Perfection Certificate accurately sets forth Borrower&#146;s place of business, or,
if more than one, its chief executive office as well as Borrower&#146;s mailing
address (if different than its chief executive office); (e)&nbsp;Borrower (and
each of its predecessors) has not, in the past five (5)&nbsp;years, changed its
jurisdiction of formation, organizational structure or type, or any
organizational number assigned by its jurisdiction; and (f)&nbsp;all other
information set forth on the Perfection Certificate pertaining to Borrower and
each of its Subsidiaries is accurate and complete (it being understood and agreed that Borrower may from time to time update
certain information in the Perfection Certificate after the Effective Date to
the extent permitted by one or more specific provisions in this Agreement).&#160; If Borrower is not now a Registered
Organization but later becomes one, Borrower shall promptly notify Bank of such
occurrence and provide Bank with Borrower&#146;s organizational identification
number.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The execution, delivery
and performance by Borrower of the Loan Documents to which it is a party have
been duly authorized, and do not (i)&nbsp;conflict with any of Borrower&#146;s
organizational documents, (ii)&nbsp;contravene, conflict with, constitute a
default under or violate any material Requirement of Law, (iii)&nbsp;contravene,
conflict or violate any applicable order, writ, judgment, injunction, decree,
determination or award of any Governmental Authority by which Borrower or any
its Subsidiaries or any of their property or assets may be bound or affected, (iv)&nbsp;require
any action by, filing, registration, or qualification with, or Governmental Approval
from, any Governmental Authority (except such Governmental Approvals which have
already been obtained and are in full force and effect or (v)&nbsp;constitute
an event of default under any material agreement by which Borrower is
bound.&#160; Borrower is not in default under
any agreement to which it is a party or by which it is bound in which the
default could reasonably be expected to have a material adverse effect on
Borrower&#146;s business.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5.2</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Collateral</b>.&#160; Borrower has good title to, has rights in,
and the power to transfer each item of the Collateral upon which it purports to
grant a Lien hereunder, free and clear of any and all Liens except Permitted
Liens.&#160; Borrower has no deposit accounts
other than the deposit accounts with Bank, the deposit accounts, if any,
described in the Perfection Certificate delivered to Bank in connection
herewith, or of which Borrower has given Bank notice and taken such actions as
are necessary to give Bank a perfected security interest therein.&#160; The Accounts are bona fide, existing
obligations of the Account Debtors.</h2>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=6,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=946973,FOLIO='6',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-01_ZBI40202.CHC",USER="LPALLES",CD='May 10 23:54 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Collateral is not in the possession of any third
party bailee (such as a warehouse) except as otherwise provided in the
Perfection Certificate.&#160; None of the components
of the Collateral shall be maintained at locations other than as provided in
the Perfection Certificate or as permitted pursuant to Section&nbsp;7.2.&#160; Borrower shall at all times during the term
of this Agreement maintain at least two-thirds of its Inventory (based upon the
fair market value of all Inventory) at Borrower&#146;s 108 Cherry Hill Drive,
Beverly, Massachusetts location and at other locations of the Borrower for
which Bank has received a landlord&#146;s waiver in form and substance reasonably
satisfactory to Bank.</font></h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">All Inventory is in all material respects of good and
marketable quality, free from material defects.</font></h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Axcelis Technologies,&nbsp;Inc. is the sole owner of
the intellectual property set forth on the Perfection Certificate, except for
non-exclusive licenses granted to its customers in the ordinary course of
business.&#160; Each patent is presumed valid
and enforceable and no part of the intellectual property has been judged
invalid or unenforceable, in whole or in part, and to the best of Borrower&#146;s
knowledge, no claim has been made that any part of the intellectual property
violates the rights of any third party.</font></h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Except as noted on the Perfection Certificate,
Borrower is not a party to, nor is bound by, any material license or other
agreement with respect to which Borrower is the licensee (a)&nbsp;that
prohibits or otherwise restricts Borrower from granting a security interest in
Borrower&#146;s interest in such license or agreement or any other property, or (b)&nbsp;for
which a default under or termination of could interfere with the Bank&#146;s right
to sell any Collateral.&#160; Borrower shall
provide written notice to Bank within thirty (30) days of entering or becoming
bound by any such license or agreement (other than over-the-counter software
that is commercially available to the public).&#160;
Borrower shall take such steps as Bank requests to obtain the consent
of, or waiver by, any person whose consent or waiver is necessary for (x)&nbsp;all
such licenses or agreements to be deemed &#147;Collateral&#148; and for Bank to have a
security interest in it that might otherwise be restricted or prohibited by law
or by the terms of any such license or agreement, whether now existing or
entered into in the future, and (y)&nbsp;Bank to have the ability in the event
of a liquidation of any Collateral to dispose of such Collateral in accordance
with Bank&#146;s rights and remedies under this Agreement and the other Loan
Documents.</font></h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5.3</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Accounts
Receivable; Inventory</b>.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>For
each Account with respect to which Advances are requested, on the date each
Advance is requested and made, such Account shall be an Eligible Account.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>All
statements made and all unpaid balances appearing in all invoices, instruments
and other documents evidencing the Eligible Accounts are and shall be true and
correct and all such invoices, instruments and other documents, and all of
Borrower&#146;s Books are genuine and in all respects what they purport to be.&#160; Whether or not an Event of Default has
occurred and is continuing, Bank may notify any Account Debtor owing Borrower
money of Bank&#146;s security interest in such funds.&#160; All sales and other transactions underlying
or giving rise to each Eligible Account shall comply in all material respects
with all applicable laws and governmental rules&nbsp;and regulations.&#160; Borrower has no knowledge of any actual or
imminent Insolvency Proceeding of any Account Debtor whose accounts are
Eligible Accounts in any Transaction Report.&#160;
To the best of Borrower&#146;s knowledge, all signatures and endorsements on
all documents, instruments, and agreements relating to all Eligible Accounts
are genuine, and all such documents, instruments and agreements are legally
enforceable in accordance with their terms.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>For
any item of Inventory consisting of Eligible Inventory in any Transaction
Report, such Inventory (i)&nbsp;consists either of raw materials, or of
finished goods, in good, new, and salable condition, which is not perishable,
returned, consigned, obsolete, not sellable, damaged, or defective, and is not
comprised of demonstrative or custom inventory, works in progress, packaging or
shipping materials, or supplies; (ii)&nbsp;meets all applicable governmental
standards; (iii)&nbsp;has been manufactured in compliance with the Fair Labor
Standards Act; (iv)&nbsp;is not subject to any Liens, except the first priority
Liens granted or in favor of Bank under this Agreement or any of the other Loan
Documents or Permitted Liens; and (v)&nbsp;is located at Borrower&#146;s 108 Cherry
Hill Drive, Beverly, Massachusetts location owned by Borrower or, provided that
Bank has received landlord&#146;s waivers in form and substance reasonably
satisfactory to Bank, at Borrower&#146;s 33 Cherry Hill Drive, Beverly,
Massachusetts and 54 Cherry Hill Drive, Beverly, Massachusetts locations.&#160; In addition, in the event the Sale and
Leaseback Transaction occurs, Borrower shall concurrently therewith furnish
Bank the waiver and agreement required by Section&nbsp;7.1 which</h4>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=7,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=291611,FOLIO='7',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-01_ZBI40202.CHC",USER="LPALLES",CD='May 10 23:54 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">shall include, inter alia, a landlord&#146;s waiver
reasonably satisfactory to Bank with respect to Borrower&#146;s 108 Cherry Hill
Drive, Beverly, Massachusetts location.</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5.4</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Litigation</b>.&#160; As of the Effective Date, except as disclosed
to Bank in writing, there are no actions or proceedings pending or, to the
knowledge of the Responsible Officers, threatened in writing by or against
Borrower or any of its Subsidiaries involving more than One Million Dollars
($1,000,000) or that would reasonably be expected to have a material adverse
effect on Borrower&#146;s business.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5.5</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>No
Material Deviation in Financial Statements</b>.&#160;
All consolidated financial statements for Borrower and any of its
Subsidiaries delivered to Bank fairly present in all material respects Borrower&#146;s
consolidated financial condition and Borrower&#146;s consolidated results of
operations.&#160; There has not been any
material deterioration in Borrower&#146;s consolidated financial condition since the
date of the most recent financial statements submitted to Bank.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5.6</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Solvency</b>.&#160; The fair salable value of Borrower&#146;s assets
(including goodwill minus disposition costs) exceeds the fair value of its
liabilities; Borrower is not left with unreasonably small capital after the
transactions in this Agreement; and Borrower is able to pay its debts
(including trade debts) as they mature.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5.7</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Regulatory
Compliance</b>.&#160; Borrower is not an &#147;investment
company&#148; or a company &#147;controlled&#148; by an &#147;investment company&#148; under the
Investment Company Act of 1940, as amended.&#160;
Borrower is not engaged as one of its important activities in extending
credit for margin stock (under Regulations X, T and U of the Federal Reserve
Board of Governors).&#160; Borrower has
complied in all material respects with the Federal Fair Labor Standards
Act.&#160; Neither Borrower nor any of its
Subsidiaries is a &#147;holding company&#148; or an &#147;affiliate&#148; of a &#147;holding company&#148; or
a &#147;subsidiary company&#148; of a &#147;holding company&#148; as each term is defined and used
in the Public Utility Holding Company Act of 2005.&#160; Borrower has not violated any laws,
ordinances or rules, the violation of which could reasonably be expected to
have a material adverse effect on its business.&#160;
None of Borrower&#146;s or any of its Subsidiaries&#146; properties or assets has
been used by Borrower or any Subsidiary or, to the best of Borrower&#146;s
knowledge, by previous Persons, in disposing, producing, storing, treating, or
transporting any hazardous substance other than legally.&#160; Borrower and each of its Subsidiaries have
obtained all consents, approvals and authorizations of, made all declarations
or filings with, and given all notices to, all Government Authorities that are
necessary to continue their respective businesses as currently conducted except
where the failure to make such declarations, notices or filings could not
reasonably be expected to have a material adverse effect on Borrower&#146;s
business.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5.8</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Subsidiaries;
Investments</b>.&#160; Borrower does not own
any stock, partnership interest or other equity securities except for Permitted
Investments.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5.9</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Tax
Returns and Payments; Pension Contributions</b>.&#160; Borrower and its Subsidiaries has timely
filed all required tax returns and reports, and has timely paid all foreign,
federal, state and local taxes, assessments, deposits and contributions owed by
Borrower or such Subsidiary.&#160; Borrower
may defer payment of any contested taxes, provided that Borrower (a)&nbsp;in
good faith contests its obligation to pay the taxes by appropriate proceedings
promptly and diligently instituted and conducted, (b)&nbsp;notifies Bank in
writing of the commencement of, and any material development in, the
proceedings, and (c)&nbsp;posts bonds or takes any other steps required to
prevent the governmental authority levying such contested taxes from obtaining
a Lien upon any of the Collateral that is other than a &#147;Permitted Lien&#148;.&#160; Borrower is unaware of any claims or
adjustments proposed for any of Borrower&#146;s prior tax years which could result
in additional taxes becoming due and payable by Borrower.&#160; Borrower has paid all amounts necessary to
fund all present pension, profit sharing and deferred compensation plans in
accordance with their terms, and Borrower has not withdrawn from participation
in, and has not permitted partial or complete termination of, or permitted the
occurrence of any other event with respect to, any such plan which could
reasonably be expected to result in any liability of Borrower, including any
liability to the Pension Benefit Guaranty Corporation or its successors or any
other governmental agency.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5.10</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Use of
Proceeds</b>.&#160; Borrower shall use the
proceeds of the Credit Extensions solely as working capital and to fund its
general business requirements and not for personal, family, household or
agricultural purposes.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5.11</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Full
Disclosure</b>.&#160; No written
representation, warranty or other statement of Borrower in any certificate or
written statement given to Bank, as of the date such representation, warranty,
or other statement was</h2>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=8,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=871912,FOLIO='8',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-01_ZBI40202.CHC",USER="LPALLES",CD='May 10 23:54 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">made, taken together with all such written
certificates and written statements given to Bank, contains any untrue
statement of a material fact or omits to state a material fact necessary to
make the statements contained in the certificates or statements not misleading
(it being recognized by Bank that the projections and forecasts provided by
Borrower in good faith and based upon reasonable assumptions are not viewed as
facts and that actual results during the period or periods covered by such
projections and forecasts may differ from the projected or forecasted results).</font></h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5.12</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Designation
of Obligations as Designated Senior Indebtedness.&#160; </b>All Obligations, including all principal,
interest (including all interest accruing after the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding), and all fees, costs,
expenses and other amounts accrued or due under this Agreement and otherwise
shall at all times constitute &#147;Designated Senior Indebtedness&#148; under the terms
of the Indenture and any similar agreement.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5.13</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Specific
Representation Regarding Matrix Integrated Systems Acquisition Corporation.</b>&#160; The sole assets of Matrix Integrated Systems
Acquisition Corporation, a wholly-owned Subsidiary of Axcelis Technologies,&nbsp;Inc.,
consist of (a)&nbsp;tangible assets having an aggregate fair market value of
not more than $50,000.00, (b)&nbsp;goodwill and (c)&nbsp;intellectual property
which is immaterial to the business of the Borrower and/or its Subsidiaries.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>AFFIRMATIVE
COVENANTS</u></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Borrower shall do all of
the following:</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.1</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Government
Compliance</b>.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Subject
to Sections 7.2 and 7.3, maintain its and all its Subsidiaries&#146; legal existence
and good standing in their respective jurisdictions of formation and maintain
qualification in each jurisdiction in which the failure to so qualify would
reasonably be expected to have a material adverse effect on Borrower&#146;s
business.&#160; Borrower shall comply, and
have each Subsidiary comply, with all laws, ordinances and regulations to which
it is subject, noncompliance with which could have a material adverse effect on
Borrower&#146;s business.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Obtain
all of the Governmental Approvals necessary for the performance by Borrower of
its obligations under the Loan Documents to which it is a party and the grant
of a security interest to Bank in all of its property.&#160; Borrower shall promptly provide copies of any
such obtained Governmental Approvals to Bank.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.2</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Financial
Statements, Reports, Certificates</b>.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Borrower
shall provide Bank with the following:</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h5 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt 1.0in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(i)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>upon
each request for a Credit Extension and, in all events, within thirty (30) days
after the end of each month a Transaction Report (and any schedules related
thereto including, but not limited to, a schedule of any litigation of the type
described in Section&nbsp;5.4 which may arise or be threatened from and after
the Effective Date);</h5>

<h5 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h5>

<h5 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt 1.0in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(ii)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>within
thirty (30) days after the end of each month, (A)&nbsp;monthly accounts
receivable agings, aged by invoice date, (B)&nbsp;monthly accounts payable
agings, aged by invoice date, and outstanding or held check registers, if any, (C)&nbsp;monthly
reconciliations of accounts receivable agings (aged by invoice date),
transaction reports and general ledger, and (D)&nbsp;monthly inventory reports
for Inventory valued on a first-in, first-out basis at the lower of cost or
market (in accordance with GAAP), Inventory backlog reports, or such other
inventory reports as are requested by Bank in its good faith business judgment;</h5>

<h5 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h5>

<h5 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt 1.0in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(iii)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>within
forty-five (45) days after the end of each fiscal quarter of Borrower, a
Compliance Certificate signed by a Responsible Officer, certifying that as of
the end of such quarter, Borrower was in full compliance with all of the terms
and conditions of this Agreement, and setting forth calculations showing
compliance with the financial covenants set forth in this Agreement and such
other information as Bank shall reasonably request, including, without
limitation, a statement that at the end of such quarter there were no held
checks;</h5>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=9,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=621567,FOLIO='9',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-01_ZBI40202.CHC",USER="LPALLES",CD='May 10 23:54 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h5 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt 1.0in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(iv)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>as
soon as available, and in any event within forty-five (45) days after the end
of each fiscal quarter of Borrower, quarterly unaudited financial statements,
prepared on a consolidated and consolidating (in a manner reasonably
satisfactory to Bank) basis;</h5>

<h5 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h5>

<h5 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt 1.0in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(v)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>within
sixty (60) days after the end of each fiscal year of Borrower, (A)&nbsp;annual
operating budgets (including income statements, balance sheets and cash flow
statements, by quarter) for the then current fiscal year of Borrower, and (B)&nbsp;annual
financial projections for the then current fiscal year (on a quarterly basis)
as approved by Borrower&#146;s board of directors, together with any related
business forecasts used in the preparation of such annual financial
projections, all prepared on a consolidated and consolidating (in a manner
reasonably satisfactory to Bank) basis; and</h5>

<h5 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h5>

<h5 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt 1.0in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(vi)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>as
soon as available, and in any event within one hundred twenty (120) days
following the end of Borrower&#146;s fiscal year, annual financial statements
prepared on a consolidated and consolidating (in a manner reasonably
satisfactory to Bank)&#160; basis, certified
by, and with an unqualified opinion of, independent certified public
accountants acceptable to Bank.</h5>

<h5 style="font-weight:normal;margin:0in 0in .0001pt 1.0in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h5>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>within
ten (10)&nbsp;days after filing, all reports on Form&nbsp;10-K, 10-Q and 8-K
filed with the Securities and Exchange Commission or a link thereto on Borrower&#146;s
or another website on the Internet.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Prompt
written notice of (i)&nbsp;any material change in the composition of the
intellectual property or (ii)&nbsp;Borrower&#146;s knowledge of an event that
materially adversely affects the value of the intellectual property.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.3</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Accounts
Receivable</b>.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Schedules
and Documents Relating to Accounts</u><i>. </i>&#160;Borrower shall deliver to Bank Transaction
Reports, as provided in Section&nbsp;6.2, on Bank&#146;s standard forms; provided,
however, that Borrower&#146;s failure to execute and deliver the same shall not
affect or limit Bank&#146;s Lien and other rights in all of Borrower&#146;s Accounts, nor
shall Bank&#146;s failure to advance or lend against a specific Account affect or
limit Bank&#146;s Lien and other rights therein.&#160;
If requested by Bank, Borrower shall furnish Bank with copies (or, at
Bank&#146;s request, originals) of all contracts, orders, invoices, and other
similar documents, and all shipping instructions, delivery receipts, bills of
lading, and other evidence of delivery, for any goods the sale or disposition
of which gave rise to such Accounts.&#160; In
addition, Borrower shall deliver to Bank, on its request, the originals of all
instruments, chattel paper, security agreements, guarantees and other documents
and property evidencing or securing any Accounts, in the same form as received,
with all necessary indorsements, and copies of all credit memos.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Disputes</u>.&#160; Borrower shall promptly notify Bank of all
disputes or claims relating to material Accounts.&#160; Borrower may forgive (completely or
partially), compromise, or settle any Account for less than payment in full, or
agree to do any of the foregoing so long as (i)&nbsp;Borrower does so in good
faith, in a commercially reasonable manner, in the ordinary course of business,
in arm&#146;s-length transactions, and reports the same to Bank in the regular
reports provided to Bank; (ii)&nbsp;no Default or Event of Default has occurred
and is continuing; and (iii)&nbsp;after taking into account all such discounts,
settlements and forgiveness, the total outstanding Advances will not exceed the
lesser of the Revolving Line or the Borrowing Base.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Collection
of Accounts</u>.&#160; Borrower shall have the
right to collect all Accounts, unless and until a Default or an Event of
Default has occurred and is continuing.&#160;
Whether or not an Event of Default has occurred and is continuing,
Borrower shall hold all payments on, and proceeds of, Accounts in trust for
Bank, and Borrower shall immediately deliver all such payments and proceeds to
Bank in their original form, duly endorsed, to be applied to the Obligations
pursuant to the terms of Section&nbsp;9.4 hereof.&#160; All proceeds of Accounts shall be deposited
by Borrower into a lockbox account, or such other &#147;blocked account&#148; as Bank may
specify, pursuant to a blocked account agreement in such form as Bank may
specify; <u>provided</u>, <u>however</u>, in the event (i)&nbsp;Borrower
maintains or exceeds $50,000,000 in (A)&nbsp;Borrower&#146;s unrestricted cash plus
Cash Equivalents on deposit at Bank plus (B)&nbsp;unused availability under the
Revolving Line, as determined by Bank with reference to the Availability Amount
and (ii)&nbsp;no Default or Event of Default has occurred and is continuing,
then all payments on, and proceeds of, Accounts shall be transferred by Bank to
an operating account of Borrower maintained at Bank.</h4>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=10,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=705315,FOLIO='10',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-01_ZBI40202.CHC",USER="LPALLES",CD='May 10 23:54 2008' -->



<div style="font-family:Times New Roman;">

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Returns</u><i>.</i>&#160; Provided no Event
of Default has occurred and is continuing, if any Account Debtor returns any
Inventory to Borrower, Borrower shall promptly (i)&nbsp;determine the reason
for such return, (ii)&nbsp;issue a credit memorandum to the Account Debtor in the
appropriate amount, and (iii)&nbsp;provide a copy of such credit memorandum to
Bank, upon request from Bank.&#160; In the
event any attempted return occurs after the occurrence and during the
continuance of any Event of Default, Borrower shall hold the returned Inventory
in trust for Bank, and&nbsp;immediately notify Bank of the return of the
Inventory.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(e)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Verification</u><i>.</i>&#160; Bank may, from time
to time, verify directly with the respective Account Debtors the validity,
amount and other matters relating to the Accounts, either in the name of
Borrower or Bank or such other name as Bank may choose.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(f)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>No Liability</u><i>.</i>&#160; Bank shall not be
responsible or liable for any shortage or discrepancy in, damage to, or loss or
destruction of, any goods, the sale or other disposition of which gives rise to
an Account, or for any error, act, omission, or delay of any kind occurring in
the settlement, failure to settle, collection or failure to collect any
Account, or for settling any Account in good faith for less than the full
amount thereof, nor shall Bank be deemed to be responsible for any of Borrower&#146;s
obligations under any contract or agreement giving rise to an Account.&#160; Nothing herein shall, however, relieve Bank
from liability for its own gross negligence or willful misconduct.</h4>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.4</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Remittance of Proceeds</b>.&#160; Except as otherwise provided in Section&nbsp;6.3(c),
deliver, in kind, all proceeds arising from the disposition of any Collateral
to Bank in the original form in which received by Borrower not later than the
following Business Day after receipt by Borrower, to be applied to the
Obligations pursuant to the terms of Section&nbsp;9.4 hereof; provided that, if
no Default or Event of Default has occurred and is continuing, Borrower shall
not be obligated to remit to Bank the proceeds of the sale of worn out or
obsolete Equipment disposed of by Borrower in good faith in an arm&#146;s length
transaction for an aggregate purchase price of One Hundred Thousand Dollars ($100,000.00) or less (for all such transactions
in any fiscal year).&#160; Borrower agrees that
it will not commingle proceeds of Collateral with any of Borrower&#146;s other funds
or property, but will hold such proceeds separate and apart from such other
funds and property and in an express trust for Bank.&#160; Nothing in this Section&nbsp;6.4 limits the
restrictions on disposition of Collateral set forth elsewhere in this
Agreement.</h2>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

<p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.5</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font face="Times New Roman" style="font-weight:bold;">Taxes; Pensions</font></b><font face="Times New Roman">.&#160;
Timely file, and require each of its Subsidiaries to timely file, all
required tax returns and reports and timely pay, and require each of its
Subsidiaries to timely file, all foreign, federal, state and local taxes,
assessments, deposits and contributions owed by Borrower and each of its
Subsidiaries, except for deferred payment of any taxes contested pursuant to
the terms of Section&nbsp;5.9 hereof, and shall deliver to Bank, on demand,
appropriate certificates attesting to such payments, and pay all amounts
necessary to fund all present pension, profit sharing and deferred compensation
plans in accordance with their terms.</font></p>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.6</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Access to Collateral;
Books and Records</b>.&#160; Upon reasonable
notice (provided no notice is required if an Event of Default has occurred and
is continuing), Bank, or its agents, shall have the right, with such frequency
as Bank shall determine necessary in its sole discretion, to inspect the Collateral
and the right to audit and copy Borrower&#146;s Books.&#160; The foregoing inspections and audits shall be
at Borrower&#146;s expense, and the charge therefor shall be $750 per person per day
(or such higher amount as shall represent Bank&#146;s then-current standard charge
for the same), plus reasonable out-of-pocket expenses; provided, however, that
Bank shall conduct no more than two (2)&nbsp;such audit(s)&nbsp;per fiscal year
at Borrower&#146;s expense in the event no Event of Default has occurred and is
continuing.&#160; In the event Borrower and
Bank schedule an audit more than ten (10)&nbsp;days in advance, and Borrower
cancels or seeks to reschedules the audit with less than ten (10)&nbsp;days
written notice to Bank, then (without limiting any of Bank&#146;s rights or
remedies), Borrower shall pay Bank a fee of $1,000 plus any out-of-pocket
expenses incurred by Bank to compensate Bank for the anticipated costs and
expenses of the cancellation or rescheduling.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.7</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b>Insurance</b>.&#160; Keep its business and the Collateral insured
for risks and in amounts standard for companies in Borrower&#146;s industry and
location and as Bank may reasonably request.&#160;
Insurance policies shall be in a form, with companies, and in amounts
that are satisfactory to Bank.&#160; All
property policies shall have a loss payable endorsement showing Bank as loss
payee and waive subrogation against Bank, and all liability policies shall
show, or have endorsements showing, Bank as an additional insured.&#160; All policies (or the loss payable and
additional insured endorsements) shall provide that the insurer shall endeavor
to give Bank at least twenty (20) days notice before canceling, amending, or
declining to renew its policy.&#160; At Bank&#146;s
request, Borrower shall deliver certificates of insurance and/or copies of
policies and evidence of all premium payments.&#160;
Proceeds payable under any property </h2>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">11</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=11,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=295484,FOLIO='11',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-03_ZBI40202.CHC",USER="LPALLES",CD='May 10 23:57 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">policy shall, at Bank&#146;s option, be payable to Bank on account of the
Obligations.&#160; Notwithstanding the
foregoing, (a)(x)&nbsp;so long as no Event of Default has occurred and is
continuing, Borrower shall have the option of applying the proceeds of any
casualty policy up to One Hundred Thousand Dollars ($100,000.00) with respect
to any loss, but not exceeding Two Hundred Fifty Thousand&#160; Dollars ($250,000.00) in the aggregate for
all losses under all casualty policies in any one year, toward the replacement
or repair of destroyed or damaged property; <u>provided</u> that any such
replaced or repaired property (i)&nbsp;shall be of equal or like value as the
replaced or repaired Collateral and (ii)&nbsp;shall be deemed Collateral in
which Bank has been granted a first priority security interest, and (b)&nbsp;after
the occurrence and during the continuance of an Event of Default, all proceeds
payable under such casualty policy shall, at the option of Bank, be payable to
Bank on account of the Obligations.&#160; If
Borrower fails to obtain insurance as required under this Section&nbsp;6.7 or
to pay any amount or furnish any required proof of payment to third persons and
Bank, Bank may make all or part of such payment or obtain such insurance
policies required in this Section&nbsp;6.7, and take any action under the
policies Bank deems prudent.</font></h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.8</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Operating Accounts</b>.</h2>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Maintain
(i)&nbsp;not less than 60% of the dollar value of all Unrestricted Cash of Borrower
and its Subsidiaries with banks or financial institutions located within the
United States; and (ii)&nbsp;Borrower&#146;s and its Domestic Subsidiaries&#146; primary
operating accounts, disbursement accounts, and other deposit accounts and
securities accounts with Bank and Bank&#146;s Affiliates, which accounts shall
represent at least 51% of the dollar value of all of Borrower&#146;s and its
Subsidiaries&#146; operating and other deposit accounts and securities accounts at
all banks or financial institutions.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Provide
Bank five (5)&nbsp;days prior written notice before establishing any Collateral
Account within the United States at or with any bank or financial institution
other than Bank or Bank&#146;s Affiliates.&#160;
For each Collateral Account located within the United States that Borrower
at any time maintains, Borrower shall cause the applicable bank or financial
institution (other than Bank) at or with which any such Collateral Account is
maintained to execute and deliver a Control Agreement or other appropriate
instrument with respect to such Collateral Account to perfect Bank&#146;s Lien in
such Collateral Account in accordance with the terms hereunder.&#160; The provisions of the previous sentence shall
not apply to deposit accounts exclusively used for payroll, payroll taxes and
other employee wage and benefit payments to or for the benefit of Borrower&#146;s
employees and identified to Bank by Borrower as such, or to the Borrower&#146;s
pledged time deposit maintained with ABN Amro Bank to secure the letters of credit issued in connection with value added tax
recovery initiatives of Axcelis Technologies GmbH, or to those
Collateral Accounts identified on Schedule 6.8(b)&nbsp;hereto, <u>provided</u>
that the amounts on deposit in such Collateral Accounts shall not exceed the
maximum amounts indicated on Schedule 6.8(b).</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Notwithstanding
(i)&nbsp;the requirement in Section&nbsp;6.8(a)&nbsp;that all of Borrower&#146;s and
its Domestic Subsidiaries&#146; primary operating accounts, disbursement accounts,
and other deposit accounts and securities accounts be maintained with Bank and
Bank&#146;s Affiliates; or (ii)&nbsp;the requirement in Section&nbsp;6.8(b)&nbsp;that
Borrower shall cause any bank or financial institution (other than Bank) at or
with which any Collateral Account is maintained to execute and deliver a
Control Agreement or other appropriate instrument with respect to such
Collateral Account to perfect Bank&#146;s Lien in such Collateral Account; Bank
agrees that Borrower shall have ninety (90) days from the Effective Date (or
such longer period as Bank may agree to in writing) to close all of Borrower&#146;s
and its Domestic Subsidiaries&#146; primary operating accounts, disbursement
accounts, and other deposit accounts and securities accounts located with banks
or financial institutions other than Bank and Bank&#146;s Affiliates; <u>provided</u>,
<u>however</u>, that with respect to Account No.&nbsp;5800355702 maintained
with LaSalle Bank (the &#147;<b>Existing Lockbox Account</b>&#148;),
Borrower shall cause such account to be closed within 120 days from the
Effective Date (or such longer period as Bank may agree to in writing) provided
that, at all times prior to such closure, Borrower shall cause all deposits in
the Existing Lockbox Account to be swept on a daily basis and deposited into a
lockbox account, or such other &#147;blocked account&#148;, maintained with Bank; <u>provided</u>
<u>further</u>, that at all times from and after the Effective Date, Borrower
shall maintain sufficient deposits with Bank and Bank&#146;s Affiliates to comply
with the minimum dollar value requirements set forth in clauses (i)&nbsp;and (ii)&nbsp;of
Section&nbsp;6.8(a).</h4>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.9</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Financial Covenants</b>.</h2>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Liquidity</u>.&#160; (i)&nbsp;At all times until Borrower
furnishes Bank with evidence satisfactory to Bank that Borrower, on a
consolidated basis, has achieved Net Income of at least $1.00 for two
consecutive fiscal quarters, Borrower shall maintain the greater of (A)&nbsp;$50,000,000
or (B)&nbsp;two times (2x) the amount of all outstanding Credit </h4>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">12</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=12,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=72179,FOLIO='12',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-03_ZBI40202.CHC",USER="LPALLES",CD='May 10 23:57 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Extensions (including all amounts outstanding under
the Receivables Purchase Facility), of (x)&nbsp;unrestricted cash and Cash
Equivalents at Bank plus (y)&nbsp;unused availability under the Revolving Line,
as determined by Bank with reference to the Availability Amount set forth
herein; and (ii)&nbsp;at all times thereafter, Borrower shall maintain at least
$40,000,000 of (A)&nbsp;unrestricted cash and Cash Equivalents at Bank plus (B)&nbsp;unused
availability under the Revolving Line, as determined by Bank with reference to
the Availability Amount set forth herein; <u>provided</u>  <u>that</u>, in no
event shall the minimum liquidity covenant be reduced to $40,000,000 until
after such time as the Convertible Senior Subordinated Notes have been
satisfied in full and the Indenture has been terminated.</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Maximum Losses</u>.&#160; As of the last day of each applicable fiscal
quarter, on a consolidated basis, Borrower shall not suffer any loss in excess
of: (i)&nbsp;$17,500,000 for the fiscal quarter ended March&nbsp;31, 2008; (ii)&nbsp;$7,500,000
for the fiscal quarter ended June&nbsp;30, 2008; and (iii)&nbsp;$2,500,000 for
the fiscal quarter ended September&nbsp;30, 2008.</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Profitability</u>.&#160; As of the last day of each applicable fiscal
quarter, on a consolidated basis, Borrower shall maintain a minimum positive
Net Income of $1 for each fiscal quarter following the fiscal quarter ended September&nbsp;30,
2008.</h4>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt 6.0pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt 6.0pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.10</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Protection
and Registration of Intellectual Property Rights</b>.&#160; Borrower shall: (a)&nbsp;protect, defend and
maintain the validity and enforceability of its material intellectual property;
(b)&nbsp;promptly advise Bank in writing of material infringements of its
intellectual property; and (c)&nbsp;not allow any intellectual property material
to Borrower&#146;s business to be abandoned, forfeited or dedicated to the public
without Bank&#146;s written consent.&#160; If
Borrower (i)&nbsp;obtains any patent, registered trademark or servicemark,
registered copyright, registered mask work, or any pending application for any
of the foregoing, whether as owner, licensee or otherwise, or (ii)&nbsp;applies
for any patent or the registration of any trademark or servicemark, then
Borrower shall provide written notice thereof to Bank on a quarterly basis upon
the delivery of the Compliance Certificate for such period, and shall execute
such intellectual property security agreements and other documents and take
such other actions as Bank shall request in its good faith business judgment to
perfect and maintain a first priority perfected security interest in favor of
Bank in such property.&#160; If Borrower
decides to register any copyrights or mask works in the United States Copyright
Office, Borrower shall: (x)&nbsp;provide Bank with at least fifteen (15) days
prior written notice of Borrower&#146;s intent to register such copyrights or mask
works together with a copy of the application it intends to file with the
United States Copyright Office (excluding exhibits thereto); (y)&nbsp;execute
an intellectual property security agreement and such other documents and take
such other actions as Bank may request in its good faith business judgment to
perfect and maintain a first priority perfected security interest in favor of
Bank in the copyrights or mask works intended to be registered with the United States
Copyright Office; and (z)&nbsp;record such intellectual property security
agreement with the United States Copyright Office contemporaneously with filing
the copyright or mask work application(s)&nbsp;with the United States Copyright
Office.&#160; Upon Bank&#146;s request, Borrower
shall promptly provide to Bank copies of all applications that it files for
patents or for the registration of trademarks, servicemarks, copyrights or mask
works, together with evidence of the recording of the intellectual property
security agreement necessary for Bank to perfect and maintain a first priority
perfected security interest in such property.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.11</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160; </font>Litigation Cooperation</b>.&#160; From the date hereof and continuing through
the termination of this Agreement, make available to Bank, without expense to
Bank, Borrower and its officers, employees and agents and Borrower&#146;s books and
records, to the extent that Bank may deem them reasonably necessary to
prosecute or defend any third-party suit or proceeding instituted by or against
Bank with respect to any Collateral or relating to Borrower.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.12</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160; </font>Further Assurances</b>.&#160; Execute any further instruments and take
further action as Bank reasonably requests to perfect or continue Bank&#146;s Lien
in the Collateral or to effect the purposes of this Agreement.&#160; Deliver to Bank,<b>  </b>within
five (5)&nbsp;days after the same are sent or received, copies of all
correspondence, reports, documents and other filings with any Governmental
Authority regarding compliance with or maintenance of Governmental Approvals or
Requirements of Law or that could reasonably be expected to have a material
effect on any of the Governmental Approvals or otherwise on the operations of
Borrower or any of its Subsidiaries.</h2>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

<p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6</font></b>.<b>13</b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160; </font>Designated
Senior Indebtedness.</b>&#160; Borrower shall
designate all principal of, interest (including all interest accruing after the
commencement of any bankruptcy or similar proceeding, whether or not a claim
for post-petition interest is allowable as a claim in any such proceeding), and
all fees, costs, expenses and other amounts accrued or due under this Agreement
as &#147;Designated Senior Indebtedness&#148;, or such similar term, in any future </p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">13</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=13,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=241497,FOLIO='13',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-03_ZBI40202.CHC",USER="LPALLES",CD='May 10 23:57 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Subordinated Debt
incurred by Borrower after the date hereof, if such Subordinated Debt contains
such term or similar term and if the effect of such designation is to grant to
Bank the same or similar rights as granted to Bank as a holder of &#147;Designated
Senior Indebtedness&#148; under the Indenture and any similar agreement.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">7</font></b><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><u style="font-weight:bold;">NEGATIVE COVENANTS</u></b></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Borrower shall not do any
of the following without Bank&#146;s prior written consent:</font></p>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">7.1</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Dispositions</b>.&#160; Convey, sell, lease, transfer or otherwise
dispose of (collectively, &#147;<b>Transfer</b>&#148;), or
permit any of its Subsidiaries to Transfer, all or any part of its business or
property, except for Transfers (a)&nbsp;of Inventory in the ordinary course of
business; (b)&nbsp;of worn-out or obsolete Equipment; (c)&nbsp;in connection
with Permitted Liens and Permitted Investments; (d)&nbsp;of non-exclusive
licenses for the use of the property of Borrower or its Subsidiaries in the
ordinary course of business; and (e)&nbsp;in the event no Default or Event of
Default has occurred and is continuing, the Sale Leaseback Transaction, <u>provided
that</u> (i)&nbsp;not less than seventy-five percent (75%) of the proceeds of
the Sale Leaseback Transaction shall be maintained at Bank at all times,
provided, however, subject to the terms of Section&nbsp;7.9, such proceeds may
be used to retire Borrower&#146;s indebtedness under the Convertible Senior
Subordinated Notes and (ii)&nbsp;Borrower shall have received a waiver and
agreement from the buyer/lessor under the Sale Leaseback Transaction in form
and substance annexed hereto as Exhibit&nbsp;7.1.&#160; Concurrently with the consummation of the
Sale Leaseback Transaction in accordance with the forgoing, Bank shall provide
a discharge of the Negative Pledge.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">7.2</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Changes in Business,
Management, Ownership, Control, or Business Locations</b>.&#160; (a)&nbsp;Engage in or permit any of its
Subsidiaries to engage in any business other than the businesses currently
engaged in by Borrower and such Subsidiary, as applicable, or reasonably
related thereto; (b)&nbsp;liquidate or dissolve, other than the dissolution of
the Subsidiaries identified on Schedule 7.2 attached hereto; or (c)&nbsp;have a
material change in executive management (provided that Borrower shall have
ninety (90) days to retain a replacement reasonably acceptable to Bank) or
permit or suffer any Change in Control.&#160;
Borrower shall not, without at least thirty (30) days prior written
notice to Bank: (1)&nbsp;add any new offices or business locations, including
warehouses (unless such new offices or business locations contain less than One
Million Dollars ($1,000,000.00) in Borrower&#146;s assets or property or Borrower
obtains a landlord agreement or bailee agreement in form and substance
reasonably satisfactory to Bank), (2)&nbsp;change its jurisdiction of
organization, (3)&nbsp;change its organizational structure or type, (4)&nbsp;change
its legal name, or (5)&nbsp;change any organizational number (if any) assigned
by its jurisdiction of organization.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">7.3</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Mergers or Acquisitions</b>.&#160; Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with any other Person, or acquire, or
permit any of its Subsidiaries to acquire, all or substantially all of the
capital stock or property of another Person.&#160;
A Subsidiary (other than a Domestic Subsidiary) may merge or consolidate
into another Subsidiary or into Borrower and a Domestic Subsidiary may merge
into another Domestic Subsidiary or into Borrower.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">7.4</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Indebtedness</b>.&#160; Create, incur, assume, or be liable for any
Indebtedness, or permit any Subsidiary to do so, other than Permitted
Indebtedness.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">7.5</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Encumbrance</b>.&#160; Create, incur, allow, or suffer any Lien on
any of its property, or assign or convey any right to receive income, including
the sale of any Accounts, or permit any of its Subsidiaries to do so, except
for Permitted Liens, permit any Collateral not to be subject to the first
priority security interest granted herein, or enter into any agreement,
document, instrument or other arrangement (except with or in favor of Bank)
with any Person which directly or indirectly prohibits or has the effect of
prohibiting Borrower or any Subsidiary from assigning, mortgaging, pledging,
granting a security interest in or upon, or encumbering any of Borrower&#146;s or
any Subsidiary&#146;s intellectual property, except as is otherwise permitted in Section&nbsp;7.1
hereof and the definition of &#147;Permitted Lien&#148; herein.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">7.6</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Maintenance of
Collateral Accounts</b>.&#160; Maintain any
Collateral Account except pursuant to the terms of Section&nbsp;6.8.(b)&nbsp;hereof.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">7.7</font></b><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b>Distributions;
Investments</b>.&#160; (a)&nbsp;Pay any
dividends or make any distribution or payment or redeem, retire or purchase any
capital stock provided that (i)&nbsp;Borrower may convert any of its
convertible securities into other securities pursuant to the terms of such
convertible securities or otherwise in exchange thereof, and </h2>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=14,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=303662,FOLIO='14',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-03_ZBI40202.CHC",USER="LPALLES",CD='May 10 23:57 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(ii)&nbsp;Borrower may pay dividends solely in common
stock; or (b)&nbsp;directly or indirectly make any Investment other than
Permitted Investments, or permit any of its Subsidiaries to do so.</font></h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">7.8</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Transactions with
Affiliates</b>.&#160; Directly or indirectly
enter into or permit to exist any material transaction with any Affiliate of
Borrower, except for transactions that are in the ordinary course of Borrower&#146;s
business, upon fair and reasonable terms that are no less favorable to Borrower
than would be obtained in an arm&#146;s length transaction with a non-affiliated
Person.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">7.9</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Subordinated Debt</b>.&#160; (a)&nbsp;Make or permit any payment on any
Subordinated Debt, except under the terms of the subordination, intercreditor,
or other similar agreement to which such Subordinated Debt is subject;
provided, however, Borrower acknowledges and agrees that no payments will be
made on account of the Convertible Senior Subordinated Notes in the event any
Default or Event of Default then exists or would occur after giving effect to
any such payment having been made, or (b)&nbsp;amend any provision in any
document relating to the Subordinated Debt which would increase the amount
thereof or adversely affect the subordination thereof to Obligations owed to
Bank.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">7.10</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Compliance</b>.&#160; Become an &#147;investment company&#148; or a company
controlled by an &#147;investment company&#148;, under the Investment Company Act of
1940, as amended, or undertake as one of its important activities extending
credit to purchase or carry margin stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System), or use the proceeds of any
Credit Extension for that purpose; fail to meet the minimum funding
requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as
defined in ERISA, to occur; fail to comply with the Federal Fair Labor
Standards Act or violate any other law or regulation, if the violation could
reasonably be expected to have a material adverse effect on Borrower&#146;s
business, or permit any of its Subsidiaries to do so; withdraw or permit any
Subsidiary to withdraw from participation in, permit partial or complete
termination of, or permit the occurrence of any other event with respect to,
any present pension, profit sharing and deferred compensation plan which could
reasonably be expected to result in any liability of Borrower, including any
liability to the Pension Benefit Guaranty Corporation or its successors or any
other governmental agency.</h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">8</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>EVENTS OF DEFAULT</u></b></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Any one of the following
shall constitute an event of default (an &#147;<b>Event of Default</b>&#148;)
under this Agreement:</font></p>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">8.1</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Payment Default</b>.&#160; Borrower fails to (a)&nbsp;make any payment
of principal or interest on any Credit Extension on its due date, or (b)&nbsp;pay
any other Obligations within three (3)&nbsp;Business Days after such
Obligations are due and payable (which three (3)&nbsp;day grace period shall
not apply to payments due on the Revolving Line Maturity Date).&#160; During the cure period, the failure to cure
the payment default is not an Event of Default (but no Credit Extension will be
made during the cure period);</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">8.2</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Covenant Default</b>.</h2>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&nbsp;Borrower fails
or neglects to perform any obligation in Sections 6.2, 6.4, 6.7, 6.8, 6.9, 6.12
or violates any covenant in Section&nbsp;7; or</font></p>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&nbsp;Borrower fails or neglects to perform, keep,
or observe any other term, provision, condition, covenant or agreement
contained in this Agreement or any Loan Documents, and as to any default (other
than those specified in this Section&nbsp;8) under such other term, provision,
condition, covenant or agreement that can be cured, has failed to cure the
default within ten (10)&nbsp;days after the occurrence thereof; provided,
however, that if the default cannot by its nature be cured within the ten (10)&nbsp;day
period or cannot after diligent attempts by Borrower be cured within such ten (10)&nbsp;day
period, and such default is likely to be cured within a reasonable time, then
Borrower shall have an additional period (which shall not in any case exceed
thirty (30) days) to attempt to cure such default, and within such reasonable
time period the failure to cure the default shall not be deemed an Event of
Default (but no Credit Extensions shall be made during such cure period).&#160; Grace periods provided under this section
shall not apply, among other things, to financial covenants or any other
covenants set forth in subsection (a)&nbsp;above;</font></h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">8.3</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Material Adverse Change</b>.&#160; A Material Adverse Change occurs;</h2>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">15</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=15,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=951480,FOLIO='15',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-03_ZBI40202.CHC",USER="LPALLES",CD='May 10 23:57 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">8.4</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Attachment; Levy;
Restraint on Business</b>.&#160; (a)&nbsp;(i)&nbsp;The
service of process seeking to attach, by trustee or similar process, any funds
of Borrower or of any entity under control of Borrower (including a Subsidiary)
on deposit with Bank or any Bank Affiliate, or (ii)&nbsp;a notice of lien,
levy, or assessment is filed against any of Borrower&#146;s assets by any government
agency, and the same under subclauses (i)&nbsp;and (ii)&nbsp;hereof are not,
within ten (10)&nbsp;days after the occurrence thereof, discharged or stayed
(whether through the posting of a bond or otherwise); provided, however, no
Credit Extensions shall be made during any ten (10)&nbsp;day cure period; and (b)&nbsp;(i)&nbsp;any
material portion of Borrower&#146;s assets is attached, seized, levied on, or comes
into possession of a trustee or receiver, or (ii)&nbsp;any court order enjoins,
restrains, or prevents Borrower from conducting any material part of its
business;</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">8.5</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Insolvency</b>.&#160; (a)&nbsp;Borrower is unable to pay its debts
(including trade debts) as they become due or otherwise becomes insolvent; (b)&nbsp;Borrower
begins an Insolvency Proceeding; or (c)&nbsp;an Insolvency Proceeding is begun
against Borrower and not dismissed or stayed within forty-five (45) days (but
no Credit Extensions shall be made while of any of the conditions described in
clause (a)&nbsp;exist and/or until any Insolvency Proceeding is dismissed);</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">8.6</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Other Agreements</b>.&#160; There is a default in any agreement to which
Borrower or any Guarantor is a party with a third party or parties resulting in
a right by such third party or parties, whether or not exercised, to accelerate
the maturity of any Indebtedness in an amount in excess of Five Hundred
Thousand Dollars ($500,000.00) or that could have a material adverse effect on
Borrower&#146;s or any Guarantor&#146;s business.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">8.7</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Judgments</b>.&#160; One or more judgments, orders, or decrees for
the payment of money in an amount, individually or in the aggregate, of at
least Five Hundred Thousand&#160; Dollars
($500,000.00) (not covered by independent third-party insurance as to which
liability has been accepted by such insurance carrier) shall be rendered
against Borrower and shall remain unsatisfied, unvacated, or unstayed for a
period of ten (10)&nbsp;days after the entry thereof (provided that no Credit
Extensions will be made prior to the satisfaction, vacation, or stay of such
judgment, order, or decree);</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">8.8</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Misrepresentations</b>.&#160; Borrower or any Person acting for Borrower
makes any representation, warranty, or other statement now or later in this
Agreement, any Loan Document or in any writing delivered to Bank or to induce
Bank to enter this Agreement or any Loan Document, and such representation,
warranty, or other statement is incorrect in any material respect when made;</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">8.9</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Subordinated Debt</b>.&#160; A default or breach occurs under any
agreement between Borrower and any creditor of Borrower that signed a
subordination, intercreditor, or other similar agreement with Bank, or any
creditor that has signed such an agreement with Bank breaches any terms of such
agreement;</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">8.10</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Guaranty; Guarantor
Defaults</b>.&#160; (a)&nbsp;Any Guaranty of
any Obligations terminates or ceases for any reason to be in full force and
effect; (b)&nbsp;any Guarantor does not perform any obligation or covenant
under any Guaranty of the Obligations; (c)&nbsp;any circumstance described in
Sections 8.3, 8.4, 8.5, 8.7, or 8.8. occurs with respect to any Guarantor; (d)&nbsp;the
liquidation, winding up, or termination of existence of any Guarantor; (e)&nbsp;the
occurrence of any &#147;Event of Default&#148; under (and as defined in) any Guarantor
Security Agreement; or (f)&nbsp;the occurrence of any &#147;Event of Default&#148; under
(and as defined in) any Pledge Agreement executed and delivered by any
Guarantor; or</h2>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

<p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">8.11</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Governmental
Approvals</b>.&#160; Any Governmental Approval
shall have been (a)&nbsp;revoked, rescinded, suspended, modified in an adverse
manner or not renewed in the ordinary course for a full term or (b)&nbsp;subject
to any decision by a Governmental Authority that designates a hearing with
respect to any applications for renewal of any of such Governmental Approval or
that could result in the Governmental Authority taking any of the actions
described in clause (a)&nbsp;above, and such decision or such revocation,
rescission, suspension, modification or non-renewal (i)&nbsp;has, or could
reasonably be expected to have, a Material Adverse Change, or (ii)&nbsp;adversely
affects the legal qualifications of Borrower or any of its Subsidiaries to hold
such Governmental Approval in any applicable jurisdiction and such revocation,
rescission, suspension, modification or non-renewal could reasonably be
expected to affect the status of or legal qualifications of Borrower or any of
its Subsidiaries to hold any Governmental Approval in any other jurisdiction.</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">16</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=16,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=509113,FOLIO='16',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-03_ZBI40202.CHC",USER="LPALLES",CD='May 10 23:57 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">9</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>BANK&#146;S RIGHTS AND
REMEDIES</u></b></p>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">9.1</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Rights and Remedies</b>.&#160; While an Event of Default occurs and
continues Bank may, without notice or demand, do any or all of the following:</h2>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>declare all Obligations
immediately due and payable (but if an Event of Default described in Section&nbsp;8.5
occurs all Obligations are immediately due and payable without any action by
Bank);</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>stop advancing money or
extending credit for Borrower&#146;s benefit under this Agreement or under any other
agreement between Borrower and Bank;</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>demand that Borrower (i)&nbsp;deposits
cash with Bank in an amount equal to the aggregate amount of any Letters of
Credit remaining undrawn, as collateral security for the repayment of any
future drawings under such Letters of Credit, and Borrower shall forthwith
deposit and pay such amounts, and (ii)&nbsp;pay in advance all Letter of Credit
fees scheduled to be paid or payable over the remaining term of any Letters of
Credit;</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>terminate any FX Forward
Contracts;</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(e)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>settle or adjust
disputes and claims directly with Account Debtors for amounts on terms and in
any order that Bank considers advisable, notify any Person owing Borrower money
of Bank&#146;s security interest in such funds, and verify the amount of such
account;</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(f)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>make any payments and
do any acts it considers necessary or reasonable to protect the Collateral
and/or its security interest in the Collateral.&#160;
Borrower shall assemble the Collateral if Bank requests and make it
available as Bank designates.&#160; Bank may
enter premises where the Collateral is located, take and maintain possession of
any part of the Collateral, and pay, purchase, contest, or compromise any Lien
which appears to be prior or superior to its security interest and pay all
expenses incurred. Borrower grants Bank a license to enter and occupy any of
its premises, without charge, to exercise any of Bank&#146;s rights or remedies;</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(g)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>apply to the Obligations
any (i)&nbsp;balances and deposits of Borrower it holds, or (ii)&nbsp;any
amount held by Bank owing to or for the credit or the account of Borrower;</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(h)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>ship, reclaim, recover,
store, finish, maintain, repair, prepare for sale, advertise for sale, and sell
the Collateral.&#160; Bank is hereby granted a
non-exclusive, royalty-free license or other right to use, without charge,
Borrower&#146;s labels, patents, copyrights, mask works, rights of use of any name,
trade secrets, trade names, trademarks, service marks, and advertising matter,
or any similar property as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and, in connection
with Bank&#146;s exercise of its rights under this Section, Borrower&#146;s rights under
all licenses and all franchise agreements inure to Bank&#146;s benefit;</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(i)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>place
a &#147;hold&#148; on any account maintained with Bank and/or deliver a notice of
exclusive control, any entitlement order, or other directions or instructions
pursuant to any Control Agreement or similar agreements providing control of
any Collateral;</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(j)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>demand
and receive possession of Borrower&#146;s Books; and</h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(k)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>exercise
all rights and remedies available to Bank under the Loan Documents or at law or
equity, including all remedies provided under the Code (including disposal of
the Collateral pursuant to the terms thereof).</h4>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h4 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">9.2</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Power
of Attorney</b>.&#160; Borrower hereby
irrevocably appoints Bank as its lawful attorney-in-fact, exercisable upon the
occurrence and during the continuance of an Event of Default, to:&#160; (a)&nbsp;endorse Borrower&#146;s name on any
checks or other forms of payment or security; (b)&nbsp;sign Borrower&#146;s name on
any invoice or bill of lading for any Account or drafts against Account
Debtors; (c)&nbsp;settle and adjust disputes and claims about the Accounts
directly with Account Debtors, for amounts and on terms Bank determines
reasonable; (d)&nbsp;make, settle, and adjust all claims under Borrower&#146;s
insurance policies; (e)&nbsp;pay, contest or settle any Lien, charge,
encumbrance, security interest, and adverse claim in or to the Collateral, or
any judgment based thereon, or otherwise take any action to terminate or
discharge the same; and (f)&nbsp;transfer the Collateral into the name of Bank
or a third party as the Code permits.&#160;
Borrower hereby appoints Bank as its lawful attorney-in-fact to sign
Borrower&#146;s name on any documents necessary to perfect or continue the
perfection of Bank&#146;s security interest in the Collateral regardless of whether
an </h4>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">17</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=17,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=316616,FOLIO='17',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-03_ZBI40202.CHC",USER="LPALLES",CD='May 10 23:57 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Event of Default has occurred until all Obligations
have been satisfied in full (except for contingent indemnification obligations
for which no claim has been made) and Bank is under no further obligation to
make Credit Extensions hereunder.&#160; Bank&#146;s
foregoing appointment as Borrower&#146;s attorney in fact, and all of Bank&#146;s rights
and powers, coupled with an interest, are irrevocable until all Obligations
have been fully repaid and performed and Bank&#146;s obligation to provide Credit
Extensions terminates.</font></h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">9.3</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Protective Payments</b>.&#160; If Borrower fails to obtain the insurance
called for by Section&nbsp;6.7 or fails to pay any premium thereon or fails to
pay any other amount which Borrower is obligated to pay under this Agreement or
any other Loan Document, Bank may obtain such insurance or make such payment,
and all amounts so paid by Bank are Bank Expenses and immediately due and
payable, bearing interest at the then highest applicable rate, and secured by
the Collateral.&#160; Bank will make
reasonable efforts to provide Borrower with notice of Bank obtaining such
insurance at the time it is obtained or within a reasonable time thereafter.&#160; No payments by Bank are deemed an agreement
to make similar payments in the future or Bank&#146;s waiver of any Event of
Default.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">9.4</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Application of Payments
and Proceeds</b>.&#160; Borrower shall have no
right to specify the order or the accounts to which Bank shall allocate or
apply any payments required to be made by Borrower to Bank or otherwise
received by Bank under this Agreement when any such allocation or application
is not specified elsewhere in this Agreement.&#160;
If an Event of Default has occurred and is continuing, Bank may apply
any funds in its possession, whether from Borrower account balances, payments,
proceeds realized as the result of any collection of Accounts or other
disposition of the Collateral, or otherwise, to the Obligations in such order
as Bank shall determine in its sole discretion.&#160;
Any surplus shall be paid to Borrower by credit to the Designated
Deposit Account or to other Persons legally entitled thereto; Borrower shall
remain liable to Bank for any deficiency.&#160;
If Bank, in its good faith business judgment, directly or indirectly
enters into a deferred payment or other credit transaction with any purchaser
at any sale of Collateral, Bank shall have the option, exercisable at any time,
of either reducing the Obligations by the principal amount of the purchase
price or deferring the reduction of the Obligations until the actual receipt by
Bank of cash therefor.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">9.5</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Bank&#146;s Liability for
Collateral</b>.&#160; So long as Bank complies
with reasonable banking practices regarding the safekeeping of the Collateral
in the possession or under the control of Bank, Bank shall not be liable or
responsible for: (a)&nbsp;the safekeeping of the Collateral; (b)&nbsp;any loss
or damage to the Collateral; (c)&nbsp;any diminution in the value of the
Collateral; or (d)&nbsp;any act or default of any carrier, warehouseman,
bailee, or other Person.&#160; Borrower bears
all risk of loss, damage or destruction of the Collateral.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">9.6</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>No Waiver; Remedies
Cumulative</b>.&#160; Bank&#146;s failure, at any
time or times, to require strict performance by Borrower of any provision of
this Agreement or any other Loan Document shall not waive, affect, or diminish
any right of Bank thereafter to demand strict performance and compliance
herewith or therewith.&#160; No waiver
hereunder shall be effective unless signed by Bank and then is only effective
for the specific instance and purpose for which it is given.&#160; Bank&#146;s rights and remedies under this
Agreement and the other Loan Documents are cumulative.&#160; Bank has all rights and remedies provided
under the Code, by law, or in equity.&#160;
Bank&#146;s exercise of one right or remedy is not an election, and Bank&#146;s
waiver of any Event of Default is not a continuing waiver.&#160; Bank&#146;s delay in exercising any remedy is not
a waiver, election, or acquiescence.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">9.7</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Demand Waiver</b>.&#160; Borrower waives demand, notice of default or
dishonor, notice of payment and nonpayment, notice of any default, nonpayment
at maturity, release, compromise, settlement, extension, or renewal of
accounts, documents, instruments, chattel paper, and guarantees held by Bank on
which Borrower is liable.</h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">10</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>NOTICES</u></b></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">All notices, consents,
requests, approvals, demands, or other communication by any party to this
Agreement or any other Loan Document must be in writing and shall be deemed to
have been validly served, given, or delivered: (a)&nbsp;upon the earlier of
actual receipt and three (3)&nbsp;Business Days after deposit in the U.S. mail,
first class, registered or certified mail return receipt requested, with proper
postage prepaid; (b)&nbsp;upon transmission, when sent by electronic mail or
facsimile transmission; (c)&nbsp;one (1)&nbsp;Business Day after deposit with a
reputable overnight courier with all charges prepaid; or (d)&nbsp;when
delivered, if hand-delivered by messenger, all of which shall be addressed to
the party to be notified and sent to the address, facsimile number, or email
address indicated below.&#160; Bank or
Borrower may change its mailing or electronic mail address or facsimile number
by giving the other party written notice thereof in accordance with the terms
of this Section&nbsp;10.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">18</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=18,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=492451,FOLIO='18',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-03_ZBI40202.CHC",USER="LPALLES",CD='May 10 23:57 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="86%" style="border-collapse:collapse;margin-left:1.0in;width:86.7%;">
 <tr>
  <td width="22%" valign="top" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">If to Borrower:</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Axcelis Technologies,&nbsp;Inc.</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">108 Cherry Hill Drive</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Beverly, Massachusetts 01915</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Attn: Stephen G. Bassett, Chief Financial Officer
  and Executive Vice President</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Fax: 978-787-4090</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Email: Stephen.bassett@axcelis.com</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="top" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">If to Borrower:</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Axcelis Technologies,&nbsp;Inc.</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">108 Cherry Hill Drive</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Beverly, Massachusetts 01915</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Attn: Lynnette C. Fallon, Executive Vice President
  HR/Legal, General Counsel and Secretary</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Fax: 978-787-4090</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Email: lynnette.fallon@axcelis.com</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="top" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">With a copy to:</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Edward Angell Palmer and Dodge LLP</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">111 Huntington Avenue</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Boston, Massachusetts 02199</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Attn: James I. Rubens, Esquire</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Fax: 888-325-9130</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Email: jrubens@eapdlaw.com</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="top" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">If to Bank:</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Silicon Valley Bank</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">One Newton Executive Park, Suite&nbsp;200</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2221 Washington Street</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Newton, Massachusetts 02462</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Attn: Michael Tramack</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Fax: 617.969.5478</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Email: mtramack@svbank.com</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="top" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">with a copy to:</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Riemer&nbsp;&amp; Braunstein LLP</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Three Center Plaza</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Boston, Massachusetts 02108</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Attn: Charles W. Stavros, Esquire</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Fax: 617.880.3456</font></p>
  </td>
 </tr>
 <tr>
  <td width="22%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:22.4%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.6%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Email: CStavros@riemerlaw.com</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">11</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>CHOICE OF LAW,
VENUE, JURY TRIAL WAIVER AND JUDICIAL REFERENCE</u></b></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Massachusetts
law governs the Loan Documents without regard to principles of conflicts of
law.&#160; Borrower and Bank each submit to
the exclusive jurisdiction of the State and Federal courts in Massachusetts; <u>provided</u>,
<u>however</u>, that nothing in this Agreement shall be deemed to operate to
preclude Bank from bringing suit or taking other legal action in any other
jurisdiction to realize on the Collateral or any other security for the
Obligations, or to enforce a judgment or other court order in favor of
Bank.&#160; Borrower expressly submits and
consents in advance to such jurisdiction in any action or suit commenced in any
such court, and Borrower hereby waives any objection that it may have based
upon lack of personal jurisdiction, improper venue, or forum non conveniens and
hereby consents to the granting of such legal or equitable relief as is deemed
appropriate by such court.&#160; Borrower
hereby waives personal service of the summons, complaints, and other process
issued in such action or suit and agrees that service of such summons,
complaints, and other process may be made by registered or certified mail
addressed to Borrower at the address set forth in Section&nbsp;10 of this Agreement
and that service so made shall be deemed completed upon the earlier to occur of
Borrower&#146;s actual receipt thereof or three (3)&nbsp;days after deposit in the
U.S. mails, proper postage prepaid.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">19</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=19,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=692074,FOLIO='19',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-03_ZBI40202.CHC",USER="LPALLES",CD='May 10 23:57 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE
LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT,
BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR
BOTH PARTIES TO ENTER INTO THIS AGREEMENT.&#160;
EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL</font></b>.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">12</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>GENERAL
PROVISIONS</u></b></p>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">12.1</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Termination Prior to
Revolving Line Maturity Date</b>.&#160; This
Agreement may be terminated prior to the Revolving Line Maturity Date by
Borrower, effective three (3)&nbsp;Business Days after written notice of
termination is given to Bank; <u>provided</u> that the Receivables Purchase
Facility shall automatically, without further action, terminate upon the
termination of this Agreement.&#160;
Notwithstanding any such termination, Bank&#146;s lien and security interest
in the Collateral shall continue until Borrower fully satisfies its Obligations
in cash (except for contingent indemnification obligations for which no claim
has been made).&#160; If such termination is
at Borrower&#146;s election (regardless of whether any Default or Event of Default
then exists) or at Bank&#146;s election due to the occurrence and continuance of an
Event of Default, Borrower shall pay to Bank, in addition to the payment of any
other expenses or fees then-owing, a termination fee in an amount equal to (i)&nbsp;two
percent (2%) of the Total Commitment if such termination occurs on or prior to
the first anniversary of the Effective Date, and (ii)&nbsp;one percent (1%) of
the Total Commitment if such termination occurs after the first anniversary of
the Effective Date but prior to the second anniversary of the Effective Date.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">12.2</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Right of Set-Off</b>.&#160; Borrower hereby grants to Bank a Lien and a
right of setoff as security for all Obligations to Bank, whether now existing
or hereafter arising upon and against all deposits, credits, collateral and
property, now or hereafter in the possession, custody, safekeeping or control
of Bank or any entity under the control of Bank (including a subsidiary of
Bank) or in transit to any of them.&#160; At
any time after the occurrence and during the continuance of an Event of
Default, without demand or notice, Bank may setoff the same or any part thereof
and apply the same to any liability or Obligation of Borrower even though
unmatured and regardless of the adequacy of any other collateral securing the
Obligations.&#160; ANY AND ALL RIGHTS TO
REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER
COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF
SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER,
ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">12.3</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Successors and Assigns</b>.&#160; This Agreement binds and is for the benefit
of the successors and permitted assigns of each party.&#160; Borrower may not assign this Agreement or any
rights or obligations under it without Bank&#146;s prior written consent (which may
be granted or withheld in Bank&#146;s discretion).&#160;
Bank has the right, without the consent of or notice to Borrower, to
sell, transfer, negotiate, or grant participation in all or any part of, or any
interest in, Bank&#146;s obligations, rights, and benefits under this Agreement and
the other Loan Documents; provided, however, that prior to the occurrence of an
Event of Default, any such assignment or participation may only be made to an
Eligible Assignee.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">12.4</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Indemnification</b>.&#160; Borrower agrees to indemnify, defend and hold
Bank and its directors, officers, employees, agents, attorneys, or any other
Person affiliated with or representing Bank (each, an &#147;<b>Indemnified
Person</b>&#148;) harmless against:&#160; (a)&nbsp;all
obligations, demands, claims, and liabilities (collectively, &#147;<b>Claims</b>&#148;) asserted by any other party in connection with the
transactions contemplated by the Loan Documents; and (b)&nbsp;all losses or
Bank Expenses incurred, or paid by such Indemnified Person from, following, or
arising from transactions between Bank and Borrower (including reasonable
attorneys&#146; fees and expenses), except for Claims and/or losses directly caused
by such Indemnified Person&#146;s gross negligence or willful misconduct.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">12.5</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Time of Essence</b>.&#160; Time is of the essence for the performance of
all Obligations in this Agreement.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">12.6</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Severability of Provisions</b>.&#160; Each provision of this Agreement is severable
from every other provision in determining the enforceability of any provision.</h2>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">20</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=20,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=187019,FOLIO='20',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-03_ZBI40202.CHC",USER="LPALLES",CD='May 10 23:57 2008' -->



<div style="font-family:Times New Roman;">

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">12.7&#160;&#160;&#160;&#160;&#160;&#160;&#160; Correction of Loan Documents</font></b>.&#160; Bank may correct patent errors and fill in
any blanks in this Agreement and the other Loan Documents consistent with the
agreement of the parties.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">12.8&#160;&#160;&#160;&#160;&#160;&#160;&#160; Amendments in Writing; Integration</font></b>.&#160; All amendments to this Agreement must be in
writing and signed by both Bank and Borrower.&#160;
This Agreement and the Loan Documents represent the entire agreement
about this subject matter and supersede prior negotiations or agreements.&#160; All prior agreements, understandings,
representations, warranties, and negotiations between the parties about the
subject matter of this Agreement and the Loan Documents merge into this
Agreement and the Loan Documents.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">12.9&#160;&#160;&#160;&#160;&#160;&#160;&#160; Counterparts</font></b>.&#160; This Agreement may be executed in any number
of counterparts and by different parties on separate counterparts, each of
which, when executed and delivered, are an original, and all taken together,
constitute one Agreement.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">12.10&#160;&#160;&#160;&#160;&#160; Survival</font></b>.&#160;
All covenants, representations and warranties made in this Agreement
continue in full force until this Agreement has terminated pursuant to its
terms and all Obligations (other than inchoate indemnity obligations and any
other obligations which, by their terms, are to survive the termination of this
Agreement) have been satisfied.&#160; The
obligation of Borrower in Section&nbsp;12.2 to indemnify Bank shall survive
until the statute of limitations with respect to such claim or cause of action
shall have run.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">12.11&#160;&#160;&#160;&#160;&#160; Confidentiality</font></b>.&#160; In handling any confidential information,
Bank shall exercise the same degree of care that it exercises for its own
proprietary information, but disclosure of information may be made: (a)&nbsp;to
Bank&#146;s Subsidiaries or Affiliates; (b)&nbsp;to prospective transferees or
purchasers of any interest in the Credit Extensions (provided, however, Bank
shall use commercially reasonable efforts to obtain such prospective transferee&#146;s
or purchaser&#146;s agreement to the terms of this provision); (c)&nbsp;as required
by law, regulation, subpoena, or other order; (d)&nbsp;to Bank&#146;s regulators or
as otherwise required in connection with Bank&#146;s examination or audit; (e)&nbsp;as
Bank considers appropriate in exercising remedies under the Loan Documents; and
(f)&nbsp;to third-party service providers of Bank so long as such service
providers have executed a confidentiality agreement with Bank with terms no
less restrictive than those contained herein.&#160;
Confidential information does not include information that either: (i)&nbsp;is
in the public domain or in Bank&#146;s possession when disclosed to Bank, or becomes
part of the public domain after disclosure to Bank; or (ii)&nbsp;is disclosed
to Bank by a third party, if Bank does not know that the third party is
prohibited from disclosing the information.</h2>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Bank may use confidential information for any purpose,
including, without limitation, for the development of client databases,
reporting purposes, and market analysis, so long as Bank does not disclose
Borrower&#146;s identity or the identity of any person associated with Borrower
unless otherwise expressly permitted by this Agreement.&#160; The provisions of the immediately preceding
sentence shall survive the termination of this Agreement.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">13&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>DEFINITIONS</u></font></b></p>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">13.1&#160;&#160;&#160;&#160;&#160;&#160;&#160; Definitions</font></b>.&#160; As used in this Agreement, the following
terms have the following meanings:</h2>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Account</b>&#148; is any
&#147;account&#148; as defined in the Code with such additions to such term as may
hereafter be made, and includes, without limitation, all accounts receivable
and other sums owing to Borrower.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Account Debtor</b>&#148;
is any &#147;account debtor&#148; as defined in the Code with such additions to such term
as may hereafter be made.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Advance</b>&#148; or &#147;<b>Advances</b>&#148; means an advance (or advances) under the Revolving
Line.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Affiliate</b>&#148; of
any Person is a Person that owns or controls directly or indirectly the Person,
any Person that controls or is controlled by or is under common control with
the Person, and each of that Person&#146;s senior executive officers, directors,
partners and, for any Person that is a limited liability company, that Person&#146;s
managers and members.&#160; For avoidance of
doubt, Borrower and Bank agree that SEN Corporation, an SHI and Axcelis
Company, is not an Affiliate hereunder.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Agreement</b>&#148; is
defined in the preamble hereof.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">21</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=21,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=642642,FOLIO='21',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-05_ZBI40202.CHC",USER="LPALLES",CD='May 11 02:04 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Availability Amount</b>&#148;
is (a)&nbsp;the lesser of (i)&nbsp;the Revolving Line or (ii)&nbsp;the amount available under
the Borrowing Base minus (b)&nbsp;the
amount of all outstanding Letters of Credit (including drawn but unreimbursed
Letters of Credit) plus an amount equal to the Letter of Credit Reserve, minus (c)&nbsp;the
FX Reserve, minus (d)&nbsp;any amounts used for Cash Management Services, and
minus (e)&nbsp;the outstanding principal balance of any Advances.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Bank</b>&#148; is
defined in the preamble hereof.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Bank Expenses</b>&#148;
are all audit fees and expenses, costs, and expenses (including reasonable
attorneys&#146; fees and expenses) for preparing, amending, negotiating,
administering, defending and enforcing the Loan Documents (including, without
limitation, those incurred in connection with appeals or Insolvency
Proceedings) or otherwise incurred with respect to Borrower.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Bankruptcy-Related
Defaults</b>&#148; is defined in Section&nbsp;9.1.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Borrower</b>&#148; is
defined in the preamble hereof</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Borrower&#146;s Books</b>&#148;
are all Borrower&#146;s books and records including ledgers, federal and state tax
returns, records regarding Borrower&#146;s assets or liabilities, the Collateral,
business operations or financial condition, and all computer programs or
storage or any equipment containing such information.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Borrowing Base</b>&#148;
is, without duplication, the sum of the following: (a)&nbsp;80% of Eligible
Accounts, plus (b)&nbsp;80% of Eligible Foreign L/C Accounts, plus (c)&nbsp;65%
of Eligible Foreign Accounts, plus (d)&nbsp;the lesser of 25% of the value of
Borrower&#146;s Eligible Inventory (valued at the lower of cost or wholesale fair
market value) or $5,000,000, but in no event shall amounts advanced against
Eligible Inventory exceed 25% of the aggregate Credit Extensions, all as
determined by Bank from Borrower&#146;s most recent Transaction Report; <u>provided</u>,
<u>however</u>, that Bank may, following any Collateral inspection or audit
conducted by or on behalf of Bank, decrease the foregoing percentages and
amount in its good faith business judgment based on events, conditions,
contingencies, or risks which, as reasonably determined by Bank after
consultation with Borrower, may adversely affect Collateral.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Borrowing Resolutions</b>&#148;
are, with respect to any Person, those resolutions adopted by such Person&#146;s
Board of Directors (or other applicable governing body) and delivered by such
Person to Bank approving the Loan Documents to which such Person is a party and
the transactions contemplated thereby, together with a certificate executed by
its secretary on behalf of such Person certifying that (a)&nbsp;such Person has
the authority to execute, deliver, and perform its obligations under each of
the Loan Documents to which it is a party, (b)&nbsp;that attached to such
certificate is a true, correct, and complete copy of the resolutions then in
full force and effect authorizing and ratifying the execution, delivery, and
performance by such Person of the Loan Documents to which it is a party, (c)&nbsp;the
name(s)&nbsp;of the Person(s)&nbsp;authorized to execute the Loan Documents on
behalf of such Person, together with a sample of the true signature(s)&nbsp;of
such Person(s), and (d)&nbsp;that Bank may conclusively rely on such
certificate unless and until such Person shall have delivered to Bank a further
certificate canceling or amending such prior certificate.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Business Day</b>&#148;
is any day other than a Saturday, Sunday or other day on which banking
institutions in the Commonwealth of Massachusetts are authorized or required by
law or other governmental action to close, except that if any determination of
a &#147;Business Day&#148; shall relate to a LIBOR Advance, the term &#147;Business Day&#148; shall
also mean a day on which dealings are carried on in the London interbank
market, and if any determination of a &#147;Business Day&#148; shall relate to an FX
Forward Contract, the term &#147;Business Day&#148; shall mean a day on which dealings
are carried on in the country of settlement of the foreign (i.e., non-Dollar)
currency. is any day that is not a Saturday, Sunday or a day on which Bank is
closed.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

<p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Cash Equivalents&#148;</font></b> means (a)&nbsp;marketable
direct obligations issued or unconditionally guaranteed by the United States or
any agency or any State thereof having maturities of not more than one (1)&nbsp;year
from the date of acquisition; (b)&nbsp;commercial paper maturing no more than
one (1)&nbsp;year after its creation and having the highest rating from either
Standard&nbsp;&amp; Poor&#146;s Ratings Group or Moody&#146;s Investors Service,&nbsp;Inc.;
(c)&nbsp;Bank&#146;s certificates of deposit issued maturing no more than one (1)&nbsp;year
after issue.</p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

<p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Cash Management Services&#148; </font></b>is
defined in Section&nbsp;2.1.4.</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">22</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=22,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=846128,FOLIO='22',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-05_ZBI40202.CHC",USER="LPALLES",CD='May 11 02:04 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Change in Control</b>&#148; means any event, transaction, or occurrence as a result of which (a)&nbsp;any &#147;person&#148; (as such term is defined in Sections 3(a)(9)&nbsp;and 13(d)(3)&nbsp;of the Securities Exchange Act of 1934, as an amended (the &#147;<b>Exchange Act</b>&#148;)), other than a trustee or other fiduciary holding securities under an employee benefit plan of Borrower, is or becomes a beneficial owner (within the meaning Rule&nbsp;13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of Borrower, representing twenty-five percent (25%) or more of the combined voting power of Borrower&#146;s then outstanding securities; or (b)&nbsp;during any period of twelve consecutive calendar months, individuals who at the beginning of such period constituted the Board of Directors of Borrower (together with any new directors whose election by the Board of Directors of Borrower was approved by a vote of at least two-thirds of the directors then still in office who either were directions at the beginning of such period&#160; or whose election or nomination for election was previously so approved) cease for any reason other than death or disability to constitute a majority of the directors then in office.</font></p><p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p><p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Code</b>&#148; is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the Commonwealth of Massachusetts; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in Article&nbsp;or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Bank&#146;s Lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the Commonwealth of Massachusetts, the term &#147;<b>Code</b>&#148; shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes on the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions.</font></p><p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Collateral</b>&#148; is
any and all properties, rights and assets of Borrower described on <u>Exhibit&nbsp;A</u>.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Collateral Account</b>&#148;
is any Deposit Account, Securities Account, or Commodity Account.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Commodity Account</b>&#148;
is any &#147;commodity account&#148; as defined in the Code with such additions to such
term as may hereafter be made.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Compliance Certificate</b>&#148;
is that certain certificate in the form attached hereto as <u>Exhibit&nbsp;B</u>.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Contingent Obligation</b>&#148;
is, for any Person, any direct or indirect liability, contingent or not, of
that Person for (a)&nbsp;any indebtedness, lease, dividend, letter of credit or
other obligation of another such Person as an obligation directly or indirectly
guaranteed, endorsed, co-made, discounted or sold with recourse by that Person,
or for which that Person is directly or indirectly liable; (b)&nbsp;any
obligations for undrawn letters of credit for the account of that Person; and (c)&nbsp;all
obligations from any interest rate, currency or commodity swap agreement, interest
rate cap or collar agreement, or other agreement or arrangement designated to
protect a Person against fluctuation in interest rates, currency exchange rates
or commodity prices; but &#147;Contingent Obligation&#148; does not include endorsements
in the ordinary course of business.&#160; The
amount of a Contingent Obligation is the stated or determined amount of the
primary obligation for which the Contingent Obligation is made or, if not
determinable, the maximum reasonably anticipated liability for it determined by
the Person in good faith; but the amount may not exceed the maximum of the
obligations under any guarantee or other support arrangement.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Control Agreement</b>&#148;
is any control agreement entered into among the depository institution at which
Borrower maintains a Deposit Account or the securities intermediary or
commodity intermediary at which Borrower maintains a Securities Account or a
Commodity Account, Borrower, and Bank pursuant to which Bank obtains control
(within the meaning of the Code) over such Deposit Account, Securities Account,
or Commodity Account.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

<p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Convertible Senior Subordinated Notes&#148;</font></b>
are the 4.25% Senior Subordinated Notes due 2009 issued under the Indenture in
the approximate amount of $75,000,000 as of the Effective Date.</p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Credit Extension</b>&#148;
is any Advance, Letter of Credit, FX Forward Contract, amount utilized for Cash
Management Services, or any other extension of credit by Bank for Borrower&#146;s
benefit.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Default</b>&#148; means
any event which with notice or passage of time or both, would constitute an
Event of Default.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">23</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=23,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=709191,FOLIO='23',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-05_ZBI40202.CHC",USER="LPALLES",CD='May 11 02:04 2008' -->


<br clear="all" style="page-break-before:always;">


<div>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Default Rate</b>&#148;
is defined in Section&nbsp;2.3(b).</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Deposit Account</b>&#148;
is any &#147;deposit account&#148; as defined in the Code with such additions to such
term as may hereafter be made.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Designated Deposit Account</b>&#148;
is Borrower&#146;s deposit account, account number 330609227, maintained with Bank.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Dollars</b><i>,</i>&#148;<i>  </i>&#147;<b>dollars</b>&#148; and &#147;<b>$</b>&#148; each mean
lawful money of the United States.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Domestic Subsidiary</b>&#148;
means a Subsidiary organized under the laws of the United States or any state
or territory thereof or the District of Columbia.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Effective Date</b>&#148;
is the date Bank executes this Agreement as indicated on the signature page&nbsp;hereof.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Eligible Accounts</b>&#148;
means Accounts which arise in the ordinary course of Borrower&#146;s business that
meet all Borrower&#146;s representations and warranties in Section&nbsp;5.3.&#160; Bank reserves the right at any time after the
Effective Date to adjust any of the criteria set forth below and to establish
new criteria in its good faith business judgment.&#160;&#160; Without limiting the fact that the
determination of which Accounts are eligible for borrowing is a matter of Bank&#146;s
good faith judgment, the following (&#147;<b>Minimum Eligibility
Requirements</b>&#148;) are the minimum requirements for an Account to be an
Eligible Account and, unless Bank agrees otherwise in writing, Eligible
Accounts shall not include:</font></p>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Accounts that the Account Debtor has
not paid within ninety (90) days of invoice date regardless of invoice payment
period terms;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Accounts
owing from an Account Debtor, fifty percent (50%) or more of whose Accounts
have not been paid within ninety (90) days of invoice date;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Accounts billed in the United States
and owing from an Account Debtor which does not have its principal place of
business in the United States or Canada;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Accounts billed and payable outside
of the United States;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(e)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Accounts owing from an Account Debtor
to the extent that Borrower is indebted or obligated in any manner to the
Account Debtor (as creditor, lessor, supplier or otherwise - sometimes called &#147;contra&#148;
accounts, accounts payable, customer deposits or credit accounts), with the
exception of customary credits, adjustments and/or discounts given to an
Account Debtor by Borrower in the ordinary course of its business;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(f)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Accounts for which the Account
Debtor is Borrower&#146;s Affiliate (or a company in which Borrower or its
Affiliates have greater than a 20% ownership interest, including, without
limitation, SEN Corporation, an SHI and Axcelis Company), officer, employee, or
agent;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(g)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Accounts with credit balances over
ninety (90) days from invoice date;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(h)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Accounts owing from an Account
Debtor, including Affiliates, whose total obligations to Borrower exceed
twenty-five (25%) of all Accounts, for the amounts that exceed that percentage,
unless Bank, on a case-by-case basis and in its sole discretion, otherwise
approves any such Account;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Accounts owing from an Account
Debtor which is a United States government entity or any department, agency, or
instrumentality thereof unless Borrower has assigned its payment rights to Bank
and the assignment has been acknowledged under the Federal Assignment of Claims
Act of 1940, as amended;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(j)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Accounts for demonstration or
promotional equipment, or in which goods are consigned, or sold on a &#147;sale
guaranteed&#148;, &#147;sale or return&#148;, &#147;sale on approval&#148;, or other terms if Account
Debtor&#146;s payment may be conditional;</font></h4>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">24</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=24,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=529195,FOLIO='24',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-05_ZBI40202.CHC",USER="LPALLES",CD='May 11 02:04 2008' -->


<br clear="all" style="page-break-before:always;">


<div>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(k)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Accounts for which an Account Debtor
has not been invoiced or where goods or services have not yet been rendered to
the Account Debtor (sometimes called memo billings or pre-billings);</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(l)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Accounts subject to contractual
arrangements between Borrower and an Account Debtor where payments shall be
scheduled or due according to completion or fulfillment requirements and where
the Account Debtor has a right of offset for damages suffered as a result of
Borrower&#146;s failure to perform in accordance with the contract (sometimes called
contracts accounts receivable, progress billings, milestone billings, or
fulfillment contracts);</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(m)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Accounts owing from an Account Debtor
the amount of which may be subject to withholding based on the Account Debtor&#146;s
satisfaction of Borrower&#146;s complete performance (but only to the extent of that
portion of the amount withheld which exceeds ten percent (10%) of the Account;
sometimes called retainage billings);</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(n)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Accounts subject to trust provisions,
subrogation rights of a bonding company, or a statutory trust;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(o)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Accounts owing from an Account Debtor
that have been invoiced for goods that have not been shipped to the Account
Debtor unless Bank, Borrower, and the Account Debtor have entered into an
agreement acceptable to Bank in its sole discretion wherein the Account Debtor
acknowledges that (i)&nbsp;it has title to and has ownership of the goods
wherever located, (ii)&nbsp;a bona fide sale of the goods has occurred, and (iii)&nbsp;it
owes payment for such goods in accordance with invoices from Borrower
(sometimes called &#147;bill and hold&#148; accounts);</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(p)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; [Intentionally omitted]</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(q)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Accounts for which the Account Debtor
has not been invoiced;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(r)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Accounts that represent non-trade
receivables or that are derived by means other than in the ordinary course of
Borrower&#146;s business;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(s)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Accounts for which Borrower has permitted
Account Debtor&#146;s payment to extend beyond 90 days;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(t)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Accounts subject to chargebacks or
others payment deductions taken by an Account Debtor (but only to the extent
the chargeback is determined invalid and subsequently collected by Borrower);</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(u)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Accounts in which the Account Debtor
disputes liability or makes any claim (but only up to the disputed or claimed
amount), or if the Account Debtor is subject to an Insolvency Proceeding, or
becomes insolvent, or goes out of business; and</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(v)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Accounts for which Bank in its good
faith business judgment determines collection to be doubtful or otherwise
ineligible.</font></h4>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Eligible Assignee</b>&#148;
shall mean any commercial bank, insurance company, investment or mutual fund or
other entity that is an &#147;accredited investor&#148; (as defined in Regulation D under
the Securities Act) and which extends credit or buys loans as one of its
businesses; <u>provided</u> that any direct competitor of the Borrower shall
not be an Eligible Assignee.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Eligible Foreign Accounts</b>&#148;
are Accounts for which the Account Debtor does not have its principal place of
business in the United States and do not satisfy the criteria of clauses (c)&nbsp;and
(d)&nbsp;of the definition of Eligible Accounts, but which are otherwise
Eligible Accounts but do not constitute Eligible Foreign L/C Accounts, and
which Bank has, on a case-by-case basis in its sole discretion, approved in
writing.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Eligible Foreign L/C
Accounts</b>&#148; are Accounts for which the Account Debtor does not have
its principal place of business in the United States and do not satisfy the
criteria of clauses (c)&nbsp;and (d)&nbsp;of the definition of Eligible
Accounts, but which are otherwise Eligible Accounts, and which Accounts are
supported by letter(s)&nbsp;of credit acceptable to Bank, as determined on a
case-by-case basis in its sole discretion.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">25</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=25,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=984680,FOLIO='25',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-05_ZBI40202.CHC",USER="LPALLES",CD='May 11 02:04 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Eligible Inventory</b>&#148;
means Inventory that meets all of Borrower&#146;s representations and warranties in Section&nbsp;5.3
and is otherwise acceptable to Bank in all respects.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Equipment</b>&#148; is all
&#147;equipment&#148; as defined in the Code with such additions to such term as may
hereafter be made, and includes without limitation all machinery, fixtures,
goods, vehicles (including motor vehicles and trailers), and any interest in
any of the foregoing.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>ERISA</b>&#148; is the
Employee Retirement Income Security Act of 1974, and its regulations.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Event of Default</b>&#148;
is defined in Section&nbsp;8.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Foreign Currency</b>&#148;
means lawful money of a country other than the United States.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Foreign Subsidiary</b>&#148;
means any Subsidiary which is not a Domestic Subsidiary.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Funding Date</b>&#148;
is any date on which a Credit Extension is made to or on account of Borrower
which shall be a Business Day.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>FX Business Day</b>&#148;
is any day when (a)&nbsp;Bank&#146;s Foreign Exchange Department is conducting its
normal business and (b)&nbsp;the Foreign Currency being purchased or sold by
Borrower is available to Bank from the entity from which Bank shall buy or sell
such Foreign Currency.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>FX Forward Contract</b>&#148;<b>  </b>is defined in Section&nbsp;2.1.3.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>FX Reserve</b>&#148;<b>  </b>is defined in Section&nbsp;2.1.3.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>GAAP</b>&#148; is
generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other Person as
may be approved by a significant segment of the accounting profession, which
are applicable to the circumstances as of the date of determination.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>General Intangibles</b>&#148;
is all &#147;general intangibles&#148; as defined in the Code in effect on the date
hereof with such additions to such term as may hereafter be made, and includes
without limitation, all copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
work, whether published or unpublished, any patents, trademarks, service marks
and, to the extent permitted under applicable law, any applications therefor,
whether registered or not, any trade secret rights, including any rights to
unpatented inventions, payment intangibles, royalties, contract rights,
goodwill, franchise agreements, purchase orders, customer lists, route lists,
telephone numbers, domain names, claims, income and other tax refunds, security
and other deposits, options to purchase or sell real or personal property,
rights in all litigation presently or hereafter pending (whether in contract,
tort or otherwise), insurance policies (including without limitation key man,
property damage, and business interruption insurance), payments of insurance
and rights to payment of any kind.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Governmental Approval</b>&#148; is any consent, authorization,
approval, order, license, franchise, permit, certificate, accreditation,
registration, filing or notice, of, issued by, from or to, or other act by or
in respect of, any Governmental Authority.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Governmental Authority</b>&#148;
is any nation or government, any state or other political subdivision thereof,
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative functions of or pertaining to government, any securities
exchange and any self-regulatory organization</font>.</p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Guarantor</b>&#148;<b>  </b>is any present or future guarantor of the Obligations,
including all present or future Domestic Subsidiaries (with the exception of
Matrix Integrated Systems Acquisition Corporation).</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">26</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=26,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=107303,FOLIO='26',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-05_ZBI40202.CHC",USER="LPALLES",CD='May 11 02:04 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Guarantor Security
Agreement(s)</b>&#148;<b>  </b>is each
Security Agreement executed and delivered by a Guarantor to Bank to secure the
Guaranty of such Guarantor.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Guaranty(ies)</b>&#148;
is any guaranty of the Obligations executed and delivered by a Guarantor to
Bank.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Indebtedness</b>&#148;
is (a)&nbsp;indebtedness for borrowed money or the deferred price of property
or services, such as reimbursement and other obligations for surety bonds and
letters of credit, (b)&nbsp;obligations evidenced by notes, bonds, debentures
or similar instruments, (c)&nbsp;capital lease obligations, and (d)&nbsp;Contingent
Obligations.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Indemnified Person</b>&#148;
is defined in Section&nbsp;12.3.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

<p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Indenture&#148; </font></b>is that certain
Indenture dated as of May&nbsp;2, 2006 entered into between Axcelis
Technologies,&nbsp;Inc. and U.S. Bank National Association, as Trustee, as
supplemented from time to time.</p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Insolvency Proceeding</b>&#148;
is any proceeding by or against any Person under the United States Bankruptcy
Code, or any other bankruptcy or insolvency law, including assignments for the
benefit of creditors, compositions, extensions generally with its creditors, or
proceedings seeking reorganization, arrangement, or other relief.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Inventory</b>&#148; is
all &#147;inventory&#148; as defined in the Code in effect on the date hereof with such
additions to such term as may hereafter be made, and includes without
limitation all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products, including without
limitation such inventory as is temporarily out of Borrower&#146;s custody or
possession or in transit and including any returned goods and any documents of
title representing any of the above.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Investment</b>&#148; is
any beneficial ownership interest in any Person (including stock, partnership
interest or other securities), and any loan, advance or capital contribution to
any Person.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>IP Agreement</b>&#148;
is that certain Intellectual Property Security Agreement executed and delivered
by Borrower and Guarantors to Bank of even date herewith.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Letter of Credit&#148;</b>
means a standby letter of credit issued by Bank or another institution based
upon an application, guarantee, indemnity or similar agreement on the part of
Bank as set forth in Section&nbsp;2.1.2.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Letter of Credit
Application</b>&#148; is defined in Section&nbsp;2.1.2(a).</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Letter of Credit Reserve</b>&#148;
has the meaning set forth in Section&nbsp;2.1.2(d).</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>LIBOR Supplement</b>&#148;
means the LIBOR Supplement attached hereto as <u>Exhibit&nbsp;D</u> and
specifically incorporated by reference herein.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Lien</b>&#148; is a
claim, mortgage, deed of trust, levy, charge, pledge, security interest or
other encumbrance of any kind, whether voluntarily incurred or arising by
operation of law or otherwise against any property.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Loan Documents</b>&#148;
are, collectively, this Agreement, the Perfection Certificate, the IP
Agreement, the Pledge Agreements, the Negative Pledge, the Guarantor Security
Agreements, each Guaranty, any note, or notes executed by Borrower or any
Guarantor, and any other present or future agreement executed or delivered by
Borrower or any Guarantor and/or for the benefit of Bank in connection with
this Agreement, all as amended, restated, or otherwise modified.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Material Adverse Change</b>&#148;
is (a)&nbsp;a material impairment in the perfection or priority of Bank&#146;s Lien
in the Collateral or in the value of such Collateral; (b)&nbsp;a material
adverse change in the business, operations, or condition (financial or
otherwise) of Borrower, taken as a whole; or (c)&nbsp;a material impairment of
the prospect of repayment of any portion of the Obligations.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Negative Pledge</b>&#148;
is that certain Negative Pledge Agreement executed and delivered by Borrower
and Guarantors to Bank of even date herewith.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">27</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=27,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=568091,FOLIO='27',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-05_ZBI40202.CHC",USER="LPALLES",CD='May 11 02:04 2008' -->


<br clear="all" style="page-break-before:always;">


<div>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Net Income</b>&#148;
means, as calculated on a consolidated basis for Borrower and its Subsidiaries
for any period as at any date of determination, the net profit (or loss), after
provision for taxes, of Borrower and its Domestic Subsidiaries for such period
taken as a single accounting period.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Obligations</b>&#148;
are Borrower&#146;s obligation to pay when due any debts, principal, interest, Bank
Expenses and other amounts Borrower owes Bank now or later, whether under this
Agreement, the Loan Documents, the Receivables Purchase Facility or otherwise,
including, without limitation, all obligations relating to letters of credit
(including reimbursement obligations for drawn and undrawn letters of credit),
cash management services, and foreign exchange contracts, if any, and including
interest accruing after Insolvency Proceedings begin and debts, liabilities, or
obligations of Borrower&#160; assigned to
Bank, and the performance of Borrower&#146;s duties under the Loan Documents.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Operating Documents</b>&#148;
are, for any Person, such Person&#146;s formation documents, as certified with the
Secretary of State of such Person&#146;s state of formation on a date that is no
earlier than 30 days prior to the Effective Date, and, (a)&nbsp;if such Person
is a corporation, its bylaws in current form, (b)&nbsp;if such Person is a
limited liability company, its limited liability company agreement (or similar
agreement), and (c)&nbsp;if such Person is a partnership, its partnership
agreement (or similar agreement), each of the foregoing with all current
amendments or modifications thereto.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Overadvance</b>&#148; is
defined in Section&nbsp;2.2.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Perfection Certificate</b>&#148;
is defined in Section&nbsp;5.1.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Permitted Indebtedness</b>&#148;
is:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Borrower&#146;s Indebtedness to Bank under
this Agreement and the other Loan Documents;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Indebtedness existing on the
Effective Date and shown on the Perfection Certificate;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Subordinated Debt;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; unsecured Indebtedness to trade creditors incurred in the ordinary course of
business;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(e)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;  unsecured Indebtedness with respect to surety bonds, letters of credit and/or and
similar instruments in connection with value added tax recovery initiatives of
Axcelis Technologies GmbH incurred in the ordinary course of business;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(f)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Indebtedness owing from (i)&nbsp;one
Borrower to another Borrower; (ii)&nbsp;any Borrower to any Subsidiary; and (iii)&nbsp;any
Subsidiary to any Borrower, provided that, in each case, such Indebtedness is
incurred in the ordinary course of business of such Borrower or Subsidiary and
pursuant to an arms-length transaction;&#160;
and</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(g)&nbsp;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; extensions, refinancings,
modifications, amendments and restatements of any items of Permitted
Indebtedness (a)&nbsp;through (d)&nbsp;above, provided that the principal
amount thereof is not increased or the terms thereof are not modified to impose
more burdensome terms upon Borrower or its Subsidiary, as the case may be.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Permitted Investments</b>&#148;
are:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Investments shown on the Perfection
Certificate and existing on the Effective Date;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Cash Equivalents;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)<b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </b>Investments
consisting of the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of Borrower;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Investments consisting of deposit
accounts maintained with Bank and subject to Bank&#146;s first priority Lien;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">28</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=28,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=847587,FOLIO='28',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-05_ZBI40202.CHC",USER="LPALLES",CD='May 11 02:04 2008' -->


<br clear="all" style="page-break-before:always;">


<div>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(e)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Investments of Subsidiaries in or to
Borrower or any Guarantor and Investments of one Borrower in or to another
Borrower;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(f)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Investments consisting of (i)&nbsp;travel
advances and employee relocation loans and other employee loans and advances in
the ordinary course of business, and (ii)&nbsp;loans to employees, officers or
directors relating to the purchase of equity securities of Borrower or its
Subsidiaries pursuant to employee stock purchase plans or agreements approved
by Borrower&#146;s Board of Directors (or other applicable governing body);</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(g)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Investments (including debt
obligations) received in connection with the bankruptcy or reorganization of
customers or suppliers and in settlement of delinquent obligations of, and
other disputes with, customers or suppliers arising in the ordinary course of
business;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(h)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Investments consisting of notes
receivable of, or prepaid royalties and other credit extensions, to customers
and suppliers who are not Affiliates, in the ordinary course of business;
provided that this paragraph (h)&nbsp;shall not apply to Investments of
Borrower in any Subsidiary; and</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(i)&nbsp;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Money market funds that (i)&nbsp;comply
with the criteria set forth in Rule&nbsp;2a-7 under the Investment Company Act
of 1940, (ii)&nbsp;are rated AAA by S&amp;P and Aaa by Moody&#146;s and (iii)&nbsp;have
portfolio assets of at least $500,000,000.00;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(j)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Other equity and debt investments
that are consistent with the investment policy of the Borrower dated as of March&nbsp;2003,
a copy of which has been delivered to Bank;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(k)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Investments of Borrower and its
Subsidiaries consisting of deposit accounts held with foreign financial
institutions; <u>provided</u>, that the aggregate dollar value of all such
deposit accounts does not exceed 40% of the dollar value of all Unrestricted
Cash of Borrower and its Subsidiaries; and</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(l)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Investments of Borrower in
Subsidiaries not to exceed $1,000,000.00 in the aggregate.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Permitted Liens</b>&#148;
are:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Liens existing on the Effective Date
and shown on the Perfection Certificate or arising under this Agreement and the
other Loan Documents;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Liens for taxes, fees, assessments or
other government charges or levies, either not delinquent or being contested in
good faith and for which Borrower maintains adequate reserves on its Books, <u>provided</u>
that no notice of any such Lien has been filed or recorded under the Internal
Revenue Code of 1986, as amended, and the Treasury Regulations adopted
thereunder;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; purchase money Liens
(i)&nbsp;on Equipment acquired or held by Borrower incurred for financing the
acquisition of the Equipment securing no more than $1,000,000 in the aggregate
amount outstanding, or (ii)&nbsp;existing on Equipment when acquired, <u>if</u>
the Lien is confined to the property and improvements and the proceeds of the
Equipment;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Liens incurred in the extension,
renewal or refinancing of the indebtedness secured by Liens described in (a)&nbsp;through
(c), <u>but</u> any extension, renewal or replacement Lien must be limited to
the property encumbered by the existing Lien and the principal amount of the
indebtedness may not increase;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(e)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; leases or subleases of real property
granted in the ordinary course of business, and leases, subleases,
non-exclusive licenses or sublicenses of property (other than real property or
intellectual property) granted in the ordinary course of Borrower&#146;s business, <u>if</u>
such leases, subleases, licenses and sublicenses do not prohibit granting Bank
a security interest;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(f)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; non-exclusive license of
intellectual property granted to third parties in the ordinary course of business;
and</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">29</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=29,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=535972,FOLIO='29',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-05_ZBI40202.CHC",USER="LPALLES",CD='May 11 02:04 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(g)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Liens arising from attachments or
judgments, orders, or decrees in circumstances not constituting an Event of
Default under Sections 8.4 and 8.7.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Person</b>&#148; is any
individual, sole proprietorship, partnership, limited liability company, joint
venture, company, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, firm, joint stock company, estate,
entity or government agency.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Pledge Agreement(s)</b>&#148;
those certain Pledge Agreements executed and delivered by Borrower and Fusion
Technology International,&nbsp;Inc. in favor of Bank.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Prime Rate</b>&#148; is
the greater of (i)&nbsp;five and one-half percent (5.50%) and (ii)&nbsp;Bank&#146;s
most recently announced &#147;prime rate,&#148; even if it is not Bank&#146;s lowest rate.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Receivables Purchase
Facility</b>&#148; is that certain Non-Recourse Receivables Purchase
Agreement of even date herewith among Borrower (as Seller) and Bank (as Buyer),
as amended, modified, restated or replaced from time to time.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Registered Organization</b>&#148;
is any &#147;registered organization&#148; as defined in the Code with such additions to
such term as may hereafter be made</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Requirement
of Law</b>&#148; is as to any Person, the organizational or governing
documents of such Person, and any law (statutory or common), treaty, rule&nbsp;or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Reserves</b>&#148; means, as of any date of determination, upon
notice to and after consultation with Borrower,&#160;
such amounts as Bank may reasonably from time to time establish and
revise in its good faith business judgment, reducing the amount of Advances and
other financial accommodations which would otherwise be available to Borrower
to reflect events, conditions, contingencies or risks which, as determined by
Bank in its good faith business judgment, do or may adversely affect in any
material way (i)&nbsp;the assets, business or prospects of Borrower or any
Guarantor, or (ii)&nbsp;the security interests and other rights of Bank in the
Collateral (including the enforceability, perfection and priority thereof).</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Responsible Officer</b>&#148;
is any of the Chief Executive Officer, President, Chief Financial Officer and
Controller of Borrower.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Revolving Line</b>&#148;
is the Total Commitment <u>minus</u> the then aggregate outstanding loans,
advances and other extensions of credit made by Bank under the Receivables
Purchase Facility.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

<p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Revolving Line Maturity Date&#148;</font></b>
is April&nbsp;23, 2010.</p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

<p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Sale Leaseback Transaction&#148;</font></b> is
a sale and leaseback transaction (excluding any Equipment) relating to Borrower&#146;s
corporate headquarters and manufacturing facility located at 108 Cherry Hill
Drive, Beverly, Massachusetts, pursuant to an arms-length transaction.</p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Securities Account</b>&#148;
is any &#147;securities account&#148; as defined in the Code with such additions to such
term as may hereafter be made.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Settlement Date</b>&#148;<b>  </b>is defined in Section&nbsp;2.1.3.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Subordinated Debt</b>&#148;
is (i)&nbsp;the Convertible Senior Subordinated Notes and (ii)&nbsp;indebtedness
incurred by Borrower subordinated to all of Borrower&#146;s now or hereafter
indebtedness to Bank (pursuant to a subordination, intercreditor, or other
similar agreement in form and substance satisfactory to Bank entered into
between Bank and the other creditor), on terms acceptable to Bank.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">30</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=30,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=566440,FOLIO='30',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-05_ZBI40202.CHC",USER="LPALLES",CD='May 11 02:04 2008' -->



<div>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Subsidiary</b>&#148;
means, with respect to any Person, any Person of which more than 50.0% of the
voting stock or other equity interests (in the case of Persons other than
corporations) is owned or controlled directly or indirectly by such Person or
one or more of Affiliates of such Person.&#160;
For the avoidance of doubt, Borrower and Bank agree that SEN
Corporation, an SHI and Axcelis Company is not a Subsidiary.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Total Commitment</b>&#148;
is Fifty Million Dollars ($50,000,000.00).</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Transaction Report</b>&#148;
is that certain report of transactions and schedule of collections in the form
attached hereto as <u>Exhibit&nbsp;C</u>.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Transfer</b>&#148; is
defined in Section&nbsp;7.1.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Unused Line Fee Percentage</b>&#148;&#160; is (i)&nbsp;at such times as Borrower&#146;s
unrestricted cash plus Cash Equivalents at Bank are equal to or less than Fifty
Million ($50,000,000), 0.95% and (ii)&nbsp;at such times as Borrower&#146;s
unrestricted cash plus Cash Equivalents at Bank are greater than Fifty Million
($50,000,000), 0.70%.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Unused Revolving Line
Facility Fee&#148;</b> is defined in Section&nbsp;2.4(c).</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">[Signature page&nbsp;follows.]</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">31</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=31,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=835552,FOLIO='31',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-07_ZBI40202.CHC",USER="LPALLES",CD='May 11 00:05 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">IN WITNESS WHEREOF</font></b>, the parties
hereto have caused this Agreement to be executed as a sealed instrument under
the laws of the Commonwealth of Massachusetts as of the Effective Date.</p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">BORROWER</font></u>:</p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">AXCELIS TECHNOLOGIES, INC.</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="2%" valign="top" style="padding:0in 0in 0in 0in;width:2.92%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By</font></p>
  </td>
  <td width="50%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:50.42%;">
  <p style="margin:0in 0in .0001pt 40.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ Stephen G. Bassett</font></p>
  </td>
  <td width="46%" valign="top" style="padding:0in 0in 0in 0in;width:46.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="5%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:5.84%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name:</font></p>
  </td>
  <td width="94%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:94.16%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Stephen G. Bassett</font></p>
  </td>
 </tr>
 <tr>
  <td width="5%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:5.84%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title:</font></p>
  </td>
  <td width="94%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:94.16%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Chief Financial Officer
  and Executive Vice President</font></p>
  </td>
 </tr>
 <tr>
  <td width="5%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:5.84%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="94%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:94.16%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="100%" colspan="4" valign="top" style="padding:0in 0in 0in 0in;width:100.0%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">AXCELIS TECHNOLOGIES CCS
  CORPORATION</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="5%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:5.84%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="94%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:94.16%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="5%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:5.84%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="94%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:94.16%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="2%" valign="top" style="padding:0in 0in 0in 0in;width:2.92%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By</font></p>
  </td>
  <td width="50%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:50.42%;">
  <p style="margin:0in 0in .0001pt 40.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ Stephen G. Bassett</font></p>
  </td>
  <td width="46%" valign="top" style="padding:0in 0in 0in 0in;width:46.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="5%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:5.84%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name:</font></p>
  </td>
  <td width="94%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:94.16%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Stephen G. Bassett</font></p>
  </td>
 </tr>
 <tr>
  <td width="5%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:5.84%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title:</font></p>
  </td>
  <td width="94%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:94.16%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Chief Financial Officer
  and Executive Vice President</font></p>
  </td>
 </tr>
 <tr>
  <td width="5%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:5.84%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="94%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:94.16%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="5%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:5.84%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="94%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:94.16%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="100%" colspan="4" valign="top" style="padding:0in 0in 0in 0in;width:100.0%;">
  <p style="margin:0in 0in .0001pt;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">BANK:</font></u></p>
  </td>
 </tr>
 <tr>
  <td width="5%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:5.84%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="94%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:94.16%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="100%" colspan="4" valign="top" style="padding:0in 0in 0in 0in;width:100.0%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">SILICON VALLEY BANK</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="5%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:5.84%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="94%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:94.16%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="2%" valign="top" style="padding:0in 0in 0in 0in;width:2.92%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By</font></p>
  </td>
  <td width="50%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:50.42%;">
  <p style="margin:0in 0in .0001pt 40.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ Michael Tramack</font></p>
  </td>
  <td width="46%" valign="top" style="padding:0in 0in 0in 0in;width:46.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="5%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:5.84%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name:</font></p>
  </td>
  <td width="94%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:94.16%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Michael Tramack</font></p>
  </td>
 </tr>
 <tr>
  <td width="5%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:5.84%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title:</font></p>
  </td>
  <td width="94%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:94.16%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Senior Vice President</font></p>
  </td>
 </tr>
 <tr height="0">
  <td width="22" style="border:none;"></td>
  <td width="22" style="border:none;"></td>
  <td width="355" style="border:none;"></td>
  <td width="349" style="border:none;"></td>
 </tr>
</table>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Effective Date: April&nbsp;23,
2008</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=32,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=398192,FOLIO='1',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-07_ZBI40202.CHC",USER="LPALLES",CD='May 11 00:05 2008' -->


<br clear="all" style="page-break-before:always;">


<div>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-weight:bold;line-height:normal;margin:0in 0in .0001pt;text-align:center;text-decoration:underline;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">EXHIBIT A &#150; COLLATERAL DESCRIPTION</font></u></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Collateral consists
of all of Borrower&#146;s right, title and interest in and to the following personal
property:</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">All goods, Accounts, Equipment, Inventory, contract
rights or rights to payment of money, leases, license agreements, franchise
agreements, General Intangibles, commercial tort claims, documents, instruments
(including any promissory notes), chattel paper (whether tangible or
electronic), cash, deposit accounts, letters of credit rights (whether or not
the letter of credit is evidenced by a writing), securities, and all other
investment property, supporting obligations, and financial assets, whether now
owned or hereafter acquired, wherever located; and</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">all Borrower&#146;s Books relating to the foregoing, and
any and all claims, rights and interests in any of the above and all
substitutions for, additions, attachments, accessories, accessions and
improvements to and replacements, products, proceeds and insurance proceeds of
any or all of the foregoing.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Notwithstanding the foregoing,
the &#147;Collateral&#148; does not include (i)&nbsp;more than 66% of the presently
existing and hereafter arising issued and outstanding shares of capital stock
owned by Borrower of any Foreign Subsidiary which shares entitle the holder
thereof to vote for directors or any other matter and (ii)&nbsp;any of Borrower&#146;s
rights, title and interest in SEN Corporation, an SHI and Axcelis Company.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=33,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=1026788,FOLIO='1',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-07_ZBI40202.CHC",USER="LPALLES",CD='May 11 00:05 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-weight:bold;line-height:normal;margin:0in 0in .0001pt;text-align:center;text-decoration:underline;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">EXHIBIT B - COMPLIANCE CERTIFICATE</font></u></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.8%;">
  <p style="margin:0in -.25in .0001pt 0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">TO:</font></p>
  </td>
  <td width="69%" valign="top" style="padding:0in .7pt 0in .7pt;width:69.12%;">
  <p style="margin:0in -.25in .0001pt 0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">SILICON VALLEY BANK</font></p>
  </td>
  <td width="5%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:5.56%;">
  <p style="margin:0in -.25in .0001pt 0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Date:</font></p>
  </td>
  <td width="14%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:14.5%;">
  <p style="margin:0in -.25in .0001pt 0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.8%;">
  <p style="margin:0in -.25in .0001pt 0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">FROM:</font></p>
  </td>
  <td width="69%" valign="top" style="padding:0in .7pt 0in .7pt;width:69.12%;">
  <p style="margin:0in -.25in .0001pt 0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Axcelis Technologies,&nbsp;Inc. and Axcelis Technologies CCS
  Corporation</font></p>
  </td>
  <td width="20%" colspan="2" valign="bottom" style="padding:0in .7pt 0in .7pt;width:20.08%;">
  <p style="margin:0in -.25in .0001pt 0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The undersigned authorized officer of Axcelis
Technologies,&nbsp;Inc. and Axcelis Technologies CCS Corporation (&#147;Borrower&#148;)
certifies that under the terms and conditions of the Loan and Security
Agreement between, inter alia, Borrower and Bank (the &#147;Agreement&#148;), (1)&nbsp;Borrower
is in complete compliance for the period ending &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
with all required covenants except as noted below, (2)&nbsp;there are no Events
of Default, (3)&nbsp;all representations and warranties in the Agreement are
true and correct in all material respects on this date except as noted below;
provided, however, that such materiality qualifier shall not be applicable to
any representations and warranties that already are qualified or modified by
materiality in the text thereof; and provided, further that those
representations and warranties expressly referring to a specific date shall be
true, accurate and complete in all material respects as of such date, (4)&nbsp;Borrower,
and each of its Domestic Subsidiaries, has timely filed all required tax
returns and reports, and Borrower has timely paid all foreign, federal, state
and local taxes, assessments, deposits and contributions owed by Borrower
except as otherwise permitted pursuant to the terms of Section&nbsp;5.9 of the
Agreement, and (5)&nbsp;no Liens have been levied or claims made against
Borrower or any of its Domestic Subsidiaries relating to unpaid employee
payroll or benefits of which Borrower has not previously provided written
notification to Bank.&#160; Attached are the
required documents supporting the certification.&#160; The undersigned certifies that these are
prepared in accordance with GAAP consistently applied from one period to the
next except as explained in an accompanying letter or footnotes.&#160; The undersigned acknowledges that no
borrowings may be requested at any time or date of determination that Borrower
is not in compliance with any of the terms of the Agreement, and that
compliance is determined not just at the date this certificate is
delivered.&#160; Capitalized terms used but
not otherwise defined herein shall have the meanings given them in the
Agreement.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Please
indicate compliance status by circling Yes/No under &#147;Complies&#148; column.</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="46%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:46.38%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Reporting Covenant</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.5%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="29%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:29.82%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Required</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.5%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="17%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:17.42%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Complies</font></b></p>
  </td>
  <td width="1%" valign="top" style="padding:0in .7pt 0in .7pt;width:1.38%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="46%" valign="top" style="border:none;padding:0in .7pt 0in .7pt;width:46.38%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="29%" valign="top" style="border:none;padding:0in .7pt 0in .7pt;width:29.82%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="top" style="border:none;padding:0in .7pt 0in .7pt;width:17.42%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0in .7pt 0in .7pt;width:1.38%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="46%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:46.38%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Quarterly financial statements with Compliance
  Certificate</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="29%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:29.82%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Quarterly
  within 45 days</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:17.42%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes&nbsp;&nbsp;&nbsp;&nbsp;No</font></p>
  </td>
  <td width="1%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:1.38%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="46%" valign="top" style="padding:0in .7pt 0in .7pt;width:46.38%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Annual financial statement (CPA Audited) + CC</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="29%" valign="top" style="padding:0in .7pt 0in .7pt;width:29.82%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">FYE
  within 120 days</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="top" style="padding:0in .7pt 0in .7pt;width:17.42%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes&nbsp;&nbsp;&nbsp;&nbsp;No</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0in .7pt 0in .7pt;width:1.38%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="46%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:46.38%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10-Q, 10-K and 8-K</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="29%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:29.82%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Within
  10 days after filing with SEC</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:17.42%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes&nbsp;&nbsp;&nbsp;&nbsp;No</font></p>
  </td>
  <td width="1%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:1.38%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="46%" valign="top" style="padding:0in .7pt 0in .7pt;width:46.38%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Transaction Report, A/R&nbsp;&amp; A/P Agings,
  Inventory reports</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="29%" valign="top" style="padding:0in .7pt 0in .7pt;width:29.82%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Monthly
  within 30 days</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="top" style="padding:0in .7pt 0in .7pt;width:17.42%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes&nbsp;&nbsp;&nbsp;&nbsp;No</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0in .7pt 0in .7pt;width:1.38%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
following Intellectual Property was registered (or a registration application
submitted) after the Effective Date (if no registrations, state &#147;None&#148;)</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in -.25in .0001pt 4.0in;text-indent:-4.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="99%" style="border-collapse:collapse;width:99.98%;">
 <tr>
  <td width="50%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:50.68%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Financial&nbsp;Covenant</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.52%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="17%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:17.1%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Required</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.52%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:11.84%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Actual</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.52%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:11.44%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Complies</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="50%" valign="top" style="border:none;padding:0in 0in 0in 0in;width:50.68%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.52%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="17%" valign="bottom" style="border:none;padding:0in 0in 0in 0in;width:17.1%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.52%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;padding:0in 0in 0in 0in;width:11.84%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.52%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;padding:0in 0in 0in 0in;width:11.44%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.4%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="50%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:50.68%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Maintain, tested on a quarterly (unless
  otherwise indicated) basis:</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.52%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="17%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:17.1%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.52%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:11.84%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.52%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:11.44%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:1.4%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.68%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Liquidity, at all times</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="bottom" style="padding:0in 0in 0in 0in;width:17.1%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">&gt;</font></u>
  $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million</p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0in 0in 0in 0in;width:11.84%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0in 0in 0in 0in;width:11.44%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes&nbsp;&nbsp;&nbsp;&nbsp;No</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.4%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="50%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:50.68%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Profitability, as of the last day of each
  quarter</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:17.1%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:11.84%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:11.44%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes&nbsp;&nbsp;&nbsp;&nbsp;No</font></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:1.4%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.68%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Maximum Losses, as of the last day of each
  quarter</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="bottom" style="padding:0in 0in 0in 0in;width:17.1%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0in 0in 0in 0in;width:11.84%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0in 0in 0in 0in;width:11.44%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes&nbsp;&nbsp;&nbsp;&nbsp;No</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.4%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="line-height:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
following financial covenant analys[is][es] and information set forth in
Schedule 1 attached hereto are true and accurate as of the date of this
Certificate.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=34,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=85935,FOLIO='1',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-07_ZBI40202.CHC",USER="LPALLES",CD='May 11 00:05 2008' -->


<br clear="all" style="page-break-before:always;">


<div>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="line-height:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Schedule
2 attached hereto sets forth all applications for any patent or the
registration of any trademark or servicemark made by Borrower since the date of
the last Compliance Certificate delivered to Bank.</font></p>

<p style="line-height:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="line-height:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
following are the exceptions with respect to the certification above:&#160; (If no exceptions exist, state &#147;No exceptions
to note.&#148;)</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="52%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:52.24%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">AXCELIS TECHNOLOGIES,
  INC.</font></p>
  </td>
  <td width="47%" colspan="6" valign="top" style="padding:0in .7pt 0in .7pt;width:47.76%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">BANK
  USE ONLY</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="52%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:52.24%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="47%" colspan="6" valign="top" style="padding:0in .7pt 0in .7pt;width:47.76%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="52%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:52.24%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="4" valign="top" style="padding:0in .7pt 0in .7pt;width:11.08%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Received by: </font></p>
  </td>
  <td width="36%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:36.7%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.62%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="38%" colspan="5" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:38.62%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.98%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" colspan="5" valign="top" style="padding:0in .7pt 0in .7pt;width:17.72%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="30%" valign="top" style="padding:0in .7pt 0in .7pt;width:30.06%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">AUTHORIZED SIGNER</font></p>
  </td>
 </tr>
 <tr>
  <td width="5%" colspan="5" valign="top" style="padding:0in .7pt 0in .7pt;width:5.92%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name:</font></p>
  </td>
  <td width="36%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:36.32%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.98%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="5%" valign="top" style="padding:0in .7pt 0in .7pt;width:5.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Date:</font></p>
  </td>
  <td width="42%" colspan="5" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:42.76%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="4%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:4.96%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title:</font></p>
  </td>
  <td width="37%" colspan="3" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:37.28%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.98%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="47%" colspan="6" valign="top" style="padding:0in .7pt 0in .7pt;width:47.76%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="4%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:4.96%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="37%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:37.28%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.98%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="47%" colspan="6" valign="top" style="padding:0in .7pt 0in .7pt;width:47.76%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="52%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:52.24%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:7.76%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Verified:</font></p>
  </td>
  <td width="40%" colspan="3" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:40.0%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="52%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:52.24%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">AXCELIS TECHNOLOGIES
  CCS CORPORATION</font></p>
  </td>
  <td width="17%" colspan="5" valign="top" style="padding:0in .7pt 0in .7pt;width:17.74%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="30%" valign="top" style="padding:0in .7pt 0in .7pt;width:30.04%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">AUTHORIZED
  SIGNER</font></p>
  </td>
 </tr>
 <tr>
  <td width="52%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:52.24%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="5%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:5.1%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Date:</font></p>
  </td>
  <td width="42%" colspan="4" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:42.66%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="52%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:52.24%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="47%" colspan="6" valign="top" style="padding:0in .7pt 0in .7pt;width:47.76%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="3%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:3.72%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="38%" colspan="4" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:38.54%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.98%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="47%" colspan="6" valign="top" style="padding:0in .7pt 0in .7pt;width:47.76%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Compliance
  Status:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No</font></p>
  </td>
 </tr>
 <tr>
  <td width="5%" colspan="4" valign="top" style="padding:0in .7pt 0in .7pt;width:5.68%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name:</font></p>
  </td>
  <td width="36%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:36.56%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.98%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="47%" colspan="6" valign="top" style="padding:0in .7pt 0in .7pt;width:47.76%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="4%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:4.96%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title:</font></p>
  </td>
  <td width="37%" colspan="3" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:37.28%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.98%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="47%" colspan="6" valign="top" style="padding:0in .7pt 0in .7pt;width:47.76%;">
  <p style="line-height:normal;margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr height="0">
  <td width="27" style="border:none;"></td>
  <td width="1" style="border:none;"></td>
  <td width="9" style="border:none;"></td>
  <td width="5" style="border:none;"></td>
  <td width="2" style="border:none;"></td>
  <td width="272" style="border:none;"></td>
  <td width="75" style="border:none;"></td>
  <td width="37" style="border:none;"></td>
  <td width="1" style="border:none;"></td>
  <td width="20" style="border:none;"></td>
  <td width="25" style="border:none;"></td>
  <td width="50" style="border:none;"></td>
  <td width="225" style="border:none;"></td>
 </tr>
</table>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=35,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=152182,FOLIO='2',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-07_ZBI40202.CHC",USER="LPALLES",CD='May 11 00:05 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="line-height:normal;margin:0in 0in .0001pt;text-align:center;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Schedule 1 to Compliance Certificate</font></u></b></p>

<p align="center" style="line-height:normal;margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="line-height:normal;margin:0in 0in .0001pt;text-align:center;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Financial Covenants of Borrower</font></u></b></p>

<p align="center" style="line-height:normal;margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; In the event of a conflict between this Schedule and
the Loan Agreement, the terms of the Loan Agreement shall govern.</font></p>

<p style="line-height:normal;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="95%" style="border-collapse:collapse;width:95.58%;">
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Dated:</font></p>
  </td>
  <td width="20%" colspan="4" valign="top" style="padding:0in .7pt 0in .7pt;width:20.12%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td width="60%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:60.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I.</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Liquidity</font></b> (Section&nbsp;6.9(a))</p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Required:</font></p>
  </td>
  <td width="6%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:6.96%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="73%" colspan="4" valign="top" style="padding:0in .7pt 0in .7pt;width:73.48%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Actual:</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt 20.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A.</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Unrestricted cash and Cash
  Equivalents</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt 20.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt 20.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">B.</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Unused availability under
  the Revolving Line, as determined by Bank with reference to the<br>
  Availability Amount</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt 20.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt 20.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">C.</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Liquidity (line A plus
  line B)</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="89%" colspan="8" valign="top" style="padding:0in .7pt 0in .7pt;width:89.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Is line C equal to or
  greater than required amount [$50 million] or [$40 million]?</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:4.02%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="56%" colspan="4" valign="top" style="padding:0in .7pt 0.375pt .7pt;width:56.3%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">No, not in compliance</font></p>
  </td>
  <td width="4%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:4.02%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" valign="top" style="padding:0in .7pt 0.375pt .7pt;width:16.1%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes, in compliance</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">II.</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Maximum Losses</font></b> (Section&nbsp;6.9(b))</p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Required:</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Actual:</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A.</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Aggregate value of
  Borrower losses</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="89%" colspan="8" valign="top" style="padding:0in .7pt 0in .7pt;width:89.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Is line A less than or
  equal to $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;?</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:4.02%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="56%" colspan="4" valign="top" style="padding:0in .7pt 0.375pt .7pt;width:56.3%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">No, not in compliance</font></p>
  </td>
  <td width="4%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:4.02%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" valign="top" style="padding:0in .7pt 0.375pt .7pt;width:16.1%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes, in compliance</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">III.</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Profitability</font></b> (Section&nbsp;6.9(c))</p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Required:</font></p>
  </td>
  <td width="6%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:6.2%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="74%" colspan="5" valign="top" style="padding:0in .7pt 0in .7pt;width:74.24%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Actual:</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A.</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net Income</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="89%" colspan="8" valign="top" style="padding:0in .7pt 0in .7pt;width:89.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Is line A equal to or
  greater than $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;?</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="80%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:80.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="padding:0in .7pt 0in .7pt;width:9.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:4.02%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="56%" colspan="4" valign="top" style="padding:0in .7pt 0.375pt .7pt;width:56.3%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">No, not in compliance</font></p>
  </td>
  <td width="4%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:4.02%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" valign="top" style="padding:0in .7pt 0.375pt .7pt;width:16.1%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes, in compliance</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr height="0">
  <td width="64" style="border:none;"></td>
  <td width="29" style="border:none;"></td>
  <td width="16" style="border:none;"></td>
  <td width="5" style="border:none;"></td>
  <td width="94" style="border:none;"></td>
  <td width="287" style="border:none;"></td>
  <td width="29" style="border:none;"></td>
  <td width="115" style="border:none;"></td>
  <td width="75" style="border:none;"></td>
 </tr>
</table>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=36,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=213478,FOLIO='3',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-07_ZBI40202.CHC",USER="LPALLES",CD='May 11 00:05 2008' -->


<br clear="all" style="page-break-before:always;">


<div>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="line-height:normal;margin:0in 0in .0001pt;text-align:center;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Schedule 2 to Compliance Certificate</font></u></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="line-height:normal;margin:0in 0in .0001pt;text-align:center;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Additional Patents and Trademarks</font></u></b></p>

<p align="center" style="line-height:normal;margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="line-height:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">[Borrower
to provide]</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=37,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=528506,FOLIO='4',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-07_ZBI40202.CHC",USER="LPALLES",CD='May 11 00:05 2008' -->


<br clear="all" style="page-break-before:always;">


<div>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-weight:bold;line-height:normal;margin:0in 0in .0001pt;text-align:center;text-decoration:underline;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">EXHIBIT C &#150; TRANSACTION REPORT</font></u></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">[TO BE PROVIDED BY LENDING OFFICER]</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=38,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=849911,FOLIO='1',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-07_ZBI40202.CHC",USER="LPALLES",CD='May 11 00:05 2008' -->



<div>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-weight:bold;line-height:normal;margin:0in 0in .0001pt;text-align:center;text-decoration:underline;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">EXHIBIT D</font></u></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-weight:bold;line-height:normal;margin:0in 0in .0001pt;text-align:center;text-decoration:underline;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;text-decoration:none;">LIBOR SUPPLEMENT TO AGREEMENT</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This LIBOR Supplement to Agreement (the &#147;<b>LIBOR Supplement</b>&#148;) is a supplement to the Loan and Security&#160; Agreement (the &#147;<b>Loan
Agreement</b>&#148;) dated as of April&nbsp;23, 2008 between <b>SILICON VALLEY BANK</b> (&#147;<b>Bank</b>&#148;) and <b>AXCELIS TECHNOLOGIES, INC.</b> and <b>AXCELIS
TECHNOLOGIES CCS CORPORATION</b>, each a Delaware corporation with
offices located at 108 Cherry Hill Drive, Beverly, Massachusetts 01915
(individually and collectively, jointly and severally &#147;<b>Borrower</b>&#148;),
and forms a part of and is incorporated into the Loan Agreement.&#160; Notwithstanding any other provision of the
Loan Agreement to the contrary, the following provisions shall govern with
respect to LIBOR Advances as to the matters covered:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>DEFINITIONS.</u></font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Additional Costs</b>&#148;
is defined in Section&nbsp;6(b)&nbsp;of this LIBOR Supplement.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Continuation Date</b>&#148;
means any date on which Borrower elects to continue a LIBOR Advance into
another Interest Period.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Conversion Date</b>&#148;
means any date on which Borrower elects to convert a Prime Rate Advance to a
LIBOR Advance or a LIBOR Advance to a Prime Rate Advance.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Effective Amount</b>&#148;
means with respect to any Advances on any date, the aggregate outstanding
principal amount thereof after giving effect to any borrowing and prepayments
or repayments thereof occurring on such date.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Interest Payment Date</b>&#148;
means (a)&nbsp;with respect to any LIBOR Advance, the last day of each Interest
Period applicable to such LIBOR Advance and the last day of each month, and (b)&nbsp;with
respect to Prime Rate Advances, the first (1<sup>st</sup> ) day of each month
(or, if the first day of the month does not fall on a Business Day, then on the
first Business Day following such date), and each date a Prime Rate Advance is
converted into a LIBOR Advance to the extent of the amount converted to a LIBOR
Advance.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Interest Period</b>&#148;
means, as to any LIBOR Advance, the period commencing on the date of such LIBOR
Advance, or on the conversion/continuation date on which the LIBOR Advance is
converted into or continued as a LIBOR Advance, and ending on the date that is
one (1), two (2)&nbsp;or three (3)&nbsp;months thereafter, in each case as
Borrower may elect in the applicable Notice of Borrowing or Notice of
Conversion/Continuation; <i>provided, however,</i>
that (a)&nbsp;no Interest Period with respect to any LIBOR Advance shall end
later than the Revolving Line<b>  </b>Maturity Date,
(b)&nbsp;the last day of an Interest Period shall be determined in accordance
with the practices of the LIBOR interbank market as from time to time in
effect, (c)&nbsp;if any Interest Period would otherwise end on a day that is
not a Business Day, that Interest Period shall be extended to the following
Business Day unless, in the case of a LIBOR Advance, the result of such
extension would be to carry such Interest Period into another calendar month,
in which event such Interest Period shall end on the preceding Business Day, (d)&nbsp;any
Interest Period pertaining to a LIBOR Advance that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the calendar month at the end of such
Interest Period, and (e)&nbsp;interest shall accrue from and include the first
Business Day of an Interest Period but exclude the last Business Day of such
Interest Period.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Interest Rate
Determination Date</b>&#148; means each date for calculating the LIBOR for
purposes of determining the interest rate in respect of an Interest
Period.&#160; The Interest Rate Determination
Date shall be the second Business Day prior to the first day of the related
Interest Period for a LIBOR Advance.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>LIBOR</b>&#148; means,
for any Interest Rate Determination Date with respect to an Interest Period for
any Advance to be made, continued as or converted into a LIBOR Advance, the
rate of interest per annum determined by Bank to be the per annum rate of
interest at which deposits in United States Dollars are offered to Bank in the
London interbank market (rounded upward, if necessary, to the nearest
1/10,000th of one percent (0.0001%)) in which Bank customarily participates at
11:00&nbsp;a.m. (local time in such interbank market) two (2)&nbsp;Business
Days prior to the first day of such Interest Period for a period approximately
equal to such Interest Period and in an amount approximately equal to the amount
of such Advance.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=39,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=256614,FOLIO='2',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-09_ZBI40202.CHC",USER="LPALLES",CD='May 11 02:14 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>LIBOR Advance</b>&#148;
means an Advance that bears interest based at the LIBOR Rate.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>LIBOR Rate</b>&#148;
means, for each Interest Period in respect of LIBOR Advances comprising part of
the same Advances, an interest rate <i>per annum</i>
(rounded upward, if necessary, to the nearest 1/10,000th of one percent
(0.0001%)) equal to the greater of (i)&nbsp;two and three-quarters of one
percent (2.75%) and (ii)&nbsp;LIBOR for such Interest Period <i>divided by</i> one (1)&nbsp;<i>minus</i> the
Reserve Requirement for such Interest Period.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>LIBOR Rate Margin</b>&#148;
is (i)&nbsp;at such times as Borrower&#146;s unrestricted cash plus Cash Equivalents
at Bank are equal to or less than Fifty Million ($50,000,000), three and
three-quarters of one percent (3.75%) and (ii)&nbsp;at such times as Borrower&#146;s
unrestricted Cash plus Cash Equivalents at Bank are greater than Fifty Million
($50,000,000), three and one-quarter of one percent (3.25%).</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Notice of Borrowing</b>&#148;
means a notice given by Borrower to Bank in accordance with Section&nbsp;3.2(a),
substantially in the form of <u>Schedule I</u>, with appropriate insertions.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Notice of
Conversion/Continuation</b>&#148; means a notice given by Borrower to Bank in
accordance with Section&nbsp;3.5(b), substantially in the form of <u>Schedule
II</u>, with appropriate insertions.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Parent</b>&#148; is
defined in Section&nbsp;6(c)&nbsp;of this LIBOR Supplement.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Prime Rate Advance</b>&#148;
means an Advance that bears interest based at the Prime Rate.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Prime Rate Margin</b>&#148;
is (i)&nbsp;at such times as Borrower&#146;s unrestricted Cash plus Cash Equivalents
at Bank are equal to or less than Fifty Million ($50,000,000), one percent
(1.00%) and (ii)&nbsp;at such times as Borrower&#146;s unrestricted Cash plus Cash
Equivalents at Bank are greater than Fifty Million ($50,000,000), one-half of
one percent (0.50%).</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Regulatory Change</b>&#148;
means, with respect to Bank, any change on or after the Effective Date of the
Loan Agreement in United States federal, state, or foreign laws or regulations,
including Regulation D, or the adoption or making on or after such date of any
interpretations, directives, or requests applying to a class of lenders
including Bank, of or under any United States federal or state, or any foreign
laws or regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b>Reserve Requirement</b>&#148;
means, for any Interest Period, the average maximum rate at which reserves
(including any marginal, supplemental, or emergency reserves) are required to
be maintained during such Interest Period under Regulation D against &#147;Eurocurrency
liabilities&#148; (as such term is used in Regulation D) by member banks of the
Federal Reserve System.&#160; Without limiting
the effect of the foregoing, the Reserve Requirement shall reflect any other
reserves required to be maintained by Bank by reason of any Regulatory Change
against (a)&nbsp;any category of liabilities which includes deposits by
reference to which the LIBOR Rate is to be determined as provided in the
definition of LIBOR or (b)&nbsp;any category of extensions of credit or other
assets which include Advances.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">2</font></b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>GENERAL PROVISIONS RELATING TO
THE ADVANCES.</u></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Each Advance shall, at Borrower&#146;s option in accordance
with the terms of the Loan Agreement, be either in the form of a Prime Rate
Advance or a LIBOR Advance; provided that in no event shall Borrower maintain
at any time LIBOR Advances having more than three (3)&nbsp;different Interest
Periods.&#160; Borrower shall pay interest
accrued on the Advances at the rates and in the manner set forth in Section&nbsp;2.3(a).</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3</font></b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>PROCEDURES FOR BORROWING.</u></p>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b>Subject to the prior satisfaction of all
other applicable conditions to the making of an Advance set forth in the Loan
Agreement, each Advance shall be made upon Borrower&#146;s irrevocable written
notice delivered to Bank in the form of a Notice of Borrowing, each executed by
a Responsible Officer of Borrower or his or her designee or without
instructions if the Advances are necessary to meet Obligations which have
become due.&#160; Bank may rely on any
telephone notice given by a person whom Bank believes is a Responsible Officer
or designee.&#160; Borrower will indemnify
Bank for any loss Bank suffers due to such reliance.&#160; Such Notice of Borrowing must be received by
Bank prior to 12:00&nbsp;p.m. Eastern time,<font style="letter-spacing:0pt;"><font face="Times New Roman"> (i)&nbsp;</font></font>at least three (3)&nbsp;Business
Days prior to the requested Funding </h2>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=40,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=421392,FOLIO='3',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-09_ZBI40202.CHC",USER="LPALLES",CD='May 11 02:14 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Date, in the case of LIBOR Advances, and<font style="letter-spacing:0pt;"><font face="Times New Roman"> (ii)&nbsp;</font></font>on the
requested Funding Date, in the case of Prime Rate Advances, specifying:</font></h2>

<h3 align="left" style="font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h3>

<h3 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.1.1&#160;&#160;&#160;&#160;&#160;&#160; </font></b>the
amount of the Advance;</h3>

<h3 align="left" style="font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h3>

<h3 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.1.2&#160;&#160;&#160;&#160;&#160;&#160; </font></b>the
requested Funding Date;</h3>

<h3 align="left" style="font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h3>

<h3 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.1.3&#160;&#160;&#160;&#160;&#160;&#160; </font></b>whether
the Advance is to be comprised of LIBOR Advances or Prime Rate Advances; and</h3>

<h3 align="left" style="font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h3>

<h3 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.1.4&#160;&#160;&#160;&#160;&#160;&#160; </font></b>the
duration of the Interest Period applicable to any such LIBOR Advances included
in such notice; <i>provided </i>that if the Notice of
Borrowing shall fail to specify the duration of the Interest Period for any
Advance comprised of LIBOR Advances, such Interest Period shall be one (1)&nbsp;month.</h3>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.2&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b>The proceeds of all such Advances will
then be made available to Borrower on the Funding Date by Bank by transfer to
the Designated Deposit Account and, subsequently, by wire transfer to such
other account as Borrower may instruct in the Notice of Borrowing.&#160; No Advances shall be deemed made to Borrower,
and no interest shall accrue on any such Advance, until the related funds have
been deposited in the Designated Deposit Account.</h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">4</font></b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>CONVERSION
AND CONTINUATION ELECTIONS.</u></p>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">4.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b>So long as (i)&nbsp;no Event of Default or
Default exists; (ii)&nbsp;Borrower shall not have sent any notice of termination
of the Loan Agreement; and (iii)&nbsp;Borrower shall have complied with such
customary procedures as Bank has established from time to time for Borrower&#146;s
requests for LIBOR Advances, Borrower may, upon irrevocable written notice to
Bank:</h2>

<h3 align="left" style="font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h3>

<h3 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">4.1.1&#160;&#160;&#160;&#160;&#160;&#160; </font></b>elect
to convert on any Business Day, Prime Rate Advances into LIBOR Advances;</h3>

<h3 align="left" style="font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h3>

<h3 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">4.1.2&#160;&#160;&#160;&#160;&#160;&#160; </font></b>elect
to continue on any Interest Payment Date any LIBOR Advances maturing on such
Interest Payment Date; or</h3>

<h3 align="left" style="font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h3>

<h3 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">4.1.3&#160;&#160;&#160;&#160;&#160;&#160; </font></b>elect
to convert on any Interest Payment Date any LIBOR Advances maturing on such
Interest Payment Date into Prime Rate Advances.</h3>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">4.2&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b>Borrower shall deliver a Notice of
Conversion/Continuation to be received by Bank prior to 12:00&nbsp;p.m. Pacific
time (i)&nbsp;at least<font style="letter-spacing:0pt;"><font face="Times New Roman">  </font></font>three
(3)&nbsp;Business Days in advance of the Conversion Date or Continuation Date,
if any Advances are to be converted into or continued as LIBOR Advances; and<font style="letter-spacing:0pt;"><font face="Times New Roman"> (ii)&nbsp;</font></font>on the
Conversion Date, if any Advances are to be converted into Prime Rate Advances,
in each case specifying the:</h2>

<h3 align="left" style="font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h3>

<h3 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">4.2.1&#160;&#160;&#160;&#160;&#160;&#160; </font></b>proposed
Conversion Date or Continuation Date;</h3>

<h3 align="left" style="font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h3>

<h3 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">4.2.2&#160;&#160;&#160;&#160;&#160;&#160; </font></b>aggregate
amount of the Advances to be converted or continued;</h3>

<h3 align="left" style="font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h3>

<h3 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">4.2.3&#160;&#160;&#160;&#160;&#160;&#160; </font></b>nature
of the proposed conversion or continuation; and</h3>

<h3 align="left" style="font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h3>

<h3 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">4.2.4&#160;&#160;&#160;&#160;&#160;&#160; </font></b>duration
of the requested Interest Period.</h3>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">4.3&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b>If upon the
expiration of any Interest Period applicable to any LIBOR Advances, Borrower
shall have timely failed to select a new Interest Period to be applicable to
such LIBOR Advances, Borrower shall be deemed to have elected to convert such
LIBOR Advances into Prime Rate Advances.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">4.4&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b>Any LIBOR Advances shall, at Bank&#146;s
option, convert into Prime Rate Advances in the event that (i)&nbsp;an Event of
Default or Default shall exist, or (ii)&nbsp;the aggregate principal amount of
the Prime Rate Advances which have been previously converted to LIBOR Advances,
or the aggregate principal amount of existing LIBOR Advances continued, as the
case may be, at the beginning of an Interest Period shall at any time during
such Interest Period exceed the Revolving Line.&#160;
Borrower agrees to pay Bank, upon demand by Bank (or Bank may, at </h2>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=41,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=148034,FOLIO='4',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-09_ZBI40202.CHC",USER="LPALLES",CD='May 11 02:14 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">its option, charge the Designated Deposit Account or
any other account Borrower maintains with Bank) any amounts required to
compensate Bank for any loss (including loss of anticipated profits), cost, or
expense incurred by Bank, as a result of the conversion of LIBOR Advances to
Prime Rate Advances pursuant to any of the foregoing.</font></h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">4.5&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b>Notwithstanding anything to the contrary
contained herein, Bank shall not be required to purchase United States Dollar
deposits in the London interbank market or other applicable LIBOR market to
fund any LIBOR Advances, but the provisions hereof shall be deemed to apply as
if Bank had purchased such deposits to fund the LIBOR Advances.</h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5</font></b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>SPECIAL PROVISIONS GOVERNING
LIBOR ADVANCES.</u></p>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><u>Determination of Applicable Interest
Rate</u>.&#160; As soon as practicable on each
Interest Rate Determination Date, Bank shall determine (which determination
shall, absent manifest error in calculation, be final, conclusive and binding
upon all parties) the interest rate that shall apply to the LIBOR Advances for
which an interest rate is then being determined for the applicable Interest
Period and shall promptly give notice thereof (in writing or by telephone
confirmed in writing) to Borrower.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5.2&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><u>Inability to Determine Applicable
Interest Rate</u>.&#160; In the event that
Bank shall have determined (which determination shall be final and conclusive
and binding upon all parties hereto), on any Interest Rate Determination Date
with respect to any LIBOR Advance, that by reason of circumstances affecting
the London interbank market adequate and fair means do not exist for
ascertaining the interest rate applicable to such Advance on the basis provided
for in the definition of LIBOR, Bank shall on such date give notice (by
facsimile or by telephone confirmed in writing) to Borrower of such
determination, whereupon (i)&nbsp;no Advances may be made as, or converted to,
LIBOR Advances until such time as Bank notifies Borrower that the circumstances
giving rise to such notice no longer exist, and (ii)&nbsp;any Notice of
Borrowing or Notice of Conversion/Continuation given by Borrower with respect
to Advances in respect of which such determination was made shall be deemed to
be rescinded by Borrower.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5.3&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><u>Compensation for Breakage or
Non-Commencement of Interest Periods</u>.&#160;
Borrower shall compensate Bank, upon written request by Bank (which
request shall set forth the manner and method of computing such compensation),
for all reasonable losses, expenses and liabilities, if any (including any
interest paid by Bank to lenders of funds borrowed by it to make or carry its
LIBOR Advances and any loss, expense or liability incurred by Bank in
connection with the liquidation or re-employment of such funds) such that Bank
may incur: (i)&nbsp;if for any reason (other than a default by Bank or due to
any failure of Bank to fund LIBOR Advances due to impracticability or
illegality under Sections&nbsp;6(d)&nbsp;and 6(e)&nbsp;of this LIBOR
Supplement) a borrowing or a conversion to or continuation of any LIBOR Advance
does not occur on a date specified in a Notice of Borrowing or a Notice of
Conversion/Continuation, as the case may be, or (ii)&nbsp;if any principal
payment or any conversion of any of its LIBOR Advances occurs on a date prior
to the last day of an Interest Period applicable to that Advance.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5.4&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><u>Assumptions Concerning Funding of
LIBOR Advances</u>.&#160; Calculation of all
amounts payable to Bank under this Section&nbsp;5 and under Section&nbsp;3 of
this LIBOR Supplement shall be made as though Bank had actually funded each of
its relevant LIBOR Advances through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to the definition of LIBOR Rate
in an amount equal to the amount of such LIBOR Advance and having a maturity
comparable to the relevant Interest Period; <i>provided, however</i>,
that Bank may fund each of its LIBOR Advances in any manner it sees fit and the
foregoing assumptions shall be utilized only for the purposes of calculating
amounts payable under this Section&nbsp;5 and under Section&nbsp;3 of this
LIBOR Supplement.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5.5&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><u>LIBOR Advances After Default</u>.&#160; After the occurrence and during the
continuance of an Event of Default, (i)&nbsp;Borrower may not elect to have an
Advance be made or continued as, or converted to, a LIBOR Advance after the
expiration of any Interest Period then in effect for such Advance and (ii)&nbsp;subject
to the provisions of Section&nbsp;5(c), any Notice of Conversion/Continuation
given by Borrower with respect to a requested conversion/continuation that has
not yet occurred shall be deemed to be rescinded by Borrower and be deemed a
request to convert or continue Advances referred to therein as Prime Rate
Advances.</h2>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=42,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=557450,FOLIO='5',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-09_ZBI40202.CHC",USER="LPALLES",CD='May 11 02:14 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6</font></b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>ADDITIONAL
REQUIREMENTS/PROVISIONS REGARDING LIBOR ADVANCES.</u></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b>If for any reason (including voluntary or
mandatory prepayment or acceleration), Bank receives all or part of the
principal amount of a LIBOR Advance prior to the last day of the Interest
Period for such Advance, Borrower shall immediately notify Borrower&#146;s account
officer at Bank and, on demand by Bank, pay Bank the amount (if any) by which (i)&nbsp;the
additional interest which would have been payable on the amount so received had
it not been received until the last day of such Interest Period exceeds (ii)&nbsp;the
interest which would have been recoverable by Bank by placing the amount so
received on deposit in the certificate of deposit markets, the offshore
currency markets, or United States Treasury investment products, as the case
may be, for a period starting on the date on which it was so received and
ending on the last day of such Interest Period at the interest rate determined
by Bank in its reasonable discretion.&#160;
Bank&#146;s determination as to such amount shall be conclusive absent
manifest error.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.2&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b>Borrower shall pay Bank, upon demand by
Bank, from time to time such amounts as Bank may determine to be necessary to
compensate it for any costs incurred by Bank that Bank determines are
attributable to its making or maintaining of any amount receivable by Bank
hereunder in respect of any Advances relating thereto (such increases in costs
and reductions in amounts receivable being herein called &#147;<b>Additional
Costs</b>&#148;), in each case resulting from any Regulatory Change which:</h2>

<h3 align="left" style="font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h3>

<h3 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.2.1&#160;&#160;&#160;&#160;&#160;&#160; </font></b>changes
the basis of taxation of any amounts payable to Bank under the Loan Agreement
in respect of any Advances (other than changes which affect taxes measured by
or imposed on the overall net income of Bank by the jurisdiction in which Bank
has its principal office);</h3>

<h3 align="left" style="font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h3>

<h3 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.2.2&#160;&#160;&#160;&#160;&#160;&#160; </font></b>imposes
or modifies any reserve, special deposit or similar requirements relating to
any extensions of credit or other assets of, or any deposits with, or other
liabilities of Bank (including any Advances or any deposits referred to in the
definition of LIBOR); or</h3>

<h3 align="left" style="font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h3>

<h3 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.2.3&#160;&#160;&#160;&#160;&#160;&#160; </font></b>imposes
any other condition affecting the Loan Agreement (or any of such extensions of
credit or liabilities).</h3>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Bank will notify Borrower of any event occurring after
the Effective Date which will entitle Bank to compensation pursuant to this Section&nbsp;6
as promptly as practicable after it obtains knowledge thereof and determines to
request such compensation.&#160; Bank will
furnish Borrower with a statement setting forth the basis and amount of each
request by Bank for compensation under this Section&nbsp;6.&#160; Determinations and allocations by Bank for
purposes of this Section&nbsp;6 of the effect of any Regulatory Change on its
costs of maintaining its obligations to make Advances, of making or maintaining
Advances, or on amounts receivable by it in respect of Advances, and of the
additional amounts required to compensate Bank in respect of any Additional
Costs, shall be conclusive absent manifest error.</font></p>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.3&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b>If Bank shall determine that the adoption
or implementation of any applicable law, rule, regulation, or treaty regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank, or
comparable agency charged with the interpretation or administration thereof, or
compliance by Bank (or its applicable lending office) with any respect or
directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank, or comparable agency, has or would have
the effect of reducing the rate of return on capital of Bank or any person or
entity controlling Bank (a &#147;<b>Parent</b>&#148;) as a
consequence of its obligations hereunder to a level below that which Bank (or
its Parent) could have achieved but for such adoption, change, or compliance
(taking into consideration policies with respect to capital adequacy) by an
amount deemed by Bank to be material, then from time to time, within fifteen
(15) days after demand by Bank, Borrower shall pay to Bank such additional
amount or amounts as will compensate Bank for such reduction.&#160; A statement of Bank claiming compensation
under this Section&nbsp;6(c)&nbsp;and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive absent manifest error.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.4&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b>If, at any time, Bank, in its sole and
absolute discretion, determines that (i)&nbsp;the amount of LIBOR Advances for
periods equal to the corresponding Interest Periods are not available to Bank
in the offshore currency interbank markets, or (ii)&nbsp;LIBOR does not
accurately reflect the cost to Bank of lending the LIBOR Advances, then Bank
shall promptly give notice thereof to Borrower.&#160;
Upon the giving of such notice, Bank&#146;s obligation to make the LIBOR
Advances shall terminate; <i>provided, however</i>,
Advances shall not terminate if Bank and Borrower agree in writing to a
different interest rate applicable to LIBOR Advances.</h2>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></h2>

<h2 align="left" style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:left;text-indent:1.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.5&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b>If it shall become unlawful for Bank to
continue to fund or maintain any LIBOR Advances, or to perform its obligations
hereunder, upon demand by Bank, Borrower shall prepay the Advances in </h2>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=43,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=134416,FOLIO='6',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-09_ZBI40202.CHC",USER="LPALLES",CD='May 11 02:14 2008' -->


<br clear="all" style="page-break-before:always;">


<div>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 align="left" style="font-weight:normal;margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">full with accrued interest thereon and all other
amounts payable by Borrower hereunder (including, without limitation, any
amount payable in connection with such prepayment pursuant to Section&nbsp;6(a)&nbsp;of
this LIBOR Supplement).&#160; Notwithstanding
the foregoing, to the extent a determination by Bank as described above relates
to a LIBOR Advance then being requested by Borrower pursuant to a Notice of
Borrowing or a Notice of Conversion/Continuation, Borrower shall have the
option, subject to the provisions of Section&nbsp;5(c)&nbsp;of this LIBOR
Supplement, to (i)&nbsp;rescind such Notice of Borrowing or Notice of
Conversion/Continuation by giving notice (by facsimile or by telephone
confirmed in writing) to Bank of such rescission on the date on which Bank
gives notice of its determination as described above, or (ii)&nbsp;modify such
Notice of Borrowing or Notice of Conversion/Continuation to obtain a Prime Rate
Advance or to have outstanding Advances converted into or continued as Prime
Rate Advances by giving notice (by facsimile or by telephone confirmed in
writing) to Bank of such modification on the date on which Bank gives notice of
its determination as described above.</font></h2>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=44,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=64327,FOLIO='7',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-09_ZBI40202.CHC",USER="LPALLES",CD='May 11 02:14 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">SCHEDULE I</font></u></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">FORM&nbsp;OF NOTICE OF BORROWING</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">AXCELIS TECHNOLOGIES, INC.
and AXCELIS TECHNOLOGIES CCS CORPORATION<br><br></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="66%" valign="top" style="padding:0in .7pt 0in .7pt;width:66.62%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="5%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:5.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Date:</font></p>
  </td>
  <td width="16%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:16.06%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td width="12%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:12.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.06%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">TO:</font></p>
  </td>
  <td width="91%" valign="top" style="padding:0in .7pt 0in .7pt;width:91.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">SILICON
  VALLEY BANK</font></p>
  </td>
 </tr>
 <tr>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.06%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="91%" valign="top" style="padding:0in .7pt 0in .7pt;width:91.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3003
  Tasman Drive</font></p>
  </td>
 </tr>
 <tr>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.06%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="91%" valign="top" style="padding:0in .7pt 0in .7pt;width:91.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Santa
  Clara, CA&nbsp; 95054</font></p>
  </td>
 </tr>
 <tr>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.06%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="91%" valign="top" style="padding:0in .7pt 0in .7pt;width:91.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Attention:&nbsp; Corporate Services Department</font></p>
  </td>
 </tr>
 <tr>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.06%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="91%" valign="top" style="padding:0in .7pt 0in .7pt;width:91.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.06%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">RE:</font></p>
  </td>
  <td width="91%" valign="top" style="padding:0in .7pt 0in .7pt;width:91.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Loan
  and Security Agreement dated as of April&nbsp;23, 2008 (as amended, modified,
  supplemented or restated from time to time, the &#147;<b><i style="font-weight:bold;">Loan
  Agreement</i></b>&#148;), by and among Axcelis Technologies,&nbsp;Inc. and
  Axcelis Technologies CCS Corporation (individually and collectively, jointly
  and severally &#147;<b><i style="font-weight:bold;">Borrower</i></b>&#148;), and Silicon
  Valley Bank (the &#147;<b><i style="font-weight:bold;">Bank</i></b>&#148;)</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Ladies and Gentlemen:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The undersigned refers to the Loan Agreement, the terms defined therein
and used herein as so defined, and hereby gives you notice irrevocably,
pursuant to Section&nbsp;3 of the LIBOR Supplement to the Loan Agreement, of
the borrowing of an Advance.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-autospace:none;text-indent:.5in;"><b><font size="2" face="Times New Roman">&nbsp;</font></b></p>

<p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:left;text-autospace:none;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b>The Funding Date, which shall be a Business
Day, of the requested borrowing is &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.</p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-autospace:none;text-indent:.5in;"><b><font size="2" face="Times New Roman">&nbsp;</font></b></p>

<p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:left;text-autospace:none;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">2.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b>The aggregate amount of the requested
borrowing is $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.</p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-autospace:none;text-indent:.5in;"><b><font size="2" face="Times New Roman">&nbsp;</font></b></p>

<p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:left;text-autospace:none;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b>The requested Advance shall consist of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
of Prime Rate Advances and $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
of LIBOR Advances.</p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-autospace:none;text-indent:.5in;"><b><font size="2" face="Times New Roman">&nbsp;</font></b></p>

<p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:left;text-autospace:none;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">4.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b>The duration of the Interest Period for the
LIBOR Advances included in the requested Advance shall be &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
month(s).</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;page-break-after:avoid;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
undersigned hereby certifies that the following statements are true on the date
hereof, and will be true on the date of the proposed Advance before and after
giving effect thereto, and to the application of the proceeds therefrom, as
applicable:</font></p>

<p style="letter-spacing:0pt;margin:0in 0in .0001pt .5in;page-break-after:avoid;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;page-break-after:avoid;text-indent:.5in;"><font style="letter-spacing:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font></font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; all
representations and warranties of Borrower contained in the Loan Agreement are
true, accurate and complete in all material respects as of the date hereof;</p>

<p style="letter-spacing:0pt;margin:0in 0in .0001pt .5in;page-break-after:avoid;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;page-break-after:avoid;text-indent:.5in;"><font style="letter-spacing:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font></font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; no
Default or Event of Default has occurred and is continuing, or would result
from such proposed Advance; and</p>

<p style="letter-spacing:0pt;margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:.5in;"><font style="letter-spacing:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></font>the
requested Advance will not cause the aggregate principal amount of the
outstanding Advances to exceed, as of the designated Funding Date, (a)&nbsp;the
Revolving Line, minus (b)&nbsp;the amount of all outstanding Letters of Credit
(including drawn but unreimbursed Letters of Credit) plus an amount equal to
the Letter of Credit Reserves, minus (c)&nbsp;the FX Reserve, and minus (d)&nbsp;the
outstanding principal balance of any Advances (including any amounts used for
Cash Management Services).</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">[Signature page&nbsp;follows.]</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=45,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=395269,FOLIO='8',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-09_ZBI40202.CHC",USER="LPALLES",CD='May 11 02:14 2008' -->


<br clear="all" style="page-break-before:always;">


<div>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="41%" valign="top" style="padding:0in .7pt 0in .7pt;width:41.14%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="58%" valign="top" style="padding:0in .7pt 0in .7pt;width:58.86%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">BORROWER:</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="41%" valign="top" style="padding:0in .7pt 0in .7pt;width:41.14%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="58%" valign="top" style="padding:0in .7pt 0in .7pt;width:58.86%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="41%" valign="top" style="padding:0in .7pt 0in .7pt;width:41.14%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="58%" valign="top" style="padding:0in .7pt 0in .7pt;width:58.86%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">[AXCELIS ENTITY]</font></b></p>
  </td>
 </tr>
</table>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="35%" valign="top" style="padding:0in 0in 0in 0in;width:35.62%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="64%" colspan="5" valign="top" style="padding:0in 0in 0in 0in;width:64.38%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="35%" valign="top" style="padding:0in 0in 0in 0in;width:35.62%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.76%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="47%" colspan="3" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:47.2%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="top" style="padding:0in 0in 0in 0in;width:13.42%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="35%" valign="top" style="padding:0in 0in 0in 0in;width:35.62%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="5%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:5.62%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name:</font></p>
  </td>
  <td width="45%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:45.34%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="top" style="padding:0in 0in 0in 0in;width:13.42%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="35%" valign="top" style="padding:0in 0in 0in 0in;width:35.62%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="5%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:5.62%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="5%" valign="top" style="padding:0in 0in 0in 0in;width:5.0%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;Title:</font></p>
  </td>
  <td width="40%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:40.34%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="top" style="padding:0in 0in 0in 0in;width:13.42%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr height="0">
  <td width="266" style="border:none;"></td>
  <td width="28" style="border:none;"></td>
  <td width="14" style="border:none;"></td>
  <td width="37" style="border:none;"></td>
  <td width="302" style="border:none;"></td>
  <td width="100" style="border:none;"></td>
 </tr>
</table>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

<p style="margin:0in 0in .0001pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">For internal Bank use only</font></i></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.02%;">
 <tr>
  <td width="27%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:27.68%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">LIBOR&nbsp;Pricing&nbsp;Date</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.5%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="21%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:21.28%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">LIBOR</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.5%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="21%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:21.28%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">LIBOR&nbsp;Variance</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.5%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="21%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:21.28%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Maturity&nbsp;Date</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="27%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in 0in 0in 0in;width:27.68%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="21%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in 0in 0in 0in;width:21.28%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="21%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in 0in 0in 0in;width:21.28%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">%</font></p>
  </td>
  <td width="21%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in 0in 0in 0in;width:21.28%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:1.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=46,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=429268,FOLIO='9',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-09_ZBI40202.CHC",USER="LPALLES",CD='May 11 02:14 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-weight:bold;line-height:normal;margin:0in 0in .0001pt;text-align:center;text-decoration:underline;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">SCHEDULE II</font></u></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-weight:bold;line-height:normal;margin:0in 0in .0001pt;text-align:center;text-decoration:underline;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;text-decoration:none;">FORM&nbsp;OF NOTICE OF CONVERSION/CONTINUATION</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">AXCELIS TECHNOLOGIES, INC.
and AXCELIS TECHNOLOGIES CCS CORPORATION<br><br></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="71%" valign="top" style="padding:0in .7pt 0in .7pt;width:71.06%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="5%" valign="top" style="padding:0in .7pt 0in .7pt;width:5.12%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Date:</font></p>
  </td>
  <td width="23%" valign="top" style="padding:0in .7pt 0in .7pt;width:23.82%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.06%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">TO:</font></p>
  </td>
  <td width="91%" valign="top" style="padding:0in .7pt 0in .7pt;width:91.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">SILICON
  VALLEY BANK</font></p>
  </td>
 </tr>
 <tr>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.06%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="91%" valign="top" style="padding:0in .7pt 0in .7pt;width:91.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3003 Tasman Drive</font></p>
  </td>
 </tr>
 <tr>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.06%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="91%" valign="top" style="padding:0in .7pt 0in .7pt;width:91.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Santa Clara, CA&nbsp;
  95054</font></p>
  </td>
 </tr>
 <tr>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.06%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="91%" valign="top" style="padding:0in .7pt 0in .7pt;width:91.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Attention:</font></p>
  </td>
 </tr>
 <tr>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.06%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="91%" valign="top" style="padding:0in .7pt 0in .7pt;width:91.94%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.06%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">RE:</font></p>
  </td>
  <td width="91%" valign="top" style="padding:0in .7pt 0in .7pt;width:91.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Loan
  and Security Agreement dated as of April&nbsp;23, 2008 (as amended, modified,
  supplemented or restated from time to time, the &#147;<b><i style="font-weight:bold;">Loan
  Agreement</i></b>&#148;), by and among Axcelis Technologies,&nbsp;Inc. and
  Axcelis Technologies CCS Corporation (individually and collectively, jointly
  and severally &#147;<b><i style="font-weight:bold;">Borrower</i></b>&#148;), and Silicon
  Valley Bank (the &#147;<b><i style="font-weight:bold;">Bank</i></b>&#148;)</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Ladies and Gentlemen:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The undersigned refers to the Loan Agreement, the terms defined therein
being used herein as therein defined, and hereby gives you notice irrevocably,
pursuant to Section&nbsp;4 of the LIBOR Supplement to the Loan Agreement, of
the [conversion] [continuation] of the Advances specified herein, that:</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-autospace:none;text-indent:.5in;"><b><font size="2" face="Times New Roman">&nbsp;</font></b></p>

<p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:left;text-autospace:none;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b>The date of the [conversion] [continuation]
is &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
20&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.</p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-autospace:none;text-indent:.5in;"><b><font size="2" face="Times New Roman">&nbsp;</font></b></p>

<p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:left;text-autospace:none;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">2.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b>The aggregate amount of the proposed Advances
to be [converted] is $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or
[continued] is
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.</p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-autospace:none;text-indent:.5in;"><b><font size="2" face="Times New Roman">&nbsp;</font></b></p>

<p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:left;text-autospace:none;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b>The Advances are to be [converted into]
[continued as] [LIBOR] [Prime Rate] Advances.</p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-autospace:none;text-indent:.5in;"><b><font size="2" face="Times New Roman">&nbsp;</font></b></p>

<p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:left;text-autospace:none;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">4.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b>The duration of the Interest Period for the
LIBOR Advances included in the [conversion] [continuation] shall be &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
month(s).</p>

<p style="color:black;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" color="black" face="Times New Roman" style="color:windowtext;font-size:10.0pt;">&nbsp;</font></p>

<p style="color:black;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" color="black" face="Times New Roman" style="color:windowtext;font-size:10.0pt;">The undersigned, on behalf of Borrower, hereby certifies that
the following statements are true on the date hereof, and will be true on the
date of the proposed [conversion] [continuation], before and after giving
effect thereto and to the application of the proceeds therefrom:</font></p>

<p style="letter-spacing:0pt;margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:.5in;"><font style="letter-spacing:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></font>no
Default or Event of Default has occurred and is continuing, or would result
from such proposed [conversion] [continuation].</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">[Signature page&nbsp;follows.]</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=47,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=386247,FOLIO='1',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-09_ZBI40202.CHC",USER="LPALLES",CD='May 11 02:14 2008' -->


<br clear="all" style="page-break-before:always;">


<div>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="47%" valign="top" style="padding:0in .7pt 0in .7pt;width:47.82%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="52%" colspan="5" valign="top" style="padding:0in .7pt 0in .7pt;width:52.18%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="47%" valign="top" style="padding:0in .7pt 0in .7pt;width:47.82%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="52%" colspan="5" valign="top" style="padding:0in .7pt 0in .7pt;width:52.18%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">BORROWER:</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="47%" valign="top" style="padding:0in .7pt 0in .7pt;width:47.82%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="52%" colspan="5" valign="top" style="padding:0in .7pt 0in .7pt;width:52.18%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="47%" valign="top" style="padding:0in .7pt 0in .7pt;width:47.82%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="52%" colspan="5" valign="top" style="padding:0in .7pt 0in .7pt;width:52.18%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">[AXCELIS ENTITY]</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="47%" valign="top" style="padding:0in .7pt 0in .7pt;width:47.82%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" colspan="5" valign="top" style="padding:0in .7pt 0in .7pt;width:52.18%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="47%" valign="top" style="padding:0in .7pt 0in .7pt;width:47.82%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.8%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="38%" colspan="3" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:38.28%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.1%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="47%" valign="top" style="padding:0in .7pt 0in .7pt;width:47.82%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:6.04%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name:</font></p>
  </td>
  <td width="36%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:36.04%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.1%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="47%" valign="top" style="padding:0in .7pt 0in .7pt;width:47.82%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="5%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:5.04%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title:</font></p>
  </td>
  <td width="37%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:37.04%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in .7pt 0in .7pt;width:10.1%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr height="0">
  <td width="358" style="border:none;"></td>
  <td width="28" style="border:none;"></td>
  <td width="9" style="border:none;"></td>
  <td width="7" style="border:none;"></td>
  <td width="270" style="border:none;"></td>
  <td width="76" style="border:none;"></td>
 </tr>
</table>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

<p style="margin:0in 0in .0001pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">For internal Bank use only</font></i></p>

<p style="margin:0in 0in .0001pt .5in;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">&nbsp;</font></i></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.02%;">
 <tr>
  <td width="27%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:27.68%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">LIBOR&nbsp;Pricing&nbsp;Date</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.5%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="21%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:21.28%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">LIBOR</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.5%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="21%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:21.28%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">LIBOR&nbsp;Variance</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.5%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="21%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:21.28%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Maturity&nbsp;Date</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="27%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in 0in 0in 0in;width:27.68%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="21%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in 0in 0in 0in;width:21.28%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="21%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in 0in 0in 0in;width:21.28%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">%</font></p>
  </td>
  <td width="21%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in 0in 0in 0in;width:21.28%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:1.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=48,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=543292,FOLIO='2',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-09_ZBI40202.CHC",USER="LPALLES",CD='May 11 02:14 2008' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-weight:bold;line-height:normal;margin:0in 0in .0001pt;text-align:center;text-decoration:underline;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">Schedule 6.8(b)</font></u></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="24%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:24.06%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;page-break-after:avoid;text-align:left;text-indent:0in;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Institution
  Name</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.72%;">
  <p align="center" style="line-height:normal;margin:0in 0in .0001pt;page-break-after:avoid;text-align:center;text-indent:0in;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="73%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:73.22%;">
  <p align="center" style="line-height:normal;margin:0in 0in .0001pt;page-break-after:avoid;text-align:center;text-indent:0in;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Account
  Number (if applicable) / Maximum Amount</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="24%" valign="top" style="border:none;padding:0in .7pt 0in .7pt;width:24.06%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.72%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="73%" valign="top" style="border:none;padding:0in .7pt 0in .7pt;width:73.22%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="24%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:24.06%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Beverly
  National Bank</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:2.72%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="73%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:73.22%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2-8000171-20;&nbsp; Amount not to exceed $30,000</font></p>
  </td>
 </tr>
 <tr>
  <td width="24%" valign="top" style="padding:0in .7pt 0in .7pt;width:24.06%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.72%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="73%" valign="top" style="padding:0in .7pt 0in .7pt;width:73.22%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="24%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:24.06%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">US
  Bank</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:2.72%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="73%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:73.22%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">793841000
  (Trust account used solely for payments made in connection with the
  Convertible Senior Subordinated Notes Due 2009)</font></p>
  </td>
 </tr>
 <tr>
  <td width="24%" valign="top" style="padding:0in .7pt 0in .7pt;width:24.06%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.72%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="73%" valign="top" style="padding:0in .7pt 0in .7pt;width:73.22%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="24%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:24.06%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Merrill
  Lynch</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:2.72%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="73%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:73.22%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">171
  08U80; Amount (value) not to exceed $15,000</font></p>
  </td>
 </tr>
 <tr>
  <td width="24%" valign="top" style="padding:0in .7pt 0in .7pt;width:24.06%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.72%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="73%" valign="top" style="padding:0in .7pt 0in .7pt;width:73.22%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="24%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:24.06%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt 10.0pt;text-align:left;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">United
  States Patent and Trademark Office</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:2.72%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="73%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:73.22%;">
  <p align="left" style="line-height:normal;margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Amount
  not to exceed $85,000 (used solely for the payment of various fees to USPTO)</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-weight:bold;line-height:normal;margin:0in 0in .0001pt;text-align:center;text-decoration:underline;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">Schedule 7.2</font></u></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h6 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Matrix
Integrated Systems Acquisition Corporation (California corporation)</h6>

<h6 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Matrix
Europe, N.V. (Belgium)</h6>

<h6 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Axcelis
Technologies, B.V. (Netherlands)</h6>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=49,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2",CHK=463461,FOLIO='3',FILE="DISK116:[08ZBI2.08ZBI40202]11302-2-KC-09_ZBI40202.CHC",USER="LPALLES",CD='May 11 02:14 2008' -->


<BR>
<!-- SEQ=,FILE='QUICKLINK',USER=LPALLES,SEQ=,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="2" -->
<!-- TOCEXISTFLAG -->
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>3
<FILENAME>a2185666zex-31_1.htm
<DESCRIPTION>EXHIBIT 31.1
<TEXT>
<HTML>
<HEAD>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
<BR>
<FONT SIZE=3 ><A HREF="#08ZBI40201_3">QuickLinks</A></FONT>
<font size=3> -- Click here to rapidly navigate through this document</font>
<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_BASECOLOR,"Black" -->




<!-- COMMAND=ADD_DEFAULTFONT,"font-family:times;" -->


 </FONT></P>

<!-- TOC_END -->
<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><A
NAME="kk40201_exhibit_31.1"> </A>
<A NAME="toc_kk40201_1"> </A>
<BR></FONT><FONT SIZE=2><B>Exhibit&nbsp;31.1    <BR>    </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><I> <A NAME="kk40201_certification_of_the_principal__cer04372"> </A>
<A NAME="toc_kk40201_2"> </A>
<BR>    </I></FONT><FONT SIZE=2><B>CERTIFICATION<BR>  of the Principal Executive Officer<BR>  Pursuant to Rule&nbsp;13a-14(a)/15d-14(a) (implementing Section&nbsp;302 of the Sarbanes-Oxley Act)    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I,
Mary G. Puma, certify that: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>1.</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>I
have reviewed this quarterly report on Form&nbsp;10-Q of Axcelis Technologies,&nbsp;Inc.;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>2.</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>3.</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the company as of, and for, the periods presented in this report;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>4.</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules&nbsp;13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules&nbsp;13a-15(f) and 15d-15(f))
for the company and have:
<BR><BR></FONT>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating
to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(c)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Evaluated
the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(d)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Disclosed
in this report any change in the company's internal control over financial reporting that occurred during the company's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and
<BR><BR></FONT></DD></DL>
</DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>5.</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the
audit committee of the company's board of directors (or persons performing the equivalent functions):
<BR><BR></FONT>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
company's ability to record, process, summarize and report financial information; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. </FONT></DD></DL>
</DD></DL>
</UL>
<BR>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="76%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="47%" style="font-family:times;"><FONT SIZE=2>Date: May&nbsp;12, 2008</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="50%" style="font-family:times;"><FONT SIZE=2>/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>MARY G. PUMA</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Mary G. Puma,<BR></FONT> <FONT SIZE=2><I>Chairman, Chief Executive Officer and
President</I></FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=1,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="3",CHK=502799,FOLIO='blank',FILE='DISK132:[08ZBI1.08ZBI40201]KK40201A.;11',USER='LPALLES',CD='12-MAY-2008;10:43' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<BR>
<P><br><A NAME="08ZBI40201_3">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<UL>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_kk40201_1">Exhibit 31.1</A></FONT><BR>
</UL>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_kk40201_2">CERTIFICATION of the Principal Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) (implementing Section 302 of the Sarbanes-Oxley Act)</A></FONT><BR>

<!-- SEQ=,FILE='QUICKLINK',USER=LPALLES,SEQ=,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="3" -->
<!-- TOCEXISTFLAG -->
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>4
<FILENAME>a2185666zex-31_2.htm
<DESCRIPTION>EXHIBIT 31.2
<TEXT>
<HTML>
<HEAD>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
<BR>
<FONT SIZE=3 ><A HREF="#08ZBI40201_4">QuickLinks</A></FONT>
<font size=3> -- Click here to rapidly navigate through this document</font>
<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_BASECOLOR,"Black" -->




<!-- COMMAND=ADD_DEFAULTFONT,"font-family:times;" -->


 </FONT></P>

<!-- TOC_END -->
<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><A
NAME="km40201_exhibit_31.2"> </A>
<A NAME="toc_km40201_1"> </A>
<BR></FONT><FONT SIZE=2><B>Exhibit&nbsp;31.2    <BR>    </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>CERTIFICATION<BR>
of the Principal Financial Officer<BR>
Pursuant to Rule&nbsp;13a-14(a)/15d-14(a) (implementing Section&nbsp;302 of the Sarbanes-Oxley Act)  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I, Stephen G. Bassett, certify that: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>1.</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>I
have reviewed this quarterly report on Form&nbsp;10-Q of Axcelis Technologies,&nbsp;Inc.;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>2.</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>3.</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the company as of, and for, the periods presented in this report;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>4.</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules&nbsp;13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules&nbsp;13a-15(f) and 15d-15(f))
for the company and have:
<BR><BR></FONT>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating
to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(c)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Evaluated
the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(d)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Disclosed
in this report any change in the company's internal control over financial reporting that occurred during the company's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and
<BR><BR></FONT></DD></DL>
</DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>5.</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the
audit committee of the company's board of directors (or persons performing the equivalent functions):
<BR><BR></FONT>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
company's ability to record, process, summarize and report financial information; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. </FONT></DD></DL>
</DD></DL>
</UL>
<BR>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="76%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="47%" style="font-family:times;"><FONT SIZE=2>Date: May&nbsp;12, 2008</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="50%" style="font-family:times;"><FONT SIZE=2>/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>STEPHEN G. BASSETT</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Stephen G. Bassett,<BR></FONT> <FONT SIZE=2><I>Executive Vice President and
Chief Financial Officer</I></FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=1,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="4",CHK=18584,FOLIO='blank',FILE='DISK132:[08ZBI1.08ZBI40201]KM40201A.;6',USER='LPALLES',CD='12-MAY-2008;10:43' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<BR>
<P><br><A NAME="08ZBI40201_4">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<UL>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_km40201_1">Exhibit 31.2</A></FONT><BR>
</UL>
<!-- SEQ=,FILE='QUICKLINK',USER=LPALLES,SEQ=,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="4" -->
<!-- TOCEXISTFLAG -->
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>5
<FILENAME>a2185666zex-32_1.htm
<DESCRIPTION>EXHIBIT 32.1
<TEXT>
<HTML>
<HEAD>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
<BR>
<FONT SIZE=3 ><A HREF="#08ZBI40201_5">QuickLinks</A></FONT>
<font size=3> -- Click here to rapidly navigate through this document</font>
<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_BASECOLOR,"Black" -->




<!-- COMMAND=ADD_DEFAULTFONT,"font-family:times;" -->


 </FONT></P>

<!-- TOC_END -->
<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><A
NAME="ko40201_exhibit_32.1"> </A>
<A NAME="toc_ko40201_1"> </A>
<BR></FONT><FONT SIZE=2><B>EXHIBIT 32.1    <BR>    </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>AXCELIS TECHNOLOGIES,&nbsp;INC.<BR>
Certification of the Principal Executive Officer<BR>
Pursuant to Section&nbsp;1350 of Chapter&nbsp;63 of title 18 of the United States Code  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
undersigned Chief Executive Officer of Axcelis Technologies,&nbsp;Inc., a Delaware corporation, hereby certifies, for the purposes of Section&nbsp;1350 of Chapter&nbsp;63 of
title 18 of the United States Code (as implemented by Section&nbsp;906 of the Sarbanes-Oxley Act of 2002) as follows: </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Form&nbsp;10-Q quarterly report fully complies with the requirements of section&nbsp;13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d))
and the information contained herein fairly presents, in all material respects, the financial condition and results of operations of the Company. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the undersigned has executed this Certification as of May&nbsp;12, 2008. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="76%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="47%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="50%" style="font-family:times;"><FONT SIZE=2>/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>MARY G. PUMA</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Mary G. Puma<BR></FONT> <FONT SIZE=2><I>Chairman, Chief Executive Officer and
President of Axcelis Technologies,&nbsp;Inc.</I></FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=1,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="5",CHK=879377,FOLIO='blank',FILE='DISK132:[08ZBI1.08ZBI40201]KO40201A.;6',USER='LPALLES',CD='12-MAY-2008;10:43' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<BR>
<P><br><A NAME="08ZBI40201_5">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<UL>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_ko40201_1">EXHIBIT 32.1</A></FONT><BR>
</UL>
<!-- SEQ=,FILE='QUICKLINK',USER=LPALLES,SEQ=,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="5" -->
<!-- TOCEXISTFLAG -->
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>6
<FILENAME>a2185666zex-32_2.htm
<DESCRIPTION>EXHIBIT 32.2
<TEXT>
<HTML>
<HEAD>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
<BR>
<FONT SIZE=3 ><A HREF="#08ZBI40201_6">QuickLinks</A></FONT>
<font size=3> -- Click here to rapidly navigate through this document</font>
<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_BASECOLOR,"Black" -->




<!-- COMMAND=ADD_DEFAULTFONT,"font-family:times;" -->


 </FONT></P>

<!-- TOC_END -->
<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><A
NAME="kq40201_exhibit_32.2"> </A>
<A NAME="toc_kq40201_1"> </A>
<BR></FONT><FONT SIZE=2><B>EXHIBIT 32.2    <BR>    </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>AXCELIS TECHNOLOGIES,&nbsp;INC.<BR>
Certification of the Principal Financial Officer<BR>
Pursuant to Section&nbsp;1350 of Chapter&nbsp;63 of title 18 of the United States Code  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned Chief Financial Officer of Axcelis Technologies,&nbsp;Inc., a Delaware corporation, hereby certifies, for the purposes of Section&nbsp;1350 of
Chapter&nbsp;63 of title 18 of the United States Code (as implemented by Section&nbsp;906 of the Sarbanes-Oxley Act of 2002) as follows: </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Form&nbsp;10-Q quarterly report fully complies with the requirements of section&nbsp;13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d))
and the information contained herein fairly presents, in all material respects, the financial condition and results of operations of the Company. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the undersigned has executed this Certification as of May&nbsp;12, 2008. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="76%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="47%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="50%" style="font-family:times;"><FONT SIZE=2>/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>STEPHEN G. BASSETT</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Stephen G. Bassett<BR></FONT> <FONT SIZE=2><I>Executive Vice President and
Chief Financial Officer of Axcelis Technologies,&nbsp;Inc.</I></FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=1,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="6",CHK=979643,FOLIO='blank',FILE='DISK132:[08ZBI1.08ZBI40201]KQ40201A.;6',USER='LPALLES',CD='12-MAY-2008;10:43' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<BR>
<P><br><A NAME="08ZBI40201_6">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<UL>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_kq40201_1">EXHIBIT 32.2</A></FONT><BR>
</UL>
<!-- SEQ=,FILE='QUICKLINK',USER=LPALLES,SEQ=,EFW="2185666",CP="AXCELIS TECHNOLOGIES, INC.",DN="6" -->
<!-- TOCEXISTFLAG -->
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
</SUBMISSION>
