SEVENTH AMENDMENT
TO
LOAN AND SECURITY AGREEMENT

          This Seventh Amendment to Loan and Security Agreement is entered into
as of June 30, 2003 (the “Amendment”), by and between COMERICA BANK, successor
by merger to COMERICA BANK-CALIFORNIA (“Bank”) and MAXWELL TECHNOLOGIES, INC.
(“Parent”) 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, that certain Third Amendment to Loan and
Security Agreement dated as of December 21, 2001 (the “Third Amendment”), that
certain Fourth Amendment to Loan and Security Agreement dated as of July 2,
2002, that certain Fifth Amendment to Loan and Security Agreement dated as of
August 13, 2002, and that certain Sixth Amendment to Loan and Security Agreement
dated as of October 31, 2002 (collectively, the “Loan Agreement”).

          In addition, Bank agreed to make the Term Loan (as defined in the
Third Amendment) to Parent under the terms and conditions set forth in the Term
Loan Agreement, the Note, Addendum to Note, and Environmental Indemnity (each as
defined in the Third Amendment and dated as of December 21, 2001) (collectively,
the “Term Loan Agreements”).  Parent’s obligations under the Term Loan
Agreements are secured by the Collateral as well as by a Deed of Trust, Security
Agreement, and Fixture Filing (With Assignment of Rents and Leases) recorded on
December 26,2001, as File Number 2001-0954268, in the office of the County
Recorder of San Diego County, California (the “Deed of Trust”), an Assignment of
Real Property Leases and Rents (the “Assignment”), and a UCC fixture filing,
each dated as of December 21, 2001.  The Loan Agreement, the Term Loan
Agreements, the Deed of Trust and the Assignment are collectively referred to
herein as the Loan Documents.

          The parties desire to amend the Loan Documents in accordance with the
terms of this Amendment.

          NOW, THEREFORE, the parties agree as follows:

          1.          Section 6.10 of the Loan Agreement hereby is amended in
its entirety to read as follows:

 

“6.10     Tangible Net Worth.  Borrowers shall maintain, as of the last day of
each calendar month, a Tangible Net Worth of not less than Eighteen Million
Dollars ($18,000,000).”

          2.          Exhibit D to the Loan Agreement hereby is replaced by
Exhibit D attached hereto.

          3.          In consideration of the foregoing amendment, Borrowers
agree to pay and perform each and all of the conditions and covenants required
to be performed by Borrowers pursuant to the Loan Documents.

          4.          Unless otherwise defined, all initially capitalized terms
in this Amendment shall be as defined in the Loan Documents.  The Loan
Documents, as amended hereby, shall be and remain in full force and effect in
accordance with their respective terms and hereby are 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 Loan Documents, 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 Loan
Documents.

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

          6.          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.

          7.          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)         An amount equal to all Bank Expenses incurred to date,
which amount may be debited from any of Borrower’s account no. 1891-382036; and

          (c)         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/ [illegible]

 

 

 

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Title: VP CFO

 

 

 

 

 

MML ACQUISITION CORP.

 

 

 

 

 

By: /s/ [illegible]

 

 

 

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Title: VP CFO

 

 

 

 

 

COMERICA BANK

 

 

 

 

 

By: /s/ [illegible]

 

 

 

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Title: Vice President

 

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EXHIBIT D
COMPLIANCE CERTIFICATE

TO:

COMERICA BANK

 

 

FROM:

MAXWELL TECHNOLOGIES, INC., MML ACQUISITION CORP.

          The undersigned authorized officer of MAXWELL TECHNOLOGIES, INC.
(“Parent”) on behalf of Parent and 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

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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

IP Report

 

Within 30 days of 2/1 and 8/1

 

Yes

No

Financial Covenant

 

Required

 

Actual

 

Complies

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Maintain monthly:

 

 

 

 

 

 

 

         Minimum Tangible Net Worth

 

$ 18,000,000

 

$_______

 

Yes

No

Comments Regarding Exceptions:  See Attached.

 

BANK USE ONLY

 

 

 

 

 

 

 

Received by:

 

 

 

 

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Sincerely,

 

AUTHORIZED SIGNER  

 

 

 

Date:

 

 

 

 

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Verified:

 

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SIGNATURE

 

AUTHORIZED SIGNER  

 

 

 

 

 

 

 

Date:

 

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TITLE

 

 

 

 

 

Compliance Status                    Yes                  No

 

DATE

 

 

 

 

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[Illegible initials]

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