Document:

EXHIBIT 10(23)

                DATED September 8, 2000
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(1)           GROSVENOR  WEST  END  PROPERTIES

(2)            CANARGO  ENERGY  CORPORATION

---------------------------------------------------------

---------------------------------------------------------
                       UNDERLEASE

of first and second floors 148/150 Buckingham Palace Road
London SW1
---------------------------------------------------------

From:                              24 June 2000

Term:                                  10 years

Expires:                           23 June 2010

Initial rent:                UK Pounds  141,950

                DATED September 8, 2000
--------------------------------------------------------

--------------------------------------------------------
(1)      GROSVENOR  WEST  END  PROPERTIES

(2)      CANARGO  ENERGY  CORPORATION

--------------------------------------------------------
--------------------------------------------------------
Counterpart/
                       UNDERLEASE

of first and second floors 148/150 Buckingham Palace Road
London  SW1
--------------------------------------------------------

From:                              24 June 2000

Term:                                  10 years

Expires:                           23 June 2010

Initial rent:                 UK Pounds 141,950

                                      INDEX
                                      -----

INTERPRETATION .....................................................1
        Defined terms...............................................1
        End of the Term.............................................6
        Landlord and Tenant (Covenants) Act.........................7
        Construction of obligations.................................7
        Statutes....................................................7
        Value Added Tax.............................................7
        Indemnities.................................................8
        Superior interests..........................................8
        Approvals...................................................8
        Vitiation of insurance......................................8
        Parties and joint and several obligations...................9
        Clause numbers..............................................9

TERM RIGHTS & RENTS.................................................9

TENANT'S COVENANTS..................................................10
        Rent........................................................10
        Interest on arrears.........................................10
        Outgoings...................................................11
        Empty rates.................................................11
        Value Added Tax.............................................11
        Gas electricity and other services..........................12
        Repair......................................................12
        To clean windows............................................12
        Internal decoration.........................................12
        Standard of works...........................................13
        Reinstatement and delivery at end of Term...................13
        Alienation..................................................14
        Enforcement of underlease terms.............................14
        Registration of dealings....................................15
        Alterations.................................................15
        Permitted user..............................................15
        No nuisance.................................................15
        No overloading..............................................16
        Other restrictions..........................................16
        Contamination...............................................16
        Waste and refuse............................................16
        Plant and machinery.........................................17
        Aerials.....................................................17
        Signs.......................................................17
        Preservation of rights and boundaries.......................18
        Reletting notices...........................................18
        Rights of entry.............................................18
        To permit Landlord to remedy breach.........................19
        Statutory obligations.......................................20
        Copies of notices...........................................20
        To pay charges under Planning Acts..........................21
        No planning applications etc without consent................21
        Copies of permissions.......................................21
        To obtain approval of permissions...........................21
        To complete works before end of Term........................21
        Landlord's costs............................................22
        Indemnities.................................................23
        Regulations.................................................23

LANDLORD'S COVENANTS................................................23
        Quiet enjoyment.............................................23
        Compliance with superior lease..............................23
        Services....................................................23
        Access to data hub..........................................24

INSURANCE OBLIGATIONS...............................................24
        Landlord to effect insurance................................24
        Landlord to obtain consents for rebuilding..................24
        Landlord to reinstate (other than minor damage).............25
        Cesser of rent..............................................26
        Tenant's insurance obligations..............................26

PROVISOS............................................................28
        Forfeiture..................................................28
        No implied rights...........................................29
        No restrictions on adjoining property.......................29
        Exclusion of liability......................................29
        Compensation................................................29
        Service of notices..........................................30
        Alterations to the Communal Garden..........................30
        Representations.............................................30
        Disputes....................................................31
        Exclusion of third party rights.............................31
        Sums due to Landlord treated as rent........................31
        Stamp duty certificate......................................31
        Governing law and jurisdiction..............................31

RENT REVIEW.........................................................32
        Frequency of review.........................................32
        Upwards only reviews........................................32
        Basis of valuation..........................................32
        Treatment of rent free periods..............................34
        Method of determination.....................................35
        Interim arrangements........................................36
        Time not of the essence.....................................36
        Statutory restrictions......................................37
        Memoranda...................... ............................37

SCHEDULE 1..........................................................37
        (Particulars of the Premises)...............................37

SCHEDULE 2..........................................................38
        (Rights granted)............................................38

SCHEDULE 3..........................................................39
        (Exceptions and reservations)...............................39

SCHEDULE 4..........................................................40
        (The Service Charge)........................................40
        (Definitions)...............................................40
        (Calculation and payment)...................................41
        (Services)..................................................44
        (Expenses)..................................................45

SCHEDULE 5..........................................................48
        (Alienation conditions).....................................48
        (Requirements for an assignment)............................48
        (General requirements)......................................50

THIS UNDERLEASE made the 8th day  of  September 2000
---------------

BETWEEN:
-------

(1)     GROSVENOR  WEST  END  PROPERTIES  (Company  Registration  Number 956235)
        --------------------------------
        whose registered office is at 70 Grosvenor Street London  W1X  9DB ("the

        Landlord")  and

(2)     CANARGO  ENERGY  CORPORATION whose registered office is at 32 Loockerman
        ----------------------------
        Square Suite L-100 Dover Delaware 19904 Dover Kent (address for  service

        in the  UK is c/o McGrigor Donald 63 Queen  Victoria Street  London EC4N

        4ST ("the Tenant")

WITNESSES  as  follows:
---------

INTERPRETATION
--------------

1.     IN this Lease the headings and index shall be ignored in its construction

       and  unless  the  context  otherwise  requires:

Defined  terms
--------------

1.1     The following expressions have the meanings set against them:

        "Basic  Rent"  the  rent  payable  under  Clause  2.1

        "Building"     the  whole  and  each part  of  the land  and  building

                       known  as 148/150  Buckingham Palace  Road London SW1 for

                       identification purposes only edged green on the  attached

                       plan being the land registered at H M Land Registry under

                       title number  NGL772951  including:

                       (a)  any  ancillary  vaults

                       (b)  all  additions  and  alterations  thereto

                       (c)  all  fixtures  annexed  thereto  (except  tenant's

                            fixtures)

      "Common Parts"   those  parts  of the  Building which are not from time to

                       time  let  or  intended to  be  let  to  any occupational

                       tenants  including (but  without limiting  the foregoing)

                       staircases  entrance halls  and coffee point on the third

                       floor of the Building

      "Communal        the  garden  at  the rear of 126 to 158 Buckingham Palace

      "Garden"Road     London SW1

      "Conduits"       pipes  sewers drains cisterns ducts gutters  watercourses

                       wires cables channels flues  telecommunications equipment

                       and  other  conducting  media  and  any  other  ancillary

                       apparatus

      "Contractual     the date on  which the contractual term created by Clause

      Expiry Date"     2 will expire  if the  Term  does  not  end  earlier

      "Full Cost of"   such amount as  the Landlord from time to time determines

      Reinstatement    as the  cost of rebuilding the relevant  part or parts of

                       the  Building  after  destruction by  an  Insured    Risk

                       ( including  the  cost  of  shoring-up  demolition   site

                       clearance any works  that  may  be  required  by  statute

                       fees payable on any applications for planning  permission

                       or other  consents professional fees and other incidental

                       expenses )  when  the  rebuilding  occurs  including  any

                       increases in building costs up to the time of  completion

      "Insurance Rent" such  sums  as shall  be a fair proportion (as determined

                       from  time  to time by  the  Landlord save in the case of

                       loss  of  Rent  when the proportion shall be 100%) of the

                       amount which the Landlord  pays  by  way of gross premium

                       (or  if  the Premises  or the Building  are  insured with

                       other property where applicable a fair proportion of such

                       sums  payable  under  the  relevant  insurance  policy

                       determined from  time  to  time  by  the  Landlord):

                       (1) for  effecting  insurance  under  Clause  5.1  and

                       (2) in  respect of the  Landlord's  Liability  Insurance

                           Together  with  the  said  proportion  of:

                       (3) all  expenses  incurred by the Landlord in connection

                           with assessing the  Full Cost of Reinstatement of the

                           Building provided that the Tenant shall not be liable

                           for  the  cost  of  assessment  any more than once in

                           every year of the Term and

                       (4) any  excesses under  any policy of insurance effected

                           by the Landlord under Clause  5.1 in respect  of  any

                           Insured  Damage  that  occurs

      "Insured        damage or destruction to any part of the Building which is

      Damage"         caused by a risk against which  and  to the extent that at

                      the time of the damage or destruction the  Landlord has or

                      should  have  effected  insurance  of  that  part  of  the

                      Building under  Clause  5.1

      "Insured        fire  lightning  storm explosion impact aircraft and other

      Risks"          aerial  devices  and  articles  dropped  therefrom    riot

                      malicious  damage civil  commotion  earthquake  (fire  and

                      shock)  bursting  or overflowing  of water tanks apparatus

                      or  pipes subsidence  heave landslip for so  long  as each

                      such  risk  remains  insurable with insurers  of repute at

                      reasonable commercial rates or  is actually insured by the

                      Landlord in its discretion  for the purposes of this Lease

                      together with such other  risks  of  damage or destruction

                      against  which  the Landlord from time to time  decides to

                      effects insurance for the purposes of  this Lease (if any)

      "Landlord's     insurance  against all  liability of the Landlord to third

      Liability       parties  arising out of or in connection with the Building

      Insurance"     or any matter relating to the Building on such terms and in

                      such amount as the Landlord from time to time determines

      "Loss of        the amount of the Rents  for the time being payable during

      Rent"           a period of three years (or for so long as the Landlord so

                      elects during such longer period as the Landlord from time

                      to  time  reasonably  determines  necessary  in  order  to

                      rebuild the Building) including any increase  in the Basic

                      Rent during such period which the Landlord  estimates will

                      occur as a result of any review due under  Clause  7

      "Outgoings"     (in relation to the Building the Common Parts the Premises

                      or other property  as  the  context  requires) all present

                      and  future  rates  charges taxes assessments  impositions

                      and  outgoings of any kind (including without limiting the

                      foregoing  any  which  are  of  a capital or non-recurring

                      nature or wholly novel)assessed charged imposed or payable

                      by  or on any owner or occupier of or on  or in respect of

                      the  Building  the  Common  Parts  the  Premises  or other

                      property respectively excluding (save for Value Added Tax)

                      any  payable  by  the  Landlord or any  superior  landlord

                      occasioned  by receipt of  the Rents or  the rents payable

                      under a superior lease or by any dealing with any interest

                      in the Premises of the Landlord or any  superior  landlord

      "Planning       the Town and Country Planning Act 1990 the Planning(Listed

      Acts"           Buildings  and  Conservation  Areas)  Act  1990  and   the

                      Planning  (Hazardous  Substances) Act  1990 and  any other

                      statutes  relating  to  town  and  country  planning

      "Plant"         all plant and machinery now  or  hereafter  in  or serving

                      the Building including(but without limiting the foregoing)

                      any  lifts  and  lift  machinery  boilers  public  address

                      system  internal  telephones  air conditioning heating and

                      ventilation plant and  machinery sprinklers and associated

                      Conduits  electrical  systems  fire  detection  and   fire

                      prevention  systems  central  or  monitoring  systems  and

                      installations  and  any  plant  and machinery from time to

                      time installed to replace  any  of  the  foregoing

      "Premises"      the  whole  and  each  part of  the  part of the first and

                      second floors of the Building more particularly  described

                      in  Schedule  1

      "Prescribed     four  per  cent per  annum above the base rate of National

      Rate"           Westminster Bank plc or above such other rate  of interest

                      as the Landlord from time to time reasonably  determines

      "Quarter Days"  25 March 24 June 29 September and 25 December in each year

      "Rents"         the Basic Rent the Insurance Rent and the  Service  Charge

      "Service Charge"the  sums  payable  by the Tenant at the times and in the

                      manner set out in

      "Services"      the  services  set  out  in  Part  III  of  Schedule  4

      "Term"          the term of years granted by  Clause 2  with any period of

                      holding-over extension or continuance by statute or common

                      law

      "Visitor"       the Tenant any undertenant (however remote)of the whole or

                      any part  of  the  Premises  and any person at or near the

                      Building expressly or by implication with the authority of

                      the  Tenant  or  any  such  undertenant

      "1954 Act"      the  Landlord  and  Tenant  Act  1954

End  of  the  Term
------------------

1.2     "The  last  year  of  the  Term" and "the end of the Term" mean the last

        twelve months  of  and the end of the Term however it ends (including by

        expiry forfeiture  or  surrender)

Landlord  and  Tenant  (Covenants)  Act
---------------------------------------

1.3     The  expressions  "excluded assignment" "authorised guarantee agreement"

        and  "collateral agreement" have in  relation to this Lease the meanings

        specified  in  Sections  11(1)  16 and 28(1) of the Landlord  and Tenant

        (Covenants) Act 1995

Construction  of  obligations
-----------------------------

1.4     Obligations  by  the  Tenant:

        1.4.1     not  to  do  or  omit to do  anything  in  relation   to   the

                  Premises or the Building include an obligation to ensure  that

                  It  is not done or omitted by (in relation  to  the  Premises)

                  Any  other  person  and ( in relation to  other parts  of  the

                  Building)  any  Visitor

        1.4.2     to  do  anything in  relation  to the Premises or the Building

                  include  an  obligation  to  ensure  that (in  the case of the

                  Premises) all other persons and (in  the  case of  other parts

                  of the Building) all Visitors comply with them

1.5     References  to  obligations    of  the  Tenant  in  this  Lease  include

        obligations  of  the  Tenant in any  document entered  into  pursuant to

        this Lease and  in  any  collateral  agreement

Statutes
--------

1.6     References  to a statute or a statutory instrument include any extension

        amendment  or  re-enactment  for  the   time  being  in  force  and  any

        regulations instruments permissions directions orders or notices for the

        time being made or issued  under  them

Value  Added  Tax
-----------------

1.7     References to Value Added Tax include any similar tax substituted for or

        levied  in  addition  to  it

Indemnities
-----------

1.8     Obligations  to  indemnify the Landlord against a matter are obligations

        to  indemnify  the  Landlord  against  liabilities  actions  proceedings

        damages  penalties  costs  expenses  claims  and demands  of  whatsoever

        nature  and  any  fees  and  expenditure  incurred  arising  directly or

        indirectly from or in connection with  that  matter

Superior  interests
-------------------

1.9     References to the Landlord include any superior landlord and any chargee

        of  the  Landlord  or  of  any  superior  landlord  where:

        1.9.1     the  relevant superior  lease  or charge requires the approval

                  of  the  superior  landlord  or  chargee  to  a matter and the

                  Landlord's  approval  to  that  matter  is required under this

                  Lease  (although  nothing  in  this  Lease  shall  prevent the

                  Superior  landlord or chargee from withholding its approval if

                  it is entitled to do so under the relevant superior  lease  or

                  charge)

        1.9.2     there  is  provision  for  repayment  to  the  Landlord of any

                  expenses incurred  and

        1.9.3     there  is  an  indemnity  in  favour  of  the  Landlord

Approvals
---------

1.10     References  to the approval or consent of or to a matter being approved
         by  a  person  are  to  its  prior  written  approval  or  consent

Vitiation  of  insurance
------------------------

1.11     References  to  insurance  being vitiated are to the insurance effected

         under  Clause  5.1 (and if relevant any other insurance effected by the

         Landlord against  damage  or destruction to  neighbouring  property  or

         Landlord's  Liability  Insurance  or  other  similar  insurance)  being

         vitiated and/or payment of the insurance  monies  under  such insurance

         being refused in whole or part by reason of any  act or omission by any

         Visitor (whether or not also resulting from an act or  omission  by any

         other  person)

Parties  and  joint  and  several  obligations
----------------------------------------------

1.12     References  to  "the  Landlord"  and "the Tenant" include the immediate

         landlord  and  tenant  for   the time   being  under this Lease and (if

         respectively  more  than one  person) their  obligations are joint  and

         several

Clause  numbers
---------------

1.13     Without  further  designation   references  to   numbered  Clauses  and

         Schedules  are  to  clauses  of  and  schedules  to  this  Lease

TERM  RIGHTS  &  RENTS
----------------------

2.     THE  Landlord  LEASES  the  Premises  to  the  Tenant
                      ------

       TOGETHER  WITH (in  common with the Landlord  those  authorized by it and
       --------------
                      others  with  similar  rights)  the  rights  specified  in

                      Schedule  2

       RESERVING to the Landlord and those authorised by it the rights specified
       ---------
       in Schedule  3

       SUBJECT  to  all  rights  and  obligations  affecting  the  Premises
       -------

       TO  HOLD  to the Tenant from and including the 24th day of June  2000 for
       --------
       a term of  ten  years

       PAYING  to  the  Landlord:
       ------

2.1     Yearly  during  the  Term  (and  proportionately for any shorter period)

        141,950  (One  hundred and forty-one thousand and nine hundred and fifty

        pounds)  (subject  to increase  in accordance  with  Clause 7)  by equal

        quarterly  payments in advance  on  the  Quarter  Days  the  first to be

        made on the date of this Lease proportionate from and including the 18th

        day of October 2000 to and including the  24th  day  of  December  2000

2.2     By  way  of  further  rent  the  Insurance  Rent  on  demand

2.3     By  way  of  further  rent  the  Service  Charge

TENANT'S  COVENANTS
-------------------

3.     THE  Tenant COVENANTS with the Landlord during the Term and thereafter as
--     ---         ---------
       specified  as  follows:

       Rent
       ----

       3.1     To  pay  the  Rents:

               3.1.1   in  accordance  with Clause 2 without  any  deduction and

                       not to exercise any  right  or  claim  to  withhold  rent

                       or  legal  or  equitable  set-off

               3.1.2   (if so requested by the  Landlord in writing) by standing

                       order to a bank account in the United  Kingdom  nominated

                       by  the Landlord

Interest  on  arrears
---------------------

3.2    To  pay  the Landlord interest  at the Prescribed Rate from when the rent

       or  other  sum was due or incurred until actual  payment or reimbursement

       (whether formally demanded  or not  and before  and  after judgment)  on:

       3.2.1   any  part  of  the  Basic  Rent  unpaid  on  the  due  date

       3.2.2   any other  sum due under this Lease unpaid seven days after it is

               due and

       3.2.3   any  sum  incurred  by the  Landlord  as a result of a failure by

               the  Tenant  to  comply  with  its  obligations  in  this  Lease

       PROVIDED  THAT  this  sub-clause  is without prejudice to any other right
       --------------
       of the Landlord  and  Rents  and other sums shall be deemed unpaid if the

       Landlord has refused  to  accept  a payment so as not to waive a right to

       forfeit this Lease

Outgoings
---------

3.3 To  pay and indemnify  the Landlord against all Outgoings which relate to

       the  Premises

Empty  rates
------------

3.4    To  make good to the Landlord any loss of rating  relief for the Premises

       applicable  to  empty  premises  which the Landlord suffers after the end

       of the Term  because  the  relief  is allowed to  the Tenant or any other

       person for any earlier  period

Value  Added  Tax
-----------------

3.5    To pay the Landlord as additional  rent any Value Added Tax chargeable on

       any  payments  or other consideration (including the Rents) made or given

       by the Tenant under or in connection with this Lease such Value Added Tax

       to be payable in  addition  to  such  payments  or  other  consideration

3.6    Where  under  this  Lease  the  Tenant agrees  to pay the Landlord or any

       other  person (including  without limitation  by  way of  service  charge

       indemnity or reimbursement) a sum calculated by  reference  to  an amount

       expended by the Landlord or another person to pay in addition a sum equal

       to any Value Added Tax on  such  amount  save to the extent (if any) that

       it will  be recoverable by  the Landlord  or  other  person  respectively

       without  (if  respectively it has not done so)  exercising  any  election

       to  waive  exemption  from  Value  Added  Tax

Gas  electricity  and  other  services
--------------------------------------

3.7    To  pay  to  the  suppliers  all  charges  for gas electricity  and other

       services  consumed  or used at or in connection with the Premises and all

       charges for meters and telephones and  to comply with all regulations and

       requirements of the  supplying  authorities  insofar  as  they  relate to

       the  Premises

Repair
------

3.8    To keep the Premises (including the tiles  carpeting and other furnishing

       of the floors) in good and  substantial repair and  condition  (including

       decorative  condition)  and  (when  necessary)  to  renew and rebuild the

       Premises  except  Insured  Damage  save where the  insurance against such

       Insured Damage is vitiated

3.9    To  keep  the  Premises  in  a clean and tidy  condition and clear of all

       rubbish

3.10    To  replace any landlord's fixtures in the  Premises which are or become

        beyond  repair  with  other  good  quality  fixtures

3.11    To  give written notice to the Landlord  of any defect or item requiring

        repair in the Premises or the Building which might give rise to a common

        law or statutory  duty  on  the Landlord in  favour of the Tenant or any

        other person as soon as it comes to the attention of the Tenant or those

        deriving title under it

3.12    To  indemnify  the  Landlord  against  any  breach  of  any  such  duty

To  clean  windows
------------------

3.13    To  clean  the  inside  of  all  windows  of  the  Premises as  often as

        necessary  and  at  least  once  in  every  month

Internal  decoration
--------------------

3.14    In the fifth year of the  Term and in the last month of the last year of

        the  Term  to  paint  enamel french polish or otherwise treat such parts

        of the interior of  the Premises as are or should be so treated with two

        coats of good quality  paint  or  best  quality polish or other suitable

        material of the best quality (the colour scheme and materials to be used

        on the last such occasion during  the Term to  be such as is required by

        the Landlord) and  wash down all tiles  and  similar  washable  surfaces

3.15    In  the  last  month  of  the  last  year of  the Term to supply and lay

        throughout  the  Premises  new  fitted carpets all such carpets to be of

        no less quality than those in the Premises at the date of this Lease and

        of a colour and design  required  by  the  Landlord  acting  reasonably

3.16    As  often  as is in the  reasonable opinion of the Landlord necessary to

        clean  and  treat  in  a  proper  manner  and  in  accordance  with  any

        instructions issued  by  the  Landlord  all  other surfaces and fixtures

        in the Premises not required  to  be  painted

Standard  of  works
-------------------

3.17    To  carry  out  the  repairs decorations  and other works required under

        this  Lease  in  a  good and  workmanlike  manner  and to the reasonable

        satisfaction  of  the  Landlord and  in the last year  of the  term such

        decorations  are to be in  colours reasonable  approved by  the Landlord

        such approval for to be unreasonably withheld  or  delayed

Reinstatement  and  delivery  at  end  of  Term
-----------------------------------------------

3.18    Before  the  end  of  the  Term:

      3.18.1   (save  to  the extent  that  the  Landlord  otherwise directs in

                writing) to  remove  any  additions  or  alterations made to the

                Premises during the Term

      3.18.2   to  remove  any advertisements or signs  erected  on or  near the

               Premises

      3.18.3   to make good any damage caused by such removal and the removal of

               tenant's  fixtures  and  chattels

3.19    At the  end  of  the  Term to  deliver the Premises up  in repair and in

        accordance  with  the  Tenant's  obligations in this Lease

Alienation
----------

3.20    Not  to  assign  charge underlet hold on  trust for another or otherwise

        part  with  or  share  possession or  occupation  of or suffer any other

        person to occupy  or have an  interest in the  whole or  any part of the

        Premises save by way of  an  assignment  charge  or underletting  of the

        whole  of the  Premises  or an  underletting  of  part  of  the Premises

        satisfying the relevant requirements of Schedule  5

Enforcement  of  underlease  terms
----------------------------------

3.21    In  relation  to any underlease  however remote of the whole or any part

        of  the  Premises:

        3.21.1    not  to  waive  or  vary  its  terms

        3.21.2    to  procure that  the tenant for the time  being complies with

                  the  covenants  given  or  which  it  should have given to the

                  Landlord pursuant to Part II of Schedule 6 and in any document

                  entered into by the Tenant pursuant to this Lease

        3.21.3    to  operate  properly any  provisions for  the  review of rent

                  thereby  reserved  so  as  to  increase  such  rent  to  the

                  maximum extent in accordance with its  terms

        3.21.4    to  submit to any court  expert or arbitrator determining such

                  rent any representations that the Landlord reasonably requests

                  and

        3.21.5    within fourteen days to give notice to the Landlord of the

                  details of the  determination  of  every  rent  review

Registration  of  dealings
--------------------------

3.22    Within  twenty-one  days  after  any  assignment  charge  underlease  or

        transmission  or  other  disposition or devolution relating to the whole

        or any part  of  the Premises or any derivative interest in them to give

        notice    of such to the   Landlord   and to   produce to the Landlord a

        certified copy of the relevant document and  to  pay  the     Landlord's

        solicitors' proper charges for the registration of every  such  document

Alterations
-----------

3.23    Not  to  erect  any  new  buildings  on  the  Premises  nor to annex the

        Premises  to  other  premises nor to make  any  alterations or additions

        which will alter the height elevation or architectural appearance of the

        Premises  and  not  to   make  any  other  external  or  any  structural

        alterations or additions to the Premises

3.24    Subject  to  Clause 3.23 not to make  any other alterations or additions

        to the Premises without the Landlord's approval (such approval not to be

        unreasonably withheld or delayed) nor without having entered  into  such

        obligations  as  the  Landlord  shall  reasonably  require  as to  their

        execution and reinstatement

Permitted  user
---------------

3.25    To  use  the  Premises  only  as business  or professional office within

        sub-class  (a) of  Class B1  of the Schedule  to  the  Town and  Country

        Planning  (Use Classes)  Order  1987  (ignoring  for  this  purpose  any

        Extension  amendment or revocation of  such Order made after the date of

        this Lease) but not governmental or  diplomatic  offices

No  nuisance
------------

3.26    Not to  do on the Premises or the Building anything which in the opinion

        of the  Landlord  may  become  or cause  a nuisance  disturbance  damage

        annoyance or  inconvenience  to  the  Landlord or its lessees  or to the

        owners or occupiers of neighbouring  property

No  overloading
---------------

3.27    Not to do or bring in or on the Premises or the  Building anything which

        may  put  any  weight  or impose a  strain in excess  of that which  the

        Premises or the Building are designed to bear with due margin for safety

        and not to fix any machinery  to  the  walls ceilings  or  roof  of  the

        Premises or the Building

Other  restrictions
-------------------

3.28    To  keep  the  entrance  ways  of  and exits from the Premises clear and

        unobstructed at all times and not to cause an obstruction in any part of

        the Building

3.29    Not  to  hold  any  sale  by  auction  on  the  Premises

3.30    Not  to  permit  any  person  to  sleep  in  the Premises nor to use the

        Premises or  the Building for any residential illegal or immoral purpose

        or for the  purposes  of  prostitution

3.31    Not to allow to pass into the sewers drains or  watercourses serving the

        Premises  or the Building any  noxious or  deleterious effluent or other

        Substance which may  obstruct or  damage them  and to make good any such

        obstruction or damage  caused  thereto  by  any  Visitor

Contamination
-------------

3.32    Not  to  allow  any  noxious  or  deleterious  effluent  or  any form of

        contaminant  or pollutant  or other  substance to seep into or otherwise

        enter the buildings or other structures on the  Premises or  the  ground

        below them

Waste  and  refuse
------------------

3.33    Not  to  discharge  trade  effluent or waste without the approval of the

        Landlord

3.34    To  make proper and adequate arrangements  for the frequent removal from

        the  Premises  of all  trade  and other  waste in  accordance  with  the

        requirements of any competent authority and any  regulations  from  time

        to time made by the Landlord

Plant  and  machinery
---------------------

3.35    Not  without  the  approval  of the Landlord  to erect or install in the

        Premises or the  Building any engine or  machinery or other appliance or

        Apparatus of  any  description (other than usual office machinery in the

        Premises) and to ensure that any such erected  or  installed is properly

        installed and safely  maintained and not liable to leak or cause  a fire

        or  explosion

3.36    Not  to  overload  the  electrical  wiring or drainage installations and

        apparatus in  or serving the Premises or the Building and to ensure that

        any in or  solely serving the  Premises comply with the terms conditions

        and regulations of  the  relevant  authorities

3.37    To  keep  all  Plant  within  and  exclusively  serving  the Premises in

        working  order

Aerials
-------

3.38    Not  to  erect on the exterior of the Premises or  the Building any pole

        mast  wire or  aerial radio or  television mast  aerial or  dish  or any

        erection of any  kind  whatsoever

Signs
-----

3.39    Not  to  fix  or  exhibit  on  the  exterior  of or (if visible from the

        exterior) the interior of the Premises nor anywhere on  the Building any

        name-place  bill  sign  placard notice  fascia board  flag banner  blind

        advertisement or similar device so that  there  shall  be  no indication

        of the use of the Premises  save  with  the  approval  of  the  Landlord

        such approval not to be unreasonably  withheld or delayed  for one small

        name-plate on or at the front entrance  door  of the Building or (if the

        Landlord so requires) on the communal nameboard  for  the  Building  and

        nameplates  on  the  doors  of  the Premises

Preservation  of  rights  and  boundaries
-----------------------------------------

3.40    Not  to obstruct any window or light enjoyed  by the Premises and to use

        best  endeavours  to  prevent  the  loss  of any right  belonging to the

        Premises

3.41    To  prevent any encroachment on the  Premises and the acquisition of any

        right over the Premises  and to notify the Landlord  immediately  if  an

        encroachment  or  the acquisition  of  a  right  is  attempted  or  made

Reletting  notices
------------------

3.42    To permit the Landlord at any time after  the date six months before the

        Contractual  Expiry  Date to fix  and retain  on any  suitable  (to both

        Landlord and Tenant acting  reasonably) part  of  the  Premises a notice

        for re-letting the Premises and not to remove or obscure such notice and

        to permit  all persons with the  authority  of the Landlord to  view the

        Premises at reasonable hours on prior appointment

Rights  of  entry
-----------------

3.43    To permit the Landlord and those authorised by it to enter the Premises

        to:

        3.43.1    ascertain  whether  the  Tenant  has  complied  with  its

                  obligations in this  Lease

        3.43.2    assess  the  Full  Cost  of  Reinstatement

        3.43.3    take  schedules of  fixtures and chattels  to be yielded up at

                  the end of  the  Term

        3.43.4    provide  the  Services  and carry  out the  other  matters

                  referred to in Schedule  4

        3.43.5    carry out repairs  decorations alterations or other  works  to

                  neighbouring  property

        3.43.6    inspect  repair  renew  connect  to  cleanse  move   relay  or

                  construct  existing  or  new  Conduits or Plant   in  over  or

                  under  the  Premises  serving  or  to serve  any  neighbouring

                  property

        3.43.7    comply  with  the  obligations  in  any  superior  lease

        3.43.8    do  anything  else  reasonable   which  cannot   otherwise  be

                  conveniently done

        And  anyone  exercising  the  right  of  entry  shall:
        ---

        3.43.9    (except  in  an  emergency) do so only at reasonable times and

                  on reasonable  notice

        3.43.10   cause  as  little damage  and  inconvenience  as  reasonably

                  practicable and

        3.43.11    make  good  any  resulting  damage  to  the  Premises

To  permit  Landlord  to  remedy  breach
----------------------------------------

3.44    To  permit  the  Landlord  and  all those  authorised by it to enter the

        Premises without liability to the Tenant for any damage or inconvenience

        Thereby created to remedy any breach of the Tenant's obligations in this

        Lease specified by  the  Landlord  by  notice  to  the  Tenant  if:

        3.44.1    one  month  thereafter  the  Tenant  has not started or is not

                  continuing diligently  to  remedy  the  breach

        3.44.2    two months thereafter the Tenant has  not completed  remedying

                  the breach  or

        3.44.3    in  the  Landlord's  opinion  the  Tenant is  unlikely to have

                  completed remedying the breach within two months thereafter or

                  such  shorter  period  as  the  Landlord reasonably  considers

                  necessary  in  the  circumstances

        AND the  costs so incurred by the Landlord  (including   solicitors' and
        ---
        surveyors' fees)  shall  be  a  liquidated  debt  and paid by the Tenant

        to the Landlord on demand

Statutory  obligations
----------------------

3.45    To  comply  with  the  present  and  future  requirements of any statute

        government  department  local or  other public or competent authority or

        court relating to the Premises or their use whether imposed on any owner

        or occupier of  them

3.46    To execute all works and  provide and maintain all arrangements on or in

        respect  of  the  Premises  or  their  use  that  are  thereby  required

3.47    Not  to  do or omit to do in the Premises  or the Building anything as a

        result of  which the Landlord may under any statute have imposed upon it
 .
        or become  liable to pay any  penalty damages compensation costs charges

        or expenses

Copies  of  notices
-------------------

3.48    Immediately  after  receipt  to give to the Landlord full particulars of

        any  notice  order proposal  or recommendation given to or served on the

        Tenant or any owner or occupier  of the  Premises affecting the Premises

        or neighbouring  property  whether  advertised or served directly on the

        Tenant or any such owner or  occupier  or  the  original  (or a copy) is

        received by any of them from any other  person

3.49    If  so  requested  by  the  Landlord  to  produce  any such notice order

        proposal or  recommendation and at the  request and cost of the Landlord

        to make or join in making  such objections or representations in respect

        of it as the Landlord  requests

To  pay  charges  under  Planning  Acts
---------------------------------------

3.50    To  pay  any  charge  or levy imposed  under the Planning Acts during or

        after  the  Term in  respect of  the carrying  out or maintenance of any

        operations at  the  Premises  or the  commencement or continuance of any

        use of the Premises during  the  Term

No  planning  applications  etc  without  consent
-------------------------------------------------

3.51    Not  to  serve  any  notice on nor to  enter into any agreement with the

        planning  authority nor  without the  approval of the  Landlord make any

        application for  permission  under  the  Planning  Acts

Copies  of  permissions
-----------------------

3.52    Immediately  on  receipt  to  give  to the  Landlord a copy of the grant

        refusal or  modification  of any permission  or other decision under the

        Planning Acts

To  obtain  approval  of  permissions
-------------------------------------

3.53    Notwithstanding  any consent  or approval granted by the Landlord not to

        make  any  alteration or  addition to  the Premises or any change of use

        until the Landlord has approved every necessary permission such approval

        not to be unreasonably  withheld  PROVIDED THAT the  Landlord may refuse
                                          -------------
        approval inter alia on the grounds that any condition contained in it or

        anything omitted from it or any other  thing  referred to in it would in

        the opinion of the Landlord be (or be likely  to  be) prejudicial to the

        Landlord's interest in the Premises during or after the end of the  Term

To  complete  works  before  end  of  Term
------------------------------------------

3.54    To  carry  out  and  complete  before  the  end  of  the  Term:

        3.54.1  any works  to  be carried out to  the  Premises  by a date after

                the end of the Term by a condition  of any  planning  permission

                granted  for any development begun before the end  of  the  Term

                and

        3.54.2  any  development begun  upon  the  Premises in  respect of which

                the Landlord  shall or  may  be liable for  any charge  or  levy

                under  the Planning Acts

Landlord's  costs
-----------------

3.55    To pay to the Landlord on demand  and indemnify the Landlord against all

        costs  fees  damages charges and  expenses (including without limitation

        those of agents  bailiffs and professional  advisers)  properly incurred

        by the Landlord in connection  with  or  incidental  to:

        3.55.1    any  application  by  the  Tenant or any person deriving title

                  under the Tenant in connection  with the  Premises or any term

                  of  this Lease whether It proceeds  or is  granted refused  or

                  granted  subject  to  conditions

        3.55.2    the preparation and service of a  notice under  Section 146 of

                  the Law of  Property Act 1925 or  any  steps  taken in  or  in

                  reasonable contemplation of proceedings  under Sections 146 or

                  147 of  that Act or otherwise requiring the Tenant  to  remedy

                  any  breach  of   the   Tenant's  obligations  in  this  Lease

                  (notwithstanding that  forfeiture is avoided otherwise than by

                  relief granted by the court  and  whether or not any  right of

                  forfeiture is waived by the Landlord or a  notice served under

                  the said Section 146 is complied  with by the Tenant)

        3.55.3    any steps taken in or towards preparing  or serving a schedule

                  of dilapidations  whether during or after the  end of the Term

                  and the negotiation and agreement of the amount payable by the

                  Tenant in respect of any items of disrepair  or other breaches

                  of covenant which it has not remedied at  the end of the  Term

        3.55.4    the recovery or attempted  recovery of arrears of the Rents or

                  other sums  due from the Tenant under this Lease or any  other

                  breach  by the Tenant of its  obligations  in  this  Lease

Indemnities
-----------

3.56    To indemnify the Landlord  against any act omission or negligence of any

        Visitor  and any breach of the Tenant's obligations in this Lease by any

        Visitor

Regulations
-----------

3.57    To  comply  with  any written regulations from  time to time made by the

        Landlord  relating  to the management security  occupation or use of the

        Building or  the  Communal  Garden

LANDLORD'S  COVENANTS
---------------------

4.      THE  Landlord  COVENANTS  with  the  Tenant  as  follows:
        ---            ---------

Quiet  enjoyment
----------------

4.1     That  the  Tenant shall peaceably hold and enjoy the Premises during the

        Term  without interruption or disturbance from or by the Landlord or any

        Person lawfully  claiming  under  or  in  trust  for  the  Landlord

Compliance  with  superior  lease
---------------------------------

4.2     To  pay  the  rent and other payments payable pursuant to or reserved by

        the  superior  lease dated 26 February  1999 made  between (1) Grosvenor

        (Belgravia) Estate and  (2)  the Landlord and (by way of indemnity only)

        to comply with the essee's  obligations  in  it  insofar as they are not

        the responsibility of the Tenant  under  this  Lease

Services
--------

4.3     (Subject  to payment by the Tenant of the Service Charge) throughout the

        Term  to  use  its  reasonable  endeavours to carry out  the Services in

        Accordance with  the  principles  of  good  estate  management  PROVIDED
                                                                        --------
        THAT:
        ----

        4.3.1     notwithstanding  any  implied  or  express     obligation  the

                  Landlord  shallnot  be  liable to the Tenant  for  any failure

                  or  interruption  in  any  of  the  Services  by reason of any

                  breakdown  maintenance or  repair works renewals or any  cause

                  beyond  its  control

        4.3.2     the Landlord may from  time to time add to vary or discontinue

                  the  Services  so  long  as  the  addition  variation  or

                  discontinuation  complies with the principles of  good  estate

                  management

Access  to  data  hub
---------------------

4.4     That  on  written  request from the Tenant the Landlord will at the sole

        cost of the  Tenant and  subject to the provisions of Clause 3.23 hereof

        carry out such works  as are  required to  connect  the  data hub in the

        Premises to the trunking from the data  hub and  main riser in the lower

        ground floor of the Building

INSURANCE  OBLIGATIONS
----------------------

5.     THE  Landlord  and  the  Tenant  AGREE  with  each  other  as  follows:
       ---                              -----

Landlord  to  effect  insurance
-------------------------------

        5.1       (Unless  the  insurance  is   vitiated  and  subject  to  such

                  reasonable  or usual  exclusions  qualifications and  excesses

                  as the insurers  require) the  Landlord shall insure and  keep

                  insured the Building(excluding tenant's fixtures)and any items

                  which the Tenant covenants to insure)against  risk of loss  or

                  damage by  the Insured Risks in the Full Cost of Reinstatement

                  and for Loss  of  Rent

Landlord  to  obtain  consents  for  rebuilding
-----------------------------------------------

5.2     If  the  Building  suffers  Insured  Damage  the  Landlord shall use its

        reasonable  endeavours to  obtain  all  planning  permissions  or  other

        permits and consents required under the Planning  Acts or other statutes

        (if any) ("the Permissions") to  enable it  to rebuild  the parts of the

        Building  which have suffered the  Insured Damage so as to make good the

        Insured Damage PROVIDED THAT:
                       -------------

        5.2.1     if  the  insurance against any Insured  Damage (or  any damage

                  or  destruction  which would be  Insured Damage but  for  such

                  vitiation) is vitiated the Landlord's  obligations  in Clauses

                  5.2 and  5.3 shall  not apply  in  relation to that  damage or

                  destruction  unless and until the Tenant has within six months

                  of  the  occurrence of  the damage or destruction paid to  the

                  Landlord  in full  any sums due under Clause 5.5.2 as a result

                  of  the  vitiation

        5.2.2     all  sums received in respect of  such insurance shall  belong

                  beneficially  solely  to  the  Landlord

Landlord  to  reinstate  (other  than  minor  damage)
-----------------------------------------------------

5.3     If  the  Building  suffers  Insured Damage the Landlord shall as soon as

        reasonably  practicable  ( or  where  required  as  soon  as  reasonably

        practicable after the Permissions have  been obtained) rebuild the parts

        of the Building which  have  suffered  the  Insured Damage so as to make

        good the Insured Damage  PROVIDED  THAT the Landlord shall not be liable
                                 --------------
        to rebuild under this sub-clause if and for so long  as such  rebuilding

        is  prevented  because:

        5.3.1     the   Landlord  has  failed  despite   using  its   reasonable

                  endeavours to obtain  all  the  Permissions

5.3.2     any  of  the  Permissions  is  granted  subject  to  a  lawful

                  condition which it is unreasonable to expect or impossible for

                  the Landlord to comply with

        5.3.3     some defect  or deficiency in the site  on which it is to take

                  place  makes  rebuilding  impossible  or  incapable  of  being

                  undertaken at a reasonable cost

        5.3.4     of war act of  God governmental action strike  lockout  or

        5.3.5     of any other circumstances beyond the control of the Landlord

Cesser  of  rent
----------------

5.4     If  the Building suffers Insured Damage so as to render the whole or any

        part of  the Premises  or the  means of  access thereto in  the Building

        unfit for occupation  or  use  and  the insurance  against such  Insured

        Damage has  not been  vitiated the whole or (according to the nature and

        extent of  the Insured Damage) a  fair  proportion of the Rents shall be

        immediately suspended either until the parts of  the Building which have

        suffered the Insured Damage have been rebuilt so  that the Premises  and

        the  means  of access  thereto in the Building are no longer  unfit  for

        occupation or use as a result of the Insured Damage or until the  end of

        three years (or if longer of the  period for which insurance for Loss of

        Rent against the Insured Damage has been effected under Clause 5.1) from

        The  Insured Damage whichever first occurs PROVIDED THAT if the Building
                                                   -------------
        (or  any  part  thereof)  has  not been  reinstated within  three  years

        following  the   Insured  Damage  so  that  the  Premises  are  fit  for

        occupation and use then either party may determine  this  Lease  (within

        six  months  from the expiry of such three year period) by giving to the

        other notice in writing whereupon this Lease shall cease  and  determine

        absolutely  but without prejudice to the rights of either party  against

        the  other  in  respect  of  any  antecedent  breach of covenant

Tenant's  insurance  obligations
--------------------------------

5.5     The  Tenant  shall:

        Notice  of  damage
        ------------------

        5.5.1     give notice  to the Landlord  immediately if the Premises  are

                  destroyed  or  damaged by  any of the  Insured Risks or if any

                  event occurs which might affect any  insurance policy relating

                  to  the  Premises

        Payment  after  vitiation
        -------------------------

        5.5.2     pay to the Landlord on demand the insurance monies (other than

                  for Loss  of Rent) which would have  been payable but for such

                  insurance being  vitiated if Landlord's Liability Insurance or

                  similar insurance for neighbouring property of the Landlord is

                  vitiated   or   if  the  Premises   or  the  Building  or  any

                  neighbouring property of the Landlord are damaged or destroyed

                  by any of  the Insured  Risks and  the insurance  against such

                  damage or destruction is  vitiated

        Tenant's  insurance  monies
        ---------------------------

        5.5.3     apply all  monies to which the Tenant is entitled by virtue of

                  any  insurance  of the  Premises  in making  good the  loss or

                  damage in respect of which they  are  payable

        No  dangerous  substances
        -------------------------

        5.5.4     not  without the  consent of the  Landlord bring  or do on the

                  Premises  or  the Building anything of a dangerous combustible

                  inflammable or explosive nature

        Not  to  vitiate
        ----------------

        5.5.5     not do or omit to do on the Premises or the Building  anything

                  which  may  result in  an increase  in  the  premium  for  the

                  insurance of the Premises or the Building or any  neighbouring

                  property of the Landlord (unless the Tenant (with the approval

                  of the Landlord such approval not to be unreasonably withheld)

                  has  paid such  increased premium) or which  may  vitiate  any

                  insurance of the Premises the  Building  or  any  neighbouring

                  property of  the Landlord

        Insurer's  requirements
        -----------------------

        5.5.6     comply with the requirements  and recommendations from time to

                  time  of  the  insurers  of  the  Premises  and  the  Building

        Tenant's  third  party  liabilities
        -----------------------------------

        5.5.7     insure and  keep insured   the Premises against  the  Tenant's

                  third  party public  and occupiers'  liability risks in  a sum

                  reasonably to be approved by the Landlord such approval not to

                  be  unreasonably  withheld  or  delayed

PROVISOS
--------

6.     IT  IS  FURTHER  AGREED  as  follows:
       -----------------------

        Forfeiture
        ----------

        6.1       Whenever:

                  6.1.1     the Rents are in whole or part  unpaid fourteen days

                            after becoming  payable whether formally demanded or

                            not

                  6.1.2     there is a breach of any of the Tenant's obligations

                            in this Lease

                  6.1.3     the  Tenant (which  expression  includes  in Clauses

                            6.1.3  to 6.1.7  any person  in whom  this  Lease is

                            then vested)  becomes bankrupt  or is the subject of

                            an  interim  order under  the  Insolvency  Act  1986

                  6.1.4     the   Tenant  goes  into  voluntary   or  compulsory

                            liquidation (except solely for the purpose of a bona

                            fide  solvent amalgamation  or reconstruction) or is

                            the  subject of a winding-up order or a petition for

                            an  administration order  or is  otherwise dissolved

                            wound up or ceases to  exist

                  6.1.5     a   receiver  or   a  receiver  and  manager  or  an

                            administrative  receiver is appointed in respect  of

                            the whole or any part of the Tenant's undertaking or

                            assets

                  6.1.6    the Tenant enters into any arrangement or composition

                           for  the  benefit  of  or  with  its  creditors  or

                  6.1.7     the Tenant has any distress  or  execution levied on

                            its goods from the Premises

          Then the Landlord may re-enter the Premises or any part of them in the
          ----
          name of the  whole and the Term will determine  absolutely but without

          prejudice to the rights of the Landlord in respect of any prior breach

          of the Tenant's obligations in  this  Lease  or any  surety  for  them

No  implied  rights
-------------------

6.2     Save  for  the  rights expressly set out in Schedule 2 the Tenant is not

        and  shall  not  be  entitled by implication of  law or otherwise to any

        right or privilege  over  or  against  the  remainder of the Building or

        any neighbouring property which belongs to the  Landlord  now or in  the

        future

No  restrictions  on  adjoining  property
-----------------------------------------

6.3     Nothing  contained or implied in this Lease shall impose or be deemed to

        impose any restriction on  the  use of any  land or building (other than

        the Premises)  or  give  the  Tenant  the  benefit  of  or  prevent  the

        release or modification  of any obligation entered into by any purchaser

        lessee or occupier of  any  neighbouring  property

Exclusion  of  liability
------------------------

6.4     Except  insofar as liability may be covered by insurance effected by the

        Landlord  in  force  when  the  liability is incurred the Landlord shall

        not  be  responsible  to  the  Tenant  or  anyone at the Premises or the

        Building for any accident  happening  or  injury  suffered  or  for  any

        Damage  to or  loss of any  chattel  sustained  in the  Premises or  the

        Building whether caused by negligence or  otherwise

Compensation
------------

6.5     Save  to the extent prohibited by any rule of law neither the Tenant nor

        any  undertenant  shall be  entitled  on  quitting the whole or any part

        of the Premises  to  claim any  compensation from the Landlord under the

        1954 Act or any other  present  or  future  statute and the Tenant shall

        indemnify the Landlord against  any  claim  for  such  compensation

Service  of  notices
--------------------

6.6     Any  notice  served  under  this  Lease:

        6.6.1     shall  be  in  writing

        6.6.2     may  be  addressed to "the  Landlord" or "the  Tenant" by that

                  designation without naming the person who is the  Landlord  or

                  the  Tenant

        6.6.3     shall be validly served if left at the addressee's  last known

                  place of abode  or business  in the  United  Kingdom

        6.6.4     shall (in the case of the Tenant)be validly served if attached

                  to or left  at  the  Premises  and

        6.6.5     shall be validly served on the third day (excluding  Saturdays

                  Sundays and statutory bank holidays) after  being posted if it

                  Is  posted to  the addressee's  last known  place  of abode or

                  business in the United  Kingdom in  a registered  letter or by

                  recorded  delivery  service unless  returned through the  post

                  office  undelivered

Alterations  to  the  Communal  Garden
--------------------------------------

6.7     The  Landlord  may  for  any reason and during such time as the Landlord

        thinks  fit change the layout planning or extent available to the Tenant

        of the Communal  Garden  and or restrict access to or close the whole or

        any part of it

Representations
---------------

6.8     The  Tenant  acknowledges  that  it  has  not entered into this Lease in

        reliance wholly or partly on  any written oral or implied representation

        by or on behalf of  the  Landlord  other than the Landlord's solicitor's

        replies to the Tenant's  solicitor's  written  enquiries or contained in

        correspondence from the Landlord's  solicitors

6.9     Clause  6.8  only  excludes  or  restricts  any  liability or remedy for

        misrepresentation to the extent that (notwithstanding the  exclusion  or

        restriction) it  would be  a fair and reasonable term to include in this

        Lease having regard to the circumstances which at the date of this Lease

        were or ought reasonably  to  have been known to or in the contemplation

        of the parties hereto

Disputes
--------

6.10    All  cases  of  dispute  between  the  Tenant or any  undertenant of the

        Premises and the occupiers of any  neighbouring  property or the tenants

        Or occupiers  of  any  other  part  of  the  Building in connection with

        the use or occupation of the Premises shall be submitted to the decision

        of a  surveyor  appointed  by  the  Landlord  acting  as expert  and not

        arbitrator whose decision shall  be final and binding on matters of fact

        on all the parties to the dispute

Exclusion  of  third  party  rights
-----------------------------------

6.11    It  is  not  intended  that  any term of  this Lease is enforceable by a

        third  party under Section 1 of the  Contracts (Rights of Third Parties)

        Act 1999

Sums  due  to  Landlord  treated  as  rent
------------------------------------------

6.12    Any  sum  due from the Tenant to the  Landlord under this Lease shall be

        additional  rent  hereby  reserved  and  paid by the  Tenant (save where

        otherwise  provided)  on demand  and shall be  recoverable  by action or

        distress and the word "Rents"  shall  be  construed  accordingly

Stamp  duty  certificate
------------------------

6.13    It  is  hereby  certified that there is no  agreement for lease to which

        this  Lease  gives  effect

Governing  law  and  jurisdiction
---------------------------------

6.14.1  This  Lease shall  be governed by  and construed  in accordance with the

        laws  of  England  and  Wales

6.14.2  The  parties  hereto  (which  expression in  this Clause  includes their

        respective  successors  in  title  and in  the case of an individual his

        personal representatives) hereby confer jurisdiction  on  the High Court

        of Justice of England  and  Wales  (hereinafter called "the High Court")

        to settle all disputes which  may arise in relation to this Lease or the

        Premises(other than any which under the terms hereof are to be submitted

        For  determination  to arbitration or  to an independent expert or other

        person but including where possible any appeal  from  the  determination

        of  any  dispute  so  submitted)

6.14.3  The  Tenant  hereby agrees that  service of  notices and other documents

        (including  originating process) relating to this or the Premises may be

        validly effected  at  63 Queen Victoria  Street  London EC4N 4ST or such

        other address in  England and  Wales as it from time to time notifies in

        writing to the other party hereto

RENT  REVIEW
------------

7.      THE  Basic  Rent for  the  time  being payable under this Lease shall be
        ---
        reviewed  as  follows:

        Frequency  of  review
        ---------------------

        7.1       For the purposes of  this Clause "the  Review Date" means  the

                  day after the date of expiry of the fifth year of the Term

        Upwards  only  reviews
        ----------------------

        7.2       From and  including each Review  Date the Basic Rent  shall be

                  whichever  is the  greater of the  amount  of  the  Basic Rent

                  payable during the  twelve months immediately  preceding  that

                  Review Date(ignoring for this purpose but without prejudice to

                  any  suspension  under Clause 5) and  the open market rent for

                  the Premises at that Review  Date

        Basis  of  valuation
        --------------------

        7.3       (Subject to Clause 7.4) the open market  rent for the Premises

                  at each Review Date shall be the amount agreed by the Landlord

                  and  the  Tenant  (or  if  they  fail  to agree determined  in

                  accordance with Clause 7.5) to be the rent  per year at  which

                  the Premises  might reasonably  be expected to  be let in  the

                  open market on that Review Date:

                  7.3.1     as a whole

                  7.3.2     by a willing lessor to a willing lessee

                  7.3.3     with vacant possession

                  7.3.4     without taking  any  fine  or  premium

                  7.3.5     for a term of ten years starting on that Review Date

                  7.3.6     on  the terms  of this Lease  including  this Clause

                            other  than  as to the amount  of the Basic Rent and

                            the  rent-free  period  (if any)  applicable  at the

                            start  of  the  Term

                  ON  THE  ASSUMPTIONS  that  at  that  Review  Date:
                  --------------------

                  7.3.7     the  Landlord  (save  for  material  breach) and the

                            Tenant have fully complied with their obligations in

                            this  Lease

                  7.3.8    the Premises and the Building and all other necessary

                           services and facilities  are in good  and  ubstantial

                           repair  and  condition  and  fit  and  available  for

                           immediate beneficial occupation and use

                  7.3.9    no work has been carried out and nothing has occurred

                           on  or  directly  relating  to the Premises which has

                           diminished the rental value of the Premises

                  7.3.10   if the Premises or the Building have been damaged  or

                           destroyed they have  been fully rebuilt

                  7.3.11   the  Premises  may  be lawfully used for  any of  the

                          purposes permitted by this Lease as varied or extended

                           by  any licence  pursuant to this  Lease

                  BUT  DISREGARDING:
                  -----------------

                  7.3.12   the  fact that the  Tenant any  undertenants or their

                           respective predecessors in title shall have  been  in

                           occupation  of  the  Premises

                  7.3.13   any goodwill that shall  have become attached to  the

                           Premises from the carrying on of the  business of the

                           Tenant  or  any  undertenants  or  their  respective

                           predecessors in such  business

                  7.3.14   any  effect  on rent  of the Premises attributable to

                           the existence  at such Review Date of any improvement

                           to the  Premises lawfully  carried  out by the Tenant

                           any undertenants or their  respective predecessors in

                           title  with  the  consent  of  the  Landlord  ( where

                           necessary)  under the  terms of this  Lease otherwise

                           than in  pursuance of any  obligation to the Landlord

                           and/or their immediate  landlord

                  7.3.15   the  fact that  the  Premises or the Building or  any

                           necessary facilities  or services shall be  defective

                           in  any  way

Treatment  of  rent  free  periods
----------------------------------

7.4     The  open  market  rent  for  the  Premises shall be ascertained without

        making any discount reduction or allowance to reflect (or compensate the

        Tenant or the hypothetical tenant  for the  absence  of)  any  rent-free

        period or concessionary rent period during which fitting-out works would

        be  carried out which  it  might  then  be  the  practice in open market

        lettings for a landlord to  make  so that the open  market  rent for the

        Premises shall be that which would be payable  after the expiry  of  any

        such rent-free or concessionary rent period

Method  of  determination
-------------------------

7.5     If  the  Landlord  and the Tenant fail to agree the open market rent for

        the Premises  by a  date  three months  before  any  Review  Date  then:

        7.5.1   the  determination  of  the  open  market rent  for the Premises

                at  that  Review  Date  may  be  referred  to  an  independent

                chartered  surveyor  ("the  Surveyor")  with  experience  in the

                letting of office premises in Central London

        7.5.2   the Surveyor shall  be appointed by  the Landlord and the Tenant

                jointly  and (if  they fail  to agree) shall be nominated at the

                request of the Landlord or the  Tenant  by or on  behalf of  the

                President  (or  Senior  Officer) ("the President") for  the time

                being of The Royal Institution of Chartered Surveyors

        7.5.3   if  the  Surveyor  dies delays  or becomes  unwilling  unfit  or

                incapable of acting or  if for  any  other reason the  President

                thinks  fit he may on the  application  of the  Landlord  or the

                Tenant by writing discharge the  Surveyor and appoint another in

                his  place

        7.5.4   the costs and  expenses  of the Surveyor (including the costs of

                his appointment) shall be borne as he shall direct or in default

                of direction by the Tenant

        7.5.5   the Surveyor shall act as an arbitrator or (at the option of the

                Landlord)  independent  expert

        7.5.6   if the Surveyor is an arbitrator (subject  to  Clause 7.5.3) the

                arbitration  shall  be  conducted  in  accordance  with  the

                Arbitration Act 1996

        7.5.7   if the Surveyor is an independent  expert:

                7.5.7.1    his decision  shall be  final and  binding and

                7.5.7.2    he  shall  afford  the  Landlord  and  the  Tenant an

                           opportunity to make representations  to  him  and  to

                           comment to him on the other's representations

Interim  arrangements
---------------------

7.6     If  the  open  market rent for the Premises payable from any Review Date

        has  not been  ascertained  in  accordance with  this Clause before that

        Review Date then:

        7.6.1     the  Tenant  shall until the first quarter day after  the date

                  on which it  is ascertained continue to pay the Basic  Rent at

                  the rate applicable but for the review due at that Review Date

        7.6.2     within seven days  after the date on which  it  is ascertained

                  the Tenant shall pay to the Landlord as additional Basic Rent:

                  7.6.2.1   the   amount  (if any) of  the   shortfall   between

                            (a) the amount of the Basic  Rent so payable  by the

                            Tenant down to  such  quarter day and (b) the amount

                            Which  would  have  been  payable  if  it  had  been

                            Ascertained  before  that  Review  Date and

                  7.6.2.2   interest  at 4% below the  Prescribed  Rate  on each

                            further payment of Basic  Rent which would have been

                            payable  if  it had  been  ascertained  before  that

                            Review  Date for the period  from  when such payment

                            would have been payable until due for payment  under

                            this  sub-clause

Time  not  of  the  essence
---------------------------

7.7     In respect of the time limits mentioned in this Clause time shall not be

        or  be  deemed  to  be  of  the  essence

Statutory  restrictions
-----------------------

7.8     If  at  any  Review Date there is in force a statute or other instrument

        which prevents restricts or modifies the Landlord's rights to review the

        Basic Rent in  accordance with this Lease and/or to recover any increase

        in the Basic  Rent  then (if such prevention restriction or modification

        is  removed relaxed or modified  but  without  prejudice to  its  rights

        (if any) to recover any Basic Rent the  payment  of which has only  been

        deferred by law) the Landlord may by giving not less  ,than one  month's

        nor more than three months' notice in writing to the Tenant  at any time

        within six months of it being removed relaxed or modified  proceed  with

        any review of the  Basic Rent which was prevented or further review  the

        Basic  Rent  in  respect of any  review where  the  Landlord's right was

        restricted  or modified and the date of expiry of  such notice  shall be

        deemed to be  a  Review  Date  (provided that nothing in this sub-clause

        shall vary any subsequent  Review  Dates)  and  to recover  any increase

        in Basic Rent thereby resulting  with  effect  from  the  earliest  date

        permitted  by  law

Memoranda
---------

7.9     Whenever the Basic Rent has been agreed or determined in accordance with

        this  Clause  memoranda of it  shall be signed  by  or on behalf  of the

        Landlord and the Tenant and attached to this Lease and  its  counterpart

IN  WITNESS  whereof this Lease has been duly executed by the parties hereto and
-----------

is  delivered  as  a  Deed  the  day  and  year  first  before  written

                                   SCHEDULE 1
                                   ----------

                          (Particulars of the Premises)

The  Premises  are  shown  for identification purposes only coloured pink on the

attached plan and exclude all structural and external parts and any Conduits and

Plant  within  the  Premises  which  do  not  exclusively serve the Premises and

subject  thereto  include:

1.      All  additions  and  alterations  to  the  Premises

2.      All  fixtures  from  time  to  time  annexed  to  the  Premises

3.      Any interior screeding plaster work wall and ceiling finishes (including

        any false ceilings and the airspace above the false ceilings) and all

        ornamental or  architectural  features

4.      All  non-structural  walls  and partitioning and where such walls and or

        partitioning  abut  any other part of the Building which is suitable for

        letting  by  the  Landlord for  independent occupation one half (severed

        vertically) of each of  such  walls  or  partitioning

5.      The boards and screeds of floors and any floor coverings in the Premises

        now or in the future  provided  by  or  at  the  cost  of  the  Landlord

6.      The glass and  inside  surfaces  of the windows window frames  doors and

        door frames  in  the  walls  enclosing  or  within  the  Premises

7.      All  Conduits where not part of Plant within and exclusively serving the

        Premises

8.      All  Plant  within  and  exclusively  serving  the  Premises

                                   SCHEDULE 2
                                   ----------

                                (Rights granted)

Conduits
--------

1.      (So  far  as  the  Landlord  can  grant  them  and  subject to temporary

        interruption for repair  alteration or replacement) the passage of water

        soil gas electricity  and  other  services  to  and from the Premises in

        and through the Conduits  which  now  serve  the  Premises and are in or

        over other parts of the Building

Common  Parts
-------------

2.      (Subject  to any regulations from time to time made by the Landlord) the

        right of access  to  and egress from the Premises on foot throughout the

        Common Parts

Communal  Garden
----------------

3.      To  use  the Communal Garden for walking and for escape from the rear of

        the  Building

Support
-------

4.      Support  shelter and protection for the Premises from other parts of the

        Building

Toilets
-------

5.     The  right  to  use  the  toilet  facilities  in  the  Building

                                   SCHEDULE 3
                                   ----------

                          (Exceptions and reservations)

Conduits
--------

1.      The passage of water soil gas electricity and other services to and from

        all  neighbouring  property whether belonging to the  Landlord or not in

        and through  the  Conduits  which are  now  or hereafter in  or over the

        Premises

Easements
---------

2.      All  other  easements  or  other  rights  in the  nature of easements or

        quasi-easements   now  enjoyed  by  any  neighbouring  property  of  the

        Landlord over the  Premises

Support
-------

3.      Support shelter and protection from the Premises for adjoining buildings

        or  structures  now  or  hereafter erected  against or over the Premises

Emergency  access
-----------------

4.      In case of emergency to pass through the Premises in accordance with the

        requirements  of  any  competent  authority

Entry
-----

5.      To  enter  the  Premises  for  the  purposes  mentioned  in  this  Lease

To  build
---------

6.      To  build  or rebuild or alter any buildings on any neighbouring land in

        any  manner  whatsoever  notwithstanding that  as a  result  there is  a

        diminution in the   present  or future  access  of light  or  air to the

        Premises which it is hereby  agreed  is  and  shall  be enjoyed with the

        consent of the Landlord or other the owner or occupier of such land  and

        not  as  of  right

                                   SCHEDULE 4
                                   ----------

                              (The Service Charge)

                                     PART I
                                     ------

                                  (Definitions)

In  this  Schedule the following expressions have the meanings set against them:

"Account Day"    the  31st day  of December  in each year of the Term  (or  such

                 other day as the Landlord  from  time to  time  determines)

"Accounting      the  periods:
    Period"

                 (1)  from and including the  start of the Term (or  if  earlier

                 the date when the  Tenant  first  had  or  was entitled to have

                 access to the Premises) to and including  the first Account Day

                 (2)  from  and including the day after  each Account Day in the

                 Term (except the last one) until and including the next Account

                 Day

                 (3)  from  but excluding the  last Account Day in  the  Term to

                 the end of the Term

"the Service     the sums from time to time  calculated in  accordance  with and

Charge"          payable by the Tenant as set  out in  Part  II of this Schedule

"the Service     the aggregate of the total cost incurred by the Landlord in  or

 Charge          incidental to   providing  the   Services  and of   the   total

Expenditure"     expenses  incurred  by  the  Landlord  of  the  kind set out in

                 Part IV of this  Schedule  as  calculated  in  Part  II of this

                 Schedule

                                     PART II
                                     -------

                            (Calculation and payment)

Proportion
----------

1.      The Service Charge shall in relation to any Accounting Period during the

        Term  be  37%   of the  Service  Charge  Expenditure  incurred  in  such

        Accounting Period

Annual  Estimate
----------------

2.      Save in respect of the first Accounting Period the Landlord shall before

        or  as  soon as practicable after each Account Day prepare a certificate

        estimating  the  Service  Charge  Expenditure  for the Accounting Period

        starting  on the  day  after  that  Account  Day  and  stating  the  sum

        which  shall be the provisional  Service  Charge payable  by  the Tenant

        for that Accounting Period

Payment  on  account
--------------------

3.      The  Tenant shall  pay the provisional Service Charge sum ascertained in

        accordance  with  paragraph 2 above  by  equal quarterly payments on the

        usual quarter  days  in  that  Accounting  Period

Payment  in  first  year
------------------------

4.      The Tenant shall pay on the date of this Lease (or if later within seven

        days  of  demand)  and  on  each of the  following  Quarter  Days in the

        first Accounting  Period  such sum as  the  Landlord  specifies  and the

        aggregate of such sums  shall  be  the  provisional Service  Charge  for

        that  Accounting Period

Payment  if  no  estimate
-------------------------

5.      If the Tenant has not been given notice  of the Landlord's  estimate  of

        the provisional  Service   Charge  for an Accounting Period  the  Tenant

        shall on  the relevant  Quarter  Days  pay  an amount equal  to the last

        quarterly payment of Service  Charge  in the preceding Accounting Period

        and any requisite  adjustment shall  be  made  to  the  first  quarterly

        payment due after such notice is given

Additional  payments  on  account
---------------------------------

6.      If  during  an  Accounting  Period  the Landlord  incurs  Service Charge

        Expenditure which was  not  anticipated in  the  estimate provided under

        paragraph 2 above  for that  Accounting  Period or the payment due under

        paragraph 4 above for the  first Accounting Period then the Landlord may

        require  the  Tenant to  repay the  percentage   of  it referred  to  in

        paragraph 1 above  within  fourteen days  of  written  demand  and  such

        Service  Charge Expenditure so demanded  shall not be  included  in  the

        Statement  or  payments  for  that  Accounting  Period  referred  to  in

        paragraphs  7  and  8  below

Final  statement
----------------

7.      As  soon as  practicable after each Accounting Period the Landlord shall

        furnish  the  Tenant  with  a statement  (which  save for the correction

        of any manifest  error  in  it  shall  be  conclusive and binding on the

        Tenant) of the Service  Charge  Expenditure incurred  in and the Service

        Charge payable by the Tenant  for  that  Accounting  Period

Balancing  payment
------------------

8.      If  the Service Charge for any Accounting Period exceeds the provisional

        Service  Charge  payable  under  paragraph  3  or paragraph  4  for that

        Accounting Period the  excess  shall be due to the Landlord on demand or

        if it is less the overpayment  shall  be credited to the  Tenant against

        the next quarterly  payment of  the  Service  Charge  (or  if  necessary

        subsequent  payments)

No  dispute
-----------

9.      Without  prejudice  to  the  preceding provisions  of  this Part of this

        Schedule the  Tenant  shall not  question any item   of  Service  Charge

        Expenditure  on  the ground that it need   not have  been  incurred in a

        Particular   Accounting  Period  or   could  have   been  provided  more

        economically or on grounds relating to the length  of the residue of the

        Term for the time being if provided at proper cost

Inspection  of  vouchers
------------------------

10.     The  Tenant  may   once in each  Accounting  Period at its  own  expense

        inspect the  vouchers  supporting the statement referred to in paragraph

        7 above at such reasonable  time  and  place  as the Landlord  specifies

Position  after  end  of  Term
------------------------------

11.     The  provisions of this Schedule shall continue to apply notwithstanding

        the  end  of  the  Term but only in respect of the period before its end

        and  any  overpayment  made by   the  Tenant  in relation  to  the  last

        Accounting  Period and any sums remaining in any sinking fund or reserve

        fund shall be repaid to  the  Tenant  within  twenty-one   days  of  the

        Landlord sending a certificate of the Service Charge and  Service Charge

        Expenditure  for  the  final  Accounting  Period

Variations  to  Service  Charge
-------------------------------

12.     If at any time during the Term the total property enjoying or capable or

        enjoying the benefit of  any  of  the Services is increased or decreased

        on a permanent  basis or the  benefit of any of the Services is extended

        on  a  like  basis  to  any  neighbouring  property  the  Service Charge

        shall be varied with effect  from  the  Account Day following such event

        in such a manner as the Landlord determines  is  fair  and reasonable in

        the light of the event in question except  that  nothing  contained   in

        this Lease shall imply  an obligation  on the Landlord  to  provide  the

        Services  to  any  neighbouring  property

Treatment  of  payments  due  on  Quarter  Days
-----------------------------------------------

13.     If any Accounting Period ends on the last day of March June September or

        December  and  if the Landlord so requires the payment on account of the

        Service Charge  due on the preceding Quarter Day shall be deemed instead

        paid on account of  the  Service  Charge  for  the following  Accounting

        Period  and  shall be calculated  by  the  Landlord by reference to  its

        Estimate  of  the   Service   Charge   Expenditure  for  such  following

        Accounting  Period

Alternative  method
-------------------

14.     The  Landlord  may  elect  that  for  so  long  as  it  elects the above

        provisions   shall  not  apply  in  relation  to  any  particular  costs

        mentioned in paragraph  10  of  Part IV of Schedule 4 and in relation to

        the costs  subject  to the  election the  Tenant  shall pay  them to the

        Landlord within 14 days of written demand

                                    PART III
                                    --------

                                   (Services)

Repair
------

1.      Maintaining repairing renewing (for the purpose of repairing) rebuilding

        (for  the purposes of repair only)  decorating  cleansing  and  treating

        appropriately  the Common Parts and the foundations roofs external walls

        and other  structural  and  external parts of the Building including the

        repair and external  decoration of  the frames  of the  exterior windows

        (but not the glass in them)

Exterior
--------

2.      Landscaping  and  lighting  the  external  Common  Parts

Internal  heat  light  and  water
---------------------------------

3.      Heating  lighting and furnishing the internal Common Parts and providing
        an  adequate  supply  of  hot  water  and  cold  water  thereto

Plant
-----

4.      Maintaining  repairing renewing  and replacing all Plant in the Building

        other  than that for which the Tenant or any other tenant is responsible

        and insuring  it  (save  insofar  as   insured  by  the  Tenant  or  any

        other tenant)

Conduits
--------

5.      Maintaining  repairing  renewing and replacing all services Conduits and

        appliances   that  serve  the Building other than those belonging to the

        relevant supply authorities or  for which the Tenant or any other tenant

        is responsible

Common  structures
------------------

6.      Maintaining  repairing renewing cleansing and lighting all ways services

        or   structures  used  in  common  with  any  adjoining  or neighbouring

        premises

Security
--------

7.      Providing  such  security measures  as  the  Landlord  from time to time

        reasonably  deems  to  be  expedient  or  necessary

Refuse
------

8.     Providing  facilities  for  the  disposal  of  refuse  from  the Building

                                     PART IV
                                     -------

                                   (Expenses)

Fees
----

1.      The  fees  and  disbursements  of:

        1.1   any  managing agents accountants  engineers  surveyors  solicitors

              architects  or  other   advisers   employed or   retained  by  the

              Landlord for (or in connection with) any of the provisions of this

              Schedule and the provision of the Services  (which  expression  in

              this Part of this Schedule includes any other services and matters

              referred  to  in  such  Part)

        1.2   any  person  providing caretaking  or  security  arrangements  and

              services for  the  Building

        1.3   the  Landlord on a fair and reasonable basis if the management and

              supervision  of  the  Building  is  carried  out  by the  Landlord

Staff
-----

2.      The  cost  of  employing  such  staff  as  the Landlord  in its absolute

        discretion from time to time deems necessary for the performance  of the

        Services  and  all  other  incidental  expenditure in  relation  to such

        employment including but  without  limiting  the  foregoing:

        2.1   insurance  pension  and  welfare  contribution

        2.2   transport  facilities  and  benefits  in  kind

        2.3   the  provision  of  uniforms  and  working  clothing

        2.4   the  provision of vehicles  tools  appliances cleaning  and  other

              materials fixtures and other equipment for the proper  performance

              of  their duties

        2.5   the  provision  (including  related  Outgoings)  of   office   and

              other accommodation  in  the  Building

Outgoings
---------

3.      All Outgoings which relate to the Common  Parts  or  the Building  as  a

        whole on   its own or  with other   property but not any  parts  of  the

        Building which are or are  intended  to  be  let save for any such parts

        occupied as office and other accommodation  connected  to the  provision

        of  the  Services

Electricity  gas  etc
---------------------

4.      The  cost of  the supply of electricity gas oil or other fuels telephone

        and  public or statutory utilities in respect of the provision of any of

        the  Services and in respect of the Common Parts and the cost of running

        all   Plant other  than that for which the Tenant or any other tenant is

        responsible and the cost  of water supplied to the Building for which no

        tenant is responsible and the  cost  of  supplying  toilet requisites to

        the lavatory accommodation in the Building

Statutory  requirements
-----------------------

5.      The  cost  of  taking  all  steps  from  time  to time reasonably deemed

        desirable   or    expedient by the  Landlord  and for the benefit of all

        occupiers of the  Building for complying   with or in connection with or

        making representations against  or otherwise contesting the incidence of

        the provisions of any statutes concerning  town  planning public  health

        highways streets drainage safety fire precautions  fire  regulations  or

        other matters relating to or alleged to   relate to  the   Building  for

        which  any tenant is not directly and exclusively liable

Nuisance
--------

6.      The cost of   the Landlord    of   abating a nuisance in  respect of the

        Building insofar  as  not  the  liability  of  any  individual  tenant

Leasing
-------

7.      The  costs  of  leasing any item for the purpose of providing any of the

        Services

Interest
--------

8.      Any interest  and  fees  in respect of money borrowed by the Landlord to

        finance  the  obligations  of  the Landlord  to provide the Services and

        if the Landlord provides  monies  out  of  his  own  resources  interest

        on the monies provided  at a rate  equal  to  2%  per  annum  below  the

        Prescribed  Rate

Financial  reserves
-------------------

9.      Such  provision  (if  any)  as the Landlord from time to time determines

        necessary  for  a  sinking  fund and reserve fund with a view to meeting

        future costs

Common  items  and  Garden  Charge
----------------------------------

10.      A fair  proportion  (to  be  determined by the Landlord) of the cost of

         maintaining   keeping  in   good  order   repairing  renewing  lighting

         cleansing and resurfacing  as  appropriate:

         10.1   all  party walls boundary structures Conduits  and  other things

               (whether or  not  of a similar nature) the use of which is common

               to the Building and any other  property  and

         10.2   the  Communal  Garden  and  the  iron  railings or  other fences

               gates enclosing  it   (including  the  plinths  to which they are

               fixed) and the walks lawns and  shrubberies thereof and any other

               embellishments now or hereafter belonging thereto

Other  services
---------------

11.     (Without  limiting  or  being limited by reference to the foregoing) the

        cost  of  any  other service insurance or matter which the Landlord from

        time to time  thinks  expedient  or  necessary  for the  benefit  of the

        tenants of the Building

                                   SCHEDULE 5
                                   ----------

                             (Alienation conditions)

                                     PART I
                                     ------

                        (Requirements for an assignment)

Application
-----------

1.      This Part applies for the purposes of Section 19(1A) of the Landlord and

        Tenant  Act  1927

Authorised  guarantee  agreement
--------------------------------

2.      Before  any  assignment  of  the  Premises the  assignor  shall  give an

        authorised  guarantee  agreement  in  accordance with  the  Landlord and

        Tenant (Covenants)  Act  1995 to the Landlord of the  performance by the

        assignee of the Tenant's  obligations  in  this  Lease  in  such form as

        the Landlord reasonably requires but in any event  containing provisions

        preventing the guarantee from being  vitiated  by:

        2.1   any  neglect  or  forbearance  of  the  Landlord

        2.2   any  time  or  indulgence  given  by  the  Landlord

        2.3   any  variation of this Lease or the variation of or entry into any
              other contract  by  the  Landlord  and  the  Tenant  and

        2.4   the  release  of  any  security  or  guarantee held in relation to

              such obligations

Guarantor  of  assignor  to  join  in  guarantee
------------------------------------------------

3.      If  the  Landlord  reasonably  so requires the Tenant shall procure that

        before   any  assignment  of  the  Premises  any  person who  is then  a

        guarantor of the Tenant's  obligations  in  this  Lease  (other  than  a

        person  who  shall have previously   been  the Tenant and its guarantor)

        gives a guarantee of the  guarantee given in relation to that assignment

        pursuant to paragraph 2 in such form as the Landlord reasonably requires

        but in any event containing provisions equivalent to  those specified in

        paragraph  2

Disregard  of  guarantees
-------------------------

4.      In  deciding  whether  to approve a proposed assignment the Landlord may

        disregard:

        4.1    its rights  under  paragraphs 2 and 3 above and Section 16 of the

               Landlord and  Tenant  (Covenants)  Act  1995  and

        4.2    the fact that the assignor and/or  its  guarantor  would or might

               give a guarantee of the assignee's obligations  to  the  Landlord

No  intra-group  assignments
----------------------------

5.      The Premises  shall  not  be assigned to a person who at the date of the

        assignment   is a  member of  the  same group  as the  assignor  or  any

        guarantor   of the   assignor's  obligations  in  this  Lease within the

        meaning of Section 42 of the 1954  Act  unless following such assignment

        in the Landlord's reasonable opinion (and  on  the  assumption  that the

        Landlord wished to sell its interest in the Premises the day after  such

        assignment) the value of the Landlord's   reversionary interest  in  the

        Premises  would not be reduced as a result of such assignment

No  arrears
-----------

6.      The Tenant shall not assign the Premises unless it has paid all    Rents

        and other  sums  which  have  fallen  due  under  this  Lease before the

        date of the assignment

                                     PART II
                                     -------

                             (General requirements)

Prior  approval  to  permitted  dealings
----------------------------------------

1.      (Subject  to  the other provisions of this Schedule and Clause 3.21) the

        Tenant shall not without the approval of the Landlord (such approval not

        to be unreasonably  withheld  or delayed)  assign charge or underlet the

        whole of the Premises

Group  sharing
--------------

2.      (Notwithstanding  the  foregoing  or  any  covenant entered  into  by an

        undertenant  pursuant  to  this  Lease)  the Tenant or any   undertenant

        may share occupation  of  the  whole  or  any  part of the Premises with

        a person who is a member  of  the  same    group as the   Tenant or  the

        undertenant as the case may be (within  the  meaning  of  Section  42 of

        the 1954 Act) for so long as both the   Tenant or  undertenant   and the

        other person remain members of that group subject to:

        2.1   no landlord and tenant  relationship   or other   interest in  the

              Premises at law  or  in  equity  being  thereby  created  and

        2.2   the Tenant notifying the   Landlord immediately of the identity of

              the other  person

Underlettings  of  part
-----------------------

3.      (Notwithstanding  references in this Part and Clause 3.22 to underleases

        of part of the Premises) there shall be no underletting of any  part (as

        distinct from  the  whole)  of the  Premises other than a Permitted Part

        together with     and excepting   and   reserving  such  rights  as  are

        reasonably  necessary  in  the circumstances  and the Premises shall not

        be occupied in more than two units of occupation  (of which (for so long

        as there is such an underletting) one unit of occupation  shall  at  all

        times  be  in  the  name  of  the  Tenant)

No  premiums  for  underleases
------------------------------

4.      No underlease shall be granted at a fine  or premium nor  other  than at

        the then full open market rent  for  the premises  underlet such rent to

        be  payable  and to  be  subject  to review on the same  days and in the

        same manner as under this Lease

Undertenants'  direct  covenants
--------------------------------

5.      Before  the  grant  or  assignment  of any underlease the undertenant or

        assignee  shall  covenant  with  the  Landlord:

        5.1   to  comply  with  the  Tenant's  obligations  in  this Lease (save

              as to payment  of rent) until the underlease     is assigned by an

              assignment which is not an excluded  assignment (in the case of an

              underletting of part of the Premises insofar  only  as they relate

              to  the  premises  thereby  demised)  and

        5.2   not  to  assign  charge  underlet hold on trust    for  another or

              otherwise part  with  or  share  possession or occupation of    or

              suffer any other person to occupy  the    whole or any part of the

              premises underlet save with   the approval of the  Landlord  (such

              approval not to be unreasonably withheld or delayed) by way of  an

              assignment  of  the whole thereof complying with the provisions of

              this Schedule  mutatis  mutandis  to  a  person  who  has  entered

              into the covenants required  by  this  paragraph  5

Terms  of  underleases
----------------------

6.      Any underlease of the Premises shall be granted on the same     terms as

        this Lease  (including  the reservation of rents    equivalent    to the

        Insurance Rent and Service  Charge)  modified  to the same effect as the

        alienation covenants to be given  to  the Landlord pursuant to paragraph

        5

Exclusion  of  security  of  tenure
-----------------------------------

7.      Before completion of any underlease of the Premises   and the occupation

        by any  proposed  undertenant  of  the premises  to be demised thereby a

        valid court order  shall  be made   authorising   the   exclusion of the

        provisions of Sections 24 to 28 (inclusive)  of the 1954 Act in relation

        to the tenancy to be created by such  underlease  and a  declaration  to

        that effect shall be included in it and a   certified  copy of the order

        and the application for it shall be supplied to the Landlord

Definition  of  "Permitted  Part"
---------------------------------

8.      In this Schedule "Permitted Part" means the entirety of one floor of the

        Premises  (other than common parts and structural parts of the Premises)

    (THE  COMMON  SEAL  of  GROSVENOR
     -----------------      ---------

  (WEST  END  PROPERTIES  was  hereunto
   ---------------------

     (affixed  in  the  presence  of:

      Director

      Director

Terms  of  underleases
----------------------

6.      Any underlease of the Premises shall be granted on the same terms    as

        this Lease  (including  the reservation of rents      equivalent to the

        Insurance Rent and Service  Charge)  modified to the same effect as the

        alienation covenants to be given to the Landlord pursuant to  paragraph

        5

Exclusion  of  security  of  tenure
-----------------------------------

7.      Before completion of any underlease of the Premises  and the  occupation

        by any  proposed  undertenant  of  the premises to be demised  thereby a

        valid court order  shall   be made authorising      the exclusion of the

        provisions of Sections 24 to  28  (inclusive)  of      the   1954 Act in

        relation to the     tenancy     to be created by such  underlease  and a

        declaration to that effect shall be included in it and a certified  copy

        of  the   order  and the application     for it shall be supplied to the

        Landlord

Definition  of  "Permitted  Part"
---------------------------------

8.      In this Schedule "Permitted Part" means the entirety of one floor of the

        Premises  (other  than  common  parts  and    structural  parts  of  the

        Premises)

EXECUTED  as  a  Deed  by  CANARGO     )
--------                   -------

ENERGY  CORPORATION  by  the     )
-------------------

signature  of  a  director  and  its  secretary     )

or  two  directors     )

/s/Russ Hammond
Russ Hammond
Director

/s/Nils Trulsvik
Nils Trulsvik
Director

DATED          September 8, 2000
      ------------------------------------

-----------------------------------------------
(1)      CANARGO  ENERGY  CORPORATION

(2)      GROSVENOR  WEST  END  PROPERTIES

-----------------------------------------------
-----------------------------------------------
             RENT DEPOSIT DEED

relating to Lease of first and second floors 148/150

Buckingham Palace Road  London  SW1

-----------------------------------------------

         DATED        September 8, 2000
         --------------------------------------------

-----------------------------------------------------------
(1)              CANARGO  ENERGY  CORPORATION

(2)              GROSVENOR  WEST  END  PROPERTIES

-----------------------------------------------------------
-----------------------------------------------------------
Counterpart/
                     RENT DEPOSIT DEED

relating to Lease of first and second floors 148/150

Buckingham Palace Road London  SW1
-----------------------------------------------------------

                        INDEX
                        -----

INTERPRETATION...........................................1

PAYMENT INTO ACCOUNT.....................................3

OPERATION OF THE ACCOUNT.................................3

   Withdrawal only by Landlord...........................3

   Interest..............................................3

   Withdrawal for non-payment............................4

   Insolvency............................................4

   Forfeiture and disclaimer.............................5

   Notification of withdrawal............................5

   No prejudice to other rights..........................5

   Tenant to make up withdrawals.........................6

   Rent reviews..........................................6

   Value Added Tax.......................................6

RELEASE..................................................7

   Date for release......................................7

   Definition of Tenant in Clause 4.1.3..................7

   No release during subsisting breach...................8

NON-VITIATION............................................8

ASSIGNMENT OF REVERSION..................................9

ASSIGNMENT BY TENANT.....................................9

CHARGE...................................................9

VARIATION OF LEASE......................................10

GOVERNING LAW AND JURISDICTION..........................10

THIS DEED is made the 8th day  of September 2000
----------

BETWEEN:
-------

(1)     CANARGO  ENERGY  CORPORATION whose registered office is at 32
        ----------------------------
        Loockerman Square  Suite L-100 Dover Delaware 19904 Dover Kent(address

        for  service in  the UK  c/o McGrigor Donald 63 Queen Victoria Street

        London EC4N 4ST ("the Tenant") and

(2)     GROSVENOR  WEST END  PROPERTIES  ( Company Registration Number 956235)
        -----------------------------
        whose registered office is at 70 Grosvenor Street London W1X 9DB ("the

        Landlord")

WHEREAS:
-------

(1) The  premises briefly  described as  first  and  second  floors 148/150

        Buckingham Palace Road London SW1 ("the Premises") were  demised for a

        term often  years from 24 June 2000 by an underlease  ("the Lease") of

        even date  herewith made  between (1)  the Landlord and  (2) the Tenant

(2)     This Deed is supplemental to the Lease

(3) For  the  purposes  of  Section  3(6)(a)  of  the  Landlord  and Tenant

(Covenants) Act  1995  the  burden  an   (without  prejudice to Clauses

 6 and 7) benefit of the  Landlord's  and the  Tenant's obligations  in

this Deed are personal to each of them

(4) It was a condition precedent to the grant of the Lease that on

completion thereof the Tenant would enter into this Deed

NOW IT IS AGREED as follows:
----------------

INTERPRETATION
--------------

1.      In this Deed the headings and index shall be ignored in its construction

        and  unless  the  context  otherwise  requires:

1.1     References to numbered  Clauses  are to  the Clauses hereof so numbered

1.2     Whenever  the  Landlord  or the  Tenant  is  more than  one person their

        respective obligations are  joint and  several

1.3     The  expression  "the Lease" includes any document entered into pursuant

        thereto or  which  is expressed to be  supplemental thereto

1.4     References  to  the  term  created  by the  Lease include  any period of

        holding-over extension continuance or renewal thereof whether by statute

        or common  law

1.5     References to Value Added Tax include any similar tax levied in addition

        to or substitution for it

1.6     The following expressions have the meanings set against them:

      "the Initial     83,395.00 (Eighty three thousand three hundred and ninety

      Deposit"         -five pounds)

      "the  Bank"      National  Westminster Bank plc or  such other bank as the

                       Landlord from time to time nominates

      "the Account"    a  separately identified  deposit  account at the Bank or

                       (pending payment of the initial Deposit into that account

                       and  other  than  for the  purposes  of  Clause  2.4)  an

                       interest  bearing  client   account  of  the   Landlord's

                       Solicitors

      "the Security    the  Initial Deposit  together with any  other sums  paid

      Deposit"         into the Account  by  the  Tenant  pursuant to this  Deed

                       and any interest  credited to the Account which  has  not

                       been released to the Tenant

      "the  Tenant's   the obligations of the Tenant in this Deed together  with

      Obligations      the obligations of the Tenant to  pay the rents  reserved

                       by and to comply with theother  lessee's   obligations in

                       the Lease  until it is lawfully assigned (other  than  by

                       operation  of law) and thereafter the obligations  of the

                       Tenant in any guarantee of the obligations of the  person

                       to whom the Tenant has assigned the Lease

PAYMENT  INTO  ACCOUNT
----------------------

2.1 The  Landlord  acknowledges payment of the Initial Deposit by the Tenant

on or before the date hereof

2.2 The Landlord shall  act and the Tenant hereby authorises the Landlord to

act in connection with the Security Deposit in accordance with this Deed

2.3 The Landlord and the Tenant shall give all necessary instructions to the

Bank to give effect to the terms of  this  Deed

2.4 The  Landlord  shall  forthwith  (if it  has not done so already) pay the

Initial  Deposit into  the Account  or (if the Account is not yet opened)

Shall  procure  that  the  Initial  Deposit  is forthwith  placed  by its

Solicitors in an interest  bearing  client  account  (subject  until paid

into the Account to the other  terms of this  Deed) and open the  Account

as  soon as  practicable  and  immediately  thereafter  procure  that the

Security Deposit is transferred to the Account

OPERATION  OF  THE  ACCOUNT
---------------------------

Withdrawal  only  by  Landlord
------------------------------

3.1     Only  the  Landlord  may  withdraw  monies  from  the  Account

Interest
--------

3.2 All  interest  earned  by  the  Account during such times as there is no

subsisting breach of the Tenant's Obligations shall belong to the Tenant

and  shall be  mandated direct  to the Tenant at quarterly or such other

intervals as the  Bank from time to time determines after payment of any

bank charges payable in respect of  the  Account  and after deduction of

any  tax  as  required  by law  PROVIDED  THAT  if  there  shall be  any
                                --------------
subsisting breach  of the Tenant's  Obligations the  interest  shall  be

retained  in  the  Account until released pursuant to this Clause 3.2 or

to Clause 4 and accumulated and  form part  of the Security Deposit  and

PROVIDED FURTHER that the Landlord shall notify the Tenant in  the event
----------------
that it shall withhold monies pursuant  to the provisions of this clause

Withdrawal  for  non-payment
----------------------------

3.3     The  Landlord may withdraw from the Account for its own use the whole of

        the Security Deposit or so much thereof as shall be  required to satisfy

        any such rent or other payment or sum if and whenever:

        3.3.1   any rent  or other  payment due  to the Landlord under the Lease

                is not  paid  to the Landlord  within seven days of the due date

                for payment or

        3.3.2   the Landlord incurs any other  sums as  a result of a failure by

                the Tenant to comply with the Tenant's Obligations which are not

                reimbursed by the Tenant to  the  Landlord  within seven days of

                being  incurred

Insolvency
----------

3.4     The  Landlord  may  withdraw  from  the  Account and appropriate to such

        purposes the  whole or such part of the Security Deposit as the Landlord

        requires to  make  good  to  the Landlord any loss or liability suffered

        by the Landlord arising  out  of  any breach of the Tenant's Obligations

        which has then already arisen  or  which  may  thereafter  arise  if the

        Tenant:

        3.4.1   (being an individual) becomes bankrupt  or is the subject of  an

                interim order  under  the  Insolvency  Act  1986  or

        3.4.2   (being   a body   corporate)   enters into   liquidation whether

                voluntary or compulsory (other than voluntary iquidation for the

                purposes of solvent reconstruction or amalgamation)   or  is the

                subject of a  petition  for an administrative order or

                has a receiver or a receiver  and manager or  an  administrative

                receiver appointed  in  respect of the  whole or any part of its

                undertaking or assets

Forfeiture  and  disclaimer
---------------------------

3.5     If  the  Lease  is forfeited or is disclaimed by a trustee in bankruptcy

liquidator  the Treasury  Solicitor or any  other competent person or if

the Tenant (being a body  corporate) is otherwise dissolved  wound up or

ceases to  exist then the  Landlord  may  withdraw  from the Account and

appropriate  the  whole or  such part  of the Security  Deposit  as  the

Landlord requires and apply the same in discharge of:

3.5.1 any  loss damage  or  liability  to  the  Landlord  arising as a

result  thereof or out of  what would have  been a breach of the

Tenant's Obligations if the Lease had not determined and

3.5.2 (to the extent not included in the above) an amount equal to the

rents reserved under the Lease which would have been payable  if

the Lease had not determined  until the Landlord  has  relet the

whole  of the  Premises and  all  rent free  periods  applicable

thereto have expired

Notification  of  withdrawal
----------------------------

3.6     If the  Landlord  withdraws  the whole or  part of  the Security Deposit

        From  the  Account  pursuant  to Clauses 3.3  3.4  or 3.5 it   shall  in

        Each  case notify  the  Tenant  in  writing  of   the  amount  withdrawn

        as  far  as reasonably practicable

No  prejudice  to  other  rights
--------------------------------

3.7     Any  withdrawal from  the  Account  shall be  without prejudice   to any

        Other  rights   and   remedies  of  the  Landlord  under  the   Lease or

        Otherwise   and  any   appropriation  under   Clause  3.4  shall not  be

        Deemed  to  be payment  of rent under  the terms  of the  Lease so as to

        Prejudice the Landlord's right of re-entry in the  Lease

Tenant  to  make  up  withdrawals
---------------------------------

3.8     Within  fourteen  days of  receipt of   any  written  notification under

        Clause 3.6  the Tenant  shall pay  into the Account  such sums  as shall

        when  added to  the monies   remaining  to  the  credit of  the  Account

        (exclusive of any  interest earned  thereon)  equal the aggregate of the

        Initial  Deposit and all sums  previously paid into  the  Account  under

        Clauses  3.9 and 3.10

Rent  reviews
-------------

3.9     If  and whenever a review of rent takes place pursuant to the Lease the

Tenant  shall within  seven days of  the date  of ascertainment  of the

amount of the increased  rent  pay into the Account a sum equivalent to

one half of the annual increase in the rent resulting from such  review

Value  Added  Tax
-----------------

3.10.1 If  at the  time any  sum  is  due under Clause  3.9  the  rents (which

expression in  Clause  3.10  excludes insurance  contributions  service

charges  and  reimbursement  of  other sums  incurred  by the  Landlord

reserved as rent under the Lease)  reserved by the Lease are subject to

the addition of Value Added Tax (or an  amount equal to Value Added Tax

in respect thereof) the Tenant  shall at that time  also  pay into  the

Account an amount  equal to the rate of such  Value Added Tax  then  in

force on  the sum  due under  Clause 3.9

3.10.2 If  rents  reserved  by  the  Lease  are  at  any  time subject  to the

addition  of  Value Added Tax  (or an amount  equal to Value  Added Tax

thereon) and the rate of Value Added Tax on or in respect of such rents

at any time thereafter  increases then the Tenant shall within fourteen

days after each such increase  pay an amount equal to such  increase in

the rate of Value Added Tax on the  aggregate  of  the sums (other than

interest) which are then in the Account and the sums which  ought  then

to have been or are due within fourteen days thereafter to be paid into

the  Account

RELEASE
-------

Date  for  release
------------------

4.1     THE  Landlord  shall  release the  Security Deposit  or   any  remaining

        Balance thereof  together with all  interest  accrued thereon  (less tax

        and bank charges) to the Tenant within one month after the  happening of

        whichever of the following events  first  occurs:

        4.1.1    the determination of the Lease (other than by   reason of or in

connection  with  the  events  mentioned  in  3.5)

4.1.2 Receipt  by  the  Landlord  of  written  notice  of  a   lawful

assignment of the Lease  (other than by operation of law)  by a

person to whom the Lease shall have  previously   been lawfully

assigned  (other  than  by  operation  of law)

4.1.3 the  Tenant  giving  to  the Landlord  copies  of its   audited

accounts (and to the  extent to which  the Tenant has  or ought

to  have  prepared  such  accounts  for  such  period   audited

consolidated  accounts  for itself and  its subsidiaries)   for

each  of the three  consecutive years immediately  before  that

date showing annual  profits (before tax and extraordinary  and

exceptional  profits  or  income  and  excluding  profits  from

operations  discontinued  before that date) of an amount  equal

to three times one year's Basic Rent (as defined in the  Lease)

at the  rate  payable in  respect  of such date   (ignoring any

suspension thereof under Clause  5.4  thereof)

     TOGETHER WITH there being in the Landlord's reasonable opinion no ground to
    --------------
     suspect  that   the Tenant  will not be able  to  comply  with the Tenant's

     Obligations thereafter PROVIDED THAT there shall be no release under Clause
                            -------------
     4.1.3 for so long  as  any  increase in  the said Basic Rent is due but not

     finally ascertained

Definition  of  Tenant  in  Clause  4.1.3
-----------------------------------------

4.2     References  in  Clause  4.1.3 to "the Tenant" are references only to the

        person  in  whom  the  Lease  is  vested  for  the  time  being

No  release  during  subsisting  breach
---------------------------------------

4.3     (Notwithstanding Clause 4.1) if on occurrence of any event mentioned  in

Clause  4.1  there  is  a  subsisting  breach of  any of   the  Tenant's

Obligations which is  capable  of  remedy  the Landlord  shall forthwith

notify the Tenant of such breach then the Landlord shall  not be obliged

to  release  the Security  Deposit  until   seven  days  after  all such

breaches  have  been  remedied to  its  reasonable satisfaction

NON-VITIATION
-------------

5. The  Landlord  may at  any time without  discharging  in  any  way  or

affecting any  part  of  its  security  hereunder:

5.1      grant  to  the  Tenant  any  time  or  indulgence

5.2 release to the Tenant such sums as it may from time to time at

its sole discretion  determine

5.3 neglect or forbear to enforce the payment of the rents reserved

by  the Lease  or  compliance  with  the  Tenant's  Obligations

5.4 refuse to accept any payment in order not to waive any right to

re-enter the  Premises

5.5 release  any  security  or  guarantee  held  by the Landlord in

relation to the  Tenant's  Obligations

5.6 vary the Lease (including  by accepting  a surrender of part of

the Premises) or enter into or vary any other contract with the

Tenant

5.7 do or omit to  do any other act  or thing (other than a release

by Deed) by  which  the  Tenant's  liability would otherwise be

released in whole or part

ASSIGNMENT  OF  REVERSION
-------------------------

6.1      THE Landlord shall not assign the benefit of this Deed in whole or part

except to a person to whom the reversion immediately expectant  on  the

determination of the term  created by the Lease is also transferred and

shall thereon  either:

6.1.1 assign  the same to  such person  and procure that such person

enters  into  covenants with  the  Tenant to  comply  with the

Landlord's obligations in this Deed  or

6.1.2 discharge the security  hereby created and repay  the Security

Deposit

6.2      Each  of  the  Tenant  and its successors in title hereby releases each

person now or hereafter included in or comprising the Landlord from any

breach  of  the  Landlord's  obligations  herein  occurring  after that

person's immediate assignee has given the covenant required  by  Clause

6.1

6.3      The  covenants  to  be  given  by  the  Landlord's  successors in title

pursuant to Clause 6.1  shall contain  a  release  in  the  same  terms

as Clause 6.2

ASSIGNMENT  BY  TENANT
----------------------

7.1     The  Tenant  shall  not assign the benefit of this Deed in whole or part

        except  to  a  person  to whom the term  created by   the Lease is  also

        transferred

7.2 The  Tenant  shall  forthwith give written notice to the Landlord of any

such  assignment  and until the Landlord has been given such notice  the

Landlord shall not be  liable to the assignee if it repays  the Security

Deposit to or pays interest  to the assignor

CHARGE
------

8.1      The  Tenant with full title guarantee charges its equitable interest in

the Security Deposit to the Landlord  as  security  for  the observance

and performance  of  the  Tenant's  Obligations

8.2      Any  monies withdrawn from the Account or otherwise appropriated by the

Landlord in accordance with  this Deed  shall be thereby freed from the

Said charge and  become the  absolute  property of the Landlord

8.3      The Security  Deposit  shall  at  all times be and remain in equity the

property  of  the  Tenant  but  subject  to  the  said  charge

8.4      The  security  hereby created  shall  be  a  continuing security to the

Landlord  and shall be  in addition  to and shall  not operate so as in

anyway  to prejudice  or affect  the obligations  of the  Tenant or any

other rights of the Landlord

VARIATION  OF  LEASE
--------------------

9.       The  right  of re-entry in the Lease shall be exercisable if there is a

breach by the  Tenant of any of the terms of this  Deed while the Lease

is vested in  the  Tenant

GOVERNING  LAW  AND  JURISDICTION
---------------------------------

10.1    This  Deed shall  be  governed by and construed in  accordance  with the

        laws  of  England  and  Wales

10.2     The  parties  hereto  (which  expression  in this Clause includes their

respective  successors in title  and in  the case of an  individual his

personal representatives) hereby confer jurisdiction on  the High Court

of Justice of England  and  Wales (hereinafter called "the High Court")

to settle all disputes which may arise in relation to this  (other than

any  which under the terms hereof are to be submitted for determination

to  arbitration  or  to  an  independent  expert  or other  person  but

including where  possible  any appeal  from  the  determination  of any

dispute  so  submitted)

10.3     The  Tenant  hereby  agrees that service of notices and other documents

(including originating  process) relating  to this Deed  may be validly

effected at 63  Queen  Victoria  Street  London  EC4N 4ST or such other

address  in  England and Wales  as  it  from  time  to time notifies in

writing to the other party hereto

IN WITNESS whereof this Deed has been duly  executed by  the  parties hereto and
----------
is delivered  as a  Deed the day  and  year  first  above  written

THE  COMMON  SEAL  of  CANARGO      )
-----------------      -------
ENERGY  CORPORATION  was  hereunto  )
-------------------
affixed  in  the  presence  of:     )

/s/Russ Hammond
Russ Hammond
Director

/s/Nils Trulsvik
Nils Trulsvik
DirectorAGREEMENT AND PLAN OF REORGANIZATION

                                  AMONG

                          GATEWORKS CORPORATION,

                THE SHAREHOLDERS OF GATEWORKS CORPORATION,

                          I-BUS / PHOENIX, INC.

                                  AND

                       MAXWELL TECHNOLOGIES, INC.

                                 AS OF

                           SEPTEMBER 13, 2000

<PAGE>

                            TABLE OF CONTENTS
                                                                          Page

ARTICLE 1     TERMS OF THE MERGER                                           1
1.1           The Merger                                                    1
1.2           Effective Date of the Merger                                  2
1.3           Articles of Incorporation of the Surviving Corporation        2
1.4           Board of Directors and Officers of the Surviving Corporation  2
1.5           Consideration; Cancellation of Company Common Stock           2
1.6           No Fractional Shares                                          3
1.7           Escrow                                                        3
1.8           Exchange of Shares; Stock Transfer Books                      3
1.9           Waiver of Dissenters' Rights                                  4
1.10          Securities Act Legend                                         4

ARTICLE 2     REPRESENTATIONS AND WARRANTIES OF THE OF THE SHAREHOLDERS     4
2.1           Organization and Good Standing                                4
2.2           Subsidiaries                                                  5
2.3           Capital Structure of the Company                              5
2.4           Authorization and Approvals                                   5
2.5           Financial Statements                                          5
2.6           Taxes                                                         6
2.7           Transactions with Affiliates                                  7
2.8           Intellectual Property                                         7
2.9           Absence of Certain Changes                                    8
2.10          Contracts                                                    10
2.11          Employees                                                    10
2.12          Litigation                                                   11
2.13          Environmental Matters                                        11
2.14          Employee Benefits                                            13
2.15          Bank Accounts                                                13
2.16          Brokers and Finders                                          13

ARTICLE 3     REPRESENTATIONS AND WARRANTIES OF EACH SHAREHOLDER           13
3.1           Title to Shares                                              14
3.2           Authorization                                                14
3.3           No Violations                                                14

<PAGE>

ARTICLE 4     REPRESENTATIONS AND WARRANTIES OF MAXWELL AND I-BUS          14
4.1           Organization and Power                                       14
4.2           Capital Structure of I-Bus                                   14
4.3           Authorization and Enforceability of Agreements               15
4.4           No Conflicts                                                 15
4.5           Financial Statements and SEC Reports                         15
4.6           Brokers and Finders                                          16
4.7           I-Bus Shares                                                 16

ARTICLE 5     CLOSING                                                      16
5.1           The Closing                                                  16
5.2           Delivery of Documents                                        16

ARTICLE 6     SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS
              AND RELATED AGREEMENTS; INDEMNIFICATION                      17
6.1           General Liability Period                                     17
6.2           Indemnification by the Shareholders                          18
6.3           Indemnification by Maxwell and I-Bus                         18
6.4           Limitations on Recoverable Losses                            18
6.5           Claims for Indemnification; Disputes                         19
6.6           Exclusive Remedy                                             20

ARTICLE 7     POST-CLOSING COVENANTS                                       20
7.1           Relocation                                                   20
7.2           Operating Committee                                          20
7.3           Incentive Equity Pool                                        20
7.4           Further Acts                                                 21

ARTICLE 8     GENERAL PROVISIONS                                           22
8.1           Entire Agreement; Modifications; Waiver                      22
8.2           Severability                                                 22
8.3           Successors and Assigns                                       22
8.4           Counterparts                                                 22
8.5           Governing Law                                                22
8.6           Notices                                                      22
8.7           Expenses                                                     23
8.8           Recovery of Litigation Costs                                 23
8.9           Publicity                                                    23
8.10          Confidentiality                                              24
8.11          No Third Parties Benefitted                                  25

<PAGE>

                               EXHIBIT INDEX

Exhibit 1.5      Purchase Price

Exhibit 1.7      Escrow Agreement

Exhibit 5.2(d)   Form of Noncompetition Agreement

Exhibit 5.2(e)   Form of Investment Letter

Exhibit 5.2(f)   Form of Put Agreement

Exhibit A        Agreement of Merger

<PAGE>

                              SCHEDULE INDEX

Schedule 2.1     Organization and Good Standing

Schedule 2.3     Capital Structure of the Company

Schedule 2.4     Authorizations and Approvals

Schedule 2.5     Financial Statements

Schedule 2.6     Tax Matters

Schedule 2.7     Transactions with Affiliates

Schedule 2.8     Intellectual Property

Schedule 2.9     Absence of Certain Changes

Schedule 2.10    Contracts

Schedule 2.11    Employees

Schedule 2.12    Litigation

Schedule 2.13    Environmental Matters

Schedule 2.14    Employee Benefits

Schedule 2.15    Bank Accounts

Schedule 2.16    Brokers & Finders

<PAGE>

                 AGREEMENT AND PLAN OF REORGANIZATION

   THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is entered
into as of September ____, 2000 by and among Gordon Edmonds, Ronald Eisworth,
and Doug Hollingsworth (collectively, the "Shareholders") and Gateworks
Corporation, a California corporation (the "Company"), on the one hand, and
Maxwell Technologies, Inc., a Delaware corporation ("Maxwell") and its
subsidiary, I-Bus/Phoenix, Inc., a California corporation ("I-Bus"), on the
other hand.

                           R E C I T A L S

   WHEREAS, the Shareholders own 100% of the issued and outstanding
capital stock of the Company;

   WHEREAS, the parties intend that, subject to the terms and conditions
hereinafter set forth, the Company be merged with and into I-Bus pursuant
to this Agreement and the Agreement of Merger (the "Agreement of Merger")
substantially in the form of Exhibit A attached hereto;

   WHEREAS, the parties hereto intend that this Agreement constitutes a
Plan of Reorganization and the Merger hereunder qualifies under Section
368(a)(1)(A)  of the Internal Revenue Code of 1986, as amended (the "Code");

   NOW, THEREFORE, in order to consummate the Merger and in consideration
of the mutual representations, warranties and agreements contained herein,
the parties hereto agree as follows:

                                ARTICLE 1

                           TERMS OF THE MERGER

   1.1   The Merger.  Subject to the terms and conditions of this
Agreement and the laws of the State of California, I-Bus,  and the Company
shall execute and file, among other things, the Agreement of Merger in the
Office of the Secretary of State of the State of California (the "California
Secretary of State") pursuant to which the separate existence of the Company
shall cease and the Company shall be merged with and into I-Bus on the
Closing Date, as defined herein (the "Merger").  I-Bus and the Company are
sometimes collectively referred to as the "Constituent Corporations" and I-Bus
is sometimes referred to as the "Surviving Corporation."

   1.2   Effective Date of the Merger.  The Merger shall become effective
upon the filing of  the Agreement of Merger and any other documents required
by the General Corporation Law of the State of California (the "California
Corporation Law")  with the California Secretary of State in accordance with

<PAGE>

the California Corporation Law.  If the California Secretary of State requires
any changes in the Agreement of Merger as a condition to filing the Agreement
of Merger, I-Bus,  the Company and the Shareholders will execute necessary
revisions incorporating such changes, provided such changes are not materially
inconsistent with or result in any material changes in the terms of this
Agreement or the Agreement of Merger.

   1.3   Articles of Incorporation of the Surviving Corporation.  Upon
the effectiveness of the Merger  and without any further action on the part
of the Constituent Corporations, the Articles of Incorporation of I-Bus shall
be and remain the Articles of Incorporation of the Surviving Corporation,
and the Bylaws of I-Bus shall be the Bylaws of the Surviving Corporation. Such
Articles of Incorporation and Bylaws may thereafter be altered, amended or
repealed in accordance with the provisions thereof or applicable law.

   1.4   Board of Directors and Officers of the Surviving Corporation.
The officers and directors of I-Bus at the time of the effectiveness of the
Merger shall be the officers and directors of the Surviving Corporation.

   1.5   Consideration; Cancellation of Company Common Stock.

         (a)   The aggregate consideration (the "Purchase Price") to be
received by the Shareholders in connection with the Merger shall be one and
one-quarter times (1.25x)  the annual product revenue (excluding service
revenue) of the business formerly operated by the Company in calendar year
2001, including products developed in collaboration with I-Bus and "sold" to
I-Bus; provided, however, that if  such annual product revenue (excluding
service revenue) in calendar year 2001 is less than $15,000,000, then the
aggregate consideration will equal one times (1.0x) such 2001 product revenue.
The nature of the consideration, the timing of payment, methodology for
computing product revenue, the methodology for computing the per share value
of I-Bus common stock included in the payment of the Purchase Price, and
certain adjustments to the Purchase Price are all as set forth on Exhibit 1.5.
To the extent there is any inconsistency between the general terms of this
Section 1.5(a) and the more specific terms of Exhibit 1.5, the terms of
Exhibit 1.5 shall govern in all respects.

         (b)   The consideration to be received by each Shareholder in
connection with the Merger shall be the Purchase Price (as it may be
determined from time to time in accordance with Exhibit 1.5) divided by the
number of shares of Company Common Stock issued and outstanding upon filing
of the Agreement of Merger, multiplied by the number of shares held of record
by each such Shareholder at that time.  In lieu of issuing fractional shares
of I-Bus Common Stock, cash may be paid. Such consideration shall be paid
in part following the Closing (the "Closing Payment") and the balance
following the end of the calendar year 2001 (the "Final Payment"), each to
be determined as provided in Exhibit 1.5.

         (c)   By virtue of the Merger and without any action on the part of the
holder thereof, each share of common stock of the Company ("Company Common
Stock") issued and outstanding immediately prior to the filing of the Agreement

<PAGE>

of Merger shall be cancelled and all rights in respect thereof shall cease to
be outstanding, excepting the right to be converted into Purchase Price upon
surrender of certificates representing such shares to the Surviving Corporation.

         (d)   The Closing Payment payable upon filing of the Agreement of
Merger with the California Secretary of State shall be delivered to the
Shareholders promptly upon receipt by the Surviving Corporation of a certificate
evidencing ownership of Company Common Stock, accompanied by a stock power duly
endorsed in blank, provided that the Closing Payment to be made upon surrender
of such certificates shall not include those I-Bus Shares subject to the
Escrow, as hereinafter defined.

   1.6   No Fractional Shares.  No fractional share of I-Bus Common Stock
will be issued in the Merger, but, in lieu thereof, each holder of Company
Common Stock who would otherwise be entitled to a fraction of a share of
I-Bus Common Stock (after aggregating all fractional shares of I-Bus Common
Stock to be received by such holder) will be entitled to receive from I-Bus
an amount of cash (rounded to the nearest whole cent) equal to the product
of (a) the fraction multiplied by (b) the then applicable per-share value of
I-Bus Common Stock, as set forth on Exhibit 1.5.

   1.7   Escrow.  On the Closing Date, Maxwell, I-Bus and the Shareholders
shall enter into an agreement with U.S. Bank and Trust National Association,
as escrow agent (the "Escrow Agent") substantially in the form of
Exhibit 1.7 hereto (the "Indemnification Escrow Agreement").  At the
Closing Date, I-Bus shall deposit in escrow (the "Indemnification Escrow")
a number of I-Bus Shares equal to 10% of the number of I-Bus Shares
issuable to the Shareholders  as a part of the Closing Payment as set forth
on Exhibit 1.5 (the "Indemnification Escrow Shares").  In the event the
Shareholders are required to indemnify the Maxwell Indemnitees (as defined
in Section 6.2) pursuant to Article 6 of this Agreement, Maxwell or I-Bus
may make a claim against the Indemnification Escrow Shares in accordance
with the terms of the Indemnification Escrow Agreement; provided, however,
that the number or value of the Indemnification Escrow Shares will not in
any way limit the amount of the Shareholders' indemnification obligations
pursuant to Article 6.  The Indemnification Escrow Shares shall be released
from the Indemnification Escrow on the first anniversary of the Closing Date
in accordance with, and to the extent provided by, the Indemnification
Escrow Agreement.

   1.8   Exchange of Shares; Stock Transfer Books.  Upon filing of the
Agreement of Merger, each holder of an outstanding certificate or certificates
theretofore representing shares of Company Common Stock shall be entitled,
upon surrender of such certificate or certificates to the Surviving
Corporation, to receive as a distribution in respect of each share represented
by such certificate or certificates, the per share portion  of the Closing
Payment due on the Closing Date, less the Escrow, as further described on
Exhibit 1.5.  The cash payment shall be made by bank wire to the holders of
record of Company Common Stock as shown on the certificate representing such
Company Common Stock upon surrender to I-Bus, duly endorsed in blank for
transfer.  Upon filing of the Agreement of Merger there shall be no further
registry of transfers on the records in respect of Company Common Stock

<PAGE>

outstanding immediately prior thereto.  If, after the filing of the Agreement
of Merger, certificates are presented to the Surviving Corporation, they shall
be cancelled and exchanged for such cash payment and I-Bus Shares as provided
herein.

   1.9   Waiver of Dissenters' Rights.  Each Shareholder represents and
warrants to Maxwell and I-Bus that they are familiar with the provisions of
the California Corporation Law providing dissenters' rights and allowing
shareholders to receive in lieu of merger consideration fair value for their
shares of Company Common Stock (as such term is used in the California
Corporation Law).  By executing this Agreement and by executing a written
consent of shareholders to the Merger as a condition to the Closing under this
Agreement, the Shareholders will irrevocably waive their dissenters' rights
under the California Corporations Law.  The Shareholders understand the
consequences of this waiver and agree jointly and severally to hold Maxwell
and I-Bus  harmless from any claim arising after the date hereof related to
the dissenters' rights provisions of Sections 1300 et. seq. of the California
Corporations Code or rights of Company Shareholders arising thereunder.

   1.10   Securities Act Legend.  The I-Bus Shares issued in the Merger will
not be registered under the Securities Act, and will therefore bear customary
securities restrictive legends.

                               ARTICLE 2

                     REPRESENTATIONS AND WARRANTIES
                          OF THE SHAREHOLDERS

   The Shareholders jointly and severally represent and warrant to Maxwell
and I-Bus as follows:

   2.1   Organization and Good Standing.  The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation.  Except as set forth on Schedule 2.1
attached hereto, the Company is duly qualified to transact business and is
in good standing in every jurisdiction in which the character of its business
makes such qualification necessary, except for where the failure to be so
qualified would not have a material adverse effect on the Company or its
business, assets, properties, prospects, financial condition or results of
operations (a "Material Adverse Effect"), all of which jurisdictions are
listed on Schedule 2.1.  Except as set forth on Schedule 2.1, the Company has
all necessary corporate power and authority to carry on its business as it is
now being conducted, and to own or lease and operate its properties and assets.
Complete, current and correct copies of the Articles of Incorporation and
Bylaws of the Company, all as amended to date, stock ledgers, minute books
and all other organizational documents of the Company have been made available
to Maxwell.

<PAGE>

   2.2   Subsidiaries.  The Company does not, directly or indirectly, own or
control any interest or investment (whether equity or debt) in any corporation,
partnership, limited liability company, joint venture, business organization,
trust or other entity.

   2.3   Capital Structure of the Company.  The authorized capital stock of
the Company consists of 1,000,000 shares of Company Common Stock of which
15,000 shares are issued and outstanding, and all of such shares are owned of
record and beneficially as set forth on Schedule 2.3 attached hereto.  All of
the outstanding shares of capital stock of the Company have been duly
authorized, validly issued and are fully paid and nonassessable.  Except for
any of the transactions contemplated pursuant to this Agreement and as set
forth on Schedule 2.3, there are no options, warrants, convertible debt or
securities, calls, agreements, arrangements, commitments, understandings or
other rights to purchase any of the Company's capital stock or securities
convertible into or exchangeable for any such capital stock.  All of such
shares have been issued in transactions exempt from registration under the
Securities Act and any applicable state securities or Blue Sky laws.

   2.4   Authorization and Approvals.  The Company has all requisite
corporate power and authority to enter into this Agreement and to perform
its obligations hereunder.  This Agreement has been duly and validly
authorized by and approved by all requisite corporate action on the part
of the Company. This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms.  Except as set forth
in Schedule 2.4 attached hereto, no further approvals or consents by, or
filings with, any federal, state, municipal, foreign or other court or
governmental or administrative body, agency or other third party is required
in connection with the execution and delivery by the Company of this
Agreement, or the consummation by the Company of the transactions
contemplated hereby.

   2.5   Financial Statements.  The Company has delivered to Maxwell and
I-Bus, true and complete copies of (i) the unaudited balance sheet of the
Company as of August 31, 2000 (the "Interim Balance Sheet"), and the related
statement of profit and loss for the period January 1, 2000 to August 31,
2000 (collectively, the "Interim Financial Statements") and (ii) the
unaudited financial statements of the Company for the fiscal years ended
December 31, 1998 and 1999 (including, without limitation, the related balance
sheets and statements of profit and loss)  (collectively, with the Interim
Financial Statements, the "Financial Statements").  Except as expressly set
forth or disclosed in Schedule 2.5 attached hereto, the Financial Statements
(i) present fairly in all material respects the financial position and results
of operations of the Company as of and for the periods reflected therein, (ii)
were prepared in accordance with income tax accounting principles and (iii)
disclose all material liabilities, including contingent and/or unmatured
liabilities as of the dates thereof. The Accounts Receivable shown on the
Financial Statements (net of any reserves) are valid and collectible in the
ordinary course of business of the Company, without recourse to legal action,
and are not contested or disputed by the account debtor.  All inventories
reflected in the Financial Statements or acquired since the date of the
Interim Financial Statements, are in good condition and are currently usable
or salable in the category in which they are inventoried, in the ordinary
course of business of the Company. Except as disclosed in the Interim

<PAGE>

Financial Statements or on Schedule 2.5 attached hereto, the Company has no
material liabilities, whether known or unknown, absolute, accrued, contingent
or otherwise, except liabilities incurred after August 31, 2000 in the ordinary
course of business consistent with past practice and not in violation of this
Agreement.

   2.6   Taxes.

         (a)   Except as set forth on Schedule 2.6, the Company has timely
filed all Tax Returns that are required to be filed by the Company with respect
to the activities of the Company for any period ending on or before the Closing
Date, which Tax Returns are true, correct and complete in all material
respects, and the Company has paid within the time and in the manner prescribed
by law all Taxes shown thereon to be due.  All Taxes attributable to all
taxable periods ending on or before the date thereof, to the extent not
required to be previously paid, have been fully and adequately reserved for
(as taxes payable or as accrued taxes) on the Financial Statements (as defined
in Section 2.5).

         (b)   No Tax assessment or deficiency which has not been paid or for
which an adequate reserve has not been set aside, has been made or proposed
against the Company, nor are any of the Tax Returns now being or, to the best
knowledge of the Company and the Shareholders, threatened to be examined or
audited, and no consents waiving or extending any applicable statutes of
limitations for the Tax Returns, or any Taxes required to be paid thereunder,
have been filed.  The Company has never been subject to a Tax audit by
federal, state or local governmental authorities, nor has the Company ever
received a statement of deficiencies with respect to any tax assessed against
or agreed to by the Company.  None of the assets of the Company are subject
to any liens in respect of Taxes (other than for current taxes not yet due
and payable).  The Company is not a party to or bound by any Tax sharing, Tax
indemnity or Tax allocation agreement or other similar arrangement.

         (c)   The Company has collected all sales, use and value added Taxes
required to be collected, and has remitted, or will remit on a timely basis,
such amounts to the appropriate governmental authorities and has furnished
properly completed exemption certificates for all exempt transactions.

         (d)   The Company has properly withheld income and social security
or other similar Taxes and paid payroll Taxes with respect to all persons
properly characterized as employees for federal, state or local Tax purposes.

         (e)   Effective as of the date of incorporation, the Company duly
and timely filed with the IRS a properly completed and executed election to
be treated as an "S" corporation.  From and after such date, the Company has
been duly qualified as, and satisfied all requirements of, an "S" corporation
as defined in the Code and for all applicable state income tax purposes.

<PAGE>

         (f)   The Company has delivered to Maxwell complete and correct copies
of all state, local and foreign income or franchise Tax Returns filed by the
Company for the three most recent taxable years for which such Tax Returns have
been filed immediately preceding the date of this Agreement.  Other than with
respect to taxes shown on Tax Returns described in this clause, the Company is
not subject to any tax imposed on net income in any jurisdiction or by any
taxing authority.

         (g)   For purposes of this Agreement, the following terms shall have
the following meanings:

               (i)   "Taxes" means any net income, alternative or add-on
minimum tax, gross income, gross receipts, sales, use, ad valorem, franchise,
profits, license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, real property, personal property, or windfall profit
tax, custom duty or other tax, governmental fee or other like assessment or
charge of any kind whatsoever, addition to tax or additional amount imposed
by any governmental (whether federal, state, local or foreign) authority
(a "Taxing Authority") responsible for the imposition of any such tax
(domestic or foreign), but only if and to the extent attributable to periods
(or partial periods) prior to and including the Closing Date, together with
any interest and any penalty thereon.

               (ii)   "Tax Return" means any return, report, information
return, registration form or other document (including any related or
supporting information) filed or required to be filed with any Taxing
Authority in connection with the determination of any Tax or the
administration of any laws, regulations or administrative requirements
relating to any Tax.

   2.7   Transactions with Affiliates.  Except as set forth on Schedule
2.7 attached hereto, neither the Shareholders nor any member of their
family (including in-laws) or Corporations or other entities in or for
which a Shareholder or a member of his family holds an ownership or
profits or  interest of more than 1% or performs management duties
(including service as a Director) (collectively, "Affiliates"), (i) has
engaged or benefitted from any transaction with the Company, (ii) has any
interest, directly or indirectly, in any lease, contract, license, lien,
encumbrance, loan or other agreement to which the Company is a party or any
interest (other than as a shareholder) in any properties or assets of the
Company or (iii) has any interest in any competitor, supplier or customer
of the Company.

   2.8   Intellectual Property.

         (a)   Schedule 2.8 attached hereto contains a complete and correct
list of all patents, patent applications, trade names, trademarks or service
marks or applications for registration therefore, and copyrights
(collectively, "Intellectual Property"), including all contracts, agreements
and licenses relating thereto owned by the Company or in which it has any
rights.  Except as disclosed on Schedule 2.8, the Company has not granted any
licenses with respect to any of its respective Intellectual Property.  Except

<PAGE>

as set forth on Schedule 2.8, the Company has not received any notice of, nor
to the knowledge of the Company and the Shareholders do any grounds exist
for, any claim of infringement or other conflict or claimed conflict with
respect to the rights of others arising from or relating to the use of
Intellectual Property which could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.  The Company and the
Shareholders have no knowledge of any infringement of the Intellectual
Property by any third party.  The Company is the sole and legal owner of the
Intellectual Property in the countries indicated on Schedule 2.8 and in all
other jurisdictions in which the Company uses, has used or plans to use any
Intellectual Property and, as of the date hereof, neither the Company nor
the Shareholders has knowledge of any claim by any other person that such
other person is the legal owner of such.  The Intellectual Property confers
upon the Company all rights necessary or desirable for the conduct of its
business as now conducted and as presently proposed to be conducted.

         (b)   Except as set forth on Schedule 2.8, the Company has valid and
enforceable contracts with every employee, consultant and/or contractor of
the Company which vests with the Company all rights in any invention,
copyright and/or trade secret which relates to the business of the Company
to the fullest extent permitted by law and also protects the trade secrets
and/or proprietary information of the Company to the fullest extent
permitted by law.

         (c)   No infringement, illicit copying, misappropriation or violation
of any third party intellectual property rights has or would reasonably be
expected to occur with respect to the Company's use of the intellectual
property rights embodied in the Intellectual Property.

         (d)   Except for licenses to use software disclosed as Contracts on
Schedule 2.10, there are no other material agreements requiring the Company
to make payments or provide any consideration for, or restricting the
Company's right to use, any intellectual property rights of third parties.

         (e)   Except as set forth on Schedule 2.8 and except for claims that
would have been covered by insurance policies carried by the Company on the
Closing Date had the claim arisen during the applicable policy period, the
software and hardware products of the Company (i) meet in all material respects
all the functional specifications for which they were designed or programmed,
(ii) to the best knowledge of the Company, are free from significant bugs,
defects or errors, viruses, worms, bombs, traps or other code designed to or
having the effect of interrupting normal processing, corrupt data or render
the software or hardware products unusable and (iii) in the case of software,
have been maintained on media and hardware that are free from material defects.

   2.9   Absence of Certain Changes.  Except as set forth in Schedule 2.9
attached hereto, and except for the transactions specifically contemplated
under this Agreement, since August 31, 2000, the Company has conducted its
business in the ordinary course consistent with past practice, and there has
not been:

<PAGE>

         (a)   Any declaration, setting aside or payment of any dividend or
other distribution or payment (whether in cash, stock or property) with
respect to the capital stock of the Company, or any redemption, purchase or
other acquisition of any of the securities of the Company, or any other
payment to any stockholder of the Company in its capacity as a stockholder;

         (b)   Any transaction involving the Company not in the ordinary course
of business, including any sale of properties or assets (other than inventory
in the ordinary course);

         (c)   To the best knowledge of the Company and the Shareholders, any
material adverse change in the prospects, results of the operations,
liabilities, financial condition or business of the Company;

         (d)   Any loan or advance by the Company to any person, except normal
travel advances or other reasonable expense advances to officers or employees
of the Company and normal trade terms extended to customers;

         (e)   Any indebtedness for borrowed money incurred by the Company or
any commitment to incur indebtedness for borrowed money entered into by the
Company, or any loans made or agreed to be made by the Company other than as
set forth on Schedule 2.9;

         (f)   Any capital expenditures or commitments to make capital
expenditures materially in excess of the amount budgeted for the current
fiscal year, and a copy of such budget has been made available to Maxwell and
I-Bus;

         (g)   Any material change in the Company's lines of business or
management practices and procedures;

         (h)   Any damage, destruction or loss, whether or not covered by
insurance, which has had or may have a Material Adverse Effect on the Company;

         (i)   Except in the ordinary course of business of the Company and
consistent with past practices, any payment, satisfaction, discharge or
cancellation of any debt or claim of, or owed to, the Company;

         (j)   Any mortgage, pledge or subjection to lien, charge or
encumbrance of any kind on any of the Company's properties or assets, or any
assumption of, or taking any properties or assets subject to, any liability;

         (k)   Any amendment, modification or termination of any material
contract or agreement to which the Company is a party or pursuant to which
its properties or assets may be bound;

<PAGE>

         (l)   Any sale or granting to any party or parties of any license,
franchise, option or other right of any nature whatsoever with respect to
the Company's business or termination of any such rights;

         (m)   Any increase in, or commitment to increase, the direct or
indirect compensation payable or to become payable to any officer or director
of the Company, its employees, or to any of its Affiliates, or any commitment
to make severance, bonus or special payments to any of such parties, upon a
change in ownership or management of the Company or upon termination of such
parties;

         (n)   Any settlement of any material litigation or entry of any
judgment against the Company with a value of $50,000 or more (which judgment
has not been stayed or satisfied);

         (o)   Any alteration in the manner of keeping the books, accounts
or records of the Company or in the manner of preparing the Financial
Statements, or in the accounting practices of the Company, or any
revaluation of assets; or

         (p)   Any agreement, whether in writing or otherwise, to take any
action described in this subsections (a)-(o) of this Section 2.9.

   2.10  Contracts.  Schedule 2.10 attached hereto contains a complete and
correct list of all contracts, commitments, obligations or agreements of the
Company, whether written or oral (the "Contracts"):  (i) pursuant to which
the Company leases real or personal property, (ii) pursuant to which the
Company will make or receive payments in excess of $5,000 per annum, (iii)
regarding financing for the Company, (iv) with Affiliates, (v) with consultants
or independent contractors, (vi) resulting in the creation of any lien or
security interest (including lease notifications) or (vii) otherwise material
to the business of the Company.  Each of the Contracts is in full force and
effect and is the legal, valid and binding obligation of the Company and,
to the knowledge of the Company and the Shareholders, of the other parties
thereto, enforceable in accordance with its terms.  Other than as set forth
on Schedule 2.10, to the knowledge of the Company and the Shareholders, no
event has occurred which would constitute a default (or any event which,
with the giving of notice or lapse of time or both, would constitute a
default) under any term or provision of any of the Contracts and thereby
allow a party thereto to terminate and/or claim damages therefor.  The
Company is not a party to any Contract that restricts it from carrying on
its business or any part thereof, or from competing in any line of business
with any person, corporation or entity.

   2.11  Employees.  Schedule 2.11 attached hereto contains a complete and
correct list of all of the Company's employees ("Employees"), which includes
the job position and compensation payable to each of the Employees.  Except
to the extent set forth in Schedule 2.11:

<PAGE>

         (a)   The Company is in compliance with all laws, statutes,
ordinances, rules, regulations, orders and other requirements relating to
the employment of labor, including without limitation Title VII of the
federal Civil Rights Act of 1964, the federal Age Discrimination in
Employment Act of 1967, the federal Americans with Disabilities Act, the
federal Employee Retirement Income Security Act of 1974 ("ERISA"), and any
and all provisions thereof relating to wages, hours, collective bargaining
and the payment of social security and similar Taxes, except where the
failure to be in compliance would not have a Material Adverse Effect;

         (b)   There is no pending or, to the best knowledge of the Company
and the Shareholders, threatened charge, complaint, allegation, application
or other process or claim against the Company before any federal,
territorial, state or local or other governmental or administrative agency
or other entity relating to employment matters;

         (c)   No employees of the Company are covered by any collective
bargaining agreement, nor, to the best knowledge of the Company and the
Shareholders, is there any effort being made by any union to organize the
Company's employees; and

         (d)   No person performing services for the Company has, to the
best knowledge of the Company and the Shareholders, been improperly
classified as an independent contractor or leased employee for purposes of
employee benefits, withholding obligations or overtime wage obligations.

   2.12  Litigation.  Except as set forth in Schedule 2.12 attached hereto,
there is no pending or, to the best knowledge of the Company and the
Shareholders, threatened, action, suit, arbitration, proceeding, investigation
or inquiry before any court or governmental or administrative body or agency,
or any private arbitration tribunal, against, relating to or affecting the
Company or any director, officer or employee of the Company in his or her
capacity as such, or the assets, properties or business of the Company, or
the transactions contemplated by this Agreement, an adverse decision or
finding in which could have a Material Adverse Effect; nor to the best
knowledge of the Company and the Shareholders, are there any facts or
circumstances which could reasonably lead to or provide the basis for any
such threatened action, suit, arbitration proceeding, investigation or
inquiry.  There is not in effect any order, judgment or decree of any court
or governmental or administrative body or agency enjoining, barring,
suspending, prohibiting or otherwise limiting the Company or any officer,
director or employee of the Company from conducting or engaging in any aspect
of the ompany's business, or requiring the Company or any officer, director
or employee of the Company to take certain action with respect to any aspect
of the Company's business.

   2.13  Environmental Matters.

         (a)   The Company is in compliance with Environmental Laws and the
Company has obtained and is in compliance with all necessary permits,
licenses, approvals and authorizations required under applicable Environmental

<PAGE>

Laws, except for such noncompliance which would not have, or could not
reasonably be expected to have, singly or in the aggregate, a Material
Adverse Effect.

         (b)   The Company has not, and to the knowledge of the Company and
the Shareholders, no third party has, released Hazardous Materials at, from,
on, in, to or under the any of the properties or assets owned, leased or
operated (or formerly owned or operated) by the Company and there are no
underground storage tanks, polychlorinated biphenyl-containing equipment or
asbestos-containing material at any of the properties or assets owned, leased
or operated (or formerly owned or operated) by the Company.

         (c)   There are no past, pending or, to the knowledge of the Company
or the Shareholders, threatened, claims, notices of violation, investigations,
litigation, administrative proceedings, orders, judgments against Company
relating to Hazardous Materials, Environmental Laws or relating to any other
location where Hazardous Materials from Company have been transported, stored,
handled, disposed, treated or have otherwise come to be located ("Environmental
Claims") and neither the Company nor any of the Shareholders is aware of any
facts, events, conditions or circumstances which could reasonably be expected
to form the basis of any Environmental Claims against the Company.

         (d)   The Company is not a potentially responsible party with respect
to any federal, state or local environmental clean-up site or with respect to
investigations or corrective actions under any Environmental Law.

         (e)   The Company has not received notice of any alleged, actual or
potential responsibility, inquiry, investigation, claim or administrative or
judicial proceeding regarding  any release, transportation or dispoal of
Hazardous Material by the Company or any violation of or non-compliance by
the Company with the conditions of any permit required under any Environmental
Law or the provisions of any Environmental Law.

   For purposes of this Agreement, the following terms shall have the
following meanings:

   "Environmental Law" means any and all federal, state, local, provincial
and foreign, civil and criminal laws, statutes, rules, ordinances, codes,
regulations, permits relating to the protection of health and the environment,
worker health and safety and or governing the use, handling, storage,
discharge or disposal of Hazardous Materials, including but not limited to
the Comprehensive Environmental Response, Compensation and Liability Act,
42 USC ?9601 et. seq., the Resource Conservation and Recovery Act, 42 USC
?6901 et. seq., the Occupational Health and Safety Act, 29 USC ?651 et. seq.
and the state and local analogues thereto, all as amended or superseded from
time to time.

   "Hazardous Material" means petroleum and petroleum products, radioactive
materials, asbestos-containing materials, radon, lead-based paint,
polychlorinated biphenyls, pesticides and any other chemicals, substances,
wastes or materials defined, listed or regulated by any Environmental Law.

<PAGE>

   2.14   Employee Benefits.  Except as disclosed on Schedule 2.14 attached
hereto, the Company is not a party to any employment agreement with any
officer or employee.  Except as specified on Schedule 2.14, the Company does
not maintain any bonus, incentive compensation, deferred compensation, profit
sharing, severance, salary continuation, or consulting plan or arrangement
with or for the benefit of any officer or employee or for the benefit of any
group of officers or employees.  Except as described on Schedule 2.14, the
Company does not have, and has never had, maintained or contributed to any
"401(k)," profit sharing, savings, retirement (including health and life
insurance enefits provided after retirement) or pension plan that constitutes
an "employee benefit plan," as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or that is
intended to qualify for favorable income tax treatment under Section 401(a)
of the Internal Revenue Code.  Except as set forth on Schedule 2.14, the
Company does not maintain any plan that provides (or will provide) medical
or death benefits to one or more former employees (including retirees)
beyond their retirement or other termination of service, other than benefits
that are required to be provided pursuant to federal or state law
continuation coverage or conversion rights.  With respect to each employee
benefit plan or each employee welfare plan, the Company has not incurred
liabilities as a result of any failure to comply with any applicable
provision of ERISA, the Internal Revenue Code, any other applicable law, or
any provision of such plan.  The Company has performed, in all material
respects, all of its obligations under each such plan required to be
performed by it as of the date hereof.

   2.15   Bank Accounts.  Attached hereto as Schedule 2.15 is a complete and
correct list of the names and locations of all banks, trust companies,
savings and loan associations and other financial institutions at which the
Company maintains safe deposit boxes or accounts of any nature and the account
numbers of all such accounts.

   2.16   Brokers and Finders.  Neither the Shareholders nor the Company has
engaged or authorized any broker, finder, investment banker, financial advisor
or other third party to act on behalf of the Shareholders or the Company,
directly or indirectly, as a broker, finder, investment banker, financial
advisor or in any other like capacity in connection with this Agreement, the
transactions contemplated hereby, or the sale, merger, financing or
capitalization of the Company or has consented to or acquiesced in anyone so
acting, and neither the Shareholders nor the Company knows of any claim for
compensation from any such broker, finder, investment banker, financial
advisor or other third party for so or resulting from the closing of the
transaction contemplated hereby or of any basis for such a claim.

                               ARTICLE 3

          REPRESENTATIONS AND WARRANTIES OF EACH SHAREHOLDER

   Each Shareholder, severally and not jointly, represents and warrants to
Maxwell and I-Bus with respect to such Shareholder's Company Common Stock and
each agreement, document and instrument executed by such Shareholder as follows:

<PAGE>

   3.1   Title to Shares.  Such Shareholder is the record and beneficial owner
of the shares of Company Common Stock set forth opposite such Shareholder's name
on Schedule 2.3, free and clear of any liens, encumbrances, security interests,
restrictions or claims whatsoever, and has full power and authority to convey
such shares in accordance with the terms of this Agreement.

   3.2   Authorization.  This Agreement has been duly executed and delivered
by such Shareholder and constitutes the legal, valid and binding obligations
of such Shareholder, enforceable in accordance with its terms.

   3.3   No Violations.  Neither the execution and delivery of this Agreement,
nor the consummation of the transactions contemplated hereby will (i) violate,
or be in conflict with, or constitute a default (or other event which, with
the giving of notice or lapse of time or both, would constitute a default)
under, or give rise to any right of termination, cancellation or acceleration
under any of the terms, conditions or provisions of any lease, license,
promissory note, contract, agreement, mortgage, deed of trust or other
instrument or document to which such Shareholder is a party or by which such
Shareholder or any of his or her properties or assets may be bound, (ii)
violate any order, writ, injunction, decree, law, statute, rule or regulation
of any court or governmental authority applicable to such Shareholder or any
of his properties or assets or (iii) give rise to a declaration or imposition
of any claim, lien, charge, security interest or encumbrance of any nature
whatsoever upon the shares of Company Common Stock held by such Shareholder
or upon any of the assets of the Company.

                                ARTICLE 4

                      REPRESENTATIONS AND WARRANTIES
                          OF MAXWELL AND I-BUS

   Maxwell and I-Bus  jointly and severally represent and warrant to the
Shareholders as follows:

   4.1   Organization and Power.  Maxwell and I-Bus  are each corporations
duly organized, validly existing and in good standing under the laws of
their state of organization, and each has all requisite corporate power and
authority to own, lease and operate its properties, and to carry on its
business, as such is now being conducted.

   4.2   Capital Structure of I-Bus.  The authorized capital stock of I-Bus
consists of 30,000,000 shares of common stock, $.01 par value, of which
15,270,591 shares are issued and outstanding on the date of this Agreement.
Except for any of the transactions contemplated pursuant to this Agreement,
and for outstanding stock options covering 832,416 I-Bus Shares, there are
no outstanding options, warrants, convertible debt or securities, calls,

<PAGE>

agreements, arrangements, commitments, understandings or other rights to
purchase any of I-Bus's capital stock, or securities convertible into or
exchangeable for any such capital stock.  All of the outstanding shares of
capital stock of I-Bus have been duly authorized, validly issued and are
fully paid and nonassessable.

   4.3   Authorization and Enforceability of Agreements.  Maxwell and I-Bus
each have all requisite corporate power and authority to enter into this
Agreement and to perform their respective obligations hereunder.  This
Agreement has been duly and validly authorized by and approved by all
requisite corporate action on the part of Maxwell and I-Bus.   This Agreement
has been duly executed and delivered by Maxwell and I-Bus,  and constitutes
the legal, valid and binding obligation of Maxwell and I-Bus  enforceable in
accordance with its terms.  Except for securities law filings required by
reason of the Stock Purchase, no further approvals or consents by, or
filings with, any federal, state, municipal, foreign or other court or
governmental or administrative body, agency or other third party is required
in connection with the execution and delivery by Maxwell and I-Bus of this
Agreement or the consummation by Maxwell or I-Bus of the transactions
contemplated hereby, except for those which, if not obtained, would not have
a material adverse impact on the ability of I-Bus to perform its business
as currently conducted or the ability of I-Bus to execute and deliver this
Agreement, or to consummate the transactions contemplated hereby.

   4.4   No Conflicts.  Neither the execution and delivery of this Agreement,
nor the consummation of the transactions contemplated hereby will (a) violate
any provisions of the charter or Bylaws of Maxwell or I-Bus, (b) violate, or
be in conflict with, or constitute a default (or other event which, with the
giving of notice or lapse of time or both, would constitute a default) under,
or give rise to any right of termination, cancellation or acceleration under
any of the terms, conditions or provisions of any material lease, license,
promissory note, contract, agreement, mortgage, deed of trust or other
instrument or document to which Maxwell or I-Bus is a party or by which
Maxwell or I-Bus or any of its properties or assets may be bound, (c) violate
any order, writ, injunction, decree, law, statute, rule or regulation of any
court or governmental authority applicable to Maxwell or I-Bus or any of its
properties or assets or (d) give rise to a declaration or imposition of any
claim, lien, charge, security interest or encumbrance of any nature whatsoever
upon any of the assets of Maxwell's or I-Bus' businesses.

   4.5   Financial Statements and SEC Reports.  Maxwell has delivered to the
Shareholders copies of (i) its Annual Report on Form 10-K for the fiscal year
ended December 31, 1999, and (ii) all other reports, statements and
registration statements filed or required to be filed by it with the SEC
since December 31, 1999 (the documents referred to in clauses (i) and (ii)
being hereinafter referred to as the "Maxwell SEC Reports").  As of their
respective dates, the Maxwell SEC Reports did not contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements made therein, in light of the circumstances under which they
were made, not misleading.  The financial statements (including any related
notes) of Maxwell included in the Maxwell SEC Reports were prepared in
conformity with GAAP applied on a consistent basis, and present fairly in all
material respects the consolidated financial position, results of operations

<PAGE>

and cash flows of Maxwell and its consolidated subsidiaries as of the date
and for the periods indicated, subject, in the case of unaudited interim
consolidated financial statements, to condensation, the absence of certain
notes thereto and normal year-end adjustments.

   4.6   Brokers and Finders.  Neither Maxwell nor I-Bus has engaged or
authorized any broker, finder, investment banker, financial advisor or other
third party to act on their behalf, directly or indirectly, as a broker,
finder, investment banker, financial advisor or in any other like capacity
in connection with this Agreement or the transactions contemplated hereby,
or consented to or acquiesced in anyone so acting, and neither Maxwell nor
I-Bus knows of any claim for compensation from any such broker, finder,
investment banker, financial advisor or other third party for so acting or
resulting from the closing of the transaction contemplated hereby or of any
basis for such a claim.

   4.7   I-Bus Shares.  The I-Bus Shares to be issued and delivered pursuant
to this Agreement will, on delivery of certificates therefor in accordance
with the terms hereof, be duly authorized, validly issued, fully paid and
nonassessable.

                               ARTICLE 5

                                CLOSING

   5.1   The Closing.  At the consummation of the Merger (referred to herein
as the "Closing"), each of the parties shall take all such action and deliver
all such documents, instruments, certificates and other items as may be
required, under this Agreement or otherwise, in order to perform or fulfill
all covenants, conditions and agreements on its part to be performed or
fulfilled at or prior to the date of such Merger consummation (referred to
herein as the "Closing Date") and to cause all conditions precedent to the
other parties' obligations under this Agreement to be satisfied in full.

   5.2   Delivery of Documents.  At the Closing, the parties shall execute
and deliver the following documents:

         (a)   Consents.  The Company shall deliver copies of all consents
or approvals of any governmental authority or of any person in any
contractual relationship with the Company necessary for the consummation
of the transactions contemplated hereby.

         (b)   Company Board and Shareholder Approval.  The Company shall
deliver a certified copy of the resolutions adopted by the Company's Board
of Directors and the Shareholders authorizing and approving this Agreement
and the transactions contemplated herein and therein.

         (c)   Offer Letters. I-Bus and the Shareholders shall sign Offer
Letters regarding the Shareholders' employment with I-Bus.

<PAGE>

         (d)   Noncompetition Agreements.  Maxwell and I-Bus shall receive
from each of the Shareholders a signed Noncompetition Agreement in the form
of Exhibit 5.2(d) (the "Noncompetition Agreement") effective as of the
filing of the Agreement of Merger.

         (e)   Investment Letter.  Maxwell and I-Bus shall receive from each
Shareholder a signed Investment Letter in the form of Exhibit 5.2(e).

         (f)   Put Agreement.  I-Bus and each of the Shareholders shall have
entered into the Put Agreement in the form of Exhibit 5.2(f)  (the " Put
Agreement").

         (g)   Indemnification Escrow Agreement.  The Shareholders and I-Bus
shall execute and deliver the Indemnification Escrow Agreement.

         (h)   I-Bus and Maxwell Board Approval.  Maxwell and I-Bus  shall
deliver to the Company and the Shareholders a certified copy of the
resolutions adopted by the Board of Directors of I-Bus and Maxwell
authorizing and approving this Agreement and the transactions contemplated
herein.

         (i)   Merger Documents.  An Agreement of Merger or other documents
required to effect the Merger shall have been filed with the California
Secretary of State.

         (j)   Cash. Maxwell or I-Bus shall wire the $500,000 cash portion
of the Closing Payment to the Shareholders.

         (k)   Other Matters.  The parties shall deliver such additional
certificates, agreements and the other documents as the other may reasonably
request.

                               ARTICLE 6

                SURVIVAL OF REPRESENTATIONS, WARRANTIES,
           COVENANTS AND RELATED AGREEMENTS; INDEMNIFICATION

   6.1   General Liability Period.  The warranties, representations, covenants
and agreements made by the Company and the Shareholders on the one hand, or by
Maxwell and I-Bus, on the other hand, in this Agreement, or in any document,
certificate, schedule or instrument delivered in connection herewith shall
survive the Closing and shall continue in effect, notwithstanding any
investigation by or on behalf of Maxwell, I-Bus, the Company or the
Shareholders, for twelve months (the "General Liability Period") following
the Closing Date; provided that (a) the representations and warranties set
forth in Sections 2.1-2.4, 2.6, 3.1, 3.2, 3.3,  4.1, 4.2 and 4.3 and (b) the

<PAGE>

agreements and covenants made by the parties hereunder shall survive the
Closing indefinitely.

   6.2   Indemnification by the ShareholdersThe Shareholders, jointly and
severally, shall indemnify and hold harmless, Maxwell and I-Bus and the
officers, directors, agents, affiliates and representatives of Maxwell and
I-Bus or any of them (the "Maxwell Indemnitees") from and against, and shall
reimburse the Maxwell Indemnitees on demand for any loss, liability, damage
or expense that the Maxwell Indemnitees shall incur or suffer, but subject at
all times to Section 6.4 hereof (collectively, "Maxwell's Recoverable
Losses"), arising out of or resulting from any misrepresentation by the
Shareholders or breach by the Shareholders of any (i) representation or
warranty contained in Article 2 hereof, (ii) agreement or covenant under or
pursuant to this Agreement, or (iii) document, certificate, schedule or
instrument delivered by or on behalf of the Company or the Shareholders
pursuant hereto (collectively with respect to which a claim for Maxwell's
Recoverable Losses is made by the Maxwell Indemnitees during the General
Liability Period hereinafter referred to as a "Shareholders Agreement
Breach"); provided that no Shareholder need indemnify the Maxwell Indemnitees
for the breach by the other Shareholder of the representations and warranties
set forth in Article 3 or the separate Noncompetition Agreement or Investment
Letter delivered by the other Shareholder.  Each Shareholder, severally and
not jointly, agrees to indemnify and hold harmless the Maxwell Indemnitees
from and against Maxwell Recoverable Losses arising out of or resulting from
a breach by such Shareholder of the representations and warranties set forth
in Article 3 (collectively with respect to which a claim for Maxwell's
Recoverable Losses is made by the Maxwell Indemnitees during the General
Liability Period hereinafter shall also be referred to as a "Shareholders
Agreement Breach").

   6.3   Indemnification by Maxwell and I-Bus.  Maxwell and I-Bus shall
indemnify and hold harmless the  Shareholders from and against, and shall
reimburse the Shareholders for any loss, liability, damage or expense,
including reasonable attorneys' fees and cost of investigation incurred as
a result thereof, that the Shareholders shall incur or suffer (collectively,
the "Shareholders' Recoverable Losses") resulting from any misrepresentation
or breach by Maxwell or I-Bus of any (i) representation or warranty
contained in Article 4 hereof, (ii) agreement or covenant under or pursuant
to this Agreement or (iii) document, certificate, schedule or instrument
delivered by or on behalf of Maxwell or I-Bus in connection herewith
(collectively with respect to which a claim for the Shareholders'
Recoverable Losses is made by the Shareholders during the General Liability
Period hereinafter referred to as a "Maxwell/I-Bus  Agreement Breach").

   6.4   Limitations on Recoverable Losses.  Notwithstanding anything to the
contrary, express or implied, set forth herein, claims for payment of
Maxwell's Recoverable Losses in respect of a Shareholders  Agreement Breach
(i) may be made only with respect to claims arising during the General
Liability Period (except with respect to breaches of the representations and
warranties specified in the proviso to Section 6.1 and the covenants and
agreements contained in this Agreement which shall not be so limited), (ii)

<PAGE>

must be made by giving the written Claim Notice (as defined in Section 6.5(a)
hereof) to the Shareholders, (iii) except for breaches by the Shareholders or
any of them (a) of any representations and warranties set forth in Article 3,
(b) of any representation and warranty set forth in Sections 2.1-2.4 and 2.6,
or (c) of the covenants and agreements herein set forth, may be made only to
the extent that the aggregate amount of Maxwell's Recoverable Losses for
Shareholders Agreement Breaches exceeds $50,000, in which case all Maxwell's
Recoverable Losses for Shareholders  Agreement Breaches which are covered by
clauses (i) and (ii) herein above shall be paid by the Shareholders, and (iv)
shall not exceed the greater of $5 million or 50% of the Purchase Price.
Notwithstanding anything to the contrary, express or implied, set forth
herein, claims for payment of the Shareholders' Recoverable Losses in
respect of a Maxwell/I-Bus Agreement Breach (x) may be made only with respect
to claims arising during the General Liability Period (except with respect to
breaches of the representations and warranties specified in the proviso to
Section 6.1 and the covenants and agreements contained in this Agreement
which shall not be so limited) and (y) must be made, if at all, by giving a
written Claim Notice to Maxwell and I-Bus.

   6.5   Claims for Indemnification; Disputes.

         (a)   Claims for Indemnification.  Any party hereto (individually or
with others, collectively, the "Indemnitee") shall give the Shareholders, or
Maxwell and I-Bus, as the case may be (the "Indemnitor"), written notice (the
"Claim Notice") of any claim (including the receipt of any demand) or the
commencement of any action with respect to which indemnity may be sought by
the Indemnitee (individually, a "Claim" and collectively, the "Claims");
provided, however, that if the Indemnitee fails to give such Claim Notice
in a materially correct form prior to the expiration of the General Liability
Period (except with respect to breaches of the representations and warranties
specified in the proviso to Section 6.1 and the covenants and agreements
contained in this Agreement, which shall not be so limited), all rights of
the Indemnitee to assert any such Claims for a Maxwell/I-Bus Agreement Breach,
a Shareholders Purchase Agreement Breach  shall terminate and be forever
waived.  The Claim Notice shall include a description of the grounds upon
which the Claim for indemnification is being made.  The right of the
Indemnitee to indemnification for a Claim shall be deemed to be accepted by
the Indemnitor unless, within 45 days after the Indemnitor's receipt of the
Claim Notice, the Indemnitor shall notify the Indemnitee in writing that it
objects to the right of the Indemnitee to indemnification with respect to
the Claim.

         (b)   Control of Litigation; Mutual Cooperation.  If a Claim is based
upon a claim asserted by a third party against the Indemnitee (a "Third Party
Claim") and the Indemnitor denies liability for the Claim hereunder, the
Indemnitee shall be entitled to control the defense of the Third Party Claim,
including, without limitation, the employment of counsel and the right to
settle the Third Party Claim without any participation by or consent from the
Indemnitor.  All fees and expenses of counsel retained by the Indemnitee to
defend such Third Party Claim, expert witness fees and other costs incurred
in such action, shall be payable by the Indemnitee defending such Third Party
Claim; provided, however, that if such Third Party Claim results in a
Recoverable Loss for which the Indemnitor, notwithstanding any denial of

<PAGE>

liability, is found to be liable hereunder, such reasonable fees and expenses
of counsel, expert witness fees and other reasonable costs incurred in such
action shall be deemed to be included in such Recoverable Loss and payable
by the Indemnitor to the extent and under the limitations provided in this
Article 6.  The Indemnitee shall act in good faith and no settlement of the
Third Party Claim may be agreed to without the written consents of the
Indemnitor and the Indemnitee, which consents shall not be unreasonably
withheld.  The party controlling the defense of the Third Party Claim shall
deliver, or cause to be delivered, to the other party copies of all
correspondence, pleading, motions, briefs, appeals or other written
statements relating to or submitted in connection with the defense of the
Third Party Claim, and timely notices of, and the right to participate in
(as an observer), any hearing or other court proceeding relating to the
Third Party Claim.

   6.6   Exclusive Remedy.  Except for issues arising under the Employment
and Noncompetition Agreements and claims arising from fraud, the remedies
provided in this Article 6 shall be the exclusive remedy for monetary
damages (whether at law or in equity) arising out of or related to this
Agreement or the transactions contemplated hereby.

                                 ARTICLE 7

                          POST-CLOSING COVENANTS

   7.1   Relocation.  Maxwell and I-Bus covenant not to move the Company's
principal place of business to a location outside of San Luis Obispo County,
California prior to March 31, 2002; provided that Maxwell and I-Bus may, as
they in their reasonable judgment deem appropriate to further the development
of the Company, establish additional business locations for the Company in
any location or locations as long as none of the Shareholders are required
to relocate outside of San Luis Obispo County without their express consent.

   7.2   Operating Committee.  Until the end of the first quarter of calendar
year 2002, management of the operations formerly conducted by the Company
(the "Company's Operations") will be directed by an operating committee
comprised of Gordon Edmonds, Johni Chan (VP - Engineering and CTO of I-Bus)
and James Baumker (VP - Finance of I-BUS), with the charter of coordinating
the activities of the Company's operations with the strategic direction of
I-Bus and to leverage efficiently the combined resources of the Company's
operations and I-Bus with the absolute minimal redundancy of operating
functions.  This operating committee will report to John Werderman
(President of I-Bus) as may be determined by Mr. Werderman.  After such
quarter, this management structure could be changed based on the best
structure for the broader I-Bus enterprise.

   7.3   Incentive Equity Pool.  To assist in the hiring and retention of
key employees into the operations formerly conducted by the Company, I-Bus
agrees to create an equity incentive program promptly following the Closing,
utilizing for this purpose, as necessary, existing available employee stock
options, newly-authorized employee stock options and shares of restricted
stock, in an aggregate number of shares of I-Bus common stock of 95,017

<PAGE>

(representing 10%, fully diluted, of the I-Bus shares issued at Closing).
I-Bus further agrees to supplement this incentive equity pool with 10%,
fully diluted, of the I-Bus shares issued in the Final Payment (as defined
in Exhibit 1.5).  Options or shares of restricted stock shall be granted or
issued, from time to time out of such available incentive equity pool by
the Board of Directors (or a stock option committee thereof) of I-Bus based
on recommendations by the Shareholders.  The Board of Directors of I-Bus
(or such committee) shall adhere to such recommendations unless, in the
reasonable exercise of its business judgment, it concludes any such
recommendation is inappropriate or not in the best interest of I-Bus.

   7.4   Further Acts.

         (a)   If, at any time after the Closing, any further action by any
of the parties to this Agreement is necessary or desirable to carry out the
purposes of this Agreement and/or to vest in I-Bus full title to all
properties, assets and rights of the Company, such parties shall take all
such necessary or desirable action or use such parties' best efforts to
cause such action to be taken.

         (b)   Maxwell and I-Bus agree that in the event either of them
(or the Company) receives notice, whether orally or in writing, of any
federal, state or local examination, claim, proposed adjustment or related
matter with respect to any Tax Return for Taxes (the "Tax Controversies"),
they shall timely notify the Shareholders.  Failure of Maxwell or I-Bus to
timely notify the Shareholders of any Tax Controversies shall not constitute
a waiver of any rights of Maxwell or I-Bus with respect to the
indemnification thereof by the Shareholders, but shall relieve the Shareholders
of their indemnification obligation to the extent that such obligation is
increased as the result of such failure to give timely notice.

         (c)   After the Closing Date, each of the Shareholders shall:

               (i)   assist Maxwell and I-Bus  in preparing any Tax Returns
not covered by  (d) below for the Company for periods prior to the Closing
Date and in preparing for any audits of, or disputes, contests or proceedings
with, taxing authorities which relate to the Company for periods prior to
the Closing Date;

               (ii)  make available to Maxwell and I-Bus  and to any taxing
authority as reasonably requested all information, records and documents
relating to tax liabilities which are attributable to the Company's business
or the Company relating to periods beginning prior to the Closing Date.

               (iii) make him or herself available, without charge, as
reasonably requested, in connection with tax disputes related to periods
prior to the Closing Date; and

<PAGE>

               (iv)  keep confidential any Tax information except as may
otherwise be necessary in connection with the filing of returns or claims for
refund or in conducting any audit or other Tax proceeding.

         (d)   The Shareholders shall prepare and file federal and state
income and franchise Tax Returns for all periods up to the Closing Date and
will submit such returns to Maxwell for review prior to filing.

         (e)   Following the Closing and so long as (i) a Shareholder is
employed by I-Bus and (ii) I-Bus is a majority-owned subsidiary of Maxwell
with its stock not publicly traded, such Shareholder shall have access to
and the right to inspect, during business hours and upon reasonable prior
notice, the minute book and stock records of I-Bus.  If either clause (i)
or (ii) is no longer true, then the inspection rights of such Shareholder
shall be as permitted by applicable law.

                              ARTICLE 8

                         GENERAL PROVISIONS

   8.1   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 Maxwell
and I-Bus on the one hand and the Company and the Shareholders on the other
hand.  Inspection of documents or the receipt of information pursuant to
this Agreement shall not constitute a waiver of any representation, warranty,
covenant or condition hereunder.  No waiver shall be binding unless executed
in writing by the party making such waiver.

   8.2   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.

   8.3   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.

   8.4   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.

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

<PAGE>

   8.6   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 days
after being deposited in the United States mail, as certified or registered
mail, return receipt requested, first 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 Maxwell:

               Maxwell Technologies, Inc.
               9275 Sky Park Court
               San Diego, California  92123
               Attention:  Donald M. Roberts, Esq.
               Facsimile:  (858) 277-6754

If to the Company or the Shareholders:

               Gordon Edmonds
               7631 Morro Road
               Atascadero, CA 93422

   8.7   Expenses.  Whether or not the Merger is consummated, each of the
Shareholders (and not the Company) and Maxwell and I-Bus shall pay their
own expenses (including outside legal and accounting fees) incident to this
Agreement, filings and preparation of documents in connection with the
issuance of the I-Bus Shares, and any other documents prepared in connection
therewith and consummation of the Merger.

   8.8   Recovery of Litigation Costs.  If any legal action or arbitration or
other proceeding is brought for the enforcement of this Agreement, or because
of an alleged dispute, breach, default or misrepresentation in connection
with any of the provisions of this Agreement, the successful or prevailing
party or parties shall be entitled to recover reasonable attorneys' fees and
other costs incurred in that action or proceeding, in addition to any other
relief to which it or they may be entitled.

   8.9   Publicity.  Neither the Company nor the Shareholders nor any of their
agents or affiliates, shall either directly or indirectly make any press
release or other public communication with respect to the transaction
contemplated hereby without the prior written consent of Maxwell and I-Bus,
unless required by applicable law to make such a communication.

<PAGE>

   8.10   Confidentiality.  From and after the date hereof, Maxwell, I-Bus,
the Shareholders or the Company shall continue to be bound by, and observe
the provisions of, the Confidentiality Agreement dated July 14, 2000,
previously executed by each of them.

   8.11   No Third Parties Benefitted.  This Agreement is made and entered
into for the sole protection and benefit of the parties hereto, their
successors and assigns, and no other person or persons shall have any right
or action under this Agreement.

          [The remainder of this page is intentionally left blank]

<PAGE>

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

                                           GATEWORKS CORPORATION

                                           By: /s/ Gordon Edmonds
                                               ------------------------------
                                               Name:  Gordon Edmonds
                                               Title: President

                                           SHAREHOLDERS:

                                               /s/ Gordon Edmonds
                                               ------------------------------
                                               Gordon Edmonds

                                               /s/ R. Eisworth
                                               ------------------------------
                                               Ronald Eisworth

                                               /s/ D.C. Hollingworth
                                               ------------------------------
                                               Doug Hollingworth

                                               I-BUS/PHOENIX, INC.

                                           By: /s/ Donald M. Roberts
                                               ------------------------------
                                               Name:  Donald M. Roberts
                                               Title: Vice President

                                               MAXWELL TECHNOLOGIES, INC.

                                           By: /s/ Carlton J. Eibl
                                               ------------------------------
                                               Name:  Carlton J. Eibl
                                               Title: President and
                                                      Chief Executive Officer

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