Document:

Silicon
Valley Bank

Loan and Security Agreement
(Exim Program)

	
  Borrower:
	
  Maxwell
  Technologies, Inc.

	
   
	
   

	
  Address:
	
    9244
  Balboa Avenue

	
   
	
    San
  Diego, CA 92123

	
   
	
   

	
  Date:
	
  February
  4,2004

THIS LOAN AND SECURITY AGREEMENT
(EXIM PROGRAM) is entered into on the above date between
SILICON VALLEY BANK (“Silicon”), whose address is 3003 Tasman Drive, Santa
Clara, California 95054 and the borrower(s) named above (jointly and severally,
the “Borrower”), whose chief executive office is located at the above address
(“Borrower’s Address”). The Schedule to this Agreement (the “Schedule”) shall
for all purposes be deemed to be a part of this Agreement, and the same is an
integral part of this Agreement. (Definitions of certain terms used in this
Agreement are set forth in Section 8 below.)

1.  LOANS.

  1.1  Loans.
Silicon will make loans to Borrower (the “Loans”) up to the amounts (the
“Credit Limit”) shown on the Schedule, provided no Default or Event of Default
has occurred and is continuing, and subject to deduction of Reserves for
accrued interest and such other Reserves as Silicon deems proper from time to
time in its good faith business judgment.

  1.2  Interest.
All Loans and all other monetary Obligations shall bear interest at the rate
shown on the Schedule, except where expressly set forth to the contrary in this
Agreement. Interest shall be payable monthly, on the last day of the month.
Interest may, in Silicon’s discretion, be charged to Borrower’s loan account,
and the same shall thereafter bear interest at the same rate as the other
Loans. Silicon may, in its discretion, charge interest to Borrower’s Deposit
Accounts maintained with Silicon. Regardless of the amount of Obligations that
may be outstanding from time to time, Borrower shall pay Silicon minimum monthly
interest during the term of this Agreement in the amount set forth on the
Schedule (the “Minimum Monthly Interest”).

  1.3  Overadvances.
If at any time or for any reason the total of all outstanding Loans and all
other monetary Obligations exceeds the Credit Limit (an “Overadvance”),
Borrower shall immediately pay the amount of the excess to Silicon, without
notice or demand. Without limiting Borrower’s obligation to repay to Silicon
the amount of any Overadvance, Borrower agrees to pay Silicon interest on the
outstanding amount of any Overadvance, on demand, at the Default Rate.

  1.4  Fees.
Borrower shall pay Silicon the fees shown on the Schedule, which are in
addition to all interest and other sums payable to Silicon and are not
refundable.

  1.5  Loan
Requests. To obtain a Loan, Borrower shall make a request to Silicon by facsimile or
telephone. Loan requests received after 12:00 Noon will not be considered by
Silicon until the next Business Day. Silicon may rely on any telephone request
for a Loan given by a person whom Silicon believes is an authorized
representative of Borrower, and Borrower will indemnify Silicon for any loss
Silicon suffers as a result of that reliance.

  1.6  Letters
of Credit. [Not Applicable].

2.  SECURITY INTEREST.
To secure the payment and performance of all of the Obligations when due,
Borrower hereby grants to Silicon a security interest in all of the following
(collectively, the “Collateral”): all right, title and interest of Borrower in
and to all of the following, whether now owned or hereafter arising or acquired
and wherever located: all Accounts; all Inventory; all Equipment; 

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  Silicon
  Valley Bank
	
  Schedule
  to Loan and Security Agreement (Exim)

	
   
	
  

  

all Deposit Accounts; all General Intangibles
(including without limitation all Intellectual Property); all Investment
Property; all Other Property; and any and all claims, rights and interests in
any of the above, and all guaranties and security for any of the above, and all
substitutions and replacements for, additions, accessions, attachments,
accessories, and improvements to, and proceeds (including proceeds of any
insurance policies, proceeds of proceeds and claims against third parties) of,
any and all of the above, and all Borrower’s books relating to any and all of
the above.

3.  REPRESENTATIONS, WARRANTIES
AND COVENANTS OF BORROWER.

In order to induce
Silicon to enter into this Agreement and to make Loans, Borrower represents and
warrants to Silicon as follows, and Borrower covenants that the following
representations will continue to be true, and that Borrower will at all times
comply with all of the following covenants, throughout the term of this
Agreement and until all Obligations have been paid and performed in full:

  3.1  Corporate
Existence and Authority. Borrower is and will
continue to be, duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation. Borrower is and will continue to
be qualified and licensed to do business in all jurisdictions in which any
failure to do so would result in a Material Adverse Change. The execution,
delivery and performance by Borrower of this Agreement, and all other documents
contemplated hereby (i) have been duly and validly authorized, (ii) are
enforceable against Borrower in accordance with their terms (except as
enforcement may be limited by equitable principles and by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to creditors’
rights generally), and (iii) do not violate Borrower’s articles or certificate
of incorporation, or Borrower’s by-laws, or any law or any material agreement
or instrument which is binding upon Borrower or its property, and (iv) do not
constitute grounds for acceleration of any material indebtedness or obligation
under any agreement or instrument which is binding upon Borrower or its
property.

  3.2  Name;
Trade Names and Styles. The name of Borrower set
forth in the heading to this Agreement is its correct name. Listed in the
Representations are all prior names of Borrower and all of Borrower’s present
and prior trade names. Borrower shall give Silicon 30 days’ prior written
notice before changing its name or doing business under any other name.
Borrower has complied, and will in the future comply, in all material respects,
with all laws relating to the conduct of business under a fictitious business
name, except where the failure to so comply would not reasonably be expected to
result in a Material Adverse Change.

  3.3  Place
of Business; Location of Collateral. The address
set forth in the heading to this Agreement is Borrower’s chief executive
office. In addition, Borrower has places of business and Collateral is located
only at the locations set forth in the Representations. Borrower will give
Silicon at least 30 days prior written notice before opening any additional
place of business, changing its chief executive office, or moving any of the
Collateral to a location other than Borrower’s Address or one of the locations
set forth in the Representations, except that Borrower may maintain sales
offices in the ordinary course of business at which not more than a total of
$10,000 fair market value of Equipment is located.

  3.4  Title
to Collateral; Perfection; Permitted Liens.

         (a) Borrower
is now, and will at all times in the future be, the sole owner of all the
Collateral, except for items of Equipment which are leased to Borrower. The
Collateral now is and will remain free and clear of any and all liens, charges,
security interests, encumbrances and adverse claims, except for Permitted
Liens. Silicon now has, and will continue to have, a first-priority perfected
and enforceable security interest in all of the Collateral, subject only to the
Permitted Liens, and Borrower will at all times defend Silicon and the
Collateral against all claims of others.

         (b) Borrower
has set forth in the Representations all of Borrower’s Deposit Accounts, and
Borrower will give Silicon five Business Days advance written notice before
establishing any new Deposit Accounts and will cause the institution where any
such new Deposit Account is maintained to execute and deliver to Silicon a
control agreement in form sufficient to perfect Silicon’s security interest in
the Deposit Account and otherwise satisfactory to Silicon in its good faith
business judgment. Nothing herein limits any requirements which may be set
forth in the Schedule as to where Deposit Accounts will be maintained.

         (c) In
the event that Borrower shall at any time after the date hereof have any commercial
tort claims against others, which it is asserting or intends to assert, and in
which the potential recovery exceeds $100,000, Borrower shall promptly notify
Silicon thereof in writing and provide Silicon with such information regarding
the same as Silicon shall request (unless providing such information would
waive the Borrower’s attorney-client privilege). Such notification to Silicon
shall constitute a grant of a security interest in the commercial tort claim
and all proceeds thereof to Silicon, and Borrower shall execute and deliver all
such documents and take all such actions as Silicon shall request in connection
therewith.

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  Silicon
  Valley Bank
	
  Schedule
  to Loan and Security Agreement (Exim)

	
   
	
  

  

        (d) None
of the Collateral now is or will be affixed to any real property in such a
manner, or with such intent, as to become a fixture. Borrower is not and will
not become a lessee under any real property lease pursuant to which the lessor
may obtain any rights in any of the Collateral and no such lease now prohibits,
restrains, impairs or will prohibit, restrain or impair Borrower’s right to
remove any Collateral from the leased premises. Whenever any Collateral is
located upon premises in which any third party has an interest, Borrower shall,
whenever requested by Silicon, use its best efforts to cause such third party
to execute and deliver to Silicon, in form acceptable to Silicon, such waivers
and subordinations as Silicon shall specify in its good faith business
judgment. Borrower will keep in full force and effect, and will comply with all
material terms of, any lease of real property where any of the Collateral now
or in the future may be located.

  3.5  Maintenance
of Collateral. Borrower will maintain the
Collateral in good working condition (ordinary wear and tear excepted), and
Borrower will not use the Collateral for any unlawful purpose. Borrower will
immediately advise Silicon in writing of any material loss or damage to the
Collateral.

  3.6  Books
and Records. Borrower has maintained and will
maintain at Borrower’s Address complete and accurate books and records,
comprising an accounting system in accordance with GAAP.

  3.7  Financial
Condition, Statements and Reports. All financial
statements now or in the future delivered to Silicon have been, and will be,
prepared in conformity with GAAP and now and in the future will fairly present
the results of operations and financial condition of Borrower, in accordance
with GAAP, at the times and for the periods therein stated. Between the last
date covered by any such statement provided to Silicon and the date hereof,
there has been no Material Adverse Change.

  3.8  Tax
Returns and Payments; Pension Contributions.
Borrower has timely filed, and will timely file, all required tax returns and
reports, and Borrower has timely paid, and will timely pay, all foreign,
federal, state and local taxes, assessments, deposits and contributions now or
in the future owed by Borrower. Borrower may, however, defer payment of any
contested taxes, provided that Borrower (i) in good faith contests Borrower’s
obligation to pay the taxes by appropriate proceedings promptly and diligently
instituted and conducted, (ii) notifies Silicon in writing of the commencement
of, and any material development in, the proceedings, and (iii) posts bonds or
takes any other steps required to keep the contested taxes from becoming a lien
upon any of the Collateral. Borrower is unaware of any claims or adjustments
proposed for any of Borrower’s prior tax years which could result in additional
taxes becoming due and payable by Borrower. Borrower has paid, and shall
continue to pay all amounts necessary to fund all present and future pension,
profit sharing and deferred com pensation plans in accordance with their terms,
and Borrower has not and will not withdraw from participation in, permit
partial or complete termination of, or permit 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.

  3.9  Compliance
with Law. Borrower has, to the best of its
knowledge, complied, and will comply, in all material respects, with all
provisions of all foreign, federal, state and local laws and regulations
applicable to Borrower, including, but not limited to, those relating to
Borrower’s ownership of real or personal property, the conduct and licensing of
Borrower’s business, and all environmental matters.

  3.10  Litigation.
There is no claim, suit, litigation, proceeding or investigation pending or (to
best of Borrower’s knowledge) threatened against or affecting Borrower in any
court or before any governmental agency (or any basis therefor known to
Borrower) which could reasonably be expected to result, either separately or in
the aggregate, in any Material Adverse Change. Borrower will promptly inform
Silicon in writing of any claim, proceeding, litigation or investigation in the
future threatened or instituted against Borrower involving any single claim of
[typed change] $100,000 or more, or involving [typed change] $250,000 or more
in the aggregate.

  3.11  Use
of Proceeds. All proceeds of all Loans shall be
used solely for lawful business purposes. Borrower is not purchasing or
carrying any “margin stock” (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) and no part of the proceeds of any
Loan will be used to purchase or carry any “margin stock” or to extend credit
to others for the purpose of purchasing or carrying any “margin stock.”

4.  ACCOUNTS.

  4.1  Representations
Relating to Accounts. Borrower represents and
warrants to Silicon as follows: Each Account with respect to which Loans are
requested by Borrower shall, on the date each Loan is requested and made, (i)
represent an undisputed bona fide 

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  Silicon
  Valley Bank
	
  Schedule
  to Loan and Security Agreement (Exim)

	
   
	
  

  

existing unconditional obligation of the Account
Debtor created by the sale, delivery, and acceptance of goods or the rendition
of services, or the non-exclusive licensing of Intellectual Property, in the
ordinary course of Borrower’s business, and (ii) meet the Minimum Eligibility
Requirements set forth in Section 8 below.

  4.2  Representations
Relating to Documents and Legal Compliance.
Borrower represents and warrants to Silicon as follows: All statements made and
all unpaid balances appearing in all invoices, instruments and other documents
evidencing the Accounts are and shall be true and correct and all such
invoices, instruments and other documents and all of Borrower’s books and
records are and shall be genuine and in all respects what they purport to be.
All sales and other transactions underlying or giving rise to each Account
shall comply in all material respects with all applicable laws and governmental
rules and regulations. To the best of Borrower’s knowledge, all signatures and
endorsements on all documents, instruments, and agreements relating to all
Accounts are and shall be genuine, and all such documents, instruments and
agreements are and shall be legally enforceable in accordance with their terms.

  4.3  Schedules
and Documents relating to Accounts. Borrower shall
deliver to Silicon transaction reports and schedules of collections, as
provided in the Schedule, on Silicon’s standard forms; provided, however, that
Borrower’s failure to execute and deliver the same shall not affect or limit
Silicon’s security interest and other rights in all of Borrower’s Accounts, nor
shall Silicon’s failure to advance or lend against a specific Account affect or
limit Silicon’s security interest and other rights therein. If requested by
Silicon, Borrower shall furnish Silicon with copies (or, at Silicon’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, and Borrower warrants the genuineness of all of the
foregoing. Borrower shall also furnish to Silicon an aged accounts receivable
trial balance as provided in the Schedule. In addition, Borrower shall deliver
to Silicon, 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.

  4.4  Collection
of Accounts. Borrower shall have the right to collect all Accounts, unless and until a Default or an
Event of Default has occurred and is continuing. 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 Silicon, and Borrower shall immediately
deliver all such payments and proceeds to Silicon in their original form, duly
endorsed, to be applied to the Obligations in such order as Silicon shall
determine. Silicon may, in its good faith business judgment, require that all
proceeds of Collateral be deposited by Borrower into a lockbox account, or such
other “blocked account” as Silicon may specify, pursuant to a blocked account
agreement in such form as Silicon may specify in its good faith business
judgment.

  4.5.  Remittance
of Proceeds. All proceeds arising from the
disposition of any Collateral shall be delivered, in kind, by Borrower to
Silicon 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 in such order as Silicon shall determine; provided that, if no
Default or Event of Default has occurred and is continuing, Borrower shall not
be obligated to remit to Silicon the proceeds of the sale of worn out or
obsolete Equipment disposed of by Borrower in good faith in an arm’s length
transaction for an aggregate purchase price of [typed change] $50,000 or less
(for all such transactions in any fiscal year). Borrower agrees that it will
not commingle proceeds of Collateral with any of Borrower’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 Silicon. Nothing in this Section
limits the restrictions on disposition of Collateral set forth elsewhere in
this Agreement.

  4.6  Disputes.
Borrower shall notify Silicon promptly of all disputes or claims relating to
Accounts. Borrower shall not forgive (completely or partially), compromise or
settle any Account for less than payment in full, or agree to do any of the
foregoing, except that Borrower may do so, provided that: (i) Borrower does so
in good faith, in a commercially reasonable manner, in the ordinary course of
business, and in arm’s length transactions, which are reported to Silicon on
the regular reports provided to Silicon; (ii) no Default or Event of Default
has occurred and is continuing; and (iii) taking into account all such
discounts, settlements and forgiveness, the total outstanding Loans will not
exceed the Credit Limit.

  4.7  Returns.
Provided no Event of Default has occurred and is continuing, if any Account
Debtor returns any Inventory to Borrower, Borrower shall promptly determine the
reason for such return and promptly issue a credit memorandum to the Account
Debtor in the appropriate amount. 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 Silicon, and
immediately notify Silicon of the return of the Inventory.

  4.8  Verification.
Silicon may, from time to time, verify directly with the respective Account
Debtors the validity, amount and other matters relating to the Accounts, by
means of mail, telephone or otherwise, either in the name of Borrower or
Silicon or such other name as Silicon may choose.

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  Silicon
  Valley Bank
	
  Schedule
  to Loan and Security Agreement (Exim)

	
   
	
  

  

  4.9  No Liability.
Silicon 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 Silicon be deemed to be responsible for any
of Borrower’s obligations under any contract or agreement giving rise to an
Account. Nothing herein shall, however, relieve Silicon from liability for its
own gross negligence or willful misconduct.

5.  ADDITIONAL DUTIES OF
BORROWER.

  5.1  Financial
and Other Covenants. Borrower shall at all times
comply with the financial and other covenants set forth in the Schedule.

  5.2  Insurance.
Borrower shall, at all times insure all of the tangible personal property
Collateral and carry such other business insurance, with insurers reasonably
acceptable to Silicon, in such form and amounts as Silicon may reasonably
require and that are customary and in accordance with standard practices for
Borrower’s industry and locations, and Borrower shall provide evidence of such
insurance to Silicon. All such insurance policies shall name Silicon as an
additional loss payee, and shall contain a lenders loss payee endorsement in
form reasonably acceptable to Silicon. Upon receipt of the proceeds of any such
insurance, Silicon shall apply such proceeds in reduction of the Obligations as
Silicon shall determine in its good faith business judgment, except that, provided
no Default or Event of Default has occurred and is continuing, Silicon shall
release to Borrower insurance proceeds with respect to Equipment totaling less
than $100,000, which shall be utilized by Borrower for the replacement of the
Equipment with respect to which the insurance proceeds were paid. Silicon may
require reasonable assurance that the insurance proceeds so released will be so
used. If Borrower fails to provide or pay for any insurance, Silicon may, but
is not obligated to, obtain the same at Borrower’s expense. Borrower shall
promptly deliver to Silicon copies of all material reports made to insurance
companies.

  5.3  Reports.
Borrower, at its expense, shall provide Silicon with the written reports set
forth in the Schedule, and such other written reports with respect to Borrower
(including budgets, sales projections, operating plans and other financial
documentation), as Silicon shall from time to time specify in its good faith
business judgment.

  5.4  Access
to Collateral, Books and Records. At reasonable
times, and on one Business Day’s notice, Silicon, or its agents, shall have the
right to inspect the Collateral, and the right to audit and copy Borrower’s
books and records. The parties contemplate that such audits will be performed no
more frequently than quarterly, but nothing herein restricts Silicon’s right to
conduct such audits more frequently if (i) Silicon believes that it is
advisable to do so in Silicon’s good faith business judgment, or (ii) Silicon
believes in good faith that an event of default or an event which, with notice
or passage of time or both would constitute an event of default, has occurred
and is continuing. Silicon shall take reasonable steps to keep confidential all
information obtained in any such inspection or audit, but Silicon shall have
the right to disclose any such information to its auditors, regulatory
agencies, and attorneys, and pursuant to any subpoena or other legal process.
The foregoing inspections and audits shall be at Borrower’s expense and the
charge therefor shall be $750 per person per day (or such higher amount as
shall represent Silicon’s then current standard charge for the same), plus
reasonable out-of-pocket expenses. In the event Borrower and Silicon schedule
an audit more than 10 days in advance, and Borrower seeks to reschedules the
audit with less than 10 days written notice to Silicon, then (without limiting
any of Silicon’s rights or remedies), Borrower shall pay Silicon a cancellation
fee of $1,000 plus any out-of-pocket expenses incurred by Silicon, to
compensate Silicon for the anticipated costs and expenses of the cancellation.

  5.5  Negative
Covenants. Except as may be permitted in the
Schedule, Borrower shall not, without Silicon’s prior written consent (which
shall be a matter of its good faith business judgment), do any of the
following: (i) merge or consolidate with another corporation or entity; (ii)
acquire any assets, except in the ordinary course of business; (iii) enter into
any other transaction outside the ordinary course of business; (iv) sell or
transfer any Collateral, except for the sale of finished Inventory in the
ordinary course of Borrower’s business, and except for the sale of obsolete or
unneeded Equipment in the ordinary course of business; (v) store any Inventory
or other Collateral with any warehouseman or other third party; (vi) sell any
Inventory on a sale-or-return, guaranteed sale, consignment, or other
contingent basis; (vii) make any loans of any money or other assets; (viii)
incur any debts, outside the ordinary course of business, which would result in
a Material Adverse Change; (ix) guarantee or otherwise become liable with
respect to the obligations of another party or entity; (x) pay or declare any
dividends on Borrower’s stock (except for dividends payable solely in stock of
Borrower); (xi) redeem, retire, purchase or otherwise acquire, directly or
indirectly, any of Borrower’s stock; (xii) make any change in Borrower’s
capital structure which would result in a Material Adverse Change; or (xiii)
engage, directly or indirectly, in any business other than the businesses
currently engaged in by Borrower or reasonably related thereto; or (xiv)
dissolve or elect to dissolve. Transactions permitted by the foregoing
provisions of this Section are only permitted if no Default or Event of Default
would occur as a result of such transaction.

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  Silicon
  Valley Bank
	
  Schedule
  to Loan and Security Agreement (Exim)

	
   
	
  

  

  5.6  Litigation Cooperation.
Should any third-party suit or proceeding be instituted by or against Silicon
with respect to any Collateral or relating to Borrower, Borrower shall, without
expense to Silicon, at reasonable times and upon reasonable notice make
available Borrower and its officers, employees and agents and Borrower’s books
and records, to the extent that Silicon may deem them reasonably necessary in
order to prosecute or defend any such suit or proceeding.

  5.7  Further
Assurances. Borrower agrees, at its expense, on
request by Silicon, to execute all documents and take all actions, as Silicon,
may, in its good faith business judgment, deem necessary or useful in order to
perfect and maintain Silicon’s perfected first-priority security interest in
the Collateral (subject to Permitted Liens), and in order to fully consummate
the transactions contemplated by this Agreement.

6.  TERM.

  6.1  Maturity
Date. This Agreement shall continue in effect
until the maturity date set forth on the Schedule (the “Maturity Date”),
subject to Section 6.3 below.

  6.2  Early
Termination. This Agreement may be terminated
prior to the Maturity Date as follows: (i) by Borrower, effective three
Business Days after written notice of termination is given to Silicon; or (ii)
by Silicon at any time after the occurrence and during the continuance of an
Event of Default, without notice, effective immediately. If this Agreement is
terminated by Borrower or by Silicon under this Section 6.2, Borrower shall pay
to Silicon a termination fee in an amount equal to two percent (2.0%) of the
Overall Credit Limit (as defined in the Schedule), provided that the total
termination fee under this Loan Agreement and under the Non-Exim Agreement (as
defined in the Schedule) shall not exceed two percent (2.0%) of the Overall
Credit Limit, and, provided that no termination fee shall be charged if the
credit facility hereunder is replaced with a new facility from another division
of Silicon Valley Bank. The termination fee shall be due and payable on the
effective date of termination and thereafter shall bear interest at a rate equal
to the highest rate appli cable to any of the Obligations.

  6.3  Payment
of Obligations. On the Maturity Date or on any
earlier effective date of termination, Borrower shall pay and perform in full
all Obligations, whether evidenced by installment notes or otherwise, and
whether or not all or any part of such Obligations are otherwise then due and
payable. Without limiting the generality of the foregoing, if on the Maturity
Date, or on any earlier effective date of termination, there are any outstanding
Letters of Credit issued by Silicon or issued by another institution based upon
an application, guarantee, indemnity or similar agreement on the part of
Silicon, then on such date Borrower shall provide to Silicon cash collateral in
an amount equal to 105% of the face amount of all such Letters of Credit plus
all interest, fees and cost due or to become due in connection therewith (as
estimated by Silicon in its good faith business judgment), to secure all of the
Obligations relating to said Letters of Credit, pursuant to Silicon’s then
standard form cash pledge agreement. Notwithstanding any termination of this
Agreement, all of Silicon’s security interests in all of the Collateral and all
of the terms and provisions of this Agreement shall continue in full force and
effect until all Obligations have been paid and performed in full; provided
that Silicon may, in its sole discretion, refuse to make any further Loans
after termination. No termination shall in any way affect or impair any right
or remedy of Silicon, nor shall any such termination relieve Borrower of any
Obligation to Silicon, until all of the Obligations have been paid and
performed in full. Upon payment and performance in full of all the Obligations
and termination of this Agreement, Silicon shall promptly terminate its
financing statements with respect to the Borrower and deliver to Borrower such
other documents as may be required to fully terminate Silicon’s security
interests.

7.  EVENTS OF DEFAULT AND
REMEDIES.

  7.1  Events
of Default. The occurrence of any of the following
events shall constitute an “Event of Default” under this Agreement, and
Borrower shall give Silicon immediate written notice thereof: (a) Any warranty,
representation, statement, report or certificate made or delivered to Silicon
by Borrower or any of Borrower’s officers, employees or agents, now or in the
future, shall be untrue or misleading in a material respect when made or deemed
to be made; or (b) Borrower shall fail to pay when due any Loan or any interest
thereon or any other monetary Obligation; or (c) the total Loans and other
Obligations outstanding at any time shall exceed the Credit Limit; or (d)
Borrower shall fail to comply with any of the financial covenants set forth in
the Schedule, or shall fail to perform any other non-monetary Obligation which
by its nature cannot be cured, or shall fail to permit Silicon to conduct an
inspection or audit as specified in Section 5.4 hereof; or (e) Borrower shall
fail to perform any other non-monetary Obligation, which failure is not cured
within five Business Days after the date due; or (f) any levy, assessment,
attachment, seizure, lien or encumbrance (other than a Permitted Lien) is made
on all or any part of the Collateral which is not cured within 10 days after the
occurrence of the same; or (g) any default or event of default occurs under any
obligation secured by a Permitted Lien, which is not cured within any
applicable cure period or waived in writing by the holder of the Permitted
Lien; or (h) Borrower breaches any material contract or obligation, which has
resulted or may reasonably be expected to result in a Material Adverse Change;
or (i) Dissolution, termination of existence, 

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insolvency or business failure of Borrower; or
appointment of a receiver, trustee or custodian, for all or any part of the
property of, assignment for the benefit of creditors by, or the commencement of
any proceeding by Borrower under any reorganization, bankruptcy, insolvency,
arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction, now or in the future in effect; or (j) the commencement of
any proceeding against Borrower or any guarantor of any of the Obligations under
any reorganization, bankruptcy, insolvency, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, now or in the
future in effect, which is not cured by the dismissal thereof within 30 days
after the date commenced; or (k) revocation or termination of, or limitation or
denial of liability upon, any guaranty of the Obligations or any attempt to do
any of the foregoing, or commencement of proceedings by any guarantor of any of
the Obligations under any bankruptcy or insolvency law; or (1) revocation or
termination of, or limitation or denial of liability upon, any pledge of any
certificate of deposit, securities or other property or asset of any kind
pledged by any third party to secure any or all of the Obligations, or any
attempt to do any of the foregoing, or commencement of proceedings by or
against any such third party under any bankruptcy or insolvency law; or (m)
Borrower makes any payment on account of any indebtedness or obligation which
has been subordinated to the Obligations other than as permitted in the
applicable subordination agreement, or if any Person who has subordinated such
indebtedness or obligations terminates or in any way limits his subordination
agreement; or (n) there shall be a change in the record or beneficial ownership
of an aggregate of more than 20% of the outstanding shares of stock of
Borrower, in one or more transactions, compared to the ownership of outstanding
shares of stock of Borrower in effect on the date hereof, without the prior
written consent of Silicon; or (o) Borrower shall generally not pay its debts
as they become due, or Borrower shall conceal, remove or transfer any part of
its property, with intent to hinder, delay or defraud its creditors, or make or
suffer any transfer of any of its property which may be fraudulent under any
bankruptcy, fraudulent conveyance or similar law; or (p) a Material Adverse
Change shall occur. Silicon may cease making any Loans hereunder during any of
the above cure periods, and thereafter if an Event of Default has occurred and
is continuing.

  7.2  Remedies.
Upon the occurrence and during the continuance of any Event of Default, and at
any time thereafter, Silicon, at its option, and without notice or demand of
any kind (all of which are hereby expressly waived by Borrower), may do any one
or more of the following: (a) Cease making Loans or otherwise extending credit
to Borrower under this Agreement or any other Loan Document; (b) Accelerate and
declare all or any part of the Obligations to be immediately due, payable, and
performable, notwithstanding any deferred or installment payments allowed by
any instrument evidencing or relating to any Obligation; (c) Take possession of
any or all of the Collateral wherever it may be found, and for that purpose
Borrower hereby authorizes Silicon without judicial process to enter onto any
of Borrower’s premises without interference to search for, take possession of,
keep, store, or remove any of the Collateral, and remain on the premises or
cause a custodian to remain on the premises in exclusive control thereof,
without charge for so long as Silicon deems it necessary, in its good faith
business judgment, in order to complete the enforcement of its rights under
this Agreement or any other agreement; provided, however, that should Silicon
seek to take possession of any of the Collateral by court process, Borrower
hereby irrevocably waives: (i) any bond and any surety or security relating
thereto required by any statute, court rule or otherwise as an incident to such
possession; (ii) any demand for possession prior to the commencement of any
suit or action to recover possession thereof; and (iii) any requirement that
Silicon retain possession of, and not dispose of, any such Collateral until
after trial or final judgment; (d) Require Borrower to assemble any or all of
the Collateral and make it available to Silicon at places designated by Silicon
which are reasonably convenient to Silicon and Borrower, and to remove the
Collateral to such locations as Silicon may deem advisable; (e) Complete the
processing, manufacturing or repair of any Collateral prior to a disposition
thereof and, for such purpose and for the purpose of removal, Silicon shall
have the right to use Borrower’s premises, vehicles, hoists, lifts, cranes, and
other Equipment and all other property without charge; (f) Sell, lease or
otherwise dispose of any of the Collateral, in its condition at the time
Silicon obtains possession of it or after further manufacturing, processing or
repair, at one or more public and/or private sales, in lots or in bulk, for
cash, exchange or other property, or on credit, and to adjourn any such sale
from time to time without notice other than oral announcement at the time
scheduled for sale. Silicon shall have the right to conduct such disposition on
Borrower’s premises without charge, for such time or times as Silicon deems
reasonable, or on Silicon’s premises, or elsewhere and the Collateral need not
be located at the place of disposition. Silicon may directly or through any
affiliated company purchase or lease any Collateral at any such public
disposition, and if permissible under applicable law, at any private
disposition. Any sale or other disposition of Collateral shall not relieve
Borrower of any liability Borrower may have if any Collateral is defective as
to title or physical condition or otherwise at the time of sale; (g) Demand
payment of, and collect any Accounts and General Intangibles comprising
Collateral and, in connection therewith, Borrower irrevocably authorizes
Silicon to endorse or sign Borrower’s name on all collections, receipts,
instruments and other documents, to take possession of and open mail addressed
to Borrower and remove therefrom payments made with respect to any item of the
Collateral or proceeds thereof, and, in Silicon’s good faith business judgment,
to grant extensions of time to pay, compromise claims and settle Accounts and
the like for less than face value; (h) Offset against any sums in any of
Borrower’s general, special or other Deposit Accounts with Silicon against any
or all of the Obligations; and (i) Demand and receive possession of any of
Borrower’s federal and state income tax returns and the books and records
utilized in the preparation thereof or referring thereto. All reasonable
attorneys’ fees, expenses, costs, liabilities and obligations incurred by
Silicon with respect to the foregoing shall be added to and become part of the
Obligations, shall be due on demand, and shall bear interest at a rate equal to
the highest interest rate applicable to any of the Obligations. Without
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remedies, from and after the occurrence and during the
continuance of any Event of Default, the interest rate applicable to the
Obligations shall be increased by an additional four percent per annum (the
“Default Rate”).

  7.3  Standards
for Determining Commercial Reasonableness.
Borrower and Silicon agree that a sale or other disposition (collectively,
“sale”) of any Collateral which complies with the following standards will
conclusively be deemed to be commercially reasonable: (i) Notice of the sale is
given to Borrower at least ten days prior to the sale, and, in the case of a
public sale, notice of the sale is published at least five days before the sale
in a newspaper of general circulation in the county where the sale is to be
conducted; (ii) Notice of the sale describes the collateral in general,
non-specific terms; (iii) The sale is conducted at a place designated by
Silicon, with or without the Collateral being present; (iv) The sale commences
at any time between 8:00 a.m. and 6:00 pm; (v) Payment of the purchase price in
cash or by cashier’s check or wire transfer is required; (vi) With respect to
any sale of any of the Collateral, Silicon may (but is not obligated to) direct
any prospective purchaser to ascertain directly from Borrower any and all
information concerning the same. Silicon shall be free to employ other methods
of noticing and selling the Collateral, in its discretion, if they are
commercially reasonable.

  7.4  Power
of Attorney. Upon the occurrence and during the
continuance of any Event of Default, without limiting Silicon’s other rights
and remedies, Borrower grants to Silicon an irrevocable power of attorney
coupled with an interest, authorizing and permitting Silicon (acting through
any of its employees, attorneys or agents) at any time, at its option, but
without obligation, with or without notice to Borrower, and at Borrower’s
expense, to do any or all of the following, in Borrower’s name or otherwise,
but Silicon agrees that if it exercises any right hereunder, it will do so in
good faith and in a commercially reasonable manner: (a) Execute on behalf of
Borrower any documents that Silicon may, in its good faith business judgment,
deem advisable in order to perfect and maintain Silicon’s security interest in
the Collateral, or in order to exercise a right of Borrower or Silicon, or in
order to fully consummate all the transactions contemplated under this
Agreement, and all other Loan Documents; (b) Execute on behalf of Borrower, any
invoices relating to any Account, any draft against any Account Debtor and any
notice to any Account Debtor, any proof of claim in bankruptcy, any Notice of
Lien, claim of mechanic’s, materialman’s or other lien, or assignment or
satisfaction of mechanic’s, materialman’s or other lien; (c) Take control in
any manner of any cash or non-cash items of payment or proceeds of Collateral;
endorse the name of Borrower upon any instruments, or documents, evidence of
payment or Collateral that may come into Silicon’s possession; (d) Endorse all
checks and other forms of remittances received by Silicon; (e) Pay, contest or
settle any lien, charge, encumbrance, security interest and adverse claim in or
to any of the Collateral, or any judgment based thereon, or otherwise take any
action to terminate or discharge the same; (f) Grant extensions of time to pay,
compromise claims and settle Accounts and General Intangibles for less than
face value and execute all releases and other documents in connection
therewith; (g) Pay any sums required on account of Borrower’s taxes or to
secure the release of any liens therefor, or both; (h) Settle and adjust, and
give releases of, any insurance claim that relates to any of the Collateral and
obtain payment therefor; (i) Instruct any third party having custody or control
of any books or records belonging to, or relating to, Borrower to give Silicon
the same rights of access and other rights with respect thereto as Silicon has
under this Agreement; and (j) Take any action or pay any sum required of
Borrower pursuant to this Agreement and any other Loan Documents. Any and all
reasonable sums paid and any and all reasonable costs, expenses, liabilities,
obligations and attorneys’ fees incurred by Silicon with respect to the
foregoing shall be added to and become part of the Obligations, shall be
payable on demand, and shall bear interest at a rate equal to the highest
interest rate applicable to any of the Obligations. In no event shall Silicon’s
rights under the foregoing power of attorney or any of Silicon’s other rights
under this Agreement be deemed to indicate that Silicon is in control of the
business, management or properties of Borrower.

  7.5  Application
of Proceeds. All proceeds realized as the result
of any sale of the Collateral shall be applied by Silicon first to the
reasonable costs, expenses, liabilities, obligations and attorneys’ fees
incurred by Silicon in the exercise of its rights under this Agreement, second
to the interest due upon any of the Obligations, and third to the principal of
the Obligations, in such order as Silicon shall determine in its sole
discretion. Any surplus shall be paid to Borrower or other persons legally
entitled thereto; Borrower shall remain liable to Silicon for any deficiency.
If, Silicon, 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, Silicon shall have the option, exercisable at any time, in
its good faith business judgment, of either reducing the Obligations by the
principal amount of purchase price or deferring the reduction of the
Obligations until the actual receipt by Silicon of the cash therefor.

  7.6  Remedies
Cumulative. In addition to the rights and remedies
set forth in this Agreement, Silicon shall have all the other rights and
remedies accorded a secured party under the California Uniform Commercial Code
and under all other applicable laws, and under any other instrument or
agreement now or in the future entered into between Silicon and Borrower, and
all of such rights and remedies are cumulative and none is exclusive. Exercise
or partial exercise by Silicon of one or more of its rights or remedies shall
not be deemed an election, nor bar Silicon from subsequent exercise or partial
exercise of any other rights or remedies. The failure or delay of Silicon to
exercise any rights or remedies shall not operate as a waiver thereof, but all
rights and remedies shall continue in full force and effect until all of the
Obligations have been fully paid and performed.

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8.  DEFINITIONS. As used in
this Agreement, the following terms have the following meanings:

          “Account
Debtor” means the obligor on an Account.

          “Accounts”
means all present and future “accounts” as defined in the California Uniform
Commercial Code in effect on the date hereof with such additions to such term
as may hereafter be made, and includes without limitation all accounts
receivable and other sums owing to Borrower.

          “Affiliate”
means, with respect to any Person, a relative, partner, shareholder, director,
officer, or employee of such Person, or any parent or subsidiary of such
Person, or any Person controlling, controlled by or under common control with
such Person.

          “Business
Day” means a day on which Silicon is open for business.

          “Code”
means the Uniform Commercial Code as adopted and in effect in the State of
California from time to time.

          “Collateral”
has the meaning set forth in Section 2 above.

          “continuing”
and “during the continuance of” when used with reference to a Default or
Event of Default means that the Default or Event of Default has occurred and
has not been either waived in writing by Silicon or cured within any applicable
cure period.

          “Default”
means any event which with notice or passage of time or both, would constitute
an Event of Default.

          “Default
Rate” has the meaning set forth in Section 7.2 above.

          “Deposit
Accounts” means all present and future “deposit accounts” as defined in the
California Uniform Commercial Code in effect on the date hereof with such
additions to such term as may hereafter be made, and includes without
limitation all general and special bank accounts, demand accounts, checking
accounts, savings accounts and certificates of deposit.

          “Eligible
Inventory” [Not Applicable]

          “Eligible
Accounts” means Accounts and General Intangibles arising in the ordinary
course of Borrower’s business from the sale of goods or the rendition of
services, or the non-exclusive licensing of Intellectual Property, which
Silicon, in its good faith business judgment, shall deem eligible for borrowing
and which constitutes “Eligible Export-Related Accounts Receivable” (as defined
in the Exim Borrower Agreement referred to in the Schedule). Without limiting
the fact that the determination of which Accounts are eligible for borrowing is
a matter of Silicon’s good faith business judgment, the following (the “Minimum
Eligibility Requirements”) are the minimum requirements for a Account to be
an Eligible Account: (i) the Account must not be on terms of more than net
90 days from its invoice date and must not be outstanding for more than 60 days
past its due date as set forth in the applicable invoice (the “Eligibility
Period”), (ii) the Account must not represent progress billings, or be due
under a fulfillment or requirements contract with the Account Debtor, (iii) the
Account must not be subject to any contingencies (including Accounts arising
from sales on consignment, guaranteed sale or other terms pursuant to which
payment by the Account Debtor may be conditional), (iv) the Account must not be
owing from an Account Debtor with whom Borrower has any dispute (whether or not
relating to the particular Account), (v) the Account must not be owing from an
Affiliate of Borrower, (vi) the Account must not be owing from an Account
Debtor which is subject to any insolvency or bankruptcy proceeding, or whose
financial condition is not acceptable to Silicon, or which, fails or goes out
of a material portion of its business, (vii) the Account must not be owing from
the United States or any department, agency or instrumentality thereof (unless
there has been compliance, to Silicon’s satisfaction, with the United States
Assignment of Claims Act), (viii) [intentionally omitted], (ix) the
Account must not be owing from an Account Debtor to whom Borrower is or may be
liable for goods purchased from such Account Debtor or otherwise (but, in such
case, the Account will be deemed not eligible only to the extent of any amounts
owed by Borrower to such Account Debtor). Accounts owing from one Account
Debtor will not be deemed Eligible Accounts to the extent they exceed 25% of
the total Accounts outstanding. In addition, if more than 50% of the Accounts
owing from an Account Debtor are outstanding for a period longer than their
Eligibility Period (without regard to unapplied credits) or are otherwise not
eligible Accounts, then all Accounts owing from that Account Debtor will be
deemed ineligible for borrowing. Silicon may, from time to time, in its good
faith business judgment, revise the Minimum Eligibility Requirements, upon
written notice to Borrower.

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          “Equipment”
means all present and future “equipment” as defined in the California Uniform
Commercial Code in effect on the date hereof 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.

          “Event
of Default” means any of the events set forth in Section 7.1 of this
Agreement.

          “GAAP”
means generally accepted accounting principles consistently applied.

          “General
Intangibles” means all present and future “general intangibles” as defined
in the California Uniform Commercial Code in effect on the date hereof with
such additions to such term as may hereafter be made, and includes without
limitation all Intellectual Property, payment intangibles, royalties, contract
rights, goodwill, franchise agreements, purchase orders, customer lists, route
lists, telephone numbers, domain names, claims, income 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.

          “good
faith business judgment” means honesty in fact and good faith (as defined
in Section 1201 of the Code) in the exercise of Silicon’s business judgment.

          “including”
means including (but not limited to).

          “Intellectual
Property” means all present and future (a) copyrights, copyright rights,
copyright applications, copyright registrations and like protections in each
work of authorship and derivative work thereof, whether published or
unpublished, (b) trade secret rights, including all rights to unpatented
inventions and know-how, and confidential information; (c) mask work or similar
rights available for the protection of semiconductor chips; (d) patents, patent
applications and like protections including without limitation improvements,
divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same; (e) trademarks, servicemarks, trade styles,
and trade names, whether or not any of the foregoing are registered, and all
applications to register and registrations of the same and like protections,
and the entire goodwill of the business of Borrower connected with and
symbolized by any such trademarks; (f) computer software and computer software
products; (g) designs and design rights; (h) technology; (i) all claims for
damages by way of past, present and future infringement of any of the rights
included above; (j) all licenses or other rights to use any property or rights
of a type described above.

          “Inventory”
means all present and future “inventory” as defined in the California Uniform
Commercial 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’s custody or possession or in transit and including
any returned goods and any documents of title representing any of the above.

          “Investment
Property” means all present and future investment property, securities,
stocks, bonds, debentures, debt securities, partnership interests, limited
liability company interests, options, security entitlements, securities
accounts, commodity contracts, commodity accounts, and all financial assets
held in any securities account or otherwise, and all options and warrants to
purchase any of the foregoing, wherever located, and all other securities of
every kind, whether certificated or uncertificated.

          “Loan
Documents” means, collectively, this Agreement, the Representations, and
all other present and future documents, instruments and agreements between
Silicon and Borrower, including, but not limited to those relating to this
Agreement, and all amendments and modifications thereto and replacements
therefor.

          “Material
Adverse Change” means any of the following: (i) a material adverse change
in the business, operations, or financial or other condition of the Borrower,
or (ii) a material impairment of the prospect of repayment of any portion of
the Obligations; or (iii) a material impairment of the value or priority of
Silicon’s security interests in the Collateral.

          “Obligations”
means all present and future Loans, advances, debts, liabilities, obligations,
guaranties, covenants, duties and indebtedness at any time owing by Borrower to
Silicon, whether evidenced by this Agreement or any note or other instrument or
document, or otherwise, whether arising from an extension of credit, opening of
a letter of credit, banker’s acceptance, loan, guaranty, indemnification or
otherwise, whether direct or indirect (including, without limitation, those
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participation by Silicon in Borrower’s debts owing to
others), absolute or contingent, due or to become due, including, without
limitation, all interest, charges, expenses, fees, attorney’s fees, expert
witness fees, audit fees, letter of credit fees, collateral monitoring fees,
closing fees, facility fees, termination fees, minimum interest charges and any
other sums chargeable to Borrower under this Agreement or under any other Loan
Documents.

          “Other
Property” means the following as defined in the California Uniform
Commercial Code in effect on the date hereof with such additions to such term
as may hereafter be made, and all rights relating thereto: all present and
future “commercial tort claims” (including without limitation any commercial
tort claims identified in the Representations), “documents”, “instruments”,
“promissory notes”, “chattel paper”, “letters of credit”, “letter-of-credit
rights”, “fixtures”, “farm products” and “money”; and all other goods and
personal property of every kind, tangible and intangible, whether or not
governed by the California Uniform Commercial Code.

          “Payment”
means all checks, wire transfers and other items of payment received by Silicon
(including proceeds of Accounts and payment of the Obligations in full) for
credit to Borrower’s outstanding Loans or, if the balance of the Loans have
been reduced to zero, for credit to its Deposit Accounts.

          “Permitted
Liens” means the following: (i) purchase money security interests in
specific items of Equipment; (ii) leases of specific items of Equipment; (iii)
liens for taxes not yet payable; (iv) additional security interests and liens
consented to in writing by Silicon, which consent may be withheld in its good
faith business judgment; (v) security interests being terminated substantially
concurrently with this Agreement; (vi) liens of materialmen, mechanics,
warehousemen, carriers, or other similar liens arising in the ordinary course
of business and securing obligations which are not delinquent; (vii) liens
incurred in connection with the extension, renewal or refinancing of the
indebtedness secured by liens of the type described above in clauses (i) or
(ii) above, provided that any extension, renewal or replacement lien is limited
to the property encumbered by the existing lien and the principal amount of the
indebtedness being extended, renewed or refinanced does not increase; (viii)
Liens in favor of customs and revenue authorities which secure payment of
customs duties in connection with the importation of goods. Silicon will have
the right to require, as a condition to its consent under subparagraph (iv)
above, that the holder of the additional security interest or lien sign an
intercreditor agreement on Silicon’s then standard form, acknowledge that the
security interest is subordinate to the security interest in favor of Silicon,
and agree not to take any action to enforce its subordinate security interest
so long as any Obligations remain outstanding, and that Borrower agree that any
uncured default in any obligation secured by the subordinate security interest
shall also constitute an Event of Default under this Agreement.

          “Person”
means any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, government, or any
agency or political division thereof, or any other entity..

          “Representations”
means the written Representations and Warranties provided by Borrower to
Silicon referred to in the Schedule.

          “Reserves”
means, as of any date of determination, such amounts as Silicon may from time
to time establish and revise in its good faith business judgment, reducing the
amount of Loans, Letters of Credit and other financial accommodations which
would otherwise be available to Borrower under the lending formula(s) provided
in the Schedule: (a) to reflect events, conditions, contingencies or risks
which, as determined by Silicon in its good faith business judgment, do or may
adversely affect (i) the Collateral or any other property which is security for
the Obligations or its value (including without limitation any increase in
delinquencies of Accounts), (ii) the assets, business or prospects of Borrower
or any Guarantor, or (iii) the security interests and other rights of Silicon
in the Collateral (including the enforceability, perfection and priority
thereof); or (b) to reflect Silicon’s good faith belief that any collateral
report or financial information furnished by or on behalf of Borrower or any
Guarantor to Silicon is or may have been incomplete, inaccurate or misleading
in any material respect; or (c) in respect of any state of facts which Silicon
determines in good faith constitutes an Event of Default or may, with notice or
passage of time or both, constitute an Event of Default.

          Other
Terms. All accounting terms used in this Agreement, unless otherwise
indicated, shall have the meanings given to such terms in accordance with GAAP,
consistently applied. All other terms contained in this Agreement, unless
otherwise indicated, shall have the meanings provided by the Code, to the
extent such terms are defined therein.

9.  GENERAL PROVISIONS.

  9.1  Interest
Computation; Float Charge. In computing interest
on the Obligations, all Payments received after 12:00 Noon on any day shall be
deemed received on the next Business Day. In addition, Silicon shall be
entitled to charge Borrower a “float” charge in an amount equal to three Business
Days interest, at the interest rate applicable to the Loans, on all Payments
received by Silicon. Said 

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float charge is not included in interest for purposes
of computing Minimum Monthly Interest (if any) under this Agreement. The float
charge for each month shall be payable on the last day of the month.

  9.2  Application
of Payments. All payments with respect to the
Obligations may be applied, and in Silicon’s good faith business judgment
reversed and re-applied, to the Obligations, in such order and manner as
Silicon shall determine in its good faith business judgment.

  9.3  Charges
to Accounts. Silicon may, in its discretion,
require that Borrower pay monetary Obligations in cash to Silicon, or charge
them to Borrower’s Loan account, in which event they will bear interest at the
same rate applicable to the Loans. Silicon may also, in its discretion, charge
any monetary Obligations to Borrower’s Deposit Accounts maintained with
Silicon.

  9.4  Monthly
Accountings. Silicon shall provide Borrower
monthly with an account of advances, charges, expenses and payments made
pursuant to this Agreement. Such account shall be deemed correct, accurate and
binding on Borrower and an account stated (except for reverses and
reapplications of payments made and corrections of errors discovered by
Silicon), unless Borrower notifies Silicon in writing to the contrary within 60
days after such account is rendered, describing the nature of any alleged
errors or omissions.

  9.5  Notices.
All notices to be given under this Agreement shall be in writing and shall be
given either personally or by reputable private delivery service or by regular
first-class mail, or certified mail return receipt requested, addressed to
Silicon or Borrower at the addresses shown in the heading to this Agreement, or
at any other address designated in writing by one party to the other party.
Notices to Silicon shall be directed to the Commercial Finance Division, to the
attention of the Division Manager or the Division Credit Manager. All notices
shall be deemed to have been given upon delivery in the case of notices
personally delivered, or at the expiration of one Business Day following
delivery to the private delivery service, or two Business Days following the
deposit thereof in the United States mail, with postage prepaid.

  9.6  Severability.
Should any provision of this Agreement be held by any court of competent
jurisdiction to be void or unenforceable, such defect shall not affect the
remainder of this Agreement, which shall continue in full force and effect.

  9.7  Integration.
This Agreement and such other written agreements, documents and instruments as
may be executed in connection herewith are the final, entire and complete
agreement between Borrower and Silicon and supersede all prior and
contemporaneous negotiations and oral representations and agreements, all of
which are merged and integrated in this Agreement. There are no oral
understandings, representations or agreements between the parties which are not
set forth in this Agreement or in other written agreements signed by the
parties in connection herewith.

  9.8  Waivers;
Indemnity. The failure of Silicon at any time or
times to require Borrower to strictly comply with any of the provisions of this
Agreement or any other Loan Document shall not waive or diminish any right of
Silicon later to demand and receive strict compliance therewith. Any waiver of
any default shall not waive or affect any other default, whether prior or
subsequent, and whether or not similar. None of the provisions of this
Agreement or any other Loan Document shall be deemed to have been waived by any
act or knowledge of Silicon or its agents or employees, but only by a specific written
waiver signed by an authorized officer of Silicon and delivered to Borrower.
Borrower waives the benefit of all statutes of limitations relating to any of
the Obligations or this Agreement or any other Loan Document, and Borrower
waives demand, protest, notice of protest and notice of default or dishonor,
notice of payment and nonpayment, release, compromise, settlement, extension or
renewal of any commercial paper, instrument, account, General Intangible,
document or guaranty at any time held by Silicon on which Borrower is or may in
any way be liable, and notice of any action taken by Silicon, unless expressly
required by this Agreement. Borrower hereby agrees to indemnify Silicon and its
affiliates, subsidiaries, parent, directors, officers, employees, agents, and
attorneys, and to hold them harmless from and against any and all claims,
debts, liabilities, demands, obligations, actions, causes of action, penalties,
costs and expenses (including reasonable attorneys’ fees), of every kind, which
they may sustain or incur based upon or arising out of any of the Obligations,
or any relationship or agreement between Silicon and Borrower, or any other
matter, relating to Borrower or the Obligations; provided that this indemnity
shall not extend to damages proximately caused by the indemnitee’s own gross
negligence or willful misconduct. Notwithstanding any provision in this
Agreement to the contrary, the indemnity agreement set forth in this Section
shall survive any termination of this Agreement and shall for all purposes
continue in full force and effect.

  9.9  No
Liability for Ordinary Negligence. Neither
Silicon, nor any of its directors, officers, employees, agents, attorneys or
any other Person affiliated with or representing Silicon shall be liable for
any claims, demands, losses or damages, of any kind whatsoever, made, claimed,
incurred or suffered by Borrower or any other party through the ordinary
negligence of Silicon, or any of its directors, 

-12-

	
   
	
  Silicon
  Valley Bank
	
  Schedule
  to Loan and Security Agreement (Exim)

	
   
	
  

  

officers, employees, agents, attorneys or any other
Person affiliated with or representing Silicon, but nothing herein shall
relieve Silicon from liability for its own gross negligence or willful
misconduct.

  9.10  Amendment.
The terms and provisions of this Agreement may not be waived or amended, except
in a writing executed by Borrower and a duly authorized officer of Silicon.

  9.11  Time
of Essence. Time is of the essence in the
performance by Borrower of each and every obligation under this Agreement.

  9.12  Attorneys
Fees and Costs. Borrower shall reimburse Silicon
for all reasonable attorneys’ fees and all filing, recording, search, title
insurance, appraisal, audit, and other reasonable costs incurred by Silicon,
pursuant to, or in connection with, or relating to this Agreement (whether or
not a lawsuit is filed), including, but not limited to, any reasonable
attorneys’ fees and costs Silicon incurs in order to do the following: prepare
and negotiate this Agreement and all present and future documents relating to
this Agreement; obtain legal advice in connection with this Agreement or
Borrower; enforce, or seek to enforce, any of its rights; prosecute actions
against, or defend actions by, Account Debtors; commence, intervene in, or
defend any action or proceeding; initiate any complaint to be relieved of the
automatic stay in bankruptcy; file or prosecute any probate claim, bankruptcy
claim, third-party claim, or other claim; examine, audit, copy, and inspect any
of the Collateral or any of Borrower’s books and records; protect, obtain
possession of, lease, dispose of, or otherwise enforce Silicon’s security
interest in, the Collateral; and otherwise represent Silicon in any litigation
relating to Borrower. In satisfying Borrower’s obligation hereunder to
reimburse Silicon for attorneys fees, Borrower may, for convenience, issue
checks directly to Silicon’s attorneys, Levy, Small & Lallas, but Borrower
acknowledges and agrees that Levy, Small & Lallas is representing only Silicon
and not Borrower in connection with this Agreement. If either Silicon or
Borrower files any lawsuit against the other predicated on a breach of this
Agreement, the prevailing party in such action shall be entitled to recover its
reasonable costs and attorneys’ fees, including (but not limited to) reasonable
attorneys’ fees and costs incurred in the enforcement of, execution upon or
defense of any order, decree, award or judgment. All attorneys’ fees and costs
to which Silicon may be entitled pursuant to this Paragraph shall immediately
become part of Borrower’s Obligations, shall be due on demand, and shall bear
interest at a rate equal to the highest interest rate applicable to any of the
Obligations.

  9.13  Benefit
of Agreement. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective successors,
assigns, heirs, beneficiaries and representatives of Borrower and Silicon;
provided, however, that Borrower may not assign or transfer any of its rights
under this Agreement without the prior written consent of Silicon, and any
prohibited assignment shall be void. No consent by Silicon to any assignment
shall release Borrower from its liability for the Obligations.

  9.14  Joint
and Several Liability. If Borrower consists of
more than one Person, their liability shall be joint and several, and the
compromise of any claim with, or the release of, any Borrower shall not
constitute a compromise with, or a release of, any other Borrower.

  9.15  Limitation
of Actions. Any claim or cause of action by
Borrower against Silicon, its directors, officers, employees, agents,
accountants or attorneys, based upon, arising from, or relating to this Loan
Agreement, or any other Loan Document, or any other transaction contemplated
hereby or thereby or relating hereto or thereto, or any other matter, cause or
thing whatsoever, occurred, done, omitted or suffered to be done by Silicon,
its directors, officers, employees, agents, accountants or attorneys, shall be
barred unless asserted by Borrower by the commencement of an action or
proceeding in a court of competent jurisdiction by the filing of a complaint
within one year after the first act, occurrence or omission upon which such
claim or cause of action, or any part thereof, is based, and the service of a
summons and complaint on an officer of Silicon, or on any other person
authorized to accept service on behalf of Silicon, within thirty (30) days
thereafter. Borrower agrees that such one-year period is a reasonable and
sufficient time for Borrower to investigate and act upon any such claim or
cause of action. The one-year period provided herein shall not be waived,
tolled, or extended except by the written consent of Silicon in its sole
discretion. This provision shall survive any termination of this Loan Agreement
or any other Loan Document.

  9.16  Paragraph
Headings; Construction. Paragraph headings are
only used in this Agreement for convenience. Borrower and Silicon acknowledge
that the headings may not describe completely the subject matter of the
applicable paragraph, and the headings shall not be used in any manner to
construe, limit, define or interpret any term or provision of this Agreement.
This Agreement has been fully reviewed and negotiated between the parties and
no uncertainty or ambiguity in any term or provision of this Agreement shall be
construed strictly against Silicon or Borrower under any rule of construction
or otherwise.

  9.17  Governing
Law; Jurisdiction; Venue. This Agreement and all
acts and transactions hereunder and all rights and obligations of Silicon and
Borrower shall be governed by the laws of the State of California. As a
material part of the consideration to Silicon to enter into this Agreement,
Borrower (i) agrees that all actions and proceedings relating directly or
indirectly to this Agreement shall, at 

-13-

	
   
	
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  Valley Bank
	
  Schedule
  to Loan and Security Agreement (Exim)

	
   
	
  

  

Silicon’s option, be litigated in courts located
within California, and that the exclusive venue therefor shall be Santa Clara
County; (ii) consents to the jurisdiction and venue of any such court and
consents to service of process in any such action or proceeding by personal
delivery or any other method permitted by law; and (iii) waives any and all
rights Borrower may have to object to the jurisdiction of any such court, or to
transfer or change the venue of any such action or proceeding.

  9.18  Mutual
Waiver of Jury Trial. BORROWER AND SILICON EACH HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO,
THIS AGREEMENT OR ANY OTHER PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN
SILICON AND BORROWER, OR ANY CONDUCT, ACTS OR OMISSIONS OF SILICON OR BORROWER
OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER
PERSONS AFFILIATED WITH SILICON OR BORROWER, IN ALL OF THE FOREGOING CASES,
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.

	
  Borrower:
	
   
	
  Silicon:
	
   

	
   
	
   
	
   
	
   

	
  MAXWELL TECHNOLOGIES, INC.
	
   
	
  SILICON VALLEY BANK
	
   

	
   
	
   
	
   
	
   

	
  By
	
   
	
   
	
  By
	
   
	
   

	
   
	
  

  	
   
	
   
	
  

  	
   

	
   
	
  President or Vice President
	
   
	
  Title
	
   
	
   

	
   
	
   
	
   
	
   
	
  

  	
   

	
  By
	
   
	
   
	
   
	
   
	
   

	
   
	
  

  	
   
	
   
	
   
	
   

	
   
	
  Secretary or Ass’t Secretary
	
   
	
   
	
   
	
   

							

-14-Silicon Valley Bank

Schedule to

Loan and Security Agreement

(Exim Program)

Borrower:     Maxwell Technologies,
Inc.

Address:        9244
Balboa Avenue

                       San
Diego, CA  92123

Date:             February
4, 2004

This Schedule
forms an integral part of the Loan and Security Agreement (Exim Program)
between Silicon Valley Bank and the above-borrower of even date.

	
  

  	
  

  	
  

  	
  

  
	 	 	 	 
	 	1.	CREDIT LIMIT	 
	 	(Section 1.1):	An amount not to exceed the lesser of (i) $1,500,000
  at any one time outstanding (the “Maximum
  Credit Limit”), or (ii) 90% (the “Advance Rate”) of the
  amount of Borrower’s Eligible Accounts (as defined in Section 8 above); provided that the total outstanding Obligations
  under this Loan Agreement and under the Non-Exim Agreement (as defined below)
  shall not at any time exceed $3,000,000 (the “Overall Credit Limit”).
	 	 	 
	 	 	Silicon may, from time to time, modify the
  Advance Rate, in its good faith business judgment, upon notice to the
  Borrower, based on changes in collection experience with respect to Accounts
  or other issues or factors relating to the Accounts or other Collateral.
	 	 	 
	
  

  	
  

  	
  

  
	 	 	 
	 	2.	INTEREST.	 
	 	 	 
	 	 	Interest Rate (Section 1.2):	 
	 	 	 	 
	 	 	 	A rate equal to the “Prime Rate” in effect
  from time to time, plus 1.75% per annum, provided that the
  interest rate in effect on any day shall not be less than 5.75%
  per annum. Interest shall be calculated on the basis of a 360-day year
  for the actual number of days elapsed. 
  As used in this Agreement, “Prime Rate” means the interest rate
  announced from time to time by Silicon as its “prime rate” (which is a base rate upon which other rates charged by
  Silicon are based, and it is 

-1-

	
   
	
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	 	 	 	not necessarily the best rate available at
  Silicon.  The interest rate applicable
  to the Obligations shall change on each date there is a change in the Primate
  Rate.
	 	 	 	 
	 	 	Minimum Monthly 

  Interest
  (Section 1.2):	$2,500 per month in the aggregate as
  between this Agreement and the Non-Exim Agreement.
	 	 	 	 
	
  

  	
  

  	
  

  	
  

  
	 	 	 	 
	 	3.	FEES (Section 1.4):	 
	 	 	 	 
	 	 	Loan Fee:	$22,500, payable concurrently herewith.
	 	 	 	 
	 	 	Collateral Monitoring Fee:	$1,000, per month in the aggregate as
  between this Agreement and the Non-Exim Agreement, payable in arrears
  (prorated for any partial month at the beginning and at termination of this
  Agreement).
	 	 	 	 
	 	 	Unused Line Fee:	In the event, in any calendar
  month (or portion thereof at the beginning and end of the term hereof), the
  average daily principal balance of the Loans outstanding during the month is
  less than the amount of the Maximum Credit Limit, Borrower shall pay Silicon
  an unused line fee in an amount equal to 0.25% per annum on the difference
  between the amount of the Maximum Credit Limit and the average daily
  principal balance of the Loans outstanding during the month, computed on the
  basis of a 360-day year, which unused line fee shall be computed and paid
  monthly, in arrears, on the first day of the following month.
	 	 	 	 
	
  

  	
  

  	
  

  	
  

  
	 	 	 	 
	 	4.	MATURITY DATE
(Section 6.1):	One year from the date of this Agreement.
	 	 	 	 
	
  

  	
  

  	
  

  	
  

  
	 	 	 	 
	 	5.	FINANCIAL COVENANTS	 
	 	 	(Section 5.1):	Borrower shall comply with
  each of the financial covenants set forth in the Non-Exim Agreement (defined
  below).
	 	 	 	 
	
  

  	
  

  	
  

  	
  

  
	 	 	 	 
	 	6.	REPORTING.
(Section 5.3):	Borrower shall provide Silicon with the
  following:
	 	 	 	 
	 	 	 	1.	Transaction reports and schedules of
  collections, each week and at the time of each Loan request, on Silicon’s
  standard form.
	 	 	 	 	 
	 	 	 	2.	Monthly accounts receivable agings
  (separate from the agings required by the Non-Exim Agreement), aged by
  invoice date, within fifteen days after the end of each month.
								

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	 	 	 	3.	Monthly accounts payable agings (separate
  from the agings required by the Non-Exim Agreement), aged by invoice date,
  and outstanding or held check registers, if any, within fifteen days after
  the end of each month.
	 	 	 	 	 
	 	 	 	4.	Monthly reconciliations of accounts
  receivable agings (aged by invoice date),
  transaction reports, and general ledger, within fifteen days after the end of
  each month.
	 	 	 	 	 
	 	 	 	5.	Monthly unaudited financial statements of
  Maxwell Technologies, Inc. (on a consolidated and consolidating basis), as
  soon as available, and in any event within thirty days after the end of each
  month.
	 	 	 	 	 
	 	 	 	6.	Monthly Compliance Certificates, within
  thirty days after the end of each month, in such form as Silicon shall
  reasonably specify, signed by the Chief Financial Officer of Borrower,
  certifying that as of the end of such month 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 Silicon shall reasonably request, including, without
  limitation, a statement that at the end of such month there were no held
  checks.
	 	 	 	 	 
	 	 	 	7.	Copies of all reports on Form 10-Q filed by
  Maxwell Technologies, Inc. with the Securities and Exchange Commission within
  5 days after such filing.
	 	 	 	 	 
	 	 	 	8.	Annual operating budgets (including income
  statements, balance sheets and cash flow
  statements, by month) for the upcoming fiscal year of Borrower within
  thirty days prior to the end of each fiscal year of Borrower.
	 	 	 	 	 
	 	 	 	9.	Annual financial statements of Maxwell
  Technologies, Inc. (on a consolidated and consolidating basis), as soon as
  available, and in any event within 90 days following the end of Maxwell
  Technologies, Inc.’s fiscal year, certified by, and with an unqualified
  opinion of, independent certified public accountants acceptable to Silicon
  together with copies of all reports on Form 10-K filed by Maxwell
  Technologies, Inc. with the Securities and Exchange Commission.
							

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  Schedule to Loan and Security Agreement (Exim)

	
   
	
  

  
	
   
	
   
	
   
	
   

	
  

  	
  

  	
  

  	
  

  
	 	 	 	 	 
	 	7.	BORROWER INFORMATION:	 	 
	 	 	 	 	 
	 	 	 	Borrower represents and warrants that the
  information set forth in the Representations and Warranties of the Borrower
  dated December 4, 2003, previously submitted to Silicon (the
  “Representations”) is true and correct as of the date hereof.
	
   
	
   
	
   
	
   

	
  

  	
  

  	
  

  	
  

  
	 	 	 	 	 
	 	8.	ADDITIONAL PROVISIONS	 	 
	 	 	 	 	 
	 	 	 	(1)	Banking Relationship. Borrower shall at all
  times maintain its primary banking relationship with Silicon. Without
  limiting the generality of the foregoing, within sixty days of the date
  hereof and at all times thereafter, Borrower shall maintain not less than 85%
  of Maxwell Technologies, Inc.’s total cash and investments on deposit with
  Silicon. As to any Deposit Accounts and investment accounts maintained with
  another institution, if at any time Borrower fails to comply with the terms
  of the preceding sentence, Borrower shall cause such institution, within 10
  days after the date of such non-compliance, to enter into a control agreement
  in form acceptable to Silicon in its good faith business judgment in order to
  perfect Silicon’s first-priority security interest in said Deposit Accounts
  and investment accounts.
	 	 	 	 	 
	 	 	 	(2)	Subordination of Inside Debt. All present
  and future indebtedness of Borrower to its officers, directors and
  shareholders (“Inside Debt”) shall, at all times, be subordinated to the
  Obligations pursuant to a subordination agreement on Silicon’s standard
  form.  Borrower represents and
  warrants that there is no Inside Debt presently outstanding, except for the
  following: NONE.  Prior to incurring
  any Inside Debt in the future, Borrower shall cause the person to whom
  such Inside Debt will be owed to execute and deliver to Silicon a
  subordination agreement on Silicon’s standard form.
	 	 	 	 	 
	 	 	 	(3)	Additional Condition Precedent.  In addition to any other conditions
  precedent to funding set forth in this Agreement, prior to the funding of any
  Loans, Silicon shall have received information satisfactory to Silicon from
  Maxwell Europe’s (fka Maxwell Technologies, SA) lender, Cantonal Bank of
  Freiburg (“Cantonal Bank”), regarding its relationship with Maxwell
  Technologies, Inc. and Maxwell Europe. 
  Borrower shall use its best efforts to cause Cantonal Bank to enter
  into an intercreditor agreement with Silicon, on Silicon’s standard form with
  such changes thereto as are acceptable to Silicon, regarding Cantonal 
								

-4-

	
   
	
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  Schedule to Loan and Security Agreement (Exim)

	
   
	
  

  
	 	 	 	 	 
	 	 	 	 	Bank’s and Silicon’s relationships with
  Maxwell Technologies, Inc. and Maxwell Europe.
	 	 	 	 	 
	 	 	 	(4)	Restrictions on Transfers to Affiliates.
  Except for the Borrowers, Borrower covenants and agrees that while this
  Agreement is in effect, Borrower shall not transfer any assets or Collateral
  (beyond its historical normal course of business) to any Affiliate without
  the prior written consent of Silicon.
	 	 	 	 	 
	 	 	 	(5)	Initial Audit. An initial audit, referred to
  in Section 5.4 of this Agreement, shall be completed, with satisfactory
  results to Silicon, prior to funding hereunder.
	 	 	 	 	 
	 	 	 	(6)	Domestic Subsidiaries. Borrower represents
  and warrants to Silicon that each of Purepulse Technologies, Inc. (“Purepulse”)
  and I-Bus/Phoenix, Inc. (“I-Bus”) is a wholly owned subsidiary of Borrower
  and that each of Purepulse and I-Bus is inactive with little or no assets and
  will remain inactive with little or no assets during the term of this
  Agreement. Borrower covenants and agrees that while this Agreement is in
  effect, Borrower shall not transfer any assets or Collateral to Purepulse
  and/or I-Bus.
	 	 	 	 	 
	
  

  	
  

  	
  

  	
  

  	
  

  
	 	 	 	 	 
	 	9.	EXIM PROVISIONS:	(1)	Exim Guaranty.  Prior to the first disbursement of any Loans hereunder,
  Borrower shall cause the Export Import Bank of the United States (the “Exim
  Bank”) to guarantee the Loans made under this Agreement, pursuant to a Master
  Guarantee Agreement, Loan Authorization Agreement and (to the extent
  applicable) Delegated Authority Letter Agreement (collectively, the “Exim
  Guaranty”), and Borrower shall cause the Exim Guaranty to be in full force
  and effect throughout the term of this Agreement and so long as any Loans
  hereunder are outstanding.  If, for
  any reason, the Exim Guaranty shall cease to be in full force and effect, or
  if the Exim Bank declares the Exim Guaranty void or revokes any obligations
  thereunder or denies liability thereunder, any such event shall constitute an
  Event of Default under this Agreement. 
  Nothing in any confidentiality agreement in this Agreement or in any
  other agreement shall restrict Silicon’s right to make disclosures and
  provide information to the Exim Bank in connection with the Exim Guaranty.
	 	 	 	 	 
	 	 	 	(2)	Exim Borrower Agreement; Costs.  Borrower shall, concurrently execute and
  deliver a Borrower Agreement, in the form specified by the Exim Bank, in
  favor of Silicon and the Exim Bank (the “Exim Borrower Agreement”).  This Agreement is subject to all of the
  terms and conditions of the Exim Borrower Agreement, all of which are
  hereby incorporated herein by this reference.  Borrower expressly agrees to perform
							

-5-

	
   
	
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  Schedule to Loan and Security Agreement (Exim)

	
   
	
  

  
	 	 	 	 	 
	 	 	 	 	all of the obligations and comply with all
  of the affirmative and negative covenants and all other terms and conditions
  set forth in the Exim Borrower Agreement as though the same were expressly
  set forth herein.  In the event of any
  conflict between the terms of the Exim Borrower Agreement and the other terms
  of this Agreement, whichever terms are more restrictive shall apply.  Borrower acknowledges and agrees that it
  has received a copy of the Loan Authorization Agreement which is referred to
  in the Exim Borrower Agreement. 
  Borrower agrees to be bound by the terms of the Loan Authorization
  Agreement, including, without limitation, by any additions or revisions made
  prior to its execution on behalf of Exim Bank.  Upon the execution of the Loan Authorization Agreement by Exim
  Bank and Silicon, it shall become an attachment to the Exim Borrower
  Agreement.  Borrower shall reimburse
  Silicon for all fees and all out of pocket costs and expenses incurred by
  Silicon with respect to the Exim Guaranty and the Exim Borrower Agreement,
  including without limitation all facility fees and usage fees, and Silicon is
  authorized to debit Borrower’s account with Silicon for such fees, costs and
  expenses when paid by Silicon.
	 	 	 	 	 
	 	 	 	(3)	Non-Exim Agreement; Cross-Collateralization; Cross-Default.
  Silicon and the Borrower are parties to that certain Loan and Security
  Agreement of approximate even date herewith (as amended from time to time,
  the “Non-Exim Agreement”).  Both this
  Agreement and the Non-Exim Agreement shall continue in full force and effect,
  and all rights and remedies under this Agreement and the Non-Exim Agreement
  are cumulative.  The term
  “Obligations” as used in this Agreement and in the Non­Exim Agreement shall
  include without limitation the obligation to pay when due all Loans made
  pursuant to this Agreement (the “Exim Loans”) and all interest thereon and
  the obligation to pay when due all Loans made pursuant to the Non-Exim
  Agreement (the “Non-Exim Loans”) and all interest thereon.  Without limiting the generality of the
  foregoing, all “Collateral” as defined in this Agreement and as defined in
  the Non-Exim Agreement shall secure all Exim Loans and all Non-Exim Loans and
  all interest thereon, and all other Obligations.  Any Event of Default under this Agreement shall also constitute
  an Event of Default under the Non-Exim Agreement, and any Event of Default
  under the Non-Exim Agreement shall also constitute an Event of Default under
  this Agreement.  In the event Silicon
  assigns its rights under this Agreement and/or under any Note evidencing Exim
  Loans and/or its rights under the Non-Exim Agreement and/or under any Note
  evidencing Non-Exim Loans, to any third party, including without limitation
  the Exim Bank, whether before or after the occurrence of any Event of
  Default, Silicon shall have the right (but not any obligation), in its sole
  discretion, to allocate and apportion Collateral to the Agreement 
							

-6-

	
   
	
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  Schedule to Loan and Security Agreement (Exim)

	
   
	
  

  
	 	 	 	 	 
	 	 	 	 	and/or Note assigned and to specify the
  priorities of the respective security interests in such Collateral between
  itself and the assignee, all without notice to or consent of the Borrower.
							

 
	Borrower:	 	Silicon:	 	 
	
   
	
   
	
   
	
   
	
   
	
   

	
   
	
  MAXWELL
  TECHNOLOGIES, INC.
	
   
	
  SILICON
  VALLEY BANK
	
   
	
   

	
   
	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
   
	
   

	
   
	
  By
	
   
	
  By
	
   
	
   

	
   
	
   
	
  

  	
   
	
   
	
  

  	
   
	
   

	
   
	
  President or Vice President
	
   
	
  Title
	
   
	
   

	
   
	
   
	
   
	
   
	
   
	
  

  	
   
	
   

	
   
	
   
	
   
	
   
	
   
	
   

	
   
	
  By
	
   
	
   
	
   
	
   

	
   
	
   
	
  

  	
   
	
   
	
   
	
   
	
   

	
   
	
  Secretary or Ass’t Secretary
	
   
	
   
	
   
	
   

-7-

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