MAXWELL TECHNOLOGIES INC (Form: 8-K, Received: 09/21/2017 06:01:31)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

_____________________________________________________________

FORM 8-K

_____________________________________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event Reported): September 20, 2017

_____________________________________________________________

MAXWELL TECHNOLOGIES, INC.

(Exact Name of Registrant as Specified in its Charter)

_____________________________________________________________




Delaware	1-15477	95-2390133
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

3888 Calle Fortunada

San Diego, California 92123

(Addresses of principal executive offices, including zip code)

(858) 503-3300

(Registrant’s telephone number, including area code)

_____________________________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):



o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.	o

Item 1.01 Entry into a Material Definitive Agreement.

On September 20, 2017, Maxwell Technologies, Inc. (the "Company") entered into Amendment No. 5 to the Loan and Security Agreement, as amended (the “Amendment”) with East West Bank, evidencing an amendment to the Company’s revolving senior credit facility (the “Facility”) providing for, among other things, consent for the offering of the Notes (as defined and further described in Item 8.01 below) and the inclusion of an additional covenant related to the implementation of the dominion of funds if Liquidity (as defined under the Facility) is less than $25 million.

The foregoing is a summary description of certain terms of the Amendment and does not purport to be complete, and it is qualified in its entirety by reference to the full text of the Amendment, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

Item 1.02 Termination of a Material Definitive Agreement.

On September 20, 2017, in connection with the sale and issuance of the Notes described below, the Company terminated its Stock Purchase Agreement (the “SDIC Agreement”), dated April 10, 2017, with SDIC Fund Management Co., Ltd. (“SDIC”), in accordance with the terms of the SDIC Agreement. As a result of the termination, the Company will expense transaction costs in the third quarter of fiscal year 2017 which were previously incurred in connection with the SDIC Agreement and the transactions contemplated therein in the approximate amount of $500,000.

Item 8.01 Other Information.

On September 20, 2017, the Company issued a press release announcing the pricing of $40 million aggregate principal amount of 5.50% Convertible Senior Notes due 2022 (the “Notes”) in a private offering to qualified institutional buyers that is exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”) in reliance upon Rule 144A under the Securities Act. The Company also granted the initial purchaser of the Notes a 30-day option to purchase up to an additional $6.0 million aggregate principal amount of Notes. The Company’s press release announcing the pricing of the offering of the Notes, as well as the expected use of proceeds thereof, is filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits




Exhibit No.		Description

10.1		Amendment No. 5 to Loan and Security Agreement, dated September 20, 2017, by and among the Company and East West Bank
99.1		Press release issued by Maxwell Technologies, Inc. on September 20, 2017

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.




	MAXWELL TECHNOLOGIES, INC.

	By:		/s/ David Lyle
			David Lyle
			Senior Vice President, Chief Financial Officer, Treasurer and Secretary

Date: September 20, 2017

EXHIBIT INDEX




Exhibit No.		Description

10.1		Amendment No. 5 to Loan and Security Agreement, dated September 20, 2017, by and among the Company and East West Bank
99.1		Press release issued by Maxwell Technologies, Inc. on September 20, 2017

Exhibit 10.1

EXECUTION VERSION

FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

This Fifth Amendment to Loan and Security Agreement (this “ Amendment ”) is entered into as of September 20, 2017, by and between EAST WEST BANK (“ Bank ”) and MAXWELL TECHNOLOGIES, INC. (“ Borrower ”).

RECITALS

WHEREAS, Borrower and Bank are parties to the Loan and Security Agreement, dated as of July 3, 2015, as amended by (i) the First Amendment to the Loan and Security Agreement, dated as of April 12, 2016, by and between Bank and Borrower, (ii) the Second Amendment to the Loan and Security Agreement, dated July 27, 2016, by and between Bank and Borrower, (iii) the Third Amendment to the Loan and Security Agreement, dated October 31, 2016, by and between Bank and Borrower, and (iv) the Fourth Amendment to the Loan and Security Agreement, dated February 28, 2017, by and between Bank and Borrower (as amended from time to time, the “ Loan Agreement ”);

WHEREAS, Borrower has requested that Bank consent to Borrower incurring Indebtedness in the aggregate principal amount of up to Sixty-Five Million Dollars ($65,000,000), as evidenced by Convertible Senior Notes to be issued pursuant to an Indenture that Borrower is to enter into on or about the date of this Amendment; and

WHEREAS, Bank is willing to agree to Borrower’s request, on the terms set forth herein;

NOW, THEREFORE, the parties agree as follows:

1. Amendments to Loan Agreement .

(a) Section 6.2 of the Loan Agreement is amended by adding a new subsection (h) to read as follows:

(h) If on the last day of any month (i) one or more Advances are outstanding and (ii) Liquidity (Bank Only) is less than Twenty-Five Million Dollars ($25,000,000), Borrower shall deliver to Bank within fifteen (15) days of such day a statement setting forth the amount of Consolidated Cash that Borrower has in deposit accounts with financial institutions other than Bank on such day (the “ Non-Bank Consolidated Cash Statement ”).

(b) Section 6.6(b) of the Loan Agreement is amended to read as follows:

(b) Lockbox; Account Collection Services .

(i) Borrower shall direct each Account Debtor (and each depository institution where proceeds of Accounts are on deposit) to remit payments with respect to the Accounts to a lockbox account established with Bank or to wire transfer payments to a cash collateral account that Bank controls (collectively, the “ Lockbox ”).

(ii) So long as no Event of Default exists or an event that with notice or lapse of time or both will be an Event of Default, within three (3) days of receipt of any amounts by Bank (whether directly from Borrower or into the Lockbox), Bank will turn over to Borrower the proceeds of the Accounts of Borrower by deposit in Borrower’s deposit account with Bank; provided, however, that if an Event of Default exists, Bank may deduct from the proceeds amounts due and owing to Bank hereunder before depositing them in Borrower’s deposit account with Bank.

(iii) If Liquidity as of the last day of any calendar month is less than Twenty-Five Million Dollars ($25,000,000) (the “ Minimum Liquidity Amount ”), as

determined by Bank, based on (x) the Consolidated Cash with financial institutions other than Bank as of such day if a Non-Bank Consolidated Cash Statement is required to be delivered pursuant to Section 6.2(h), (y) the Consolidated Cash on deposit in deposit accounts maintained with Bank as of such day, and (z) the most recently delivered Borrowing Base Certificate (as delivered by Borrower in accordance with Section 6.2(b) or, if not so delivered, as prepared by Bank), then, for so long as Liquidity remains less than the Minimum Liquidity Amount, when amounts are due and owing to Bank hereunder Bank may deduct such amounts from the proceeds of Accounts before depositing them in Borrower’s deposit account with Bank.

7.4 Indebtedness . Create, incur, assume, guarantee or be or remain liable with respect to any Indebtedness, or permit any Subsidiary so to do, other than Permitted Indebtedness, or prepay any Indebtedness or take any actions which impose on Borrower an obligation to prepay any Indebtedness, except Indebtedness to Bank; provided, however, that Borrower may prepay any Indebtedness by conversion of such Indebtedness (or any portion thereof) into capital stock in Borrower.

(d) The definition of “Permitted Indebtedness” in Exhibit A to the Loan Agreement is amended to read as follows:

“Permitted Indebtedness” means:


(a)	Indebtedness of Borrower in favor of Bank arising under this Agreement or any other Loan Document;


(b)	Indebtedness existing on the Closing Date and disclosed in the Schedule;


(c)	Indebtedness not to exceed Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate in any Fiscal Year secured by a lien described in clause (c) of the defined term “Permitted Liens,” provided such Indebtedness does not exceed the lesser of the cost or fair market value of the equipment financed with such Indebtedness;


(d)	Subordinated Debt;

(e) Indebtedness with respect to surety bonds and similar obligations;


(f)	Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of business;


(g)	Indebtedness to trade creditors incurred in the ordinary course of business;


(h)	Indebtedness in an aggregate principal amount of up to Sixty-Five Million Dollars ($65,000,000) evidenced by the Convertible Senior Notes issued by Borrower pursuant to the Indenture, dated September 2017; and


(i)	Extensions, refinancings and renewals of any items of Permitted Indebtedness, provided that the principal amount is not increased.

(e) Exhibit A to the Loan Agreement is amended by adding the definitions “Availability”, “Liquidity” and “Liquidity (Bank Only)”, in the appropriate alphabetical locations, to read as follows:

“Availability” means as of any date, the amount equal to (i) the lesser of (A) the Revolving Line or (B) the Borrowing Base on such date, less (i) the sum of (A) the Advances outstanding on such date and (B) the aggregate undrawn face amount on such date of the Letters of Credit issued under the Letter of Credit Sublimit.

“Liquidity” means as of any date, the sum of (i) Availability on such date and (ii) Consolidated Cash on such date.

“Liquidity (Bank Only)” means as of any date, the sum of (i) Availability on such date and (ii) Consolidated Cash on deposit with Bank on such date.

2. Course of Dealing . No course of dealing on the part of Bank or its officers, nor any failure or delay in the exercise of any right by Bank, shall operate as a waiver thereof, and any single or partial exercise of any such right shall not preclude any later exercise of any such right. Bank’s failure at any time to require strict performance by Borrower of any provision of the Loan Documents shall not affect any right of Bank thereafter to demand strict compliance and performance. Any suspension or waiver of a right must be in writing signed by an officer of Bank.

3. Miscellaneous . Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Loan Agreement. The Loan Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its terms and hereby is ratified and confirmed in all respects. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Loan Agreement, as in effect prior to the date hereof.

4. Representations and Warranties . Borrower represents and warrants that the Representations and Warranties contained in the Loan Agreement are true and correct as of the date of this Amendment, and that no Event of Default has occurred and is continuing.

5. Conditions Precedent . As conditions precedent to the effectiveness of this Amendment:

(a) Bank shall have received, in form and substance satisfactory to Bank, the following:

(i) this Amendment, duly executed by Borrower; and

(ii) such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate;

(b) The Swiss Subsidiary shall have consented to this Amendment and shall have reaffirmed its guaranty of the Obligations pursuant to the Swiss Subsidiary Guaranty Documents by executing this Amendment as set forth below;

(c) Borrower shall have paid an amendment fee of Five Thousand Dollars ($5,000), which shall be fully-earned and nonrefundable; and

(d) Borrower shall have paid all reasonable Bank Expenses incurred through the date of this Amendment, which may be debited from any of Borrower's accounts.

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

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



	MAXWELL TECHNOLOGIES, INC.


	By: ______ /s/ David Lyle ____________________
	Name:__David Lyle_______________________
	Title:_____ CFO ____________________

	EAST WEST BANK


	By:___ /s/ Alexis Coyle ____________________
	Name:____Alexis Coyle____________________
	Title:___ Managing Director ____________________

[ Signature Page to Fifth Amendment to Loan and Security Agreement ]

The Swiss Subsidiary consents to the modifications to the Obligations pursuant to this Amendment, hereby ratifies the provisions of the Swiss Subsidiary Guaranty Documents and confirms that all provisions of Swiss Subsidiary Guaranty Documents are in full force and effect.



	MAXWELL TECHNOLOGIES SA


	By:___ /s/ Emily Lough ______________
	Name:__Emily Lough_____________________________
	Title:___ Director __________________

[ Signature Page to Fifth Amendment to Loan and Security Agreement ]

Exhibit 99.1



	FOR IMMEDIATE RELEASE
	Investor Contact:
	Soohwan Kim, CFA
	(858) 503-3368
	ir@maxwell.com

Maxwell Announces Pricing of $40 Million of 5.50% Convertible Senior Notes Due 2022

SAN DIEGO - September 20, 2017 - Maxwell Technologies, Inc. (NASDAQ: MXWL) (“Maxwell”), a leading developer and manufacturer of capacitor energy storage and power delivery solutions, today announced the pricing of its offering of $40.0 million aggregate principal amount of 5.50% Convertible Senior Notes due 2022 (the “notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). Maxwell also granted to the initial purchaser of the notes a 30-day option to purchase up to an additional $6.0 million aggregate principal amount of the notes. The sale of the notes to the initial purchaser is expected to settle on September 25, 2017, subject to customary closing conditions, and is expected to result in approximately $37.4 million in net proceeds to Maxwell after deducting fees and estimated offering expenses payable by Maxwell (assuming no exercise of the initial purchaser’s option to purchase additional notes).

The notes will be general unsecured obligations of Maxwell. The notes will bear interest at a fixed rate of 5.50% per year, payable semiannually in arrears on March 15 and September 15 of each year, beginning on March 15, 2018. The notes will mature on September 15, 2022, unless earlier repurchased, redeemed or converted. The notes will not be redeemable at Maxwell’s option prior to September 20, 2020. On or after September 20, 2020, all or any portion of the notes will be redeemable at Maxwell’s option at a redemption price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest to, but excluding the redemption date, if the last reported sale price of Maxwell’s common stock for at least 20 trading days in any 30 trading day period has been at least 130% of the conversion price then in effect for the notes.

Maxwell intends to use the net proceeds from the offering for general corporate purposes, which may include research and development expenses, capital expenditures, working capital and general and administrative expenses.

Prior to the close of business on the business day immediately preceding June 15, 2022, the notes will be convertible at the option of holders only upon the satisfaction of specified conditions and during certain periods. Thereafter until close of business on the business day immediately preceding maturity, the notes will be convertible at the option of the holders at any time regardless of these conditions. Conversions of the notes will be settled in cash, shares of

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Maxwell common stock or a combination thereof, at Maxwell’s election. The initial conversion rate is 157.5101 shares of common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $6.35 per share of Maxwell common stock). The conversion rate and the corresponding conversion price will be subject to adjustment upon the occurrence of certain events, but will not be adjusted for any accrued and unpaid interest. The initial conversion price of the notes represents a premium of approximately 24.0% to the $5.12 per share closing price of Maxwell’s common stock on September 20, 2017.

If Maxwell undergoes a fundamental change (as defined in the indenture governing the notes), holders may require Maxwell to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. In addition, if certain make-whole fundamental changes occur or if Maxwell delivers a notice of redemption, Maxwell will, in certain circumstances, increase the conversion rate for any notes converted in connection with such make-whole fundamental change or notice of redemption, as the case may be.

Neither the notes nor any shares of Maxwell’s common stock issuable upon conversion of the notes have been or are expected to be registered under the Securities Act or under any state securities laws and, unless so registered, may not be offered or sold in the United States or to U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the notes or any shares of Maxwell common stock issuable upon conversion of the notes, nor shall there be any sale of the notes or such shares, in any state or jurisdiction in which such offer, solicitation or sale would be unlawful.

About Maxwell Technologies

Maxwell is a global leader in the development and manufacture of innovative, cost-effective energy storage and power delivery solutions. Our ultracapacitor products provide safe and reliable power solutions for applications in consumer and industrial electronics, transportation, renewable energy and information technology. Our CONDIS® high-voltage grading and coupling capacitors help to ensure the safety and reliability of electric utility infrastructure and other applications involving transport, distribution and measurement of high-voltage electrical energy. For more information, visit www.maxwell.com.

Forward-Looking Statements

In addition to historical facts, this press release contains forward-looking statements that involve a number of risks and uncertainties such as those, among others, relating to Maxwell’s expectations regarding Maxwell’s use of proceeds and the timing and closing of the notes offering. Among the factors that could cause actual results to differ materially from those indicated in the forward-looking statements are risks and uncertainties associated with market conditions, the satisfaction of closing conditions related to the note offering, as well as risks and uncertainties associated with Maxwell’s business and finances in general. For further information regarding risks and uncertainties associated with

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Maxwell's business, please refer to the “Management's Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Maxwell’s SEC filings, including, but not limited to, the annual report on Form 10-K and quarterly reports on Form 10-Q. Forward-looking statements speak only as of the date the statements are made and are based on information available to Maxwell at the time those statements are made and/or management’s good faith belief as of that time with respect to future events. Maxwell undertakes no duty to update any forward-looking statement to reflect actual results or changes in Maxwell's expectations.

Investor Contact: Soohwan Kim, CFA, The Blueshirt Group, +1 (858) 503-3368, ir@maxwell.com