8-K

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 8-K

Current Report
Pursuant to Section 13 or 15 (d) of
The Securities Exchange Act of 1934

October 14, 2002	September 29, 2002
Date of Report	(Date of earliest event reported)

Maxwell Technologies, Inc.
(Exact name of registrant as specified in its charter)

Delaware (State or Other Jurisdiction of Incorporation)	0-10964 (Commission File Number)	95-2390133 (I.R.S. Employer Identification No.)
9244 Balboa Avenue, San Diego, California 92123 (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code    (858) 279-5100

Not applicable
(Former name or former address, if changed since last report.)

        This Report on Form 8-K hereby incorporates by reference Form 8-K/A filed September 18, 2002 and Form 8-K filed July 19, 2002 by Maxwell Technologies, Inc., a Delaware Corporation ("Maxwell"), relating to the acquisition of Montena Components Ltd. ("Montena").

Item 2. Disposition of Assets.

        On September 29, 2002, the Company's I-Bus/Phoenix, Inc. subsidiary ("IBP") sold substantially all of the assets, liabilities and business operations of its applied computing business, located principally in San Diego, California and Tangmere, United Kingdom, to I-Bus Corporation, a new company, whose principal shareholders are former IBP senior managers. The IBP computing business designs, manufactures and sells applied computing systems mainly to original equipment manufacturers serving the telecommunications, broadcasting and industrial automation markets. The IBP computing business was sold for (i) an 8% Senior Subordinated Note in the aggregate principal amount of $7 million of which $1 million is payable (plus 50% of all accrued interest) on March 30, 2004 and $3 million is payable (plus 100% of all accrued interest) on each of March 30, 2005 and March 30, 2006; (ii) a warrant to purchase up to 19.9% of the common stock of the new I-Bus Corporation exercisable any time after June 30, 2004 at the fair market value per share at the time of exercise; and (iii) a possible additional contingent purchase price payment of $1 million if the new I-Bus Corporation sells the computing business prior to the cash repayment of the 8% Senior Subordinated Note referred to above. IBP also agreed to reimburse I-Bus Corporation for certain shutdown and restructuring costs and to provide up to $300,000 of a back up working capital credit facility until September 2003.

        The Company will not assign any value to the Subordinated Debt as its collectability is uncertain. The warrant will expire on the earlier of the date that I-Bus Corporation completes an initial public offering or the date on which a sale of I-Bus Corporation is completed. The book value of the net assets transferred to I-Bus Corporation included in these Pro Forma Financial Statements was $5.3 million as of June 30, 2002 and the actual amounts as of September 29, 2002 are not expected to be significantly different. The Company also wrote off $5.3 million of goodwill associated with the computing business, assumed approximately $0.8 million of I-Bus Corporation's shutdown costs and will record an impairment charge of $1.4 million related to certain Maxwell assets that supported the applied computing business.

        On September 30, 2002, the Company's Maxwell Electronic Components Group Inc. subsidiary ("ECG") sold substantially all of the assets, liabilities and business operations of its TeknaSeal glass-to-metal seals division in Minneapolis, Minnesota, to a group of private investors. TeknaSeal designs, manufactures and sells hermetic glass-to-metal seals for vacuum components, battery headers, implantable medical devices and other specialty applications. The aggregate purchase price was $5.5 million in cash, of which $1 million is held in an escrow account. Each calendar quarter following the sale, the escrow agent will release from escrow an amount equal to 40% of the sales during that quarter to certain key customers. If no sales to those customers occur during any calendar quarter during the term of the escrow, all sums then held in escrow shall be paid to the buyers and the escrow shall be terminated. The escrow shall otherwise terminate when all amounts held thereunder have been paid to Maxwell. Approximately $384,000 of the $5.5 million is payable to certain TeknaSeal employees under a TeknaSeal incentive program. The net cash proceeds of the TeknaSeal sale have been invested in short-term cash equivalents and will be used to finance the Company's ongoing liquidity requirements.

Item 7. Financial Statements and Exhibits.

(a)

Financial Statements of Businesses Acquired.

Not Applicable

(b)

Pro-Forma Financial Information.

        Unaudited Pro Forma Condensed Combined Balance Sheet of Maxwell Technologies, Inc. and Subsidiaries as of June 30, 2002.

        Unaudited Pro Forma Condensed Combined Statement of Operations of Maxwell Technologies, Inc. and Subsidiaries for the year ended December 31, 2001.

        Unaudited Pro Forma Condensed Combined Statement of Operations of Maxwell Technologies, Inc. and Subsidiaries for the six months ended June 30, 2002.

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MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS

        The following unaudited pro forma combined condensed financial information gives effect to:

1)

The acquisition of 100% of Montena Components, Ltd, as described in Maxwell's Form 8-K and Form 8-K/A filed July 19, 2002 and September 18, 2002, respectively.



2)

The sale by Maxwell's 100% owned subsidiary, Maxwell Electronic Components Group, Inc., of substantially all of the assets, liabilities and business operations of its TeknaSeal Division located in Minneapolis, MN. to a private group of investors for cash of approximately $5.5 million of which $4.5 million was received at closing and $1.0 million is held in escrow until the sales benchmarks are achieved. Approximately $385,000 of the $5.5 million is payable to certain TeknaSeal employees under a TeknaSeal incentive program.



3)

The sale by Maxwell's 100% owned subsidiary, I-Bus/Phoenix, Inc. ("IBP"), of substantially all of its computing assets, liabilities and business operations to a management group for a $7 million subordinated note due in three installments and bearing interest at a rate of 8%, a warrant to purchase up to 19.9% of the new I-Bus Corporation at any time after June 30, 2004 at the then fair market value of I-Bus Corporation and a contingent consideration of $1 million if I-Bus Corporation or its assets, are sold before the subordinated note has been repaid. The note is fully reserved. IBP also agreed to reimburse I-Bus Corporation for certain shutdown and restructuring costs and to provide a $300,000 back-up working capital credit facility until September 2003. Specifically, IBP sold all of its equity ownership in its 100% owned French and UK subsidiaries, certain assets of its 100% owned German subsidiary and its US based computing inventory, intellectual property and customer relationships. IBP retained US based accounts receivable and accounts payable and a royalty free license to certain intellectual property related to energy storage and power regulation in computers.

The sale of the computing business has been accounted for as a divestiture for accounting purposes as the Company is not contingently liable for the performance on existing contracts transferred to I-Bus Corporation and has not provided any guarantees with respect to future contracts entered into by I-Bus Corporation.

4)

Maxwell is in the process of selling its manufacturing and administrative facility in San Diego, which contained IBP's US operations, and move the remaining IBP power systems operations to Maxwell's leased facility in San Diego. Maxwell also recorded impairment charges of $1.4 million related to certain Maxwell assets directly related to IBP.

        The unaudited pro forma combined condensed balance sheet is based on the historical balance sheets of Maxwell and Montena as of June 30, 2002 and has been prepared to reflect the acquisition of Montena, the sale of TeknaSeal and I-Bus/Phoenix, Inc.'s computing assets and the write-down of its owned facility held for sale and related other Maxwell assets as if these transactions had occurred as of June 30, 2002.

        The unaudited pro forma combined condensed statement of operations for the year ended December 31, 2001 is based on the historical statement of operations of Maxwell, less operating results attributable to the IBP computing business and TeknaSeal, and combines the results of operations of Montena for the year ended December 31, 2001 as if the transactions had occurred as of January 1, 2001.

        The unaudited pro forma combined condensed statement of operations for the six months ended June 30, 2002 is based on the historical statements of operations of Maxwell, less operating results attributable to the IBP computing business and TeknaSeal, and combines the results of operations for Montena for the six months ended June 30, 2002 as if the transactions had occurred as of January 1, 2002.

        The pro forma combined condensed financial information is presented for illustrative purposes only and is not necessarily indicative of the financial position or operating results that would have been achieved if the transactions had been completed as of the beginning of the periods presented, nor are they necessarily indicative of the future financial position or operating results of Maxwell. The pro forma combined condensed financial information does not give effect to any cost savings that may result from these transactions.

        The unaudited pro forma combined condensed financial information should be read in conjunction with the audited and unaudited financial statements and accompanying notes of Maxwell included in Maxwell's Annual Report on Form 10-K for the year ended December 31, 2001, Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2002 and Current Report on Form 8-K, as amended, filed on July 19, 2002 and September 18, 2002, respectively.

3

MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of June 30, 2002
(in thousands)

											Pro Forma Adjustments
			Montena		Maxwell			Consolidated			Montena			I-Bus & TeknaSeal			Pro Forma
Assets
Current assets:
	Cash and cash equivalents		$	608	$	6,584		$	7,192		$	(3,000	)(a)	$	3,996	(a)	$	8,188
	Short-term investments			—		10,452			10,452			—						10,452
	Accounts receivable, net			4,479		10,232			14,711			—			(3,631	)(b)		11,080
	Inventories			5,336		13,246			18,582			—			(4,893	)(c)		13,689
	Prepaid expenses and other current assets			1,040		1,134			2,174			(992	)(e)		(281	)(d)		901
	Deferred income taxes			—		278			278			—			—			278
	Assets held for sale			—		—			—			—			5,931	(f)		5,931
	Due from related parties			263		—			263			—			—			263
		Total current assets		11,726		41,926			53,652			(3,992	)		1,122			50,782
	Property, plant and equipment, net			2,394		20,283			22,677			1,100	(d)		(9,542	)(e)		14,235
	Deferred income taxes			53		—			53			—			—			53
	Intangible and other non-current assets			—		12,047			12,047			18,379	(f)		(8,425	)(g)		22,001
			$	14,173	$	74,256		$	88,429		$	15,487		$	(16,845	)	$	87,071
Liabilities and Stockholders' Equity
Current liabilities:
	Accounts payable and accrued liabilities		$	5,980	$	8,733		$	14,713		$	(309	)(a),(e)	$	(2,179	)(h)	$	12,225
	Accrued employee compensation			1,092		1,926			3,018			—			(598	)(i)		2,420
	Short-term borrowings			338		300			638			—			—			638
	Income taxes payable			573		3,006			3,579			—			—			3,579
	Deferred income taxes			138		—			138			—			—			138
	Loan from pension fund			51		—			51			—			—			51
	Due to related party			252		—			252			—			—			252
	Loan from related party			1,093		—			1,093			—			—			1,093
		Total current liabilities		9,517		13,965			23,482			(309	)		(2,777	)		20,396
Long-term debt				—		5,575			5,575			—			—			5,575
Loan from pension fund				202		—			202			—			—			202
Stockholders' equity:
	Common stock			675		1,143			1,818			(450	)(b),(c)		—			1,368
	Additional paid-in capital			—		94,312			94,312			20,025	(c)		—			114,337
	Deferred Compensation			—		(102	)		(102	)		—			—			(102	)
	Accumulated deficit			3,779		(39,959	)		(36,180	)		(3,779	)(b)		(14,835	)(j)		(54,794	)
	Accumulated other comprehensive gain (loss)			—		(678	)		(678	)		—			767	(j)		89
		Total stockholders' equity		4,454		54,716			59,170			15,796			(14,068	)		60,898
			$	14,173	$	74,256		$	88,429		$	15,487		$	(16,845	)	$	87,071

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MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2001
(in thousands, except share and per share data)

									Pro Forma Adjustments
			Montena			Maxwell			Montena			I-Bus & Teknaseal			Pro Forma
Sales			$	27,262		$	77,856		$	(5,132	)(g)	$	(29,548	)(a)	$	70,438
Cost of sales				21,643			66,616			(5,311	)(g),(h)		(21,884	)(b)		61,064
Gross profit				5,619			11,240			179			(7,664	)		9,374
Operating expenses:
	Selling, general and administrative			5,379			23,661			—			(9,644	)(c)		19,396
	Research and development			457			11,519			—			(5,169	)(d)		6,807
		Total operating expenses		5,836			35,180			—			(14,813	)		26,203
Operating income/(loss)				(217	)		(23,940	)		179			7,149			(16,829	)
Gain on sale of business				—			39,142			—			—			39,142
Interest expense				(134	)		(1,232	)		—			—			(1,366	)
Interest income and other, net				42			134			—			—			176
Income (loss) before income taxes and minority interest				(309	)		14,104			179			7,149			21,123
Provision (credit) for income taxes				318			23,035			—			—			23,353
Minority interest in net loss of subsidiaries				—			(710	)		—			481	(g)		(229	)
Income (loss) from continuing operations			$	(627	)	$	(8,221	)	$	179		$	6,668		$	(2,001	)
Loss per share from continuing operations:
Basic loss per share						$	(0.82	)							$	(0.16	)
Diluted loss per share						$	(0.82	)							$	(0.16	)
Shares used in computing:
Basic loss per share							10,040,000			2,250,000						12,290,000
Diluted loss per share							10,040,000			2,250,000						12,290,000

5

MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2002
(in thousands, except share and per share data)

									Pro Forma Adjustments
			Montena			Maxwell			Montena			I-Bus & Teknaseal			Pro Forma
Sales			$	14,533		$	25,944		$	(4,524	)(g)	$	(10,461	)(a)	$	25,492
Cost of sales				10,997			25,793			(5,261	)(g),(h)		(12,026	)(b)		19,503
Gross profit				3,536			151			737			1,565			5,989
Operating expenses:
	Selling, general and administrative			2,715			9,595			—			(4,510	)(c)		7,800
	Research and development			238			4,913			—			(2,459	)(d)		2,692
	Restructuring charge			—			812			—			(812	)(e)		—
		Total operating expenses		2,953			15,320			—			(7,781	)		10,492
Operating loss				583			(15,169	)		737			9,346			(4,503	)
Gain on sale of business				685			—			(685	)(g)		—			—
Interest expense				(111	)		(192	)		—			—			(303	)
Interest income and other, net				(263	)		425			—			(151	)(f)		11
Income (loss) before income taxes and minority interest				894			(14,936	)		52			9,195			(4,795	)
Provision (credit) for income taxes				131			(279	)		—			—			(148	)
Minority interest in net loss of subsidiaries				—			(241	)		—			269	(g)		28
Income (loss) from continuing operations			$	763		$	(14,416	)	$	52		$	8,926		$	(4,675	)
Loss per share from continuing operations:
Basic loss per share						$	(1.33	)							$	(0.36	)
Diluted loss per share						$	(1.33	)							$	(0.36	)
Shares used in computing:
Basic loss per share							10,838,000			2,250,000						13,088,000
Diluted loss per share							10,838,000			2,250,000						13,088,000

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MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS

Pro Forma adjustments related to the Montena acquisition

(a)

Cash paid for acquisition.

(b)

To eliminate the equity accounts and accumulated deficit of Montena Components, Ltd.

(c)

To record common stock issued in connection with acquisition.

(d)

To record fixed assets acquired at estimated fair market value.

(e)

To eliminate assets and liabilities of product line not acquired. In March 2002, Montena sold substantially all of the assets, liabilities and business operations of its Power Capacitor Division to EPCOS Electronic Components SA (EPCOS). The assets and liabilities not acquired related to a receivable of $991,000 from EPCOS for the sale of business and an accrual of $600,000 for losses on firm purchase commitments.

(f)

The residual amount of the purchase price over the net book value of the assets and liabilities have been allocated to intangible assets. The intangible assets consist of acquired backlog, developed core technology and goodwill.

(g)

To eliminate sales and cost of sales of product line previously sold by Montena (see (e) above).

(h)

Adjustment to reflect amortization of production backlog and developed core technology.

        Upon consummation of the acquisition, Maxwell acquired all of the stock of Montena, in exchange for $23.3 million of value consisting of Maxwell common stock valued at $20.3 million and cash of $3 million. The purchase price is calculated to be $23.6 million based on consideration provided and estimated acquisition related cost of $300,000. The purchase price for purposes of the unaudited pro forma combined financial statements was allocated as follows based upon a preliminary valuation of tangible and intangible assets at July 5, 2002 (in thousands).

        Total acquisition cost:

Cash and stock paid at acquisition	$	23,300
Acquisition related expenses		300
	$	23,600

        Allocation to assets and liabilities as follows:

Tangible assets	$	14,300
Assumed liabilities		(9,100	)
Acquired backlog		464
Developed Core Technology		1,136
Goodwill		16,800
	$	23,600

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Pro Forma adjustments related to the I-Bus and TeknaSeal disposition

Pro-Forma Adjustments to the Balance Sheets as of June 30, 2002 (in thousands)

Reference	Description	DR (CR) Amount
(a)	Cash at I-Bus	$	(112	)
	Cash at Teknaseal		(62	)
	Cash from sale of Teknaseal of $5.5 million less $1 million in escrow and expenses of $0.3 million		4,170
		$	3,996
(b)	Subtract accounts receivable, I-Bus Subtract accounts receivable, Teknaseal	$	(2,889 (742	) )
		$	(3,631	)
(c)	Subtract inventory, I-Bus Subtract inventory, Teknaseal	$	(4,480 (413	) )
		$	(4,893	)
(d)	Subtract prepaid expenses and other current assets, I-Bus Subtract prepaid expenses and other current assets, Teknaseal	$	(272 (9	) )
		$	(281	)
(e)	Subtract net fixed assets, I-Bus Subtract net fixed assets, Teknaseal Reclass certain net fixed assets at Maxwell that are held for sale Record impairment on certain Maxwell assets that supported I-Bus	$	(1,983 (200 (5,931 (1,428	) ) ) )
		$	(9,542	)
(f)	Record building and leasehold improvements as held for sale	$	5,931
(g)	Subtract goodwill and other long term assets assigned to I-Bus Subtract goodwill and other long term assets assigned to Teknaseal	$	(5,384 (3,041	) )
		$	(8,425	)
(h)	Subtract accounts payable and accrued liabilities, I-Bus Subtract accounts payable and accrued liabilities, Teknaseal Accrue estimated expenses associated with disposition of I-Bus	$	2,713 228 (762	)
		$	2,179
(i)	Subtract accrued compensation, I-Bus Subtract accrued compensation, Teknaseal	$	529 69
		$	598
(j)	Subtract foreign currency translation, I-Bus Gain/loss on disposal of Teknaseal Loss on disposal of I-Bus and asset impairment	$	(767 — 14,835	)
		$	14,068

8

The table below reconciles the accumulated deficit as originally reported with the pro
forma adjustments related to the disposition of I-Bus and Teknaseal.

Retained Earnings Reconciliation (in thousands)

Accumulated deficit as originally reported						$	(39,959	)
Disposition of TeknaSeal:
	Cash proceeds less $1 million held in escrow		$	4,500
	Less assets sold net of liabilities assumed by buyer			(1,129	)
	Less goodwill associated with Teknaseal			(3,041	)
	Less estimated expenses related to sale			(330	)
		Net gain/(loss) on disposition of Teknaseal					—
Disposition of I-Bus computing systems assets:
	Subordinated note receivable		$	7,000
	Less reserve for note			(7,000	)
	Warrant & contingent consideration			—
	Less assets sold net of liabilities assumed by buyer			(7,325	)
	Less goodwill associated with I-Bus computing systems			(5,320	)
	Impairment of Maxwell assets that support I-Bus computing systems			(1,428	)
	Shutdown costs assumed by Maxwell			(762	)
		Net loss on disposition of I-Bus computing systems					(14,835	)
Pro Forma accumulated deficit						$	(54,794	)

9

Pro-Forma Adjustments to the Statements of Operations to remove the results of I-Bus and Teknaseal (in thousands)

		Six months ended June 30, 2002			Twelve months ended December 31, 2001
Account
(a)	Sales         I-Bus         Teknaseal	$	(8,239 (2,222	) )	$	(24,063 (5,485	) )
		$	(10,461	)	$	(29,548	)
(b)	Cost of Sales         I-Bus         Teknaseal	$	(10,778 (1,248	) )	$	(18,299 (3,585	) )
		$	(12,026	)	$	(21,884	)
(c)	Selling, general and administrative expenses         I-Bus         Teknaseal	$	(4,146 (364	) )	$	(8,921 (723	) )
		$	(4,510	)	$	(9,644	)
(d)	Research and development         I-Bus         Teknaseal	$	(2,459 —	)	$	(5,169 —	)
		$	(2,459	)	$	(5,169	)
(e)	Restructuring         I-Bus         Teknaseal	$	(812 —	)		— —
		$	(812	)		—
(f)	Interest income and other, net         I-Bus         Teknaseal	$	(151 —	)		— —
		$	(151	)	$	—
(g)	Minority interest in net loss of subsidiaries         I-Bus         Teknaseal	$	270 (1	)	$	505 (24	)
		$	269		$	481

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Exhibits
99.1	Asset Purchase Agreement dated as of September 30, 2002, between Maxwell Electronic Components Group, Inc. and Tekna Seal L.L.C.
99.2	Purchase and Sale Agreement dated as of September 29, 2002 between I-Bus/Phoenix, Inc. and I-Bus Corporation.
99.3	8% Senior Subordinated Promissory Note dated September 29, 2002 in the principal amount of $7,000,000.
99.4	Warrant for Common Stock of I-Bus Corporation dated September 29, 2002 issued to I-Bus/Phoenix, Inc.

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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.
DATE    10/14/2002	By	/s/  JAMES A. BAUMKER
	Name	James A. Baumker
	Title	Chief Financial Officer

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Item 2. Disposition of Assets.
Item 7. Financial Statements and Exhibits.

MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET As of June 30, 2002 (in thousands)
MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2001 (in thousands, except share and per share data)
MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2002 (in thousands, except share and per share data)
MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
SIGNATURES

EX-99.1

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Exhibit 99.1

ASSET PURCHASE AGREEMENT

DATED AS OF SEPTEMBER 30, 2002,

BY AND BETWEEN

MAXWELL ELECTRONIC COMPONENTS GROUP, INC.,

AND

TEKNA SEAL LLC

ASSET PURCHASE AGREEMENT

        This ASSET PURCHASE AGREEMENT (the "Agreement") is entered into on this 30th day of September, 2002 by and between Maxwell Electronic Components Group, Inc, a California corporation ("Seller"), and Tekna Seal LLC, a Florida limited liability company ("Buyer").

        A.    Seller is engaged, through its Tekna Seal operation, in the business of design, development, manufacture and sale of glass-to-metal seals, (hereinafter the "Business" or "Tekna Seal"), which business is presently conducted at certain facilities leased by Seller and located at 5301 East River Road, Minneapolis, Minnesota 55421 (the "Facilities").

        B.    Seller and Buyer wish to enter into this Agreement covering the sale by Seller and purchase by Buyer of substantially all of the assets of the Business.

        NOW, THEREFORE, in consideration of the foregoing and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows:

ARTICLE I
PURCHASE AND SALE OF ASSETS

        1.1    Assets.    Subject to and in reliance upon the representations, warranties and agreements set forth herein, and on the terms and conditions contained herein, Seller agrees to sell, assign, transfer and deliver to Buyer at the Closing (as such term is defined in Section 1.5 below), and Buyer agrees to purchase and acquire from Seller, all right, title and interest in and to all of the assets of the Business (collectively, the "Assets"), including, but not limited to, the following:

        (a)  All of the equipment, machinery, vehicles, furniture, fixtures, furnishings and leasehold improvements owned by Seller and used by Seller in the operation of the Business, as described and listed on Schedule 1.1(a) attached hereto;

        (b)  All of Seller's inventories of supplies, raw materials, parts, finished goods, work-in-process, product labels and packaging materials used in connection with the Business and Seller's interest in all orders or contracts for the purchase of supplies, raw materials, parts, product labels and packaging materials used in connection with the Business;

        (c)  All of Seller's accounts receivable relating to the Business;

        (d)  Seller's interest in all real property leases, personal property leases and other contracts and leases, to which Seller is a party that are used in connection with the Business, as well as all unfilled or uncompleted customer contracts, commitments or purchase or sales orders received and accepted by Seller in the ordinary course of the Business, all of which are described and listed on Schedule 1.1(d) attached hereto (collectively, the "Contracts");

        (e)  All documents or other tangible materials embodying technology or intellectual property rights owned by, licensed to or otherwise controlled by Seller and used exclusively in connection with the Business (to the extent transferable by Seller), whether such properties are located on Seller's business premises or on the business premises of Seller's suppliers or customers, including, without limitation all company software;

        (f)    All rights in patents, patent applications, copyrights, trade secrets or other intellectual property rights owned by, licensed to or otherwise controlled by Seller and used in, developed for use in or necessary to the conduct of the Business as now conducted or planned to be conducted;

        (g)  The tradename "Tekna Seal" or any combination of words in which the tradename "Tekna Seal" appears or any rights associated with such tradename or any right to use such tradename in all jurisdictions in which Seller either currently uses any such tradename or has any right to use such tradename, including the right to the internet domain name "teknaseal.com;"

        (h)  All of Seller's books, records and other documents and information relating to the Assets or the Business that are located at the Facilities, including, but not limited to, all customer, prospect, dealer and distributor lists, sales literature, inventory records, purchase orders and invoices, sales orders and sales order log books, customer information, commission records, correspondence, employee payroll and personnel records, product data, material safety data sheets, price lists, product demonstrations, quotes and bids and all product catalogs and brochures;

        (i)    The current telephone listings of the Business and the right to use the telephone numbers currently being used at the principal offices and other offices or facilities of the Business;

        (j)    All permits, licenses and other governmental approvals held by Seller with respect to the Business, to the extent they are assignable;

        (k)  All cash on hand, cash in the bank, prepaid expenses, and deposits made by Seller, with respect to the Business; and

        (l)    Goodwill (including all goodwill associated with and symbolized by the name or names identified in subsection (g) above as used as a trademark or service mark in the conduct of the Business as now conducted), and all rights to continue to use the Assets in the conduct of a going business.

        The parties hereto expressly agree that Buyer is not assuming any of the liabilities, obligations or undertakings relating to the foregoing Assets, except for those liabilities and obligations specifically assumed by Buyer pursuant to the terms of Section 1.2 below.

        1.2    Liabilities.    Subject to and in reliance upon the representations, warranties and agreements set forth herein, and on the terms and conditions contained herein, Buyer agrees to assume on the Closing Date (i) the liabilities and obligations of Seller relating to the Business and set forth on the balance sheet for Tekna Seal as of July 28, 2002 (the "Tekna Seal Balance Sheet"), as such liabilities and obligations exist at the Closing, consisting of accounts payable, accrued compensation for employees of the Business (excluding any accrued benefits except as provided in Section 1.7 below) and accrued liabilities related to the Assets, (ii) other liabilities as of the Closing incurred in the ordinary course of the Business, and (iii) executory obligations under contracts listed or described on Schedule 1.1(d) attached hereto; provided, however, that the parties hereby agree that the liabilities of Seller assumed by Buyer will not include any intra-company accounts (the "Assumed Liabilities"). Buyer will not assume or be liable for any liability or obligation of Seller, other than the Assumed Liabilities.

        1.3    The Purchase Price.    The purchase price for the Assets ("Purchase Price") shall consist of the following:

        (a)  Cash payment of $4,500,000 paid at the Closing by wire transfer to a bank account designated by Seller; and

        (b)  Cash deposit of $1,000,000 placed in an escrow account with Comerica Bank-California under a form of escrow agreement customarily used by said bank and acceptable to the parties. Such funds will be held in interest bearing securities acceptable to Seller. Each calendar quarter following the Closing, the escrow agent will release from escrow an amount equal to 40% of the sales during that quarter to subsidiaries of Emerson Electric—Rosemount and Micro-Motion—plus a ratable portion of the earnings in the escrow account. Such payment will be made within 20 days following the end of each such quarter and shall be accompanied by a certificate of Buyer certifying as to the sales upon which the payment is based. If no sales to subsidiaries of Emerson Electric occur during any calendar quarter during the term of the escrow, all sums then held in escrow shall be paid to Buyer (and the Purchase Price will thereby be reduced by the amount so paid to Buyer) and the escrow shall be terminated. The escrow shall otherwise terminate when all amounts held thereunder have been paid to Seller.

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        1.4    Allocation of Purchase Price.    Not later than thirty days after the date of the Closing (the "Closing Date"), the Buyer shall prepare and deliver to the Seller a proposed allocation of the Purchase Price among the Purchased Assets substantially in the form of Schedule 1.4 hereto. Unless Seller objects to such allocation within five (5) days after delivery, such allocation shall be considered to be final. Should Seller object to Buyer's proposed allocation, the Parties shall negotiate in good faith to reach agreement upon a final allocation. Neither Seller nor Buyer shall take any position on any tax return or other filing with a governmental authority that is inconsistent with the final allocation as determined by the parties. Any adjustments to the Purchase Price after the Closing shall be allocated among the Purchased Assets in a manner consistent with the foregoing.

        1.5    Closing.    The consummation of the transactions contemplated hereby (the "Closing") shall take place simultaneously with the execution of this Agreement and shall occur no later than September 30, 2002.

        1.6    Net Book Value Adjustment.

        (a)  The purchase price for the Assets has been determined based on a net book value (calculated by subtracting total liabilities from total assets) of the Business of at least $1,065,000, as reflected on the Tekna Seal Balance Sheet updated to the Closing Date. As of the Closing Date, Seller shall perform a full closing of its books to derive a balance sheet of Tekna Seal (the "Closing Date Balance Sheet"). The amount of net book value shown on the Closing Date Balance Sheet shall be the "Closing Date Net Book Value." As soon as practicable but no later than thirty (30) days after the Closing, Seller shall deliver to Buyer the Closing Date Balance Sheet, and Seller shall make available to Buyer such books and records relating to the Closing Date Balance Sheet as Buyer may request. Buyer shall review such Closing Date Balance Sheet and provide the Seller with a report on the amount of any requested adjustments to the Closing Date Net Book Value (the "Report") within thirty (30) days following receipt of the Closing Date Balance Sheet from Seller. If Buyer has no requested adjustment in the Report or fails to deliver a Report within such 30-day period, then the Closing Date Net Book Value shown on the Closing Date Balance Sheet shall be final and conclusive between the parties. If Seller disagrees with the Report, the parties shall proceed as provided in Section 1.6(b) below. To the extent the Closing Date Net Book Value, as finally agreed between the parties, is less than $1,065,000, such difference will result in a dollar for dollar decrease in the Purchase Price (the "Closing Adjustment") and will be paid in cash by Seller within ten (10) days after the date on which the parties reach agreement on the Closing Adjustment.

        (b)  If Seller disagrees with Buyer's determination of the Closing Adjustment as set forth in the Report, then Seller shall so notify Buyer in writing within twenty days after Seller's receipt of the Report specifying in detail the basis of such disagreement; provided, however, that if Seller fails to notify Buyer of any disagreement within such twenty day period, then the determination of the Closing Date Net Book Value and the Closing Adjustment as reflected in the Report shall be final, conclusive and binding upon the Parties. Seller and Buyer shall negotiate in good faith to resolve any disagreement related to the Closing Adjustment. If any such disagreement cannot be resolved by the parties within ten days after Buyer's receipt of Seller's notice of disagreement, then the Parties shall jointly select a nationally recognized independent public accounting firm (the "Accounting Firm"), to act as an arbitrator to resolve as expeditiously as possible all points of disagreement with respect to the Closing Adjustment (or, in the event they are unable to agree to the selection, either may request the Los Angeles, California office of the American Arbitration Association to make such selection, which shall be final and binding on the parties). All determinations made by the Accounting Firm with respect to the Closing Adjustment shall be final, conclusive and binding on the parties hereto. Each party shall be responsible for its own fees and expenses, as well as one-half of the fees and expenses of the Accounting Firm, incurred in connection with the resolution of the dispute.

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        1.7    Employees.    Buyer shall offer employment to the employees of the Business at substantially the same compensation levels as shown on Schedule 1.7 attached hereto. Buyer is not assuming, under this Agreement or otherwise, and the Seller is and shall remain fully responsible for any obligation, responsibility or liability, whether contractual or statutory, arising out of Seller's termination of its employees in connection with the Closing. The service hours accrued by any individual during their employment by Seller will be recognized by Buyer for purposes of eligibility for benefits under any employee benefit plan or program maintained by Buyer. In addition, Buyer will recognize and assume responsibility for earned but untaken vacation and sick leave for hired employees that accrued at any time after December 31, 2001.

        1.8    Non-Transferable Assets.    It is understood that certain Assets (including, without limitation, manufacturers', contractors' and other warranties and guaranties, and certain contracts of the Business assumed by Buyer) may not be immediately transferable or assignable to Buyer. Such Assets are listed on Schedule 1.8 attached hereto. Buyer may in its sole discretion allow Seller to retain certain of such assets after the Closing Date (the "Non-Transferable Assets"), and this Agreement shall not constitute an assignment of any such Non-Transferable Assets. In such event, (i) Seller shall grant to Buyer full use and benefit of its interest in the Non-Transferable Assets to the extent permitted by the terms of or applicable to such Non-Transferable Assets, it being the intent of the parties that Buyer shall have the benefit of the Non-Transferable Assets as though it were the sole owner thereof, (ii) Seller shall take all actions necessary to preserve the value of the Non-Transferable Assets, (iii) Seller shall not transfer or assign the Non-Transferable Assets to any person or entity other than Buyer or Buyer's assigns, (iv) Seller shall transfer or assign the Non-Transferable Assets to Buyer at the earliest date, if any, on which such transfer or assignment can be effected and (v) Buyer shall be responsible for obligations relating to such Non-Transferable Assets as if they had been transferred or assigned to Buyer in accordance with the terms of this Agreement; provided however that all reasonable costs and expenses incurred by Seller in carrying out the foregoing clauses (i), (ii) and (iv) shall be paid or reimbursed by Buyer on demand.

ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER

        Subject to the exceptions set forth in the disclosure schedule which references the specific representations and warranties as to which the exception is made and which is provided to Buyer on or before the date of this Agreement (the "Disclosure Schedule"), Seller represents and warrants to Buyer as follows (any items disclosed in the Disclosure Schedule shall be considered an exception to other representations and warranties set forth in this Agreement that are not referenced therein if a reasonable business person who was not familiar with Seller or its operations would reasonably expect such item to apply to such other representations or warranties):

        2.1    Status and Authority.    Seller is a corporation duly organized, validly existing and in good standing under the laws of California. Seller is duly qualified to do business in Minnesota. Seller does not do business in any other jurisdiction where the failure to be qualified to do business would have a material adverse effect on the Business or the Assets. Seller has the requisite power and authority to enter into this Agreement and to complete the transactions contemplated by this Agreement and the documents specified in Section 4.1 hereto (together with this Agreement, the "Transaction Documents").

        2.2    Necessary Action.    All actions and proceedings to be taken by or on the part of Seller in connection with the transactions contemplated by the Transaction Documents have been duly and validly taken. The Transaction Documents have been duly and validly authorized, executed, and delivered by Seller and constitute the legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms except as may be limited by applicable bankruptcy,

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insolvency, moratorium, reorganization and other laws affecting creditor's rights and equitable remedies generally.

        2.3    No Defaults.    Neither the execution, delivery and performance by Seller of the Transaction Documents nor the consummation by Seller of the transactions contemplated thereby is an event that, of itself or with the giving of notice or the passage of time or both, will (a) conflict with the provisions of the organizational documents of Seller; (b) constitute a violation of, conflict with or result in any breach of or any default under, result in any termination or modification of, or cause any acceleration of any obligation under, any material contract, mortgage, agreement, lease or other instrument to which Seller is a party, or by which any of the Assets may be affected; (c) violate any judgment, decree, order, law, rule or regulation applicable to Seller, the Business or any of the Assets; or (d) result in the creation or imposition of any lien, charge or encumbrance against the Assets.

        2.4    Breach.    Seller is not in violation or breach of any of the material terms, conditions or provisions of any mortgage or deed of trust or other contract, lease, instrument, court order, judgment, arbitration award, or decree relating to or affecting the Assets or the Business and Seller has not received any notices of any such violation or breach which have not been cured or otherwise resolved.

        2.5    Taxes and Fees.    Seller has filed all applicable federal, state, local and foreign tax returns required to be filed to date, all of which are accurate and complete in all material respects, and has paid all taxes, interest, penalties and assessments (including without limitation income, withholding, excise, unemployment, Social Security, occupation, transfer, franchise, property, sales and use taxes, import duties or charges, regulatory fees and all penalties and interest in respect thereof) required to have been paid to date with respect to or involving the Assets or the Business. All taxes and other assessments and levies which Seller is required by law to withhold or to collect have been duly withheld and collected, and have been paid over to the proper governmental authorities and agencies to the extent due and payable. There are no outstanding or pending claims, deficiencies or assessments for taxes, interest or penalties with respect to any taxable period of Seller. There is no pending audit or audits with respect to any federal, state or local tax returns of Seller and, to the knowledge of Seller, no such audit has been threatened.

        2.6    Compliance.    All reports and filings required to be filed with any governmental regulatory authority, agency or court by Seller with respect to the Assets have been timely filed. All such reports and filings are accurate and complete in all material respects. Seller has not received any communication from any governmental authority indicating that Seller is not in compliance with all requirements of applicable statutes, regulations and ordinances.

        2.7    Approvals and Consents.    No approvals or consents of persons or entities not a party to this Agreement are legally or contractually required to be obtained by Seller in connection with the consummation of the transactions contemplated by this Agreement. No permit, license, or authorization of, or filing with, any governmental regulatory authority or agency is required by Seller in connection with the execution, delivery and performance of this Agreement, or the consummation of the transactions contemplated hereby.

        2.8    Condition of Assets.    Seller has good, valid and marketable title to all of the Assets, as of the Closing Date, free and clear of any and all liens, claims, securities interests and other encumbrances of any kind or nature whatsoever, other than liens for taxes not yet due or statutory liens arising in the ordinary course of business which will not individually or in the aggregate materially affect the Assets or the Business. All of the Assets are in good condition and repair, ordinary wear and tear excepted, and are, in all material respects, usable in the ordinary course of business. Seller shall convey to Buyer at Closing good and marketable title to the Assets. The Assets constitute all of the tangible and intangible assets used by Seller in connection with the Business, and the books, records and other documents and information of Seller relating to the Assets and the Business that are located at the Facilities comprise all of the books and records that are necessary for the operation of the Business.

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        2.9    Environmental Matters.    There are no pending or, to the knowledge of Seller, threatened actions against Seller with respect to the Facilities under any environmental or other law, regulation or ordinance, and Seller has not received any notice in any form of such an action, or of a possible action. Seller does not know of any factual basis upon which any such action could be instituted or prosecuted. To the knowledge of Seller, there has not been and there is not now: (i) any presence of any Hazardous Substance (as hereinafter defined) on any part of the Facilities, other than in compliance with applicable law, (ii) any present or past unlawful generation, recycling, reuse, sale, storage, handling, and/or disposal of any Hazardous Substance (including, but not limited to, gasoline, oil, other petroleum products, solvents or cleansers, all of which have always been used and disposed of lawfully) on any part of the Facilities, or (iii) with respect to the Facilities, any failure to comply in any material respect with any applicable local, state or federal environmental laws, regulations, ordinances or administrative or judicial orders relating to the generation, recycling, reuse, sale, storage, handling, and/or disposal of any Hazardous Substance. As used herein, the term "Hazardous Substance" means any substance or material defined or designated as an industrial, hazardous or toxic waste, contaminant, chemical, material or substance, petroleum product, pollutant or other similar term, by any federal, state or local statute, regulation or ordinance presently in effect, as any such statute, regulation or ordinance may be amended from time to time.

        2.10    Compliance with Law and Regulations.    The Seller (with respect to the Assets and Business) is in compliance in all material respects with all requirements of law, and all requirements of all governmental bodies or agencies having jurisdiction over it, the operation of the Business and the use of the Assets. Without limiting the foregoing, Seller has paid all monies and obtained all licenses, permits, authorizations and inspections needed or required for the operation of the Business. Seller has not received any notice, not heretofore complied with, from any federal, state or municipal authority or any insurance or inspection body that any of Tekna Seal's properties, facilities, equipment or business procedures or practices fails to comply with any applicable law, ordinance, regulation or requirement of any public authority or body.

        2.11    Labor and Employment Matters.    If Seller has any employment agreements with any of its employees who work in the Business, all of the same are terminable at will and none of the same would prevent any of such employees from becoming employees of Buyer after the Closing and working in the same or similar capacity as each such employee worked for Seller prior to the Closing. Seller does not have any collective bargaining agreement covering any of its employees who work in the Business. With respect to such employees, Seller is presently in material compliance with all labor laws and regulations, including, but not limited to, laws and regulations with respect to health, safety, equal employment opportunity, employment discrimination and hour and wage standards. There is no strike or other labor disturbance pending or, to the knowledge of Seller, threatened involving any of the employees who work in the Business nor is Seller aware of any circumstance which could reasonably be expected to give rise to any such strike or disturbance. There has not been any labor union organizing activity affecting the Business. There is no unfair labor practice complaint against Seller pending or, to the knowledge of Seller, threatened.

        2.12    Insurance.    Seller maintains insurance policies providing general coverage as set forth in the Disclosure Schedule under the caption referencing Section 2.12. All of such policies are in full force and effect and Seller is not in default of any provision thereof. Seller has not received notice from any issuer of any such policies of its intention to cancel, terminate or refuse to renew any policy issued by it. Seller will continue to maintain such insurance coverage in full force and effect through the Closing Date.

        2.13    Litigation.    There are no suits, arbitrations, administrative charges or other legal proceedings, claims or governmental investigations pending against or, to Seller's knowledge, threatened against, the Business or Seller relating to or affecting the Assets, nor, to Seller's knowledge, is there any basis for any such suit, arbitration, administrative charge or other legal proceeding, claim

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or governmental investigation. Furthermore, there are no claims or threatened claims or disputes of any kind between any current or former employee of the Business and Seller or any of Seller's management. Seller has not been operating under or subject to, or in default with respect to, any order, writ, injunction or decree of any court or governmental department, commission, board, agency or instrumentality.

        2.14    Brokers.    There is no broker or finder or other person who would have any valid claim against Buyer or Seller for a commission or brokerage fee or payment in connection with this Agreement or the transactions contemplated hereby as a result of any agreement of, or action taken by, the Seller.

        2.15    Accuracy of Information.    No statement made by Seller in this Agreement or in any document to be provided by Seller to Buyer hereunder, including those documents described in Article IV hereof, contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements contained therein not misleading.

        2.16    Insolvency Proceeding.    No insolvency proceeding of any kind, including, without limitation, bankruptcy, receivership or reorganization, and no arrangement with creditors, affecting Seller or any of its assets or properties is pending or, to Seller's knowledge, threatened, and Seller has not made any assignment for the benefit of creditors, nor taken any actions with a view to, or which would constitute the basis for, the institution of any such insolvency proceedings.

        2.17    Intellectual Property.

        (a)  Seller is not a party to any material licenses, sublicenses or other agreements pursuant to which Seller is authorized to use any third party technology, trade secret, know-how, process, patent, trademark or copyright, including software (other than licenses for off-the-shelf software used in the conduct of the Business) or other intellectual property licensed from third parties and used in the Business as currently conducted or currently proposed to be conducted. Seller owns, or has the right to use, all processes, formulas, methods, schematics, technology, know-how, computer software programs, data or applications and tangible or intangible proprietary information or material, patents, trademarks, trade names, service marks, registered copyrights, applications for and registrations of such patents, trademarks, trade names, service marks, and copyrights (collectively, the "Tekna Seal Intellectual Property Rights") required or necessary for the conduct of the Business as currently conducted. Seller has not entered into any licenses, sublicenses, distribution agreements or other agreements pursuant to which any person is authorized to use any Tekna Seal Intellectual Property Rights or has the right to manufacture, reproduce, market or exploit any product of the Business.

        (b)  The Disclosure Schedule under the caption referencing Section 2.19(b) sets forth a complete and accurate list of all patents or registered trademarks and service marks in Tekna Seal's Intellectual Property Rights, and the names of the jurisdictions covered by the applicable registration or application.

        (c)  Seller is not, nor will it be as a result of the execution and delivery of this Agreement or the performance of its obligations under this Agreement, in breach of any material license, sublicense or other agreement relating to the Tekna Seal Intellectual Property Rights.

        (d)  To Seller's knowledge, the manufacturing, marketing, licensing or sale of products by the Business do not infringe any patent, trademark, service mark, copyright, trade secret or other proprietary right of any third party. Seller (i) has not received notice that it has been sued in any suit, action or proceeding which involves a claim of infringement by Tekna Seal of any patent, trademark, service mark, copyright, trade secret or other proprietary right of any third party and (ii) has no knowledge of any claim challenging or questioning the validity or effectiveness of any license or agreement relating to any of the Tekna Seal Intellectual Property Rights.

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        2.18    Financial Statements.    Buyer has received copies of Seller's balance sheet as of July 28, 2002 and statement of operations for the twelve-month period then ended, each as applicable to the Business (collectively, the "Financial Statements"). The Financial Statements are in accordance with the books and records of Seller and present fairly in all material respects the financial position of the Business as of July 28, 2002. The Financial Statements have been prepared in accordance with generally accepted accounting principles ("GAAP") applied on a consistent basis. Except and to the extent reflected or reserved against in the Financial Statements, Seller does not have, as of the dates of such Financial Statements, any liabilities or obligations (absolute or contingent) of a nature required by GAAP to be reflected in the Financial Statements. The reserves, if any, reflected on the Financial Statements were adequate in light of the contingencies with respect to which they were made.

        2.19    No Undisclosed Liabilities.    Except as expressly set forth in the Financial Statements or otherwise in the Disclosure Schedule, or arising in the normal course of business since July 28, 2002, there are no liabilities or obligations (including, but not limited to, any tax liabilities or accruals) of Seller, including any contingent liabilities, that are, individually or in the aggregate, material to the financial condition of the Business or for which Buyer may become liable or which may adversely affect the free and clear title of Buyer to the Assets after the Closing.

        2.20    No Material Changes.    Since July 28, 2002:

        (a)  Seller has not removed any cash from the separate bank account(s) that it maintains for the Business other than to pay third party liabilities that were due and payable in the ordinary course of the Business;

        (b)  there has not been any damage, destruction or loss of property of the Business, whether or not covered by insurance, in an aggregate amount in excess of Ten Thousand Dollars ($10,000);

        (c)  no grant or agreement to make any increase in the compensation payable or to become payable by Seller to the employees of the Business has been made except those occurring in the ordinary course of the Business;

        (d)  Seller has not sold, leased, abandoned or otherwise disposed of any real property on which the Business conducts operations or any machinery, equipment or other operating property of the Business other than in the ordinary course of the Business;

        (e)  Seller has not sold, assigned, transferred, licensed or otherwise disposed of any of the Tekna Seal Intellectual Property Rights or other intangible assets of the Business, except in the ordinary course of the Business;

        (f)    Seller has not been involved in any legal proceeding or received any threat of litigation which may result in a material liability to Seller or which may affect the Assets or the Business;

        (g)  Seller has not engaged in any activity involving the Business or entered into any material commitment or transaction (including without limitation any borrowing or capital expenditure) on behalf of the Business other than in the ordinary course of the Business;

        (h)  Seller has not permitted or allowed any of the material property or assets included in the Assets to be subjected to any mortgage, deed of trust, pledge, lien, security interest or other encumbrance of any kind, other than any purchase money security interests incurred in the ordinary course of the Business;

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        (i)    Seller has not made any capital expenditure for the Business or commitment for additions to property, plant or equipment of the Business individually in excess of Ten Thousand Dollars ($10,000) or in the aggregate, in excess of Fifty Thousand Dollars ($50,000);

        (j)    Seller has not agreed to take any action described in this Section 2.20 or outside of the ordinary course of the Business or which would constitute a breach of any of the representations contained in this Agreement; and

        (k)  There has been no material adverse change in the Business or the Assets.

        2.21    Contracts.    With respect to each of the contracts and agreements described and listed on Schedule 1.1(d) attached hereto as well as those other contracts or agreements of Seller relating to the Business under which Seller is obligated to pay, or entitled to receive, $25,000 or more, all of which are included as a part of the Assets being transferred hereunder (each a "Contract" and, collectively, the "Contracts"):

        (a)  Each Contract is valid and in full force and effect, and is enforceable by Seller in accordance with its terms.

        (b)  Except as set forth in the Disclosure Schedule under the caption referencing Section 2.21:

          (i)  Each of the Contracts is in full force and effect and, to the knowledge of Seller, no person has violated or breached, or declared or committed any default under, any Contract which default is continuing and not cured or resolved;

        (ii)  To the knowledge of Seller, no event has occurred, and no circumstance or condition exists, that might (with or without notice or lapse of time) (A) result in a violation or breach of any of the provisions of any Contract, (B) give any person the right to declare a default or exercise any remedy under any Contract, (C) give any person the right to accelerate the maturity or performance of any Contract, or (D) give any person the right to cancel, terminate or modify any Contract;

        (iii)  Seller has not received any written notice or communication regarding any actual, alleged, possible or potential violation or breach of, or default under, any Contract; and

        (iv)  Seller has not waived any of its rights under any Contract.

        2.22    Inventory.    The Disclosure Schedule under the caption referencing Section 2.22 contains a materially complete list of the inventory of the Business as of July 28, 2002. The inventory of the Business, net of reserves, consists of items of a quality and quantity usable and, with respect to finished goods only, salable, in each case, in the ordinary course of the Business. Seller has on hand with respect to the Business or has ordered and expects timely delivery of inventory as is reasonably required to timely fill current orders on hand and to maintain the manufacture and shipment of products at the normal level of operations of the Business.

        2.23    Accounts Receivable.

        (a)  To the extent not already collected, all accounts receivable shown on the Financial Statements, and all accounts receivable thereafter created or acquired by Seller prior to the Closing Date (the "Accounts"), have arisen or will arise in the ordinary course of business, and, to the extent not already collected and net of reserves, represent and will represent amounts owed to Seller by unaffiliated third party account debtors in respect of goods, products or services provided to such account debtors by Seller, subject to customary adjustments which may be effected with customers in the ordinary course of business (which adjustments are not and will not be, in the aggregate, material to the financial condition of the Business).

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        (b)  Seller does not have any knowledge of any asserted counterclaims or set-offs in respect of any of such Accounts which would impair the collection of such Accounts in the ordinary course of business, subject to customary adjustments which may be effected with customers in the ordinary course of business (which adjustments are not and will not be, in the aggregate, material to the financial condition and business of Seller).

        2.24    Warranties.    All claims outstanding, pending or, to the knowledge of Seller, threatened for breach of any warranty relating to any products or services of the Business sold by Seller prior to the date hereof are listed and described in the Disclosure Schedule under the caption referencing Section 2.24. The description of Seller's product and service warranties set forth in the Disclosure Schedule under the caption referencing Section 2.24 is correct and complete. The reserves for warranty claims on the Financial Statements are consistent with Seller's prior practices and are materially sufficient to cover all warranty claims made or to be made against any products or services of the Business sold prior to the date thereof.

        2.25    Product Quality; Product Liability.    No action, arbitration, audit, hearing, investigation, litigation, suit or other proceeding is pending, and to Seller's knowledge, no such proceeding has been threatened, against or involving Seller in connection with any product sold by Seller as part of the Business alleging that such product has a defect in manufacture, design, materials or workmanship, or alleging any failure to warn of any such defect. To Seller's knowledge, there has not been any accident, happening or event caused or allegedly caused by any hazard or defect or alleged hazard or defect in the manufacture, design, materials or workmanship of any product sold or distributed by Seller as part of the Business or any failure or alleged failure to warn of any such hazard or defect or alleged hazard or defect. All product liability claims that have been asserted against Seller with respect to the Business, whether covered by insurance or not and whether litigation has resulted or not, are listed and summarized in the Disclosure Schedule under the caption referencing Section 2.25.

        2.26    Permits and Licenses.    The Disclosure Schedule under the caption referencing Section 2.26 lists all required permits, licenses and/or franchises, from whatever governmental authorities or agencies (domestic and/or foreign) requiring the same and having jurisdiction over Seller, necessary in order to operate the Business in the manner presently conducted. All of such permits, licenses and/or franchises are valid, current and in full force and effect.

        2.27    Transactions with Affiliates.    Except as described in the Disclosure Schedule under the caption referencing Section 2.27, no material asset employed in the Business is owned by, leased from, or leased to any affiliate of Seller or any partnership, corporation, limited liability company, trust or other entity in which Seller owns or holds a legal or beneficial interest, or any officer or director of Seller or any affiliate of Seller.

        2.28    Events Adversely Affecting the Assets.    To the knowledge of Seller, no event, occurrence or condition, including any damage, destruction or loss (whether or not covered by insurance) exists as of this date which adversely affects any of the Assets or which may adversely affect the operation of Buyer's business to be conducted with the Assets subsequent to the Closing or which, with the passage of time or the giving of notice, could adversely affect any of such Assets or such business. To the knowledge of Seller, no event has occurred which may adversely affect Buyer's relationship after the Closing with suppliers, customers, creditors, independent contractors, sales personnel, and employees of the Business and others having business relations with the Business.

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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER

        Buyer represents and warrants to Seller as follows:

        3.1    Status.    Buyer is a limited liability company which is duly organized, validly existing and in good standing under the laws of the State of Florida. Buyer has the requisite authority to enter into this Agreement and the documents specified in Article IV hereof and to complete the transactions contemplated by such documents.

        3.2    No Defaults.    Neither the execution, delivery and performance by Buyer of this Agreement or the documents specified in Article IV hereof, nor the consummation by Buyer of the transactions contemplated thereby are events that, themselves or with the giving of notice or the passage of time or both, will: (a) conflict with the provisions of the Articles of Organization or Operating Agreement of Buyer; (b) constitute a violation of, conflict with or result in any breach of or any default under, result in any termination or modification of, or cause any acceleration of any obligation under, any material contract, mortgage, indenture, agreement, lease or other instrument to which Buyer is a party or by which it is bound, or by which it may be affected; (c) violate any judgment, decree, order, statute, rule or regulation applicable to Buyer; or (d) result in the creation or imposition of any lien, charge or encumbrance against the business or the assets of Buyer.

        3.3    Necessary Action.    All corporate or other actions and proceedings to be taken by or on the part of Buyer in connection with the transactions contemplated by this Agreement and the documents specified in Article IV hereof have been duly and validly taken. This Agreement and the documents specified in Article IV hereof have been duly and validly authorized, executed and delivered by Buyer and constitute the legal, valid and binding obligations of Buyer, enforceable against Buyer in accordance with their respective terms except as may be limited by applicable bankruptcy, insolvency, moratorium, reorganization and other laws affecting creditor's rights and equitable remedies generally.

        3.4    Brokers.    There is no broker or finder or other person who would have any valid claim against Buyer or Seller for a commission or brokerage fee or payment in connection with this Agreement or the transactions contemplated hereby as a result of any agreement of, or action taken by, Buyer.

        3.5    Litigation.    There are no suits, arbitration proceedings, administrative charges or other legal proceedings, claims or governmental investigations of any nature pending or, to Buyer's knowledge, threatened against or affecting it that would affect Buyer's ability to carry out the transactions contemplated by this Agreement or the documents specified in Article IV hereof. Buyer is not subject to any material legal proceedings, claims or governmental investigations.

        3.6    Approvals and Consents.    No approvals or consents of persons or entities not a party to this Agreement are legally or contractually required to be obtained by Buyer in connection with the consummation of the transactions contemplated by this Agreement. No permit, license, or authorization of, or filing with, any governmental regulatory authority or agency is required in connection with the execution, delivery and performance of this Agreement, or the consummation of the transactions contemplated hereby.

ARTICLE IV
ITEMS TO BE DELIVERED AT THE CLOSING

        4.1    Deliveries by Seller.    At the Closing, Seller shall deliver to Buyer duly executed by Seller or such other signatory as may be required by the nature of the document:

        (a)  Bills of sale, certificates of title, endorsements, assignments and other good and sufficient instruments of sale, conveyance and transfer and assignment (the "Transfer Documents"), in form

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and substance satisfactory to Buyer sufficient to sell, convey, transfer and assign to Buyer all right, title and interest of Seller to the Assets and the Assumed Liabilities;

        (b)  Any consents required to be obtained by Seller prior to the Closing;

        (c)  Certified copies of resolutions, duly adopted by the board of directors of Seller, which shall be in full force and effect at the time of the Closing, authorizing the execution, delivery and performance by Seller of this Agreement and the consummation of the transactions contemplated hereby; and

        (d)  A statement of unemployment taxes due and unpaid from the Minnesota Department of Economic Security.

        4.2    Deliveries by Buyer.    At the Closing, Buyer shall deliver to Seller:

        (a)  Transfer Documents in form and substance satisfactory to Seller sufficient for Buyer to assume all right, title and interest of Seller to the Assets and the Assumed Liabilities;

        (b)  Any consents required to be obtained by Buyer prior to the Closing;

        (c)  Certified copies of resolutions duly adopted by the Board of Managers of Buyer, which shall be in full force and effect at the Closing, authorizing the execution, delivery and performance by Buyer of this Agreement and the consummation of the transactions attempted hereby;

        (d)  Funds in the amount of $4,500,000 by wire transfer; and

        (e)  Signed escrow agreement as provided in Section 1.3(b) and deposit of $1,000,000 in such escrow.

ARTICLE V
SURVIVAL; INDEMNIFICATION

        5.1    Survival.    All representations, warranties, covenants and agreements contained in this Agreement, or in any exhibit, schedule, certificate, agreement, document or statement delivered pursuant hereto, shall survive for twelve (12) months after the Closing and shall not be affected in any respect by the Closing, notwithstanding any investigation conducted by any party hereto and any other information which any party may receive.

        5.2    Basic Provision; Limitations.

        (a)  Seller hereby agrees to indemnify, defend and hold harmless Buyer, its directors, officers and employees and all persons which directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with Buyer, and their respective successors and assigns (collectively, the "Buyer Indemnitees"), from, against and in respect of, and to reimburse the Buyer Indemnitees for, the amount of any and all Seller Deficiencies (as defined in Section 5.3(a)).

        (b)  Buyer hereby agrees to indemnify, defend and hold harmless Seller and its directors, officers, employees and all persons which directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with Seller, and their respective successors and assigns (collectively, the "Seller Indemnitees") from, against and in respect of, and to reimburse the Seller Indemnitees for, the amount of any and all Buyer Deficiencies (as defined in Section 5.3(b)).

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        5.3    Definition of Deficiencies.

        (a)  As used in this Article V, the term "Seller Deficiencies" shall mean any and all losses, costs, expenses, and damages, including legal fees and costs, sustained by the Buyer Indemnitees and arising out of, based upon or resulting from:

          (i)  Any misrepresentation, breach of warranty, or any non-fulfillment of any representation, warranty, covenant, obligation or agreement on the part of Seller contained in or made pursuant to this Agreement;

        (ii)  Any failure by Seller to pay or discharge any liability relating to Seller's operation of the Business or the Assets that is not one of the Assumed Liabilities;

        (iii)  Any litigation, proceeding or claim by any third party to the extent arising out of the conduct of the Business prior to the Closing Date and that is not one of the Assumed Liabilities;

        (iv)  Any severance pay or other payment required to be paid or any other liability with respect to any employee of the Business who is not employed by Buyer; and

        (v)  Any and all acts, suits, proceedings, demands, assessments and judgments, and all fees, costs and expenses of any kind, related or incident to any of the foregoing.

        (b)  As used in this Article V, the term "Buyer Deficiencies" shall mean any and all losses, costs, expenses and damages, including legal fees and costs, sustained by the Seller Indemnitees and arising out of, based upon or resulting from:

          (i)  Any misrepresentation, breach of warranty, or any non-fulfillment of any representation, warranty, covenant, obligation or agreement on the part of Buyer contained in or made pursuant to this Agreement;

        (ii)  Any failure by Buyer to pay or discharge any of the Assumed Liabilities or any liability relating to Buyer's operation of the Business;

        (iii)  Any litigation, proceeding or claim by any third party to the extent arising out of the conduct of the Business after the Closing Date; and

        (iv)  Any and all acts, suits, proceedings, demands, assessments and judgments, and all fees, costs and expenses of any kind, related or incident to any of the foregoing.

        5.4    Procedures for Establishment of Deficiencies.

        (a)  In the event that any claim shall be asserted by any third party against the Buyer Indemnitees or Seller Indemnitees (in either case, the "Indemnitees"), which, if sustained, would result in a Buyer Deficiency or a Seller Deficiency (in either case, a "Deficiency"), then the Indemnitees, within a reasonable time after learning of such claim, shall notify the party required to indemnify the Indemnitees under the terms of Section 5.2(a) or 5.2(b), as applicable (the "Indemnifying Party") of such claim, and shall extend to the Indemnifying Party a reasonable opportunity to defend against such claim, at the Indemnifying Party's sole expense and through legal counsel acceptable to the Indemnitees, provided that the Indemnifying Party proceeds in good faith, expeditiously and diligently. The Indemnitees shall, at their option and expense, with respect to claims not solely for money damages, have the right to participate in any defense undertaken by the Indemnifying Party with legal counsel of their own selection.

        No settlement or compromise of any claim which may result in a Deficiency may be made by the Indemnifying Party without the prior written consent of the Indemnitees unless: (A) prior to such settlement or compromise the Indemnifying Party acknowledges in writing its obligation to pay in full the amount of the settlement or compromise and all associated expenses; and (B) the

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Indemnitees are furnished with security reasonably satisfactory to the Indemnitees that the Indemnifying Party will in fact pay such amount and expenses. No settlement or compromise of any claim that acknowledges any liability for a violation of law, or purports to impose any non-monetary obligation upon a party may be entered into without such party's consent.

        (b)  With respect to claims that are not third party claims, in the event that the Indemnitees assert the existence of any Deficiency against the Indemnifying Party, they shall give written notice to the Indemnifying Party of the nature and amount of the Deficiency asserted. If, within fifteen calendar days after the giving of the written notice by the Indemnitees the Indemnifying Party does not provide written notice to the Indemnitees that the Indemnifying Party intends to contest the assertion by the Indemnitees (such notice by the Indemnifying Party being hereinafter referred to as the "Contest Notice"), such assertion of the Indemnitees shall be deemed accepted and the amount of the Deficiency shall be deemed established. In the event, however, that a Contest Notice is given to the Indemnitees within said fifteen calendar day period, then the contested assertion of a Deficiency shall be settled by arbitration to be held in Los Angeles, California by a panel of three arbitrators chosen through and in accordance with the Commercial Rules of the American Arbitration Association or its successor body. The decision of the arbitrators shall be delivered in writing to the Indemnifying Party and the Indemnitees and shall be final, binding and conclusive upon all of the parties hereto and enforceable in a court of law, and the amount of the Deficiency, if any, determined to exist, shall be deemed established.

        (c)  The Indemnitees and the Indemnifying Party may agree in writing, at any time, as to the existence and amount of a Deficiency, and, upon the execution of such agreement such Deficiency shall be deemed established.

        5.5    Limitation.    Seller shall have no liability to Buyer under Section 5.2(a) above for Seller Deficiencies until the aggregate amount for which Seller is liable under said section exceeds the sum of $100,000, provided, however, that in such event Seller's liability shall include liability for such sum; provided further, however, that the foregoing provisions of this sentence will not apply to any Seller Deficiencies arising from a breach of any of the representations and warranties set forth in Section 2.5 above. Further, Seller's total liability under Section 5.2(a) shall be limited to and shall not exceed the Purchase Price.

ARTICLE VI
POST-CLOSING COVENANTS OF SELLER

        6.1    Non-Competition Agreement.    In consideration of the Purchase Price payment hereunder and other valuable consideration, Seller hereby agrees that, for a period of five years from and after the Closing, it will not directly, nor will it indirectly through another entity controlled by, controlling or under common control with Seller, engage in the business of designing, developing, manufacturing or selling glass-to-metal seals anywhere in the United States (the "Business"); provided, however, that such agreement will not prevent Seller from manufacturing or producing glass-to-metal seals for its internal use as a component of, or a processing step for, a product of Seller, nor shall such agreement prevent an entity that acquires the business of Seller (whether by way of the acquisition of Seller's capital stock or assets or otherwise) from engaging in the Business, but only to the extent that such entity engaged in the Business before acquiring control of Seller. In the event that any of the foregoing provisions of this Section 6.1, or any portion thereof, is for any reason held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect the validity of any of the other provisions of this Section 6.1, or portions thereof, and any such provision, or portion thereof, will be deemed modified to the extent necessary to make it enforceable. If a court of competent jurisdiction determines that any provision of this Section 6.1, or portion thereof, is overbroad or overreaching, then such provision, or portion thereof, will be deemed modified to the extent necessary to make it enforceable to the maximum extent allowed by law. The parties agree that

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if a court of competent jurisdiction determines that any provision of this Section 6.1, or portion thereof, is not enforceable as written, then such court shall reform such provision, or portion thereof, to provide for the maximum restrictions enforceable against Seller and that the provision, or portion thereof, as reformed, will be enforceable.

        6.2    Preservation of Records.    Seller covenants that it will preserve and make available (including the right to inspect and copy) to Buyer, its attorneys and accountants, for three years after the Closing Date, and during normal business hours, such of the books, records, files, correspondence, memoranda and other documents with respect to the Assets sold pursuant to this Agreement as may be retained by Seller pursuant to the agreement of Buyer and which Buyer may reasonably require in connection with a legitimate purpose.

        6.3    Further Assurances.    Seller agrees to remit to Buyer within 10 days of receipt any payments received by Seller after the Closing Date that relate to the Business and belong to Buyer. In addition, from time to time, on and after the Closing Date, Seller hereto will execute all such instruments and take all such actions as Buyer shall reasonably request, without payment of further consideration, to carry out and effectuate the intent and purpose hereof and all transactions and things contemplated by this Agreement, including without limitation the execution and delivery of instruments, and any and all actions which may reasonably be necessary or desirable to complete the transactions contemplated hereby. Seller shall cooperate fully with Buyer and its counsel and accountants in connection with any steps required to be taken as part of the parties' respective obligations under this Agreement.

ARTICLE VII
POST-CLOSING COVENANTS OF BUYER

        7.1    Further Assurances.    Buyer agrees to remit to Seller within 10 days of receipt any payments received by Buyer after the Closing Date that do not relate to the Business and belong to Seller. In addition, from time to time, on and after the Closing Date, Buyer will execute all such instruments and take all such actions as Seller shall reasonably request, without payment of further consideration, to carry out and effectuate the intent and purpose hereof and all transactions and things contemplated by this Agreement, including without limitation the execution and delivery of instruments, and any and all actions which may reasonably be necessary or desirable to complete the transactions contemplated hereby. Buyer shall cooperate fully with Seller and its counsel and accountants in connection with any steps required to be taken as part of the parties' respective obligations under this Agreement.

        7.2    Preservation of Records.    Buyer covenants to preserve and make available to Seller, for three years after the Closing Date, such of the books and records of the Business transferred to Buyer hereunder as Seller may reasonable require in connection with a legitimate purpose.

        7.3    Emerson Electric Business.    Following the Closing and so long as the escrow described in Section 1.3(b) remains in effect, Buyer shall use commercially reasonable efforts to preserve and enhance the customer relationship with Emerson Electric subsidiaries—Rosemount and Micro-Motion—and shall take no overt action to damage such relationship or cause the level of business transacted with those customers to be reduced.

ARTICLE VIII
MISCELLANEOUS

        8.1    Expenses.    Each party hereto shall bear all of its expenses incurred in connection with the transactions contemplated by this Agreement, including without limitation, accounting, financial advisory and legal fees incurred in connection herewith; provided, however, that Buyer shall bear any sales, transfer or use taxes arising from the transfer of the Assets to Buyer.

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        8.2    Remedies Cumulative.    The remedies provided in this Agreement shall be cumulative and shall not preclude the assertion by any party hereto of any other rights or the seeking of any other remedies against the other party hereto.

        8.3    Public Announcements.    No party shall, without the prior written approval of the other party hereto, make any press release or other public announcement concerning the existence of this Agreement or the transactions contemplated by this Agreement, except as and to the extent that such party shall be so obligated by law, in which case such party shall give advance notice to the other party and the parties shall use their best efforts to cause a mutually agreeable release or announcement to be issued. Except as and to the extent that a party is obligated by law, the timing and content of any announcements, press releases or public statements concerning this Agreement shall be by the agreement of Seller and Buyer.

        8.4    Successors and Assigns.    This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective representatives, successors and assigns. Notwithstanding anything contained herein, Buyer may assign any and all rights and obligations hereunder to any entity controlled by Buyer.

        8.5    Amendments; Waivers.    The terms, covenants, representations, warranties and conditions of this Agreement may be changed, amended, modified, waived, discharged or terminated only by a written instrument executed by the party waiving compliance. The failure of any party at any time or times to require performance of any provision of this Agreement shall in no manner affect the right of such party at a later date to enforce the same. No waiver by any party of any condition or the breach of any provision, term, covenant, representation or warranty contained in this Agreement, whether by conduct or otherwise, in any one or more instances shall be deemed to be or construed as a further or continuing waiver of any such condition or of the breach of any other provision, term, covenant, representation or warranty of this Agreement.

        8.6    Notices.    All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing (which shall include notice by telex or facsimile transmission) and shall be deemed to have been duly made and received when personally served, or when delivered by Federal Express or a similar overnight courier service, expenses prepaid, or, if sent by facsimile, addressed as set forth below:

        If to Seller then to:

Maxwell Technologies, Inc.
9244 Balboa Avenue
San Diego, CA 92123
Attention: General Counsel
Telecopier: (858) 277-6754

        If to Buyer, then to:

Tekna Seal LLC
5301 East River Road
Minneapolis, Minnesota 55421
Attn: Arlan J. Clayton, President
Telecopier: (763) 574-9139

        With copies to:

Tekna Seal LLC
810 Flightline Boulevard
DeLand, Florida 32724

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Attn: Arlan J. Clayton, President
Telecopier: (386) 736-6161

and

Lowndes, Drosdick, Doster, Kantor & Reed, P.A.
215 N. Eola Drive
Orlando, Florida 32801
Attn: James J. Hoctor, Esq.
Telecopier: (407) 843-4600

        Any party may alter the address to which communications are to be sent by giving notice of such change of address in conformity with the provisions of this Section 8.6 providing for the giving of notice.

        8.7    Captions.    The captions of Articles and Sections of this Agreement are for convenience only and shall not control or affect the meaning or construction of any of the provisions of this Agreement.

        8.8    Governing Law.    This Agreement and all questions relating to its validity, interpretation, performance and enforcement shall be governed by and construed in accordance with the laws of the State of Minnesota without giving effect to principles of conflicts of laws.

        8.9    Entire Agreement.    This Agreement, the Exhibits and Schedules hereto and the other documents delivered hereunder constitute the full and entire understanding and agreement between the parties with regard to the subject matter hereof and thereof, and supersede all prior agreements, understandings, inducements or conditions, express or implied, oral or written, relating to the subject matter hereof. The express terms hereof control and supersede any course of performance and/or usage of trade inconsistent with any of the terms hereof.

        8.10    Execution; Counterparts.    This Agreement may be executed in any number of counterparts and by telecopier, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories.

        8.11    Construction.    The parties acknowledge that each party and its counsel has reviewed and revised this Agreement and that the rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments or schedules hereto, or any documents executed in connection herewith. All schedules attached to this Agreement are hereby incorporated into this Agreement.

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        IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their duly authorized signatories, all as of the day and year first above written.

BUYER:	TEKNA SEAL LLC
	By:	/s/  ARLAN J. CLAYTON
	Name:	Arlan J. Clayton
	Title:	President
SELLER:	MAXWELL ELECTRONIC COMPONENTS GROUP, INC.
	By:	/s/  CARLTON J. EIBL
	Name:	Carlton J. Eibl
	Title:	CEO

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EX-99.2

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Exhibit 99.2

PURCHASE AND SALE AGREEMENT

        THIS PURCHASE AND SALE AGREEMENT (the "Agreement") is entered into and effective as of September 29, 2002 (the "Effective Date"), by and between I-Bus/Phoenix, Inc., a California corporation ("Seller"), and I-Bus Corporation, a California corporation ("Buyer").

R E C I T A L S

        WHEREAS, the Seller is in the business of, among other things, the design, manufacture and sale of applied computing systems and subsystems sold primarily to OEMs for integration into larger systems and conducts such operations in the U.S., U.K. and France (hereinafter, the "Computing Business"); and

        WHEREAS, senior management of the Computing Business (and who will continue as senior management) have over the last 30 days restructured the Computing Business to reduce personnel and facilities in the U.S. and in Europe and to focus on selected key customers, all for the purpose of configuring the Computing Business acceptable to the Buyer to complete the transactions contemplated by this Agreement; and

        WHEREAS, Buyer is acquiring the assets and properties of the Computing Business from Seller and concurrently with this Agreement, is issuing on this Effective Date to Seller an 8% Senior Subordinated Note in the face amount of $7 million, a warrant for the purchase of up to 19.9% of the common stock of Buyer and, as set forth under Section 9 below, a possible contingent purchase price payment, all in consideration for the transfer of such assets and properties; and

        WHEREAS, the parties desire to reflect in this Agreement the formal transfer and assignment of said assets and properties from Seller to Buyer and the formal assumption by Buyer of certain liabilities and obligations of Seller relating to the Computing Business.

A G R E E M E N T

        NOW, THEREFORE, in consideration of the issuance by Buyer to Seller of the 8% Senior Subordinated Note and the warrant referred to above and the terms and conditions of this Agreement, the parties hereto agree as follows:

        1.    Purchase and Sale of Assets.    Seller does hereby sell, transfer, convey, assign and deliver to Buyer, free and clear of any and all liens, pledges, claims, security interests or encumbrances, of any kind, and Buyer does hereby purchase, acquire and accept from Seller all of Seller's right, title and interest in and to the following assets and properties of the Computing Business, as follows:

        European Computing Business:

        (a)  All outstanding shares of the capital stock of (i) I-Bus/Phoenix (UK) Limited, which owns 100% of the capital stock of I-Bus/(UK) Limited (Tangmere operation), I-Bus Manufacturing (UK) Limited (Uckfield), (ii) of Calphobytax Limited (Portwell operation), and (iii) I-Bus/Phoenix France SA owned by Seller or any direct or indirect subsidiary of Seller. Buyer hereby contributes all shares of capital stock of I-Bus/Phoenix France SA and Calphobytax Limited (and will take such actions to formalize such contribution) to I-Bus/Phoenix (UK) Limited as additional paid in equity capital of I-Bus/Phoenix (UK) Limited by Buyer;

        North America Computing Business:

        (b)  The equipment, computer hardware and software, fixed assets, spare parts and supplies located in North America and owned by Seller that are used in engineering research and

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development of the Computing Business to be identified and mutually agreed by Buyer and Seller for reasonable use by Buyer;

        (c)  Those customer and vendor purchase or sales orders and other agreements (including any purchase order obligations to Continuous Computing), licenses and contracts specifically identified and listed on Schedule 1.1(c) hereto (all such agreements, leases, license and contracts, together with the Development Contracts described in clause (d) below, being referred to herein as the "Contracts"), to which Seller is a party and any rights associated therewith (such as rights to use customer furnished property) or deposits or other prepayments made by Seller thereunder;

        (d)  All rights in and to third party product development agreements and relationships of the Computing Business, confidential or proprietary information of such third party, and all licenses to use code incorporated therein, and all associated development contracts, licenses and maintenance agreements (collectively, the "Development Contracts"), listed or described on Schedule 1.1(d) hereto;

        (e)  All inventories of finished goods, work in progress and (except for parts to support the warranty obligation retained by seller with respect to Siemens Electrocom for the U.S. Postal Service ICS and FCS programs) raw materials relating to the Computing Business and listed on Schedule 1.1(e) hereto with respect to which representatives from I-Bus/Phoenix (UK) Limited specifically select and identify for transfer to the UK (collectively, the "Inventory"), which Inventory Buyer hereby contributes and directs the transfer to I-Bus/Phoenix (UK) Limited as additional paid in equity capital of such entity by Buyer. All inventory listed on Schedule 1.1 (e) that is not selected and identified for transfer to the UK will remain owned by seller for sale or disposition for Seller's accounts;

        (f)    All inventory, machinery, equipment, computer hardware and software, fixed assets, facility leasehold, spare parts, supplies and furniture owned by Seller, used in the Computing Business and located at Seller's Gateworks facility on 7631 Morro Road, Atascadero, California, whether or not listed on Schedules 1.1(b) or (e) hereto;

        (g)  All trademarks, trade names and patents (and applications with respect thereto) listed on Schedule 1.1(g) and Schedule 7 hereto and trade secrets, engineering designs and prototypes, proprietary technology and other intellectual property used solely in connection with the Computing Business, including without limitation the name "I-Bus" and the Internet domain name "I-Bus.com";

        (h)  All client lists, supplier lists, sales files, business development information, databases, price lists and pricing records and schedules, sales literature and technical literature, to the extent the same expressly relates to the Computing Business (provided that Seller may retain a copy for its records); and

        (i)    Loan obligations owed to Seller by employees Mien Shih and Johni Chan of Seller hired by Buyer in connection with the transactions contemplated under this Agreement; and all liabilities and obligations for accrued vacation and sick time through the Effective Date for employees of Seller hired by Buyer; and

        (j)    The non-compete obligations of the former owners of Gateworks Corporation to the Computing Business as set forth under the Non Competition Agreements dated September 13, 2000 between Seller and each of Gordon Edmonds, Ronald Einsworth and Doug Hollingsworth which agreements permit this assignment as part of any sale of the Computing Business.

        Seller and Buyer agree to cooperate in securing any legally required third party consents to the assignment or novation, as applicable, of the Contracts as soon as practicable. Until such consents are obtained, the Contracts shall be performed by Buyer as a subcontractor to Seller

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under the same terms and conditions as apply to the particular Contract, with the intended result that Buyer take responsibility for the burdens under such Contracts and enjoy the benefits of such Contracts. Buyer shall indemnify Seller against liability arising from Buyer's performance of such Contracts during such period.

        2.    Assumption of Liabilities.    Buyer does hereby assume and agree to pay, perform or otherwise satisfy the following liabilities and obligations of Seller relating to the Computing Business:

        (a)  All liabilities and obligations of Seller under the Contracts listed on Schedules 1.1(c) and (d) to the extent not paid, performed or otherwise satisfied by Seller prior to the date of this Agreement; and

        (b)  Accrued vacation and sick pay liabilities of Seller relating to those US employees of Seller hired by Buyer in connection with the transactions contemplated under this Agreement; and

        (c)  Product warranty obligations of Seller relating to all products sold prior to the date hereof in the Computing Business related to any customers that Buyer and its subsidiaries pursue or continue after the Effective Date other than Siemens Electrocom for products sold to the US Postal Service ICS and FCS programs.

        3.    European Identified Restructure Expenses.    Seller and I-Bus/Phoenix (UK) Limited have identified employees of I-Bus/Phoenix (UK) Limited, I-Bus (UK) Limited, I-Bus Manufacturing (UK) Limited and I-Bus/Phoenix France SA whose employment will be terminated within the next 60 days. Seller and I-Bus/Phoenix (UK) Limited also have identified facility and equipment lease obligations and real estate taxes that will be due and payable by I-Bus Manufacturing (UK) Limited. These severance (including social tax) and other obligations collectively are referred to as the "Identified Restructure Expenses." Seller already has advance $150,000 to I-Bus/Phoenix (UK) Limited to be applied to payment of the Identified Restructure Expenses. Seller hereby agrees to pay to I-Bus/Phoenix (UK) Limited the amount of the remaining Identified Restructure Expenses as such expenses become due and payable. I-Bus/Phoenix (UK) Limited will provide invoices and detailed back up information satisfactory to Seller for such expenses as incurred and Seller will pay such verified amounts to I-Bus/Phoenix (UK) Limited with respect to the Identified Restructure Expenses.

        4.    Transfer and Capitalization of Indebtedness.    In partial consideration of the purchase price paid by Buyer for the Computing Business, Seller hereby transfers to Buyer $2,872,334 of inter-company indebtedness as of the Effective Date hereof for money borrowed from Seller by the European subsidiaries of Seller that comprise part of the Computing Business. Buyer hereby contributes such indebtedness to I-Bus/Phoenix (UK) Limited as additional paid in equity capital of such entity by Buyer.

        5.    Accounts Receivable.    Buyer is not purchasing accounts receivable of the Seller under this Agreement related to the Computing Business located in North America, and the parties agree to cooperate in the collection of accounts receivable existing on the date hereof and created thereafter. Buyer agrees to promptly remit to Seller any payments received with respect to such accounts receivable, and Seller shall likewise remit promptly to Buyer any payments received by Seller attributable to accounts receivable of the Computing Business created after the date hereof.

        6.    Further Assurance.    The parties agree to cooperate with each other as reasonably requested to confirm the transactions effected under this Agreement. In particular, Seller agrees to execute such additional instruments and take such further action as Buyer reasonably requests to carry out and confirm the sale and assignment of assets provided for hereunder and to confirm in Buyer good title to such assets. Likewise, Buyer agrees to execute such additional instruments and take such further action as Seller may reasonably request to carry out and confirm the assumption by Buyer of certain liabilities and obligations hereunder.

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        7.    Grant Back Patent License.    Buyer hereby grants to Seller a non-exclusive, worldwide, fully paid-up right and license with right to sublicense under the patents and patent applications listed on Schedule 7 to design, manufacture, have manufactured, use and sell power modules and other power products covered by such patents and patent applications. Such license shall be for a term extending to the expiration of the last to expire of such patents or patent applications. Notwithstanding anything to the contrary under this Agreement, in the event that Buyer fails to prosecute and maintain the patents and patent applications set forth on Schedule 7, Buyer hereby agrees to transfer back to Seller ownership of such patents and patent applications.

        8.    Post-Closing Supports of Seller to Buyer and Buyer's Subsidiaries.

        (a)  As promptly as practical after the Effective Date, Seller will transfer to I-Bus/Phoenix (UK) Limited $200,000 in cash to enhance the initial cash position of Buyer and its subsidiaries. Such cash payment is part of the consideration of the purchase price paid by Buyer for the Computing Business.

        (b)  Seller agrees to make available to Buyer's U.K. subsidiary (now known as I-Bus/Phoenix (UK) Limited) a working capital loan in the event (and only to the extent) that the existing cash held by Buyer and its subsidiaries plus the working capital credit facility in the U.K. is inadequate. Any working capital loan from Seller pursuant to this Section 8 will be used solely for working capital purposes in the ordinary course of business and will be subject to certification from I-Bus/Phoenix (UK) Limited to Seller as to (i) the amount of cash on hand by Buyer and all of its subsidiaries, (ii) the amount of available credit to the Computing Business under any working capital facility, (iii) the amount of payables past due for which a working capital loan is being requested from Seller. Subject to verification by Seller of the amount needed by I-Bus/Phoenix (UK) Limited on behalf of Buyer and all of its subsidiaries and only to the extent needed, Seller hereby agrees, upon request by Buyer, during the 360-day period following the Effective Date hereof, to loan (in one or more loans) up to a total not to exceed $300,000 directly to such U.K. subsidiary. Each such loan will bear interest at the rate of 5% per annum. Repayment will be guaranteed by Buyer and all other subsidiaries of the Buyer and, as may be requested by Seller, secured by a lien on assets of Buyer and its subsidiaries, subordinate only to any third party working capital credit facility. Buyer hereby agrees to cause I-Bus/Phoenix (UK) Limited and its subsidiaries at all times to apply all cash and cash from available working capital credit facilities (to the extent not needed for immediate working capital purposes of Buyer and its subsidiaries) to repayment of any outstanding loans from Seller.

        (c)  In addition to the working capital facility from Seller to I-Bus/Phoenix (UK) Limited referred to under paragraph (b) above, Seller agrees to provide up to $80,000 of credit on factored receivables of Buyer and its subsidiaries (bearing 5% interest on an annual basis) until such time as I-Bus/Phoenix (UK) Limited and/or its subsidiaries are able to secure a factored-receivables based working capital credit facility from another party.

        (d)  For a period not to exceed 30 days from the Effective Date hereof, Seller will assist Buyer to transfer and transition (i) the production of computing systems previously made in San Diego, U.S. to Buyer's production facility located in Tangmere, UK; (ii) North American customers to Buyer's designated personnel in the U.S. or in Europe so that such customers can be supported by the U.S. or European operations of the Buyer; and (iii) the engineering lab equipment, product demonstration units to such places as requested by Buyer. In connection with such transfer and transition activities, Buyer and Seller will designate teams to compile and execute action items per agreed upon schedules.

        (e)  For a period not to exceed 90 days from the Effective Date hereof, Seller will continue to provide Buyer and its subsidiaries with information network support and to work with Buyer to transition such network support to Buyer's facility in Tangmere, UK.

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        (f)    Seller will assist Buyer to effect the recording of ownership by Buyer of 100% of the capital stock of I-Bus/Phoenix (UK) Limited, and in connection therewith the transfer and recording of ownership of 100% of the capital stock of I-Bus/Phoenix France SA from Seller to I-Bus/Phoenix (UK) Limited. The result will be that Buyer owns 100% of the capital stock of I-Bus/Phoenix (UK) Limited, which in turn owns 100% of the capital stock of I-Bus/Phoenix France SA, I-Bus Manufacturing (UK) Limited (Uckfield), I-Bus (UK) Limited and Calphobytax (Portwell operation).

        (g)  Seller will pay the reasonable accounting fees of Ernst & Young for their services related to the UK-required statutory audit of I-Bus/Phoenix (UK) Limited for calendar year 2001.

        9.    Contingent Purchase Price Payment.    If prior to the cash repayment in full of the entire principal amount plus all accrued and unpaid interest under the 8% Senior Subordinated Note issued by Buyer to Seller in connection with the purchase and sale of the Computing Business under this Agreement, Buyer or Buyer's shareholders engages in a corporate transaction that has the effect of accelerating the repayment obligation under such 8% Senior Subordinated Note, then Buyer hereby agrees to pay Seller an additional amount equal to $1 million in cash at the time of, and as a part of, the closing of such corporate transaction. Notwithstanding the foregoing, if the Computing Business is sold by Buyer to a third party purchaser prior to March 30, 2004 and, in connection with such transaction, the 8% Senior Subordinated Note is satisfied and paid in full either (i) in cash or (ii) as may be agreed in writing by Seller in its sole and absolute discretion, in capital stock and/or debt securities of such third party purchaser, then the $1 million contingent purchase price payment under this Section 9 will not apply and will be extinguished.

        10.    Entire Agreement; Modifications; Waiver.    This Agreement and the agreements ancillary hereto supersede any and all agreements heretofore made, written or oral, relating to the subject matter hereof, and constitute the entire agreement of the parties relating to the subject matter hereof. This Agreement may be amended only by an instrument in writing signed by Buyer and Seller. No waiver shall be binding unless executed in writing by the party making such waiver.

        11.    Severability.    If any clause or provision of this Agreement shall be held invalid or unenforceable by the final determination of a court of competent jurisdiction, and all appeals therefrom shall have failed or the time for such appeals shall have expired, such clause or provision shall be deemed eliminated from this Agreement but the remaining provisions shall nevertheless be given full force and effect.

        12.    Successors and Assigns.    This Agreement shall be binding upon and inure to the benefit of each of the parties hereto, and their respective successors and assigns.

        13.    Counterparts.    This Agreement may be executed in several counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.

        14.    Governing Law.    This Agreement shall be construed and interpreted in accordance with the internal substantive laws of the State of California.

        15.    Notices.    All notices required or desired to be given hereunder shall be given in writing and signed by the party so giving notice, and shall be effective when personally delivered, one business day after transmission if sent by facsimile and appropriate confirmation is received, or five (5) days after being deposited in the United States mail, as certified or registered mail, return receipt requested, first

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class postage and fees prepaid, addressed as set forth below. Any party from time to time may change such party's address for giving notice by giving notice thereof in the manner outlined above:

If to Buyer:
	c/o I-Bus Corporation Unit 6, Chichester Business Park City Fields Way Tangmere, West Sussex UK P020 2LB
	Attention:	John Weller
	Facsimile:	44 (0) 1243 756301
	c/o Johni Chan PO Box 116 Rancho Santa Fe, CA 92067
	Attention:	Johni Chan
	Facsimile:	(858) 759-5638
If to the Seller:
	I-Bus/Phoenix, Inc. c/o Maxwell Technologies, Inc. 9244 Balboa Avenue San Diego, CA 92123
	Attention:	Carl Eibl Jim Baumker Don Roberts
	Facsimile:	(858) 277-6754

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

I-Bus Corporation
By:	/s/  JOHNI CHAN
	Name:	Johni Chan
	Title:
I-BUS/PHOENIX, INC.
By:	/s/  CARLTON J. EIBL
	Name:	C J Eibl
	Title:	CEO

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List of Schedules

1.1(c)	Contracts
1.1(d)	Development Agreements
1.1(e)	Inventory
1.1(f)	Trademarks, Trade Names, Patents
7	Licensed Patents

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PURCHASE AND SALE AGREEMENT

EX-99.3

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Exhibit 99.3

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), IN RELIANCE UPON EXEMPTIONS THEREFROM. THE HOLDER MAY NOT OFFER, SELL, TRANSFER, ASSIGN, PLEDGE, HYPOTHECATE, OR OTHERWISE DISPOSE OF OR ENCUMBER THE SECURITIES REPRESENTED BY THIS CERTIFICATE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAW, OR UPON RECEIPT BY THE ISSUER OF AN OPINION OF LEGAL COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO THE ISSUER AND ITS LEGAL COUNSEL THAT SUCH OFFER, SALE, TRANSFER, ASSIGNMENT, PLEDGE, HYPOTHECATION, OR OTHER DISPOSITION OR ENCUMBRANCE IS EXEMPT FROM THE REGISTRATION PROVISIONS OF THE SECURITIES ACT AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER AND THE REGISTRATION AND/OR QUALIFICATION PROVISIONS OF APPLICABLE STATE SECURITIES LAWS.

I-BUS CORPORATION

U.S. $7,000,000 SEPTEMBER 29, 2002

8% SENIOR SUBORDINATED PROMISSORY NOTE
DUE MARCH 30, 2006

        I-BUS CORPORATION, a California corporation (the "Company"), for value received, promises to pay to I-BUS/PHOENIX, INC., a California corporation, or its registered assigns (the "Holder"), the aggregate principal amount of $7,000,000 (according to the payment schedule set forth in Section 1(a)) and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid principal amount hereof at the rate of eight percent (8.00%) per annum, compounded annually. Certain capitalized terms shall have the meanings specified in Section 4 hereof.

1.    Payment Terms.

        (a)    Principal and Interest Payment Schedule.    The Company shall repay the Holder of this Note the principal amount (as set forth below) plus (as set forth below) all accrued and unpaid interest, on the following payment dates:

Payment Date	Principal Payment Amount	Interest Payment
March 30, 2004	$1,000,000 (or such lesser principal amount as is then outstanding)	50% of all accrued and unpaid interest.
March 30, 2005	$3,000,000 (or such lesser principal amount as is then outstanding)	100% of all accrued and unpaid interest.
March 30, 2006	$3,000,000 (or such lesser principal amount as is then outstanding)	100% of all accrued and unpaid interest

        (b)    Place and Manner of Payments.    The Company shall make all payments due to Holder, to such bank account Holder may designate from time to time, in lawful money of the United States and in immediately available funds not later than 12:00 noon Pacific time on the date on which such payment is due.

        (c)    Maturity Date.    On March 30, 2006, the entire unpaid principal balance of this Note, together with any accrued and unpaid interest hereon and any other sums owing hereunder, shall become due and payable in full, without notice or demand.

        (d)    Interest.    The Company shall pay interest on the unpaid principal amount of this Note (as set forth in paragraph (a)) from the date hereof until the maturity or prepayment thereof at a rate of eight percent (8.00%) per annum, compounded annually.

        (e)    Prepayment.    The Company may prepay the principal balance of this Note in whole or in part at any time. Upon any prepayment of this Note, the Company shall pay to Holder all accrued and unpaid interest to the date of such prepayment. The Company may not reborrow any principal amount of this Note which is repaid or prepaid.

2.    Covenants.

        The Company covenants and agrees that so long as any amounts owing under this Note shall be outstanding:

        (a)    Payment of Note; Satisfaction of Obligations.    The Company will duly and punctually pay or cause to be paid the principal of and interest on the Note at the times and in the manner specified in this Note.

        (b)    Office or Agency.    The Company will maintain an office or agency in San Diego, California (or in any future principal place of business of the Company with respect to which the Holder has been notified) where notices, presentations and demands to or upon the Company in respect of this Note may be given or made.

        (c)    Financial Reports.

          (i)  The Company shall deliver or cause to be delivered to Holder, in form and detail reasonably satisfactory to Holder, as soon as practicable and in any event within 30 days after the end of each quarterly accounting period of its fiscal year (commencing with the quarter ending December 31, 2002), consolidated financial statements of the Company and its Subsidiaries as of the last day of such quarterly period, including a balance sheet and statement of shareholders equity, and the related statements of income and expense and cash flows, and a statement of sources and uses of funds for such quarterly period, including a discussion and analysis by management describing all material activities in such quarterly period and financial projections for the next four quarterly periods.

        (ii)  The Company shall deliver or cause to be delivered to Holder, in form and detail reasonably satisfactory to Holder, as soon as practicable and in any event within 45 days after the end of its fiscal year (commencing with the fiscal year ending December 31, 2003, financial statements of the Company and its Subsidiaries, including a balance sheet and statement of equity as of the close of such year, and the related statements of income and expense statement and cash flows, and a statement of sources and uses of funds.

        (iii)  All quarterly and annual financial statements required to be delivered to Holder in accordance with subparagraphs (i) and (ii) above shall be audited to the extent the Company causes its financial statements to be audited, otherwise such financial statements may be unaudited.

        (iv)  From time to time at the request of Holder, senior officers of the Company and its Subsidiaries shall meet with representatives of the Holder in person or by telephone (at Holder's option), for the purpose of disclosing any additional information about the Company and its Subsidiaries as may be requested by Holder.

        (v)  Concurrent with the delivery of financial statements hereunder, the Company (on behalf of itself and each of its Subsidiaries) will sign and deliver to Holder written certification that no Event of Default exists under this Note and, to their best knowledge, no event is pending that would cause an Event of Default.

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        (d)    Limitation on Certain Payments.    The Company shall not, directly or indirectly:

          (i)  declare or pay any dividend on, or make any distribution to the holders (as such) in respect of, any shares of its Capital Stock;

        (ii)  purchase, redeem or otherwise acquire or retire for value any Equity Interests of the Company or any Subsidiary of the Company;

        (iii)  permit any Subsidiary of the Company to declare or pay any dividend on, or make any distribution to the holders (as such) in respect of, any shares of its Capital Stock except to the Company or another directly or indirectly wholly-owned Subsidiary of the Company; or

        (iv)  permit any Subsidiary of the Company to purchase, redeem or otherwise retire for value any Equity Interests of it, the Company or any Affiliate of either of them.

        (e)    Limitation on Additional Indebtedness.    Except for Indebtedness subordinated to this Note, and for which all of the proceeds are to be used to repay any amounts outstanding under this Note, the Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become or remain directly or indirectly liable with respect to (collectively, "incur") any Indebtedness other than the Indebtedness represented by this Note and the Senior Indebtedness.

        (f)    Restrictions on Liens.    The Company will not itself, and will not permit any Subsidiary of the Company, to create or suffer to exist any Liens upon any assets of the Company or any Subsidiary of the Company or any shares of Capital Stock of the Company or any Subsidiary of the Company, in either case now owned or hereafter acquired, except for Liens to secure the Senior Indebtedness.

        (g)    Ownership of Subsidiaries.    The Company will not itself, and will not permit any direct or indirect Subsidiary of the Company, to sell or transfer the Capital Stock of any Subsidiary or to sell or transfer all or substantially all of the assets of the Company or of any Subsidiary of the Company except to the Company or another directly or indirectly wholly-owned Subsidiary of the Company.

        (h)    Employee Compensation.    The salary, bonus and other benefits paid or accrued for any executive officer of the Company or any Subsidiary of the Company shall not increase over the amount in effect on the date hereof.

3.    Defaults and Remedies.

        (a)    Events of Default.    An "Event of Default" occurs if:

          (i)  the Company defaults in the payment of the principal of this Note when the same becomes due and payable in accordance with the terms hereof;

        (ii)  the Company defaults in the payment of interest on this Note when the same becomes due and payable in accordance with the terms hereof;

        (iii)  the Company fails to comply with any of the agreements, covenants, or provisions of this Note;

        (iv)  an event of default with respect to $100,000 or more occurs under any loan agreement, note, mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness of the Company or any Subsidiary of the Company for borrowed money (or the payment of which is guaranteed by the Company or a Subsidiary of the Company), whether such Indebtedness or guarantee now exists or shall be created hereafter, which default shall permit the acceleration of such Indebtedness prior to its expressed maturity;

        (v)  a final judgment or final judgments for the payment of money are entered by a court or courts of competent jurisdiction against the Company or any Subsidiary of the Company and such

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remains undischarged for a period (during which execution shall not be effectively stayed) of 30 days, provided that the aggregate of all such judgments exceeds $100,000;

        (vi)  if a plan relating to the liquidation or dissolution of the Company is adopted, or the Company liquidates or dissolves, or sells or leases or otherwise transfers or disposes of all or any substantial part of its property, assets or business, or combines, merges or consolidates with or into any other entity, or changes its legal form, or any Change of Control occurs.

      (vii)  The Company or any Subsidiary of the Company pursuant to or within the meaning of any Bankruptcy Law:

        (A)  commences a voluntary case,

        (B)  consents to the entry of an order for relief against it in an involuntary case,

        (C)  consents to the appointment of a custodian of it or for all or substantially all of its property,

        (D)  makes a general assignment for the benefit of its creditors,

        (E)  generally is unable to pay its debts as the same become due,

        (F)  has filed against it a petition seeking any relief under any Bankruptcy Law and such petition is not vacated or discharged within sixty (60) days after the filing or making thereof, or

        (G)  a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

        (1)  is for relief against the Company or any of its Subsidiaries in an involuntary case,

        (2)  appoints a custodian of the Company or any of its Subsidiaries or for all or substantially all of its property, or

        (3)  orders the liquidation of the Company or any of its Subsidiaries, and the order or decree remains unstayed and in effect for 60 days.

The term "Bankruptcy Law" means title 11, U.S. Code or any similar foreign, federal or state law for the relief of debtors. The term "custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

        (b)    Acceleration of Notes.    If an Event of Default or a Change of Control of the Company occurs, the Holder, by notice to the Company, may declare the unpaid principal of and any accrued interest on this Note to be due and payable. Immediately upon such declaration, the principal and interest shall be due and payable. If an Event of Default specified in paragraph (vii) of Section 3(a) occurs, all unpaid principal and any accrued and unpaid interest and all other amounts due on this Note shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Holder. The Holder, by written notice to the Company, may rescind an acceleration and its consequences.

        (c)    Other Remedies.    If an Event of Default occurs and is continuing, Holder of this Note may pursue any available remedy to collect the payment of principal or interest on the Note or to enforce the performance of any provision of this Note. Any delay or omission by the Holder of this Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.

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        (d)    Waiver of Past Defaults.    The Holder of this Note, by written notice to the Company, may waive an existing Default or Event of Default and its consequences.

4.    Definitions.

        The terms defined in this Section 4 shall, for all purposes of this Note, have the meanings herein specified, unless the context otherwise requires.

        "Affiliate" means with respect to a Person, any other Person that directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. Without limiting the foregoing, all directors and executive officers of a Person that is a corporation, and all managing members of a Person that is a limited liability company, shall be deemed Affiliates of such Person for all purposes hereunder.

        "Capital Stock" means:

        (a)  in the case of a corporation, corporate stock,

        (b)  in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock,

        (c)  in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited), and

        (d)  any other interest or participation (other than Indebtedness) that confers on a Person the right to receive a share of the profits and losses of, or distributions of the assets of, the issuing Person.

        "Change of Control" means the occurrence of the following event: any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of more than 50% of the total outstanding Capital Stock of the Company entitled (without regard to the occurrence of any contingency) to vote in the election of directors of the Company.

        "Company" means I-Bus Corporation, a California corporation.

        "Default" means any event which is, or after notice or passage of time would be, an Event of Default.

        "Equity Interest" means Capital Stock or warrants, options or other rights to acquire Capital Stock (but excluding any debt security which is convertible into, or exchangeable for, Capital Stock).

        "Event of Default" shall have the meaning provided in Section 3(a) of this Note.

        "Indebtedness" means with respect to any Person, the aggregate amount of, without duplication, the following:

        (a)  all obligations for borrowed money;

        (b)  all obligations evidenced by bonds, debentures, notes or other similar instruments;

        (c)  all obligations to pay the deferred purchase price of property or services, accrued commissions and other similar accrued current liabilities in respect of such obligations, except for such liabilities which are not overdue and arise in the ordinary course of business;

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        (d)  all obligations or liabilities of others secured by a Lien on any asset owned by such Person whether or not such obligation or liability is assumed;

        (e)  all obligations of such Person, contingent or otherwise, in respect of any letters of credit or bankers' acceptances; and

        (f)    all guaranties.

        "Lien" means any mortgage, pledge, lien, encumbrance, charge or adverse claim affecting title or resulting in a charge against real or personal property, or security interest of any kind (including, without limitation, any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).

        "Note" shall mean this Senior Subordinated Promissory Note due March 30, 2006 (as set forth in Section 1 above) in the initial aggregate principal amount of $7,000,000.

        "Person" means any individual, partnership, limited liability company, association, corporation, trust, unincorporated organization or government or agency or political subdivision thereof.

        "Senior Indebtedness" means any working capital facility of the Company or any of its Subsidiaries whereby credit is extended for working capital purposes in the ordinary course of business of the Company and its Subsidiaries.

        "Subsidiary" or "Subsidiaries" means, with respect to any Person:

        (a)  I-BUS/Phoenix (U.K.) Limited (Tangmere operation), Calphobytax (Portwell operation), and I-BUS/Phoenix France, and

        (b)  any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or combination thereof), and

        (c)  any partnership (1) the sole general partner or the managing partner of which is such Person or Subsidiary of such Person or (2) the only general partners of which are such Person or one or more Subsidiaries of such Person (or any combination thereof).

5.    Miscellaneous.

        (a)    Waivers.    Presentment, demand, protest, notices of protest, dishonor and non-payment of this Note and all notices of every kind are hereby waived. To the extent permitted by applicable law, the defense of the statute of limitations is hereby waived by the Company. No single or partial exercise of any power hereunder shall preclude other or further exercise thereof or the exercise of any other power. No delay or omission on the part of the Holder in exercising any right hereunder shall operate as a waiver of such right or of any other right under this Note. No waiver of any breach of any of the covenants or conditions of this Note shall be construed to be a waiver of or acquiescence in or a consent to any previous or subsequent breach of the same or any other condition or covenant. The release of any party liable on this Note shall not operate to release any other party liable hereon. No course of dealing between the Company and the Holder of this Note or any delay or failure on the part of the Holder in exercising any rights hereunder shall operate as a waiver of any rights of the Holder, except to the extent expressly waived in writing by the Holder.

        (b)    Governing Law.    This Note shall be governed by and construed in accordance with the internal laws of the State of California without regard to principles of conflicts of laws.

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        (c)    Assignment.    This Note may not be assigned by the Company without the prior written consent of the Holder. This Note shall inure to the benefit of the Holder, its successors, assigns and representatives and shall bind the Company, its successors, assigns and representatives.

        (d)    Modification.    This Note may not be modified, amended or terminated except by a written agreement signed by the Company and the Holder.

        (e)    Expenses.    If any amounts under this Note are not paid when due, including, without limitation, at maturity or by acceleration, the undersigned promises to pay all costs of collection, including without limitation reasonable attorneys' fees, and all expenses in connection with the protection or realization of any collateral securing this Note or the enforcement of any guaranty hereof incurred by the Holder on account of such collection, whether or not suit is filed hereon; and such costs and expenses shall include without limitation all costs, attorneys' fees and expenses incurred by the Holder in connection with any insolvency, bankruptcy, reorganization, arrangement or other similar proceedings involving the Company, which in any way affect the exercise by the Holder of its rights and remedies under this Note. The amount of such costs and expenses shall be paid to the Holder by the Company upon written demand therefor.

        (f)    Headings.    The headings of the sections and paragraphs of this Note are inserted for convenience only and shall not be deemed to constitute a part hereof. All references herein to sections or paragraphs shall refer to the corresponding sections or paragraphs of this Note unless specific reference is made to such sections or paragraphs of another document or instrument. When the context and construction so require, all words used in the singular herein shall be deemed to have been used in the plural and the masculine shall include the feminine and the neuter and vice versa.

        (g)    Notices.    All notices and other communications provided for or permitted hereunder shall be made by hand-delivery, first-class mail, telecopier, or overnight air courier guaranteeing next day delivery:

(i)	if to Holder I-Bus/Phoenix, Inc. c/o Maxwell Technologies 9244 Balboa Avenue San Diego, California 92123 Attention: Chief Financial Officer
	With a copy to Latham & Watkins 701 B Street, Suite 2100 San Diego, California 92101 Attention: David C. Boatwright, Esq.; and
(ii)	if to the Company,
	I-Bus Corporation Unit 6, Chichester Business Park City Fields Way Tangmere, West Sussex UK P020 2LB
	Attention:	John Weller
	Facsimile:	44 (0) 1243 756301

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PO Box 116 Rancho Santa Fe, CA 92067
Attention:	Johni Chan
Phone:	858-759-5638
Facsimile:	858-759-5638

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; three business days after being deposited in the United States mail, postage prepaid, if mailed; when answered back if telexed; when receipt acknowledged, if telecopied; and the next business day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. The parties may change the addresses to which notices are to be given by giving five days' prior notice of such change in accordance herewith.

        (h)    Severability.    In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired or affected, it being intended that all of your rights and privileges shall be enforceable to the fullest extent permitted by law.

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        IN WITNESS WHEREOF, the Company has caused this Note to be signed in its name by a duly authorized officer and to be dated as of the day and year first above written.

I-BUS CORPORATION, a California corporation
By:	/s/  JOHNI CHAN
	Name:	Johni Chan
	Title:

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Exhibit 99.3

EX-99.4

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Exhibit 99.4

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), IN RELIANCE UPON EXEMPTIONS THEREFROM. THE HOLDER MAY NOT OFFER, SELL, TRANSFER, ASSIGN, PLEDGE, HYPOTHECATE, OR OTHERWISE DISPOSE OF OR ENCUMBER THE SECURITIES REPRESENTED BY THIS CERTIFICATE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAW, OR UPON RECEIPT BY THE ISSUER OF AN OPINION OF LEGAL COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO THE ISSUER AND ITS LEGAL COUNSEL THAT SUCH OFFER, SALE, TRANSFER, ASSIGNMENT, PLEDGE, HYPOTHECATION, OR OTHER DISPOSITION OR ENCUMBRANCE IS EXEMPT FROM THE REGISTRATION PROVISIONS OF THE SECURITIES ACT AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER AND THE REGISTRATION AND/OR QUALIFICATION PROVISIONS OF APPLICABLE STATE SECURITIES LAWS.

WARRANT

Company:	I-Bus Corporation a California corporation
Class of Stock:	Common Stock
Issued as of:	September 29, 2002
Expiration Date:	The earlier of (a) the date that the Company completes a Qualified IPO, and (b) the date on which a Sale of the Company is completed, provided that, in each case, the Warrantholder has received notice in accordance with this Warrant.

        FOR VALUE RECEIVED, the adequacy and receipt of which is hereby acknowledged, I-Bus Corporation, a California corporation, hereby certifies that I-BUS/PHOENIX, INC., a California corporation, and its successors and assigns, are entitled to purchase from the Company at any time and from time to time on and after the date hereof until 5:00 p.m. Pacific time on the Expiration Date, or if such date is not a business day on the next occurring business day, such number of shares of fully paid and nonassessable shares of Common Stock of the Company determined by the Warrantholder, not to exceed the Exercise Amount, at a per share price equal to the Exercise Price; on the terms and conditions hereinafter set forth.

        1.    Certain Definitions.    As used in this Warrant, the following terms have the following definitions:

        "Capital Stock" means (a) in the case of a corporation, corporate stock, (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (c) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited), and (d) any other interest or participation (other than indebtedness) that confers on a Person the right to receive a share of the profits and losses of, or distributions of the assets of, the issuing Person.

        "Common Stock" means the Company's Common Stock and includes any common stock of the Company of any class or classes resulting from any reclassification or reclassifications thereof which is not limited to a fixed sum or percentage of par value in respect of the rights of the

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holders thereof to participate in dividends and in the distribution of assets upon the voluntary or involuntary liquidation, dissolution or winding up of the Company.

        "Company" means [Newco], a California corporation.

        "Exchange Act" means the Securities Exchange Act of 1934.

        "Exercise Amount" means nineteen and nine-tenths percent (19.9%) of the outstanding Capital Stock of the Company (assuming exercise of all outstanding options, warrants and other rights to acquire Capital Stock of the Company and conversion of all outstanding convertible securities into Capital Stock of the Company at the then existing conversion ratios, including, without limitation, the effects of the exercise of this Warrant) on the date that this Warrant is first exercised.

        "Exercise Period" means the period commencing on June 30, 2004 and ending at 5:00 p.m. Pacific time on the Expiration Date.

        "Exercise Price" means the Fair Market Value of the Company's Common Stock per share on the date or dates of exercise of this Warrant.

        "Expiration Date" means the earlier of (a) the date that the Company completes a Qualified IPO, and (b) the date on which a Sale of the Company is completed, provided that, in each case, the Warrantholder has received notice in accordance with this Warrant.

        "Fair Market Value" as of a relevant date means either (a) if the Company's Common Stock is not publicly traded on the relevant date, the then current fair market value as of the relevant date as determined by a third party independent appraiser or investment bank selected by the Warrantholder and reasonably acceptable to the Company (all costs of such appraisal shall be paid by the Company), or (b) if the Company's Common Stock is publicly traded on the relevant date, the fair market value shall be equal to (1) the average of the last bid prices of the Common Stock quoted on the NASDAQ National Market System, if applicable, or the average of the last bid prices of the Common Stock quoted in the NASDAQ OTC Bulletin Board or the over-the-counter-market, or (2) if the Common Stock is then traded on a national securities exchange, the average of the closing prices of the Common Stock listed on the principal national securities exchange on which the Common Stock is so traded, in each case for the twenty (20) trading days preceding the relevant date.

        "Person" means any individual, partnership, limited liability company, association, corporation, trust, unincorporated organization or government or agency or political subdivision thereof.

        "Qualified IPO" means an underwritten public offering of the Company's Common Stock under the Securities Act of 1933, as amended, that results in (i) gross proceeds to the Company in such offering exceeding $20 million, and (ii) the Company's Common Stock trading on a national securities exchange or the NASDAQ National Market System.

        "Sale" means any sale or transfer of all or substantially all of the assets of the Company, or any merger or consolidation of the Company with or into another entity (other than a Subsidiary of the Company), provided, however, that the term "Sale" shall not include a merger effected for the purpose of changing the domicile of the Company.

        "Subsidiary" or "Subsidiaries" means, with respect to any Person:

        (a)  any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or combination thereof), and

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        (b)  any partnership (1) the sole general partner or the managing partner of which is such Person or Subsidiary of such Person or (2) the only general partners of which are such Person or one or more Subsidiaries of such Person (or any combination thereof).

        "Warrant(s)" means this Warrant and any warrants issued in exchange or replacement of this Warrant or upon transfer hereof.

        "Warrantholder(s)" means I-BUS Phoenix, Inc., a California corporation, and its successors and assigns.

        "Warrant Shares" means shares of Common Stock issuable to Warrantholder upon any exercise of this Warrant.

        2.    Exercise of Warrant.    This Warrant may be exercised, in whole or in part, at any time and from time to time during the Exercise Period by written notice to the Company and upon payment to the Company of the Exercise Price for the shares of Common Stock in respect of which the Warrant is exercised. In the event Warrantholder exercises this Warrant for a number of Warrant Shares which is less than the Exercise Amount, then at any time and from time to time prior to the Expiration Date, the Warrantholder may exercise this Warrant for additional Warrant Shares not to exceed the Exercise Amount in the aggregate.

        3.    Form of Payment of Exercise Price.    At the option of the Warrantholder, the Exercise Price may be paid in any one or a combination of the following forms: (a) by wire transfer to the Company, and/or (b) by the cancellation of any indebtedness owed by the Company and/or any subsidiaries of the Company to the Warrantholder.

        4.    Certificates for Warrant Shares; New Warrant.    The Company agrees that the Warrant Shares shall be deemed to have been issued to the Warrantholder as the record owner of such Warrant Shares as of the close of business on the date on which payment for such Warrant Shares has been made (or deemed to be made by conversion or net issue exercise) in accordance with the terms of this Warrant. Certificates for the Warrant Shares shall be delivered to the Warrantholder within a reasonable time, not exceeding fifteen (15) days, after this Warrant has been exercised or converted. A new Warrant representing the number of shares, if any, with respect to which this Warrant remains exercisable also shall be issued to the Warrantholder within such time so long as this Warrant has been surrendered to the Company.

        5.    Nature of Securities Issuable Upon Exercise of Warrant.

        (a)    Reorganization, Reclassification, Consolidation, Merger or Sale.    If any capital reorganization or reclassification of the capital stock of the Company, or any consolidation or merger of the Company with or into another entity, or the sale of all or substantially all of its assets to another entity shall be effected in such a way that holders of Common Stock shall be entitled to receive cash, stock, securities or assets with respect to or in exchange for Common Stock, then, as a condition of such reorganization, reclassification, consolidation, merger or sale, lawful and adequate provisions shall be made whereby the Warrantholder shall thereafter have the right to purchase and receive upon the basis and upon the terms and conditions specified in this Warrant upon exercise of this Warrant and in lieu of the shares of the Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented hereby, such cash, shares of stock, securities or assets as may be issued or payable with respect to or in exchange for a number of outstanding shares of Common Stock equal to the number of shares of such Common Stock immediately theretofore purchasable and receivable upon the exercise of the rights represented hereby, and in any such case appropriate provision shall be made with respect to the rights and interest of the Warrantholder to the end that the provisions hereof shall thereafter be applicable, as nearly as may be, in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof. The Company shall not effect

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any consolidation, merger or sale of all or substantially all of the assets of the Company unless prior to or simultaneous with the consummation thereof the successor corporation (if other than the Company) resulting from such consolidation, merger or purchase of such assets shall assume, by written instrument executed and mailed or delivered to the Warrantholder, the obligation to deliver to Warrantholder such cash (or cash equivalent), shares of stock, securities or assets as, in accordance with the foregoing provisions, the Warrantholder may be entitled to receive and containing the express assumption of such successor corporation of the due and punctual performance and observance of each provision of this Warrant to be performed and observed by the Company and of all liabilities and obligations of the Company hereunder.

        (b)    Dissolution, Liquidation and Wind-Up.    In case the Company shall, at any time prior to the expiration of this Warrant, dissolve, liquidate or wind up its affairs, the Warrantholder shall be entitled, upon the exercise of this Warrant, to receive, in lieu of the shares of Common Stock of the Company which Warrantholder would have been entitled to receive, the same kind and amount of assets as would have been issued, distributed or paid to Warrantholder upon any such dissolution, liquidation or winding up with respect to such shares of Common Stock of the Company, had such Warrantholder been the holder of record of the Warrant Shares receivable upon the exercise of this Warrant on the record date for the determination of those persons entitled to receive any such liquidating distribution. After any such dissolution, liquidation or winding up which shall result in any cash distribution in excess of the Exercise Price provided for by this Warrant, the Warrantholder may, at Warrantholder's option, exercise the same without making payment of the Exercise Price, and in such case the Company shall, upon the distribution to Warrantholder, consider that said Exercise Price has been paid in full to it and in making settlement to Warrantholder, shall deduct from the amount payable to such Warrantholder an amount equal to such Exercise Price.

        6.    Special Agreements of the Company.

        (a)    Reservation of Shares.    The Company covenants and agrees that all Warrant Shares will, upon issuance, be validly issued, fully paid and nonassessable and free from all preemptive rights and all taxes, liens and charges with respect to the issue thereof. The Company further covenants and agrees that during the Exercise Period, the Company will at all times have authorized and reserved a sufficient number of shares of Common Stock to provide for the exercise of the rights represented by this Warrant. The Company hereby covenants and agrees to take all such action as may be necessary to ensure that the par value per share of the Common Stock is at all times equal to or less than the Exercise Price.

        (b)    Avoidance of Certain Actions.    The Company will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, issue or sale of securities or otherwise, avoid or take any action which would have the effect of avoiding the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in carrying out all of the provisions of this Warrant and in taking all of such action as may be necessary or appropriate in order to protect the rights of the Warrantholder.

        (c)    Listing on Securities Exchanges; Registration.    If, and so long as, any class of the Company's Common Stock shall be listed on any national securities exchange (as defined in the Exchange Act), the Company will, at its expense, obtain and maintain the approval for listing upon official notice of issuance of all Warrant Shares and maintain the listing of Warrant Shares after their issuance; and the Company will so list on such national securities exchange, will register under the Exchange Act (or any similar statute then in effect), and will maintain such listing of, any other securities that at any time are issuable upon exercise of this Warrant if and at the time

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any securities of the same class shall be listed on such national securities exchange by the Company.

        7.    Fractional Shares.    No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. With respect to any fraction of a share called for upon exercise hereof, the Company shall pay to the Warrantholder an amount in cash equal to such fraction multiplied by the Fair Market Value of one share of Common Stock.

        8.    Notices of Stock Dividends, Subscriptions, Reclassifications, Consolidations, Mergers, Sales, Qualified IPO, etc.    If at any time: (i) the Company shall declare a cash dividend (or an increase in the then existing dividend rate), or declare a dividend on Common Stock payable otherwise than in cash out of its net earnings after taxes for the prior fiscal year; or (ii) the Company shall authorize the granting to the holders of Common Stock of rights to subscribe for or purchase any shares of capital stock of any class or of any other rights; or (iii) there shall be any Sale or any capital reorganization, or reclassification, or redemption of the capital stock of the Company, or consolidation or merger of the Company with, or sale of all or substantially all of its assets to, another corporation or firm; or (iv) a plan relating to the liquidation or dissolution of the Company is adopted, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; or (v) the Company shall complete a Qualified IPO, then the Company shall give to the Warrantholder at the address of Warrantholder as shown on the books of the Company, at least forty five (45) days prior to such event or the applicable record date hereinafter specified, a written notice summarizing such action or event and stating the record date for any such dividend or rights (or, if a record date is not to be selected, the date as of which the holders of Common Stock of record entitled to such dividend or rights are to be determined), the date on which any such reorganization, reclassification, consolidation, merger, sale of assets, dissolution, liquidation, winding up or Qualified IPO is expected to become effective, and the date as of which it is expected the holders of Common Stock of record shall be entitled to effect any exchange of their shares of Common Stock for cash (or cash equivalent), securities or other property deliverable upon any such reorganization, reclassification, consolidation, merger, sale of assets, dissolution, liquidation, winding up or Qualified IPO.

        9.    Registered Holder; Transfer of Warrants or Warrant Shares.

        (a)    Maintenance of Registration Books; Ownership of this Warrant.    The Company shall keep at its principal office a register in which the Company shall provide for the registration, transfer and exchange of this Warrant. The Company shall not at any time close such register so as to result in preventing or delaying the exercise or transfer of this Warrant.

        (b)    Exchange and Replacement.    This Warrant is exchangeable upon surrender hereof by the registered holder to the Company at its principal office for a new Warrant of like tenor and date representing in the aggregate the right to purchase the number of shares purchasable hereunder, such new Warrant to represent the right to purchase such number of shares as shall be designated by said registered holder at the time of surrender. This Warrant and all rights hereunder are transferable in whole or in part upon the books of the Company by the registered holder hereof in person or by duly authorized attorney, and a new Warrant shall be made and delivered by the Company, of the same tenor and date as this Warrant but registered in the name of the transferee(s), upon surrender of this Warrant, duly endorsed, to said office of the Company. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and upon surrender and cancellation of this Warrant, if mutilated, the Company will make and deliver a new Warrant of like tenor, in lieu of this Warrant, without requiring the posting of any bond or the giving of any other security. This Warrant shall be promptly canceled by the Company upon the surrender hereof in connection with any exchange, transfer or replacement. Warrantholder shall pay all expenses, taxes and other charges payable in

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connection with the preparation, execution and delivery of new Warrants pursuant to this Section 9.

        10.    Miscellaneous Provisions.

        (a)    Governing Law and Arbitration.    This Warrant shall be deemed to have been made in the State of California and the validity of this Warrant, the construction, interpretation, and enforcement thereof, and the rights of the parties thereto shall be determined under, governed by, and construed in accordance with the internal laws of the State of California, without regard to principles of conflicts of law. Any dispute, controversy or claim arising out of this Warrant or the performance, breach or termination thereof shall be settled by final and binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The arbitration shall be conducted by a neutral arbitrator selected by mutual agreement of the Company and the Warrantholder within fifteen (15) days after any party delivers a written demand for arbitration to the others. If the Company and the Warrantholder fail to agree within fifteen (15) days on the selection of the arbitrator, an arbitrator shall be promptly appointed by the American Arbitration Association. Judgment upon the award rendered may be entered in any court having jurisdiction. The arbitrator shall be entitled to award any appropriate remedy including, but not limited to, monetary damages, specific performance, and all other forms of legal and equitable relief; provided, however, that the arbitrator shall not be entitled to award punitive damages and shall not reform, modify or materially change this Warrant. As part of the award, the arbitrator shall award to the prevailing party all costs of arbitration including, but not limited to, reasonable attorneys' fees. All information resulting from or otherwise pertaining to any dispute shall be nonpublic and handled by the parties and their respective representatives in such a way as to prevent the public disclosure of such information.

        (b)    Notices.    All notices hereunder shall be in writing and shall be deemed to have been given three (3) days after being mailed by certified mail, addressed to the address below stated of the party to which notice is given, or to such changed address as such party may have fixed by notice:

To the Company:	I-Bus Corporation Unit 6, Chichester Business Park City Fields Way Tangmere, West Sussex UK P020 2LB
	Attention:	John Weller
	Facsimile:	44(0) 1243 756301
With a copy (which shall not constitute	PO Box 116 Rancho Santa Fe, CA 92067
notice) to:	Attention:	Johni Chan
	Phone:	858-759-5638
	Facsimile:	858-759-5638
To the Warrantholder or holder of Warrant Shares:	I-Bus/Phoenix, Inc. c/o Maxwell Technologies, Inc. 9244 Balboa Avenue San Diego, California 92123
	Attention:	Chief Financial Officer
	Fax:	858-277-6754

provided, however, that any notice of change of address shall be effective only upon receipt.

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        (c)    Successors and Assigns.    This Warrant shall be binding upon and inure to the benefit of the Company, the Warrantholder and the holders of Warrant Shares and the successors, assigns and transferees of the Company, the Warrantholder and the holders of Warrant Shares.

        (d)    Entire Agreement; Amendments and Waivers.    This Warrant sets forth the entire understanding of the parties with respect to the transactions contemplated hereby. The failure of any party to seek redress for the violation or to insist upon the strict performance of any term of this Warrant shall not constitute a waiver of such term and such party shall be entitled to enforce such term without regard to such forbearance. This Warrant may be amended, the Company may take any action herein prohibited or omit to take action herein required to be performed by it, and any breach of or compliance with any covenant, agreement, warranty or representation may be waived, only if the Company has obtained the written consent or written waiver of the Warrantholder, and then such consent or waiver shall be effective only in the specific instance and for the specific purpose for which given.

        (e)    Severability.    Every provision of this Warrant is intended to be severable from every other provision of this Warrant. If any provision of this Warrant is held to be void or unenforceable, in whole or in part, such provision shall be deemed to be reformed to the minimum extent necessary so that such provision as reformed may and shall be legally enforceable. If any provision of this Warrant is held to be void or unenforceable, in whole or in part, and cannot be reformed and made enforceable as provided in the immediately preceding sentence, the remaining provisions will remain in full force and effect.

[Signature Page Follows]

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        IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer and issued effective as of the date first set forth above.

I-Bus Corporation, a California corporation
By:	/s/  JOHNI CHAN
	Name:	Johni Chan
	Title:

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Exhibit 99.4