EXHIBIT 10.40

INDEMNITY AGREEMENT

          THIS INDEMNITY AGREEMENT (this “Agreement”) dated as of
________________, is made by and between Maxwell Technologies, Inc., a Delaware
corporation (the “Company”), and ________________ (the “Indemnitee”).

R E C I T A L S:

          A.          The Company recognizes that competent and experienced
persons are increasingly reluctant to serve as directors of corporations unless
they are protected by comprehensive liability insurance or indemnification, or
both, due to increased exposure to litigation costs and risks resulting from
their service to such corporations, and due to the fact that the exposure
frequently bears no reasonable relationship to the compensation of such
directors.

          B.          The statutes and judicial decisions regarding the duties
of directors are often difficult to apply, ambiguous, or conflicting, and
therefore fail to provide such directors with adequate, reliable knowledge of
legal risks to which they are exposed or information regarding the proper course
of action to take.

          C.          The Company and the Indemnitee recognize that plaintiffs
often seek damages in such large amounts and the costs of litigation may be so
substantial (whether or not the case is meritorious), that the defense and/or
settlement of such litigation is often beyond the personal resources of
directors.

          D.          The Company believes that it is unfair for its directors
to assume the risk of substantial judgments and other expenses which may occur
in cases in which the director received no personal profit and in cases where
such person acted in good faith.

          E.          Section 145 of the General Corporation Law of Delaware
(“Section 145”), under which the Company is organized, empowers the Company to
indemnify, among others, its directors by agreement and to indemnify persons who
serve, at the request of the Company, as the directors of other corporations or
enterprises, and expressly provides that the indemnification provided by Section
145 is not exclusive.

          F.          The Board of Directors of the Company has determined that
contractual indemnification as set forth herein is not only reasonable and
prudent but necessary to promote the best interests of the Company and its
stockholders.

          G.          The Company desires and has requested the Indemnitee to
serve or continue to serve as a director of the Company.

          H.          The Indemnitee only is willing to serve, or to continue to
serve, as a director of the Company if the Indemnitee is furnished the indemnity
provided for herein by the Company.

A G R E E M E N T :

          NOW THEREFORE, in consideration of the mutual covenants and agreements
set forth below, the parties hereto, intending to be legally bound, hereby agree
as follows:

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          1.          Definitions.  For purposes of this Agreement, the
following terms shall have the meanings set forth below:

                       (a)          “Agent” of the Company shall mean any person
who:  (i) is or was a director of the Company; or (ii) is or was serving at the
request of, for the convenience of, or to represent the interest of the Company
as a director of a Subsidiary of the Company or of another foreign or domestic
corporation, partnership, joint venture, trust or other enterprise.

                       (b)          “Expenses” shall mean all direct and
indirect costs of any type or nature whatsoever (including, without limitation,
all attorneys’ fees, fees of experts, witness fees, travel fees, and all related
disbursements, or other out-of-pocket costs of the types customarily incurred in
connection with prosecuting, defending or appealing, preparing to prosecute,
defend or appeal investigations, being or preparing to be a witness in or
otherwise participating in, a Proceeding or establishing or enforcing a right to
indemnification under this Agreement, Section 145 or otherwise.

                       (c)          “Proceeding” shall mean any threatened,
pending, or completed action, suit, arbitration, hearing or other proceeding,
whether civil, criminal, administrative, legislative, investigative or any other
type whatsoever.

                       (d)          “Subsidiary” shall mean any corporation of
which more than 50% of the outstanding voting securities are owned directly or
indirectly by the Company.

          2.          Agreement to Serve.  The Indemnitee agrees to serve and/or
continue to serve as an Agent of the Company for so long as the Indemnitee is
duly appointed or elected and qualified in accordance with the applicable
provisions of the bylaws of the Company or of any Subsidiary thereof, or until
such time as the Indemnitee tenders his resignation in writing or is removed
from his or her position in accordance with the bylaws of the Company or
otherwise; provided, however, that nothing contained in this Agreement is
intended to create any right to continued service with the Company or any other
entity in any capacity.

          3.          Indemnification.

                       (a)          Indemnification in Third Party Proceedings.

                                      (i)          Subject to Section 10 hereof,
the Company shall indemnify the Indemnitee if the Indemnitee is a party to or
threatened to be made a party to or otherwise involved in any Proceeding (other
than a Proceeding by or in the name of the Company to procure a judgment in its
favor) by reason of the fact that the Indemnitee is or was an Agent of the
Company, or by reason of any act or inaction by him in any such capacity
(including, but not limited to, any written statement of the Indemnitee that (A)
is required to be, and is, filed with the Securities and Exchange Commission
(the “SEC”) regarding the adequacy of the Company’s internal controls or the
accuracy of reports or statements filed by the Company with the SEC pursuant to
federal laws and/or administrative regulations (each, a “Required Statement”) or
(B) is made to another officer or employee of the Company to support a Required
Statement), against any and all Expenses and liabilities of any type whatsoever
(including, but not limited to, judgments, fines (including any excise taxes
assessed with respect to any employee benefit plan), penalties and, subject to
Section 10(d) hereof, amounts paid in settlement), actually and

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reasonably incurred by him in connection with the investigation, defense,
settlement or appeal of such Proceeding, but only if the Indemnitee, subject to
the presumption set forth in Section 3(c) hereof, acted in good faith and in a
manner the Indemnitee reasonably believed to be in, or not opposed to, the best
interests of the Company, and, with respect to any criminal Proceeding, had no
reasonable cause to believe Indemnitee’s conduct was unlawful.

                                      (ii)         The termination of any
Proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the Indemnitee did not act in good faith in a manner which the Indemnitee
reasonably believed to be in, or not opposed to, the best interests of the
Company, and, with respect to any criminal Proceeding, that the Indemnitee had
reasonable cause to believe that the Indemnitee’s conduct was unlawful.

                       (b)          Indemnification in Derivative Actions. 
Subject to Section 10 hereof, the Company shall indemnify the Indemnitee if the
Indemnitee is a party to or threatened to be made a party to or otherwise
involved in any Proceeding by or in the name of the Company to procure a
judgment in its favor by reason of the fact that the Indemnitee is or was an
Agent of the Company, or by reason of any act or inaction by the Indemnitee in
any such capacity (including, but not limited to, any written statement of the
Indemnitee that (i) is a Required Statement or (ii) is made to another officer
or employee of the Company to support a Required Statement), against all
Expenses actually and reasonably incurred by the Indemnitee in connection with
the investigation, defense, settlement, or appeal of such Proceedings, but only
if the Indemnitee, subject to the presumption set forth in Section 3(c) hereof,
acted in good faith and in a manner the Indemnitee reasonably believed to be in,
or not opposed to, the best interests of the Company; provided, however, that no
indemnification under this subsection (b) shall be made in respect of any claim,
issue or matter as to which the Indemnitee shall have been finally adjudged to
be liable to the Company by a court of competent jurisdiction, except and only
to the extent that any court in which such Proceeding was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, the Indemnitee is fairly and
reasonably entitled to indemnity for such expenses as such court shall deem
proper.

                       (c)          Conclusive Presumption Regarding Indemnitee
Conduct.  With respect to Sections 3(a) and 3(b) hereof, the Indemnitee shall be
conclusively presumed to have acted in good faith and in a manner Indemnitee
reasonably believed to be in, or not opposed to, the best interests of the
Company, and, with respect to any criminal Proceeding, to have had no reasonable
cause to believe Indemnitee’s conduct was unlawful, unless a determination is
made that the Indemnitee has not acted in accordance with the standards set
forth above (i) by the Board of Directors of the Company by a majority vote of a
quorum thereof consisting of directors who were not parties to the Proceeding
due to which a claim is made under this Agreement, (ii) by the stockholders of
the Company by a majority vote of stockholders who were not parties to such a
Proceeding, or (iii) in a written opinion of independent legal counsel,
selection of whom has been approved by the Indemnitee in writing or by a panel
of arbitrators, one of whom is selected by the Company, another of whom is
selected by the Indemnitee and the last of whom is selected by the first two
arbitrators so selected.

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          4.          Indemnification of Expenses of Successful Party. 
Notwithstanding any other provisions of this Agreement, to the extent that the
Indemnitee has been successful on the merits or otherwise in defense of (a) any
Proceeding referred to in Section 3(a) or 3(b) hereof or (b) any claim, issue or
matter therein, including the dismissal of any action without prejudice, the
Company shall indemnify the Indemnitee (to the maximum extent permitted by law)
against all Expenses actually and reasonably incurred by the Indemnitee in
connection with the investigation, defense or appeal of such Proceeding, or any
claim, issue or matter therein.

          5.          Partial Indemnification.  If the Indemnitee is entitled
under any provision of this Agreement to indemnification by the Company for some
or a portion of any Expenses or liabilities of any type whatsoever (including,
but not limited to, judgments, fines, penalties or, subject to Section 10(d)
hereof, amounts paid in settlement) actually and reasonably incurred by him in
the investigation, defense, settlement or appeal of a Proceeding but is not
entitled, however, to indemnification for the total amount thereof, the Company
shall nevertheless indemnify the Indemnitee for the portion thereof to which the
Indemnitee is entitled.

          6.          Advancement of Expenses.  Subject to Section 10(b) hereof,
the Company shall advance all reasonable Expenses incurred by the Indemnitee in
connection with the investigation, defense, settlement or appeal of any
Proceeding to which the Indemnitee is a party or is threatened to be made a
party by reason of the fact that the Indemnitee is or was an Agent of the
Company.  The Indemnitee hereby undertakes to repay such advanced Expenses only
if, and to the extent that, it shall ultimately be determined by a final
judgment or other final adjudication that the Indemnitee is not entitled to be
indemnified by the Company as authorized by this Agreement.  The advances to be
made hereunder shall be paid by the Company to or on behalf of the Indemnitee
within 10 days following delivery of a written request therefor by the
Indemnitee to the Company.

          7.          Notice and Other Indemnification Procedures.

                       (a)          Notification of Proceeding.  Promptly after
receipt by the Indemnitee of notice of the commencement of or the threat of any
Proceeding, the Indemnitee shall, if the Indemnitee believes that
indemnification with respect thereto may be sought from the Company under this
Agreement, notify the Company of the commencement or threat thereof.

                       (b)          Indemnification Payments.  Any
indemnification payment pursuant to Section 3 hereof requested by the Indemnitee
shall be made no later than 10 days after receipt of the written request of the
Indemnitee, unless a good faith determination is made within said 10-day period
in accordance with one of the methods set forth in Section 3(c) hereof that the
Indemnitee is not or (subject to final judgment or other final adjudication as
provided in Section 10(a) hereof) ultimately will not be entitled to
indemnification hereunder.

                       (c)          Application for Enforcement. 
Notwithstanding a determination under Section 3(c) hereof that the Indemnitee is
not entitled to indemnification with respect to any specific Proceeding, the
Indemnitee shall have the right to apply to any court of competent jurisdiction
for the purpose of enforcing the Indemnitee’s right to indemnification pursuant
to this Agreement.  In such an enforcement hearing or Proceeding, the burden of
proving by clear and convincing evidence that indemnification or advances are
not appropriate shall be on the

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Company.  Neither the failure of the Company (including its Board of Directors,
stockholders, independent legal counsel or the panel of arbitrators) to have
made a determination prior to the commencement of such action that the
Indemnitee is entitled to indemnification hereunder, nor an actual determination
by the Company (including its Board of Directors or independent legal counsel or
the panel of arbitrators) that the Indemnitee is not entitled to indemnification
hereunder, shall be a defense to the action or create any presumption that the
Indemnitee is not entitled to indemnification hereunder.

                       (d)          Indemnification of Certain Expenses.  The
Company shall indemnify the Indemnitee against all expenses incurred in
connection with any hearing or proceeding under this Section 7 unless the
Company prevails by clear and convincing evidence in such hearing or proceeding.

          8.          Assumption of Defense.  In the event the Company shall be
obligated to pay the Expenses of the Indemnitee in any Proceeding, the Company,
if appropriate, shall be entitled to assume the defense of such Proceeding, with
counsel reasonably acceptable to the Indemnitee, upon the delivery to the
Indemnitee of written notice of its election to do so.  After delivery of such
notice, approval of such counsel by the Indemnitee and the retention of such
counsel by the Company, the Company shall not be liable to the Indemnitee under
this Agreement for any fees of counsel subsequently incurred by the Indemnitee
with respect to the same Proceeding, provided that (a) the Indemnitee shall have
the right to employ separate counsel in such Proceeding at the Indemnitee’s own
expense, and (b) if (i) the employment of separate counsel by the Indemnitee has
been previously authorized in writing by the Company, (ii) the Indemnitee’s
separate counsel delivers a written statement to the Company stating that such
counsel has reasonably concluded that there may be an actual or potential
conflict of interest or actual or potential separate or different defenses
between the Company and the Indemnitee in the conduct of any such defense or
(iii) the Company shall not, in fact, have employed counsel to assume the
defense of such Proceeding within a reasonable time, then in any such event the
reasonable fees and expenses of the Indemnitee’s counsel shall be paid by the
Company.

          9.          Insurance.  The Company may, but is not obligated to,
obtain directors’ and officers’ liability insurance (“D&O Insurance”) on behalf
of the Indemnitee against any liability which may be asserted against or
incurred by the Indemnitee in Indemnitee’s capacity or arising out of the
Indemnitee’s status as an Agent of the Company, whether or not the Company would
have the power to indemnify the Indemnitee hereunder.  Notwithstanding any other
provision of this Agreement, the Company shall not be obligated to indemnify the
Indemnitee for Expenses, judgments, fines or penalties which have been paid
directly to the Indemnitee by D&O Insurance.  If the Company has D&O Insurance
in effect at the time the Company receives from the Indemnitee any notice of the
commencement or threat of a Proceeding, the Company shall give prompt notice of
the commencement or threat of such Proceeding to the insurers in accordance with
the procedures set forth in the D&O Insurance policy.  The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of the Indemnitee, all amounts payable as a result of such Proceeding
in accordance with the terms of such policy.

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          10.        Exceptions.

                       (a)          Certain Matters.  Any provision herein to
the contrary notwithstanding, the Company shall not be obligated to indemnify
the Indemnitee pursuant to the terms of this Agreement on account of any
Proceeding with respect to (i) remuneration paid to the Indemnitee if it is
determined by final judgment or other final adjudication that such remuneration
was in violation of law; (ii) which final judgment is rendered against the
Indemnitee for an accounting of profits made from the purchase or sale by the
Indemnitee of securities of the Company pursuant to the provisions of
Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar
provisions of any federal, state or local statute; or (iii) which (but only to
the extent that) it is determined by final judgment or other final adjudication
that the Indemnitee’s conduct was in bad faith, knowingly fraudulent or
deliberately dishonest.  For purposes of the foregoing sentence, a final
judgment or other adjudication may be reached in either the underlying
Proceeding or action in connection with which indemnification is sought or a
separate Proceeding or action to establish rights and liabilities under this
Agreement.

                       (b)          Securities Act Liabilities.  Any provision
herein to the contrary notwithstanding, the Company shall not be obligated
pursuant to the terms of this Agreement to indemnify the Indemnitee or otherwise
act in violation of any undertaking appearing in and required by the rules and
regulations promulgated under the Securities Act of 1933, as amended (the “Act”)
in any registration statement filed with the SEC under the Act.  The Indemnitee
acknowledges that paragraph (h) of Item 512 of Regulation S-K promulgated under
the Act requires the Company to undertake in connection with any registration
statement filed under the Act to submit the issue of the enforceability of the
Indemnitee’s rights under this Agreement in connection with any liability under
the Act on public policy grounds to a court of appropriate jurisdiction and to
be governed by any final adjudication of such issue.  The Indemnitee
specifically agrees that any such undertaking shall supersede the provisions of
this Agreement and to be bound by any such undertaking.

                       (c)          Claims Initiated by the Indemnitee.  Any
provision herein to the contrary notwithstanding, the Company shall not be
obligated pursuant to the terms of this Agreement to indemnify or advance
Expenses to the Indemnitee with respect to Proceedings or claims initiated or
brought voluntarily by the Indemnitee and not by way of defense, except with
respect to Proceedings brought to establish or enforce a right to
indemnification under this Agreement as contemplated by Section 7(c) or any
other statute or law or otherwise as required under Section 145, but such
indemnification or advancement of expenses may be provided by the Company in
specific cases if the Board of Directors of the Company finds it to be
appropriate.

                       (d)          Unauthorized Settlements.  Any provision
herein to the contrary notwithstanding, the Company shall not be obligated
pursuant to the terms of this Agreement to indemnify the Indemnitee under this
Agreement for any amounts paid in settlement of a Proceeding effected without
the Company’s prior written consent.  Neither the Company nor the Indemnitee
shall unreasonably withhold consent to any proposed settlement; provided,
however, that the Company may in any event decline to consent to (or to
otherwise admit or agree to any liability for indemnification hereunder in
respect of) any proposed settlement if the Company determines in good faith
(pursuant to Section 3(c) hereof) that the Indemnitee is not or ultimately will
not be entitled to indemnification hereunder.

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          11.        Nonexclusivity.  The provisions for indemnification and
advancement of Expenses set forth in this Agreement shall not be deemed
exclusive of any other rights which the Indemnitee may have under any provision
of law, the Company’s certificate of incorporation or bylaws, in any court in
which a Proceeding is brought, the vote of the Company’s stockholders or
disinterested directors, other agreements or otherwise, both as to action in the
Indemnitee’s official capacity and to action in another capacity while occupying
his position as an Agent of the Company, and the Indemnitee’s rights hereunder
shall continue after the Indemnitee has ceased acting as an Agent of the Company
and shall inure to the benefit of the heirs, executors and administrators of the
Indemnitee.  Any provision herein to the contrary notwithstanding, the Company
may provide, in specific cases, the Indemnitee with full or partial
indemnification of any Expenses if the Board of Directors of the Company
determines that such indemnification is appropriate.

          12.         Subrogation.  In the event of payment under this
Agreement, the Company shall be subrogated to the extent of such payment to all
of the rights of recovery of the Indemnitee, who, at the request and expense of
the Company, shall execute all papers required and shall do everything that may
be reasonably necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.

          13.         Interpretation of Agreement.  It is understood that the
parties hereto intend this Agreement to be interpreted and enforced so as to
provide indemnification to the Indemnitee to the fullest extent now or hereafter
permitted by law.

          14.         Severability.  If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever, (a) the validity, legality and enforceability of the remaining
provisions of the Agreement (including without limitation, all portions of any
paragraphs of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby; and (b) to
the fullest extent possible, the provisions of this Agreement (including,
without limitation, all portions of any paragraph of this Agreement containing
any such provision held to be invalid, illegal or unenforceable, that are not
themselves invalid, illegal or unenforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, illegal or
unenforceable and to give effect to Section 13 hereof.

          15.         Modification and Waiver.  No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by the
parties hereto.  No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.  The
indemnification rights afforded to the Indemnitee hereby are contract rights and
may not be diminished, eliminated or otherwise affected by amendments to the
certificate of incorporation or bylaws of the Company or by other agreements.

          16.         Successors and Assigns.  The terms of this Agreement shall
bind, and shall inure to the benefit of, the successors and assigns of the
parties hereto.

          17.         Notice.  Except as otherwise provided herein, any notice
or demand which, by the provisions hereof, is required or which may be given to
or served upon the parties hereto shall be

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in writing and, if by telegram, telecopy or telex, shall be deemed to have been
validly served, given or delivered when sent, if by personal delivery, shall be
deemed to have been validly served, given or delivered upon actual delivery and,
if mailed, shall be deemed to have been validly served, given or delivered three
business days after deposit in the United States mails, as registered or
certified mail, with proper postage prepaid and addressed to the party or
parties to be notified at the addresses set forth on the signature page of this
Agreement (or such other address(es) as a party may designate for itself by like
notice).

          18.         Governing Law.  This Agreement shall be governed
exclusively by and construed according to the laws of the State of Delaware, as
applied to contracts between Delaware residents entered into and to be performed
entirely within Delaware.

          19.         Entire Agreement.  This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, understandings and negotiations, written and
oral, between the parties with respect to the subject matter of this Agreement.

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

 

THE “COMPANY”:

 

 

 

 

 

Maxwell Technologies, Inc.,

 

a Delaware corporation

 

 

 

 

 

 

By:

 

 

 

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Title:

 

 

 

 

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Address: 9244 Balboa Avenue

 

 

San Diego, CA 92123

 

 

Attention: Chief Executive Officer

 

 

 

 

 

THE “INDEMNITEE”:

 

 

 

 

 

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Signature of the Indemnitee

 

 

 

 

 

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Print or Type Name of the Indemnitee

 

 

 

 

 

Address:

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