MAXWELL TECHNOLOGIES, INC. (NASDAQ:MXWL) Files An 8-K Entry into a Material Definitive Agreement

Arrangement Agreement

On February 28, 2017, Maxwell Technologies, Inc. (Maxwell)
entered into an Arrangement Agreement (the Arrangement Agreement)
with Nesscap Energy, Inc. (Nesscap), a developer and manufacturer
of ultracapacitor products for use in transportation, renewable
energy, industrial and consumer markets, providing for the
acquisition of substantially all of the assets of Nesscap (the
Acquisition) for an aggregate purchase price of $23,175,000 (the
Purchase Price), which shall be paid in full through the issuance
of 4,607,264 shares of Maxwell common stock, subject to
adjustment as provided in the Arrangement Agreement and discussed
below (the Share Consideration). The Acquisition will be effected
by means of a court-approved statutory plan of arrangement under
the federal laws of Canada in accordance with the Canada Business
Corporations Act>(the Arrangement) and will require the
approval at a Nesscap special meeting of its shareholders (the
Nesscap Shareholder Meeting) of 66^2/3% of the votes
cast by the shareholders present in person or by proxy, and, if
required by applicable Canadian law, a majority of the votes cast
by Nesscap shareholders present in person or by proxy at the
Nesscap Shareholder Meeting, excluding for this purpose votes
attached to any related or interested party in the transaction as
required to Multilateral Instrument 61-101, Protection of
Minority Security Holders in Special Transactions in accordance
with applicable Ontario securities laws. In addition, both I2
I2BF Energy, Limited and Arbat Capital Group Ltd., principal
shareholders of Nesscap (the Principal Shareholders), are each
related parties to the Company, as such term is defined in
Multilateral Instrument 61-101 – Protection of>Minority
Securityholders in Special Transactions (MI 61-101). Therefore
the Arrangement will also be conditional upon the approval of a
simple majority of the Nesscap shareholders, excluding each of
the Principal Shareholders.

Under the terms of the Arrangement Agreement, Nesscap intends to
use the proceeds from the Acquisition to satisfy existing debt
obligations and other liabilities of Nesscap with the remaining
balance of the Share Consideration to be distributed to the
shareholders of Nesscap as part of a plan of liquidation in
accordance with the Arrangement. As part of the Arrangement,
Nesscap will request to cease to be a reporting issuer on the
Toronto Stock Exchange – Venture Exchange following the closing
of the Acquisition (the Closing) followed by a complete
liquidation and dissolution of Nesscap.

The Arrangement Agreement contains customary representations,
warranties and covenants of the parties to the Arrangement
Agreement, including, but not limited to, covenants between the
date of the Arrangement Agreement and the Closing to conduct and
operate its business in the ordinary course and not to take or
engage in certain actions without the prior written consent of
Maxwell. Nesscap has agreed that, in consultation with Maxwell,
it will: (i) as promptly as reasonably practicable after the
signing of the Arrangement Agreement, and in any event no later
than 15 days from the Arrangement Agreement, apply to the Ontario
Superior Court of Justice (Commercial List) or other court with
applicable jurisdiction (the Court) providing for, among other
things, the calling and holding of the Nesscap Shareholder
Meeting; (ii) as promptly as reasonably practicable after the
execution of the Arrangement Agreement prepare a Circular and
cause to be delivered to its shareholders as promptly as
reasonably practicable after the issuance of the Interim Order,
and in any event, within 10 business days thereafter, (iii)
lawfully convene and hold the Nesscap Shareholder Meeting; and
(iv) seek to obtain the final order of the Court as soon as
reasonably practicable after the Nesscap Shareholder Meeting and,
in any event, not later than three (3) business days thereafter.
Unless there is a change of recommendation of the Board of
Directors of Nesscap (the Nesscap Board) related to a superior
proposal, as described in the Arrangement Agreement, the Nesscap
Board has agreed to use commercially reasonable efforts to
solicit from the shareholders of Nesscap proxies in favour of the
approval of the Arrangement. In addition to the Nesscap
shareholder approvals and the court approval required in
accordance with the Canada Business Corporations Act,>the
Arrangement Agreement also provides that the consummation of the
Acquisition is subject to various closing conditions, including
that a material adverse effect will not have occurred on Maxwell
or Nesscap.

The Share Consideration represents approximately 14.28% of the
outstanding shares of Maxwell, based on the number of shares of
Maxwell common stock outstanding as of February 27, 2017. The
Arrangement Agreement provides that the Share Consideration may
be subject to an adjustment upon the Closing based on the average
closing price of Maxwell common stock for the ten (10) prevailing
trading days on The Nasdaq Stock Market ending (and including)
two (2) days prior to the Closing in order to account for an
increase or decrease to such per share price compared to the
trading price used to calculate the Share Consideration at
signing; provided, however, in any event, that any such increase
or reduction in the Share Consideration is limited to a maximum
adjustment of ten percent (10%). Therefore, the maximum increase
or decrease in the Share Consideration shall be 460,726 shares.

The Arrangement Agreement provides that Nesscap is subject to
non-solicitation provisions and provides that the board of
directors of Nesscap may, under certain circumstances, terminate
the Arrangement Agreement in favor of an unsolicited superior
proposal, subject to the payment of a termination fee of USD $1
million to Maxwell (the Termination Fee), and subject to a right
of Maxwell to match the superior proposal in question. The
Arrangement Agreement also contains other customary termination
provisions, including that, subject to a partys failure to
fulfill its obligations under the agreement, a party may
terminate the Arrangement Agreement if a Closing has not occurred
by June 30, 2017.

The Arrangement is expected to be completed in the second quarter
of 2017. A copy of the Arrangement Agreement is attached hereto
as Exhibit 10.1.

Voting Support Agreements

The Arrangement has been unanimously approved by the board of
directors of each of Maxwell and Nesscap. The board of directors
of Maxwell (the Maxwell Board) has received an opinion from
Canaccord Genuity Group Inc. as to the fairness, from a financial
point of view, of the consideration to be paid by Maxwell to the
Arrangement. The Nesscap Board has received a verbal opinion from
Paradigm Capital Inc. that the consideration to be received by
Nesscap under the Arrangement is fair from a financial point of
view and it expects to receive the written fairness opinion in
connection with the mailing of a circular to its shareholders. As
part of the Arrangement, Maxwell has agreed to appoint a
representative of the Principal Shareholders to the Board of
Directors of Maxwell, which such representative shall initially
be Ilya Golubovich. Such appointment is subject to the Closing
and is intended to be no later than one business day following
Maxwells 2017 Annual Meeting of Shareholders.

In connection with the Arrangement, the Principal Shareholders,
representing approximately 79.57% of the outstanding voting
common stock of Nesscap, have entered into a voting agreement in
support of the Arrangement (the Voting Agreement) and have also
entered into shareholder agreement providing for, among other
things, a lock-up agreement regarding any Maxwell shares received
as part of the Arrangement, a standstill arrangement related to
further acquisitions and actions related to Maxwell,
non-competition and non-solicitation agreements and as referenced
above, a right to nominate a director to the Maxwell Board (the
Principal Shareholder Agreement). Additional directors and
officers, representing approximately 0.32% of the outstanding
voting common stock of Nesscap have entered into voting
agreements in support of the Arrangement and Nesscap has agreed
to use best efforts to obtain Voting Agreements from other key
shareholders in advance of the Nesscap Shareholder Meeting. The
Voting Agreements provide that each of the parties thereto shall
vote all of the shares of Nesscap, as applicable, in favor of the
Arrangement Agreement and, subject to certain customary
exceptions, shall not sell, transfer, gift, assign, convey,
pledge, hypothecate, encumber, option, grant a security interest
in or otherwise dispose of any right or interest in any of the
Subject Shares (as defined in the Voting Agreements) until the
termination of the Voting Agreements. The Voting Agreements
become terminable upon the date upon which the parties thereto
mutually agree to terminate the agreement or, if the Closing has
not yet occurred, on June 30, 2017, unless extended upon mutual
agreement.

A copy of the form of Voting Agreement is attached hereto as
Exhibit 10.2 and a copy of the Principal Shareholder Agreement is
attached hereto as Exhibit 10.3.

The summaries and descriptions of the Arrangement Agreement,
Voting Agreements and Principal Shareholder Agreement set out in
this Current Report on Form 8-K do not purport to be complete and
are qualified in their entirety by reference to the Arrangement
Agreement, Voting Agreements and Principal Shareholder Agreement,
which are attached to this Current Report on Form 8-K as Exhibits
and incorporated by reference herein.

Item 2.02. Results of Operations and Financial Condition.

On February 28, 2017, Maxwell Technologies, Inc. (the Company)
issued a press release announcing the Companys results for its
fiscal quarter and fiscal year ended December 31, 2016. A copy of
this press release is attached hereto as Exhibit 99.1.

This information contained in this Item 2.02 of this Current
Report and Exhibit 99.1 are being furnished and shall not be
deemed to be filed for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the Exchange Act), or otherwise
subject to the liabilities of that Section, nor shall they be
deemed incorporated by reference in any filing under the
Securities Act of 1933, as amended, or the Exchange Act, except
as expressly set forth by specific reference in such a filing.

On February 28, 2017, the Board of Directors of the Company
approved a comprehensive restructuring plan for the Companys
businesses that includes a wide range of organizational
efficiency initiatives and other cost reduction opportunities.
The Company estimates that it will incur total aggregate charges
of approximately $0.8 million to $1.0 million from this
restructuring, primarily based upon estimated severance and
related costs. The Company expects that most of these charges
will be cash expenditures and expects to recognize most of the
charges related to this restructuring in the first quarter of
fiscal 2017. The estimated annualized pre-tax benefit of the
restructuring initiatives is estimated to be between $2.5 million
and $3.0 million, with benefits estimated in the range of $2.0
million and $2.5 million realized over the remainder of fiscal
2017.

Item 5.02. Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.

Mr. Robert L. Guyett, who was appointed as a Class III director
in January 2000, has chosen not to stand for re-election when his
term expires at the 2017 Maxwell Annual Meeting of Stockholders.
Mr. Guyett served as Chairperson of the Maxwell Board of
Directors from May 2003 until May 2007 as well as from May 2010
to May 2011 and has served as the Chairperson for the Audit
Committee since 2000.>Mr. Guyetts decision to not stand for
re-election is not due to any disagreement with the Company on
any matter relating to the Companys operations, policies or
practices.

As referenced in Item 1.01 above, Maxwell has agreed to appoint a
representative of the Principal Shareholders to the Board of
Directors of Maxwell, which such representative shall initially
be Ilya Golubovich. Such appointment is subject to the Closing
and is intended to be no later than one business day following
Maxwells 2017 Annual Meeting of Shareholders. Additional
information required by Item 5.02 shall be provided upon the
appointment of Mr. Golubovich in a subsequent Current Report on
Form 8-K.

Item 8.01. Other Events

On February 28, 2017, Maxwell issued a press release announcing
the execution of the Arrangement Agreement. A copy of the press
release is filed as Exhibit 99.2 to this Current Report on Form
8-K and is incorporated herein by reference.

Forward Looking Statements

Some of the statements in this Current Report on Form 8-K are
forward-looking statements (or forward-looking information)
within the meaning of the U.S. Private Securities Litigation
Reform Act of 1995 and applicable Canadian securities laws. These
include statements using the words target, outlook, may, will,
should, could, estimate, continue, expect, intend, plan, predict,
potential, project and anticipate, and similar statements which
do not describe the present or provide information about the
past. There is no guarantee that the expected events or expected
results will actually occur. Such statements reflect the current
views of management of Maxwell and are subject to a number of
risks and uncertainties. These statements are based on many
assumptions and factors, including general economic and market
conditions, industry conditions, corporate approvals, regulatory
approvals, operational factors and other factors. Any changes in
such assumptions or factors could cause actual results to differ
materially from current expectations. Undue reliance should not
be placed on such forward looking statements. Forward-looking
statements speak only as of the date they are made. Except as
required by law, we do not have any intention or obligation to
update or to publicly announce the results of any revisions to
any of the forward-looking statements to reflect actual results,
future events or developments, changes in assumptions or changes
in other factors affecting the forward-looking statements.

Item 9.01. Financial Statements and Exhibits.