Fourth Amendment to Loan and Security Agreement between Comerica Bank-California and Maxwell Technologies, Inc. and Affiliates

Summary

This amendment, dated July 2, 2002, updates the existing Loan and Security Agreement between Comerica Bank-California and Maxwell Technologies, Inc. and its subsidiaries. It modifies financial covenants, including cash-to-debt ratios and minimum tangible net worth requirements, and allows Maxwell to acquire Montena Components Ltd. by issuing shares. The bank consents to this acquisition, provided the borrowers meet the new terms. The amendment also updates compliance reporting requirements and reaffirms the validity of the original agreement and related documents.

EX-10.19 6 ex10-19.htm

FOURTH AMENDMENT
TO
LOAN AND SECURITY AGREEMENT

This Fourth Amendment to Loan and Security Agreement is entered into as of July 2, 2002 (the “Amendment”), by and between COMERICA BANK-CALIFORNIA (“Bank”) and MAXWELL TECHNOLOGIES, INC., MAXWELL ELECTRONIC COMPONENTS GROUP, INC., I-BUS/PHOENIX, INC., PUREPULSE TECHNOLOGIES, INC., and MML ACQUISITION CORP. (individually, a “Borrower” and collectively, the “Borrowers”).

RECITALS

Borrowers and Bank are parties to that certain Loan and Security Agreement dated as of February 26, 2001, as amended from time to time, including but not limited to by that certain Amendment to Loan and Security Agreement dated as of May 25, 2001, that certain Second Amendment to Loan and Security Agreement dated as of June 18, 2001, and that certain Third Amendment to Loan and Security Agreement dated as of December 21, 2001 (collectively, the “Agreement”). The parties desire to amend the Agreement in accordance with the terms of this Amendment.

Borrower has entered into an agreement (the “Purchase Agreement”) with Montena Components Ltd. (“Montena”) pursuant to which, among other things, Borrower will acquire the issued and outstanding stock of Montena (the “Montena Stock”) for 2,550,000 shares of Borrower’s common stock, all as more particularly described in the Purchase Agreement. Borrower has requested that Bank permit the consummation by the Borrower of the Purchase Agreement, and Bank has agreed to the same provided Borrower agrees to the terms of this Amendment.

NOW, THEREFORE, the parties agree as follows:

	1.	Section 6.9 of the Agreement hereby is amended in its entirety as follows:

		“6.9 Cash-Total Bank Obligations. Borrowers shall at all times through August 15, 2002 maintain a ratio of Cash (defined as cash and cash equivalents held at Bank, Comerica Securities, and Munder Capital) to total Obligations owing Bank of at least 1.50 to 1.00. Borrowers shall at all times from and after August 16, 2002 and through September 30, 2002, maintain a ratio of Cash (defined as cash and cash equivalents held at Bank, Comerica Securities, and Munder Capital) to total Obligations owing Bank of at least 2.00 to 1.00.”

	2.	Section 6.10 of the Agreement hereby is amended in its entirety as follows:

		“6.10 Tangible Net Worth. Borrowers shall at all times through August 15, 2002 maintain a Tangible Net Worth of not less than Forty Two Million Dollars ($42,000,000). Borrowers shall at all times from and after August 16, 2002 and through September 30, 2002, maintain a Tangible Net Worth of not less than Forty Eight Million Dollars ($48,000,000).”

3. Bank consents to the execution and performance by Borrower of the Purchase Agreement. Specifically, Bank waives Section 7.3 of the Agreement only to the extent such section otherwise prohibits the Purchase Agreement and or the transactions contemplated thereby.

4. Exhibit D to the Agreement hereby is replaced with Exhibit D hereto.

5. Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement. The Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all respects. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment

of, any right, power, or remedy of Bank under the Agreement, as in effect prior to the date hereof. Each Borrower ratifies and reaffirms the continuing effectiveness of all promissory notes, guaranties, security agreements, mortgages, deeds of trust, environmental agreements, and all other instruments, documents and agreements entered into in connection with the Agreement.

6. Each Borrower represents and warrants that the representations and warranties contained in the Agreement are true and correct as of the date of this Amendment, and that no Event of Default has occurred and is continuing.

7. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.

8. As a condition to the effectiveness of this Amendment, Bank shall have received, in form and substance satisfactory to Bank, the following:

(a) This Amendment, duly executed by the Borrowers;

(b) The certificate for the Shares of Montena Stock, accompanied by an instrument of assignment duly executed in blank by the appropriate Borrower, in the forms attached hereto;

(d) Such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate.

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.

	MAXWELL TECHNOLOGIES, INC.

	By: /s/ Donald M. Roberts


	Title: Vice President


	MAXWELL ELECTRONIC COMPONENTS GROUP, INC.

	By: /s/ Donald M. Roberts


	Title: Vice President


	I-BUS/PHOENIX, INC.

	By: /s/ Donald M. Roberts


	Title: Vice President

	PUREPULSE TECHNOLOGIES, INC.

	By: /s/ Donald M. Roberts


	Title: Vice President


	MML ACQUISITION CORP.

	By: /s/ Donald M. Roberts


	Title: Vice President


	COMERICA BANK-CALIFORNIA

	By: /s/ [Illegible]


	Title: Vice President

EXHIBIT D
COMPLIANCE CERTIFICATE

TO:	COMERICA BANK-CALIFORNIA

FROM:	MAXWELL TECHNOLOGIES, INC., MAXWELL ELECTRONIC COMPONENTS GROUP, INC., I-BUS/PHOENIX, INC., PUREPULSE TECHNOLOGIES, INC., MAXWELL TECHNOLOGIES SYSTEMS DIVISION, INC., MML ACQUISITION CORP.

The undersigned authorized officer of MAXWELL TECHNOLOGIES, INC. (“Parent”) on behalf of Parent and MAXWELL ELECTRONIC COMPONENTS GROUP, INC., I-BUS/PHOENIX, INC., PUREPULSE TECHNOLOGIES, INC., MAXWELL TECHNOLOGIES SYSTEMS DIVISION, INC., MML ACQUISITION CORP. (collectively, “Borrowers”) hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement between Borrowers and Bank (the “Agreement”), (i) Borrower(s) are in complete compliance for the period ending ___________________ with all required covenants except as noted below and (ii) all representations and warranties of Borrowers stated in the Agreement are true and correct in all material respects as of the date hereof. Attached herewith are the required documents supporting the above certification. The Officer further certifies that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes.

Please indicate compliance status by circling Yes/No under “Complies” column.

Reporting Covenant	Required	Complies


Monthly financial statements	Monthly within 30 days	Yes	No
Quarterly financial statements	Quarterly within 45 days	Yes	No
Annual (CPA Audited)	FYE within 90 days	Yes	No
10K & 10Q	within 5 days of filing	Yes	No
A/R & A/P Agings	Quarterly beginning 12/31/02 within 45 days	Yes	No
A/R Audit	Initial and Annual	Yes	No
IP Report	Within 30 days of 2/1 and 8/1	Yes	No

Financial Covenant		Required	Actual	Complies


Maintain on a Quarterly Basis:
	Minimum Quick Ratio (beginning 12/31/02)	1.35:1.00	_____:1.00	Yes	No
	Minimum Cash to Bank Debt (through 8/15/02; monitored continuously)	1.50:1.00	_____:1.00	Yes	No
	Minimum Cash to Bank Debt (from 8/16/02 through 9/30/02; monitored monthly)	2.00:1.00	_____:1.00	Yes	No
	Minimum Tangible Net Worth (through 8/15/02; monitored continuously)	$ 42,000,000	$ _______	Yes	No
	Minimum Tangible Net Worth (from 8/16/02 through 9/30/02; monitored monthly)	$ 48,000,000	$ _______	Yes	No
	Fixed Charge Coverage Ratio	2.00:1.00	_____:1.00	Yes	No

Comments Regarding Exceptions: See Attached.		BANK USE ONLY

		Received by:

Sincerely,		AUTHORIZED SIGNER
		Date:


		Verified:

SIGNATURE		AUTHORIZED SIGNER

		Date:

TITLE
	Compliance Status	Yes	No
DATE

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED the undersigned does hereby sell, assign and transfer unto ___________________________________________________________________________ ___________________________________ (______________) shares of the Capital Stock of

Montena Components Ltd. standing in the undersigned’s name on the books of said corporation represented by Certificate No._______________ herewith and does hereby irrevocably constitute and appoint _____________________________ attorney-in-fact to transfer the said stock on the books of said corporation with full power of substitution in the premises.

Dated: July 2, 2002	MAXWELL TECHNOLOGIES, INC.

	By: /s/ Donald M. Roberts

	Printed Name: Donald M. Roberts

	Title: Vice President

ASSIGNMENT SEPARATE FROM CERTIFICATE

Dated: July 2, 2002	MAXWELL TECHNOLOGIES, INC.

	By: /s/ Donald M. Roberts

	Printed Name: Donald M. Roberts

	Title: Vice President

RECEIPT

The undersigned, Comerica Bank-California, acknowledges receipt of the original certificate number 000001 representing 99,995 shares of the capital stock of Montena Components issued in the name of Maxwell Technologies, Inc. and dated July 1, 2002. This certificate is being held under the terms of that certain Loan and Security Agreement dated as of February 26, 2001, as amended by the First through Fourth Amendments thereto.

			Comerica Bank-California

Date 7/24/02
			By [illegible]

			Title Vice President