On January 25, 2017, Maxwell Technologies, Inc. (the Company),
entered into a Localization Agreement (the Agreement) with CRRC
Qingdao Sifang Rolling Stock Research Institute Co., Ltd. (the
Localization Partner). to the Agreement, the Company and the
Localization Partner will collaborate in order for the
Localization Partner to apply for registration with the Ministry
of Industry and Information Technology in the Peoples Republic of
China in accordance with the Standard Conditions for the
Automobile Power Battery Industry (the MIIT Registration). The
Company and the Localization Partner have targeted achievement of
the MIIT Registration within twelve (12) months of the date of
the Agreement, although the Company makes no assurance that such
MIIT Registration can be obtained by such date.

The Agreement provides that the Company will transfer certain
assets and grant an exclusive license to certain intellectual
property and know-how to enable the Localization Partner to
qualify for the MIIT Registration and manufacture specified
ultracapacitor modules targeted within the China bus market,
subject to appraisal of both the transferred assets and the grant
of intellectual property rights and subject to certain regulatory
approvals. The Company will seek a third party appraiser to
assess the value of such assets and intellectual property rights
and the Localization Partner will pay the lesser of the assessed
value up to an identified cap (of which a portion would be
payable to the Companys third party contract manufacturer). The
grant of the exclusive license to the Localization Partner of
certain intellectual property rights in the China bus market
discussed above will become a non-exclusive license if the MIIT
Registration is not obtained by January 25, 2018. Additionally,
the Agreement requires the Localization Partner to pay an
up-front technology transfer fee of $3.0 million, with two
additional contingent payments of $1.0 million that are payable
if certain revenue metrics are achieved by the Localization
Partner for sales of the ultracapacitor modules in the China bus
market. The receipt of the contingent payment amounts is largely
dependent upon achieving the MIIT Registration. The Company makes
no assurance that all such payments will be received in a timely
manner due to regulatory currency controls in China.
Additionally, the Localization Partner is required to pay two
lump sum royalty payments if and when certain revenue metrics are
achieved by the Localization Partner in the China bus market.
Also, the Agreement provides for ongoing graduated royalties
based upon net sales and which decrease over time.

Additionally, the Agreement contemplates additional sales and
marketing services and design and engineering services to be
performed by the Company over a period of two (2) years. In
exchange for these services and based in part upon achievement of
milestones to be identified by the parties, the Agreement
provides that the Localization Partner will pay the Company
certain milestone payments.

to the terms of the Agreement, the Company has also granted the
Localization Partner the non-exclusive right to practice certain
intellectual property rights in accordance with the terms of the
Agreement within the rail market in China. In exchange for this
license, the Localization Partner has agreed that the Company
would serve as an exclusive supplier of ultracapacitor cells to
the Localization Partner. The terms and conditions of this
vendor-customer relationship are to be handled in a separate
commercial agreement to be executed between the parties.

The Agreement contains additional customary commercial terms and
conditions related to technology development and the licensing of
intellectual property.

The Company will file a copy of the Agreement with its Annual
Report on Form 10-K for the year ended December 31, 2016 in
redacted form subject to an application for confidential
treatment the Company intends to file with the Securities and
Exchange Commission.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits