SUBSCRIPTION AGREEMENT

THE  OFFERING  OF  SECURITIES OF ELECTROSOURCE,  INC.  HAS  NOT  BEEN
REGISTERED  UNDER  THE  SECURITIES  ACT  OF  1933,  AS  AMENDED  (THE
OSECURITIES  ACTO),  IN RELIANCE UPON THE AVAILABILITY  OF  EXEMPTION
FROM REGISTRATION PROVIDED BY SECTION 4(2) OF SAID ACT AND REGULATION
D  OF THE GENERAL RULES AND REGULATIONS PROMULGATED THEREUNDER. THERE
ARE   SUBSTANTIAL  RESTRICTIONS  UPON  TRANSFER  OF  THE  SECURITIES.
ACCORDINGLY, THE SECURITIES ARE NOT FREELY TRANSFERABLE AND MAY  HAVE
TO  BE  HELD  UNTIL  TRANSFER MAY BE MADE PURSUANT  TO  A  REGISTERED
TRANSACTION OR AN EXEMPTION FROM REGISTRATION.
                                
                       ELECTROSOURCE, INC.
                     SUBSCRIPTION AGREEMENT
                                
               To Be Fully Completed by Subscriber
                   Along with Related Appendix

   When accepted by Electrosource, Inc., a Delaware corporation  (the
"Company"),   this   Subscription  Agreement   shall   constitute   a
subscription  to purchase shares of the Common Stock,  no  par  value
(the  "Shares"),  of the Company for a purchase price  of  $1.10  per
Share.  Each person participating in the current offering  of  Shares
was  also a participant in an offering of shares of Common Stock  and
of  warrants  to purchase Common Stock (the "Warrants") conducted  by
the  Company  in  1994 (the "Prior Offering"). THIS AGREEMENT  AMENDS
CERTAIN PROVISIONS OF THE DOCUMENTS GOVERNING THE PRIOR OFFERING.

   Each part of this subscription Agreement must be completed by  the
subscriber,  and  by  his execution below, he  acknowledges  that  he
understands  that  the  Company  is relying  upon  the  accuracy  and
completeness   hereof  in  complying  with  its   obligations   under
applicable securities laws.

  Please read and complete, as thoroughly as possible, sign, date and
deliver  one copy of this Subscription Agreement and of the  required
Annex to:

                    Electrosource, Inc.
                    3800B Drossett Drive
                    Austin, Texas 78744
                    Attention: Audrey T. Dearing

  Each subscriber hereto must complete the Subscription Agreement.

   1.  Subscription. Subject to the terms and conditions hereof,  the
undersigned  subscribes for the number of Shares  set  forth  on  the
signature   page  hereof  by  his  execution  and  tender   of   this
Subscription Agreement, together with the following:
     
     (a)      In respect of the Shares, payment of the purchase price
     by check made payable to Electrosource, Inc.;
     
     (b)      A completed and executed Purchaser Questionnaire (Annex
     l);

  Upon acceptance of this subscription by the Company (which shall be
in  the  sole discretion of the Company), the undersigned  agrees  to
execute the documents described herein and all other documents as may
be required by the Company.

   2. Amendment of Prior Agreements. By executing this Agreement, the
undersigned  agrees to the following amendments to  the  Subscription
Agreement  entered into between the undersigned and  the  Company  in
connection  with  the Prior Offering (the "Prior Offering  Document")
and  to  the  Warrants issued and sold in connection with  the  Prior
Offering:
     
     (a)      The  provisions of paragraph 11 below shall apply  with
     respect  to the registration of the Shares and of the shares  of
     Common Stock purchased by the undersigned in the Prior Offering;
     paragraph  9  of  the Prior Offering Document shall  be  deleted
     therefrom and shall no longer be of any force or effect.
     
     (b)      The Exercise Price per share (as defined in the Warrants)
     of those Warrants having an original Exercise Price of $4.50 shall
     be reduced to $2.50 per share, and the Exercise Price of those
     Warrants having an original  Exercise Price of $5.50 per share 
     shall be reduced  to $3.50 per share.
     
     (c)     The Exercise Period (as defined in the Warrants) of each
     Warrant is extended to September 12, 1997.

    3.   Representations  and  Warranties  of  the  Undersigned.  The
undersigned hereby represents and warrants to the Company as follows:
     
     (a)      The  undersigned has received and read and is  familiar
with  the  Private Placement Memorandum dated August  29,  1995,  all
exhibits  thereto,  and this Subscription Agreement.  Except  as  set
forth  in  the  Private Placement Memorandum, no  representations  or
warranties have been made to the undersigned by the Company,  or  any
agent,  employee  or affiliate of any of them, and in  entering  into
this  transaction the undersigned is not relying upon any information
other  than  the  information  contained  in  the  Private  Placement
Memorandum  and  the  exhibits thereto, or  resulting  from  his  own
independent investigation.
     
     (b)      The  undersigned, before the date hereof,  has  had  an
opportunity to ask questions and receive answers from the Company  or
a  person  or persons acting on its behalf, concerning the terms  and
conditions  of this investment and has had an opportunity to  examine
all applicable documents and such applicable information as specified
in Schedule A to the Securities Act, to the extent such documents and
information are relevant to this transaction and are possessed by the
Company or are obtainable by the Company without unreasonable  effort
or  expense, and all such questions have been answered and  documents
and  information have been supplied to the full satisfaction  of  the
undersigned.
     
     (c)      The  undersigned has been furnished and  has  carefully
read  the Private Placement Memorandum and the documents attached  as
exhibits thereto, and he is aware that:
          
          (i)  there are substantial risks incident to an investment
     in  the company, and such investment is speculative and involves
     a  high  degree of risk of loss of his entire investment in  the
     Company;
          
          (ii)  no Federal or state agency has passed upon the sale of
     the  Securities or made any finding or determination  concerning
     the  fairness of this investment, and the terms of the  offering
     may  not  conform to the guidelines of certain state  securities
     administrators;
          
          (iii)  the  Company  has and may  continue  to  have  a
     significant  need  for  cash for operating  expenses  and  other
     purposes;  that  the aggregate proceeds from  the  sale  of  the
     Securities  alone  may not be sufficient  to  satisfy  the  cash
     requirements of the Company for any appreciable period of  time;
     that other sources of funds may not be available to the Company;
     and  that, if such other sources are not available, the  Company
     could  be expected to terminate its business, which could result
     in the loss of his entire investment;
          
          (iv)  the  Company  is  a development  stage  company,  and
     therefore,  all risks attendant to such enterprises  apply,  and
     while  management believes the business prospects to be  viable,
     there can be no assurance that the business plan contemplated by
     management will be realized; and
          
          (v)   the  industry  in  which the Company  is  engaged  is
     occupied  by  several firms, some of which will be substantially
     greater in size and have financial resources and personnel staff
     larger and more established than those of the Company, and there
     can be no assurance that the Company will be able to compete  in
     the market effectively;
     
     (d)      The undersigned understands that an investment  in  the
Company  is an illiquid investment and further recognizes and  agrees
that  as  a  result  of  the restrictions described  in  the  Private
Placement  Memorandum, the undersignedOs investment  in  the  Company
will, most likely, be held for a lengthy period of time.
     
     (e)      The  undersigned acknowledges awareness that there  are
substantial  restrictions on the transferability of  the  Securities.
Since the Securities will not be registered under the Securities  Act
(except  as provided herein) or any applicable state securities  law,
the Securities may not be, and the undersigned agrees that they shall
not  be, sold unless such sale is exempt from such registration under
the  Securities Act and any other applicable state blue sky  laws  or
regulations. The undersigned further acknowledges that the Company is
under  no  obligation to aid him in obtaining any exemption from  the
registration   requirements.   The  undersigned   also   acknowledges
responsibility for compliance with all conditions on transfer imposed
by  any  securities administrator of any state and for  any  expenses
incurred  by  the  Company  for  legal  or  accounting  services   in
connection  with  reviewing such a proposed transfer  and/or  issuing
opinions in connection therewith.
     
     (f)     The undersigned:
          
          (i)   is  an "Accredited Investor," as such term is defined
     in Rule 501 promulgated under the Securities Act, who
          
          (A)  is a natural person that either alone or together with
     his spouse has a net worth of at least $1,000,000; or
          
          (B)   is a natural person that had individual income of not
     less  than  $200,000  in each of 1993 and  1994  and  reasonably
     expects Income of at least $200,000 in 1995; or
          
          (C)   is a natural person that had a joint income with  his
     spouse  in  excess  of $300,000 in each of  1993  and  1994  and
     reasonably expects joint income of at least $300,000 in 1995.
     
     (g)      The  undersigned has been furnished with all  materials
relating to the Company, its proposed activities, the offering of the
Securities  or anything set forth in the Private Placement Memorandum
and  exhibits  which  he  has requested, and has  been  afforded  the
opportunity to obtain any additional information necessary to  verify
the  accuracy of any representations or information set forth in  the
Private Placement Memorandum.
     
     (h)       The  Company  has  answered  all  inquiries  that  the
undersigned  has  asked  concerning  the  Company  and  its  proposed
activities,  and all other matters relating to the formation  of  the
Company and the offering and sale of the Securities.
     
     (i)      The  undersigned  has not been furnished  any  offering
literature  other  than  the  Private Placement  Memorandum  and  the
documents attached as exhibits thereto, and he has relied on only the
information  contained in the Private Placement Memorandum  and  such
exhibits and the information, as described in subparagraphs  (g)  and
(h) above, furnished or made available to them by the Company.
     
     (j)      If the undersigned is a corporation, partnership, trust
or other form of business entity, it is authorized and otherwise duly
qualified  to  purchase  and  hold  Securities  in  the  Company  and
recognizes  that the information under the captions as set  forth  in
(f)  above  relates to investments by an individual, and such  entity
has  its  principal place of business as set forth on  the  signature
page  of  the Subscription Agreement and has not been formed for  the
specific  purpose  of acquiring Securities in the  Company.  (If  the
undersigned is one of the aforementioned entities, it must  agree  to
supply  any  additional written information that may be  required  of
it.)
     
     (k)     The undersigned is acquiring the Securities for which he
hereby  subscribes for his own account, as principal, for  investment
purposes only and not with a view to the distribution thereof.
     
     (l)       The   undersigned  has  not  distributed  the  Private
Placement  Memorandum  to anyone, and no one  has  used  the  Private
Placement Memorandum, and he has not made any copies thereof.
     
     (m)      The undersigned has adequate means of providing for his
current  needs  and  personal  contingencies  and  has  no  need  for
liquidity in his investment.
     
     (n)      The  undersigned  has previously  purchased  securities
which  were  sold  in reliance on a private offering  exemption  from
registration under the Securities Act.
     
     4.  Delivery of Securities. The Company agrees to deliver to the
undersigned  the  securities acquired pursuant to  this  Subscription
Agreement no later than ten (10) days from the date of acceptance  of
the  subject  subscription.  The undersigned  acknowledges  that  the
securities to be delivered shall bear appropriate restrictive legends
as to transfer.
     
     5.  Brokerage Fees. No brokerage fees will be paid  to  persons,
entities or brokers who have referred the purchaser to the Company.
     
     6.   Conditions  of  Acceptance.  It  is  understood  that  this
Subscription  Agreement  is not binding  on  the  Company  until  the
Company accepts it, which acceptance is in its sole discretion.
     
     7.  Transferability.  This subscription is not  transferable  or
assignable by the undersigned.
     
     8. Revocation. The undersigned agrees that the undersigned shall
not  cancel, terminate or revoke this Subscription Agreement  or  any
agreement   of   the  undersigned  made  hereunder  and   that   this
Subscription Agreement shall survive the death or disability  of  the
undersigned.
     
     9.  Governing Law. This Subscription Agreement shall be governed
by the internal laws of the State of Texas.
     
     10.     Registration Rights.

   (a)  The Company undertakes to use its reasonable best efforts
to  file, on or before October 30, 1995, a registration statement
under  the  Securities Act of 1933, as amended  (the  "Securities
Act") covering the sale of the Shares and of the shares of Common
Stock   purchased  by  the  undersigned  in  the  Prior  Offering
(collectively  referred  to  in this  paragraph  11  as  "Covered
Shares"). Such registration statement will be applicable only  to
sales of Covered Shares made through registered broker-dealers at
market  prices prevailing at the time of sale. Shares  of  Common
Stock acquired upon exercise of Warrants prior to the date of the
initial  filing of the registration statement may be included  in
such registration statement, but any such inclusion shall have no
effect  upon  the period of time that the Company is required  to
keep  such registrations statement effective. Except as  provided
in  the preceding sentence, such registration statement shall not
be  applicable to any shares of Common Stock acquired pursuant to
the  exercise of Warrants; the Purchaser acknowledges and  agrees
that  the obligations of the Company with respect to registration
of  shares of Common Stock acquired upon exercise of Warrants are
set forth in the form of Warrant itself.

   (b)  In  connection with the registration  of  Covered  Shares
undertaken  by  the  Company pursuant to this paragraph  11,  the
Company shall:
     
       (i)  prepare  and  file with the Securities  and  Exchange
     Commission (the "Commission") a registration statement  with
     respect  to such shares and use its reasonable best  efforts
     to cause such registration statement to become effective;
     
       (ii)  prepare and file with the Commission such amendments
     and  supplements  to  such registration  statement  and  the
     prospectus used in connection therewith as may be  necessary
     to keep such registration statement current at any time that
     sales  are  proposed  to  be made thereunder  for  a  period
     expiring  on  the earlier of (A) three years  following  the
     date of the closing of the offering described in the Private
     Placement  Memorandum  and (B) the  date  that  all  of  the
     Covered  Shares acquired at such closing have been  sold  by
     the  original  purchasers thereof, and to  comply  with  the
     provisions of the Securities Act with respect to the sale of
     all  Covered  Shares covered by such registration  statement
     during such period;
     
       (iii) provide Purchaser a reasonable opportunity to review
     prior to filing (A) any registration statement filed by  the
     Company in connection with a registration in which Purchaser
     is  participating pursuant to this paragraph 11, and (B) any
     amendments or supplements to such registration statement and
     any prospectus used in connection therewith;
     
       (iv)  furnish to Purchaser such number of conformed copies
     of  such  registration statement and of each such  amendment
     and   supplement  thereto  (in  each  case   including   all
     exhibits), such number of copies of the prospectus  included
     in  such  registration statement (including each preliminary
     prospectus  and  prospectus supplement), in conformity  with
     the  requirements  of  the Securities Act,  and  such  other
     documents  as Purchaser may reasonably request in  order  to
     facilitate  the sale of the Covered Shares covered  by  such
     registration statement;
     
      (v) use its best efforts to register or qualify the Covered
     Shares  covered  by such registration statement  under  such
     other  securities or blue sky laws of such jurisdictions  as
     Purchaser shall reasonably request, and do any and all other
     acts  and  things  which  may  be  reasonably  necessary  or
     advisable to enable Purchaser to consummate the sale in such
     jurisdictions  of  such shares; provided  that  the  Company
     shall  not  for any such purpose be required to register  or
     qualify  the  covered  shares covered by  such  registration
     statement in any jurisdiction in which the Common  Stock  is
     not  then qualified for public trading, to qualify generally
     to  do business as a foreign corporation in any jurisdiction
     wherein  it  would  not  but for the  requirements  of  this
     paragraph  11(c)(v)  be obligated to  be  so  qualified,  to
     subject  itself to taxation in any such jurisdiction  or  to
     consent   to  general  service  of  process  in   any   such
     jurisdiction, and provided further that, in the  event  that
     the  Company proposes to limit the number of states in which
     it   will  sell  shares,  the  expense  of  registration  or
     qualification in any states other than those  in  which  the
     Company  proposes to sell, including all legal fees incurred
     in   connection   with  such  additional  registrations   or
     qualifications, shall be borne by Purchaser;
     
       (vi)   notify  Purchaser  at any time  when  a  prospectus
     relating  to the Covered Shares covered by such registration
     statement  is required to be delivered under the  Securities
     Act,  of  the  Company's becoming aware that the  prospectus
     included in such registration statement, as then in  effect,
     includes an untrue statement of a material fact or omits  to
     state  any  material fact required to be stated  therein  or
     necessary  to make the statements therein not misleading  in
     light of the circumstances then existing, and at the request
     of  Purchaser  promptly prepare and furnish to  Purchaser  a
     reasonable number of copies of a prospectus supplemented  or
     amended  so  that, as thereafter delivered to the purchasers
     of  such shares, such prospectus shall not include an untrue
     statement  of  a material fact or omit to state  a  material
     fact required to be stated therein or necessary to make  the
     statements   therein  not  misleading  in   light   of   the
     circumstances then existing;
     
       (vii)  use  its best efforts to cause all of  the  Covered
     Shares  by such registration statement to be listed on  each
     securities  exchange on which securities of the  same  class
     issued  by  the Company are then listed or, if  there  shall
     then  be  no  such listing, to be accepted for quotation  on
     NASDAQ; and
     
       (viii)  provide  a  transfer agent and registrar  for  the
     Covered  Shares covered by such registration  statement  not
     later   than   the  effective  date  of  such   registration
     statement.

  (d) For as long as Purchaser shall continue to hold any Covered
Shares,  the Company shall use reasonable efforts to file,  on  a
timely basis, all annual, quarterly and other reports required to
be  filed by it under Sections 13 and 15(d) of the Exchange  Act,
and  the  rules and regulations of the Commission thereunder,  as
amended  from time to time. In the event of any proposed sale  of
Covered  Shares  by  Purchaser  pursuant  to  Rule  144  (or  any
successor  rule)  under  the Securities Act,  the  Company  shall
cooperate with Purchaser so as to enable such sales to be made in
accordance  with  applicable  laws, rules  and  regulations,  the
requirements of the Company's transfer agents, and the reasonable
requirements  of the broker through which the sales are  proposed
to be executed.

   (e)  In  connection  with any registration  pursuant  to  this
paragraph  11, the Company shall pay all registration and  filing
fees,  underwriting  discounts, commissions and  expenses  (other
than   those  attributable  to  Covered  Shares  being  sold   by
Purchaser),  printing  expenses, fees and  disbursements  of  the
Company's legal counsel and accountants, and transfer agentsO and
registrars'  fees.  Purchaser shall pay only those  out-of-pocket
expenses  attributable to the inclusion in the  offering  of  the
Covered   Shares  being  sold  by  Purchaser  including,  without
limitation,   registration  and  filing  fees  and   underwriting
discounts, commissions and expenses attributable thereto and fees
and disbursements of Purchaser's legal counsel and accountants.

   (f)  In  the case of each registration effected by the Company
pursuant  to  this paragraph 11, the Company agrees to  indemnify
and  hold  harmless Purchaser, each underwriter  of  the  Covered
Shares  so  registered  and each person  who  controls  any  such
underwriter  within the meaning of Section 15 of  the  Securities
Act,  against any and all losses, claims, damages or  liabilities
to  which  they  or  any  of them may become  subject  under  the
Securities Act or any other statute or common law, including  any
amount  paid  in  settlement  of  any  litigation,  commenced  or
threatened,  if  such  settlement is effected  with  the  written
consent  of the Company, and to reimburse them for any  legal  or
other  expenses incurred by them in connection with investigating
any claims and defending any actions, insofar as any such losses,
claims, damages, liabilities or actions arise out of or are based
upon  (i) any untrue statement or alleged untrue statement  of  a
material fact contained in the registration statement relating to
the  sale  of the Covered Shares, or any post-effective amendment
thereto,  or the omission or alleged omission to state therein  a
material fact required to be stated therein or necessary to  make
the  statements  therein  not  misleading,  or  (ii)  any  untrue
statement  or  alleged  untrue  statement  of  a  material   fact
contained  in  any preliminary prospectus, if used prior  to  the
effective  date of such registration statement, or  contained  in
the  final prospectus (as amended or supplemented if the  Company
shall  have  filed with the Commission any amendment  thereof  or
supplement  thereto) if used within the period during  which  the
Company  is required to keep the registration statement to  which
such  prospectus  relates  current, or the  omission  or  alleged
omission  to state therein (if so used) a material fact necessary
in  order  to  make  the  statement  therein,  in  light  of  the
circumstances  under  which  they  were  made,  not   misleading;
provided,  however, that the indemnification agreement  contained
in this paragraph (f) shall not (x) apply to such losses, claims,
damages,  liabilities or actions arising out of, or  based  upon,
any  such  untrue statement or alleged untrue statement,  or  any
such  omission or alleged omission, if such statement or omission
was  made  in  reliance upon and in conformity  with  information
furnished  in  writing  to  the  Company  by  Purchaser  or  such
underwriter  for  use in connection with the preparation  of  the
registration  statement,  any  preliminary  prospectus  or  final
prospectus  contained  in  the  registration  statement,  or  any
amendment  or supplement thereto, or (y) inure to the benefit  of
any  underwriter  or any person controlling such underwriter,  if
such  underwriter  failed to send or give a  copy  of  the  final
prospectus to the person asserting the claim at or prior  to  the
written confirmation of the sale of Covered Shares to such person
and  if  the  untrue  statement or omission  concerned  had  been
corrected in such final prospectus.

   (g)  In  the  case of a registration effected by  the  Company
pursuant to this paragraph 11, Purchaser and each underwriter  of
the  Covered  Shares to be registered shall  agree  in  the  same
manner and to the same extent as set forth in paragraph 11(f)  to
indemnify and hold harmless the Company, each person who controls
the  Company,  the  directors of the Company  and  those  of  its
officers  who shall have signed any such registration  statement,
with  respect to any untrue statement or alleged untrue statement
in,  or  omission  or  alleged omission from,  such  registration
statement  or  any  post-effective  amendment  thereto   or   any
preliminary  prospectus or final prospectus  (as  amended  or  as
supplemented, if amended or supplemented as aforesaid)  contained
in such registration statement, if such statement or omission was
made   in  reliance  upon  and  in  conformity  with  information
furnished  in writing to the Company and Purchaser  or  any  such
underwriter  for use in connection with the preparation  of  such
registration  statement or any preliminary  prospectus  or  final
prospectus contained in such registration statement or  any  such
amendment or supplement thereto.

   (h)  Each  indemnified party shall, with reasonable promptness
after  its receipt of written notice of the commencement  of  any
action  against  such  indemnified  party  in  respect  of  which
indemnity may be sought from an indemnifying party on account  of
an indemnity agreement contained in this paragraph 11, notify the
indemnifying  party  in writing of the commencement  thereof.  In
case  any  such  action shall be brought against any  indemnified
party  and  it  shall  so  notify an indemnifying  party  of  the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent it may wish, jointly  with
any  other  indemnifying party similarly notified, to assume  the
defense  thereof  with  counsel reasonably satisfactory  to  such
indemnified  party, and after notice from the indemnifying  party
to  such  indemnified  party of its election  so  to  assume  the
defense  thereof, the indemnifying party shall not be  liable  to
such  indemnified party under this paragraph 11 for any legal  or
other expenses subsequently incurred by such indemnified party in
connection  with the defense thereof other than reasonable  costs
of  investigation. The indemnity agreements in this paragraph  11
shall  be  in  addition to any liabilities that the  indemnifying
parties may have pursuant to law.

   (i)  If the indemnification provided for in this paragraph  11
shall  be  unavailable to or insufficient  to  hold  harmless  an
indemnified  party  under  paragraphs 11(f)  or  11(g)  above  in
respect of any losses, claims, damages or liabilities (or actions
in  respect  thereof) referred to therein, then the  indemnifying
parties  shall contribute to the amount paid or payable  by  such
indemnified party as a result of such losses, claims, damages  or
liabilities  (or actions in respect thereof) in such  proportions
as  are  appropriate to reflect to the relative benefits received
by  the respective indemnifying parties from the offering of  the
Covered  Shares.  If,  however, the allocation  provided  by  the
immediately  preceding  sentence is not permitted  by  applicable
law,  or  if  the  indemnified party failed to  give  the  notice
required  under  paragraph 11(h) above,  then  each  indemnifying
party shall contribute to such amount paid by or payable by  such
indemnified party in such proportion as is appropriate to reflect
not  only  such relative benefits but also the relative fault  of
the  indemnifying  parties in connection with the  statements  or
omissions  which  resulted  in such losses,  claims,  damages  or
liabilities (or actions in respect thereof) as well as any  other
relevant equitable considerations. The relative benefits received
by  the  indemnifying parties shall be deemed to be in  the  same
proportion  as  the net proceeds to any such party  bear  to  the
total  net  proceeds from the offering before deducting expenses.
The  relative  fault shall be determined by reference  to,  among
other things, whether the untrue or alleged untrue statement of a
material  fact  or the omission or alleged omission  to  state  a
material  fact relates to information supplied by the  respective
indemnifying  party and the partiesO relative intent,  knowledge,
access to information and opportunity to correct or prevent  such
statement or omission.

   (j)  In connection with any registered offering of the Covered
Shares:
     
       (i) Offers and Sales; Notices to the Company. At least ten
     business  days prior to making any offer or sale of  Covered
     Shares pursuant to the registration statement pertaining  to
     the  sale  (the  "Registration Statement"),  each  Purchaser
     participating  in  such  registered  offering  (a   "Selling
     Shareholder")  shall advise the Company  that  such  Selling
     Shareholder  proposes to make offers  or  sales  of  Covered
     Shares,  the number of Covered Shares proposed to be offered
     and  sold, the name and address of each broker or dealer  to
     or  through which such offers and sales are proposed  to  be
     made,  and  the  approximate period of time  in  which  such
     offers  and  sales  are proposed to  be  made.  If,  in  the
     reasonable judgment of the Company, it is necessary to amend
     or  supplement the Registration Statement or the  prospectus
     contained  therein  (the  "Prospectus")  prior  to   or   in
     connection with any such offer or sale or during the  period
     any  such  offer  or sale is being made,  the  Company  will
     advise  the  Selling Shareholder, who shall promptly  notify
     each  broker  or dealer named by the Selling Shareholder  as
     participating in the offer or sale of Covered Shares by  the
     Selling Shareholder. The Selling Shareholder and each broker
     or  dealer  participating in the offer or  sale  of  Covered
     Shares  by the Selling Shareholder shall not make any  offer
     or  sale  of  Covered  Shares until the  expiration  of  ten
     business days after such Selling Shareholder has advised the
     Company that he proposes to make such offers and sales  and,
     following such ten-day period, shall offer and sell  Covered
     Shares  only  during the period specified  by  such  Selling
     Shareholder   in   the   notice  given   to   the   Company.
     Notwithstanding the foregoing, if the Company  shall  advise
     the  Selling  Shareholder of its determination  that  it  is
     necessary  to amend or supplement the Registration Statement
     or  Prospectus, the Selling Shareholder and each  broker  or
     dealer participating in the offer and sale of Covered Shares
     by  the Selling Shareholder shall make no offers or sales of
     Covered  Shares  until  the  Company  notifies  the  Selling
     Shareholder that such supplement has been filed with or that
     such   amendment   has  been  declared  effective   by   the
     Commission. Shareholder shall promptly notify the Company of
     each  sale  of Covered Shares and shall promptly notify  the
     Company  when the sale or other distribution of all  Covered
     Shares held by such Selling Shareholder has been completed.
     
       (ii)  Copies of Registration Statement and Prospectus. The
     Company will furnish to each Selling Shareholder a conformed
     copy  of  the  Registration Statement and of each  amendment
     thereto.  From  time  to time, for such  period  as  in  the
     opinion  of  counsel  for  the  Company  the  Prospectus  is
     required by law to be delivered in connection with offers or
     sales   of  Covered  Shares  pursuant  to  the  Registration
     Statement,   the  Company  will  deliver  to   the   Selling
     Shareholder,  in such quantities as the Selling  Shareholder
     may reasonably request, copies of the Prospectus (and of any
     amendments or supplements thereto). The Company consents  to
     the  use  of  the  Prospectus  (and  of  any  amendments  or
     supplements thereto) only in accordance with the  Securities
     Act  in  connection with the offer or sale  of  the  Covered
     Shares  and for such period of time thereafter, if  any,  as
     the  Prospectus  is  required by  law  to  be  delivered  in
     connection therewith. If during such period any event  shall
     occur  as  a  result of which it is in the judgment  of  the
     Company  necessary to amend or supplement  the  Registration
     Statement  or  Prospectus in order to  make  the  statements
     therein not misleading or to comply with the Securities  Act
     or  any other law or any undertaking made by the Company  in
     the  Registration Statement or Prospectus, the Company  will
     promptly prepare and file with the Commission an appropriate
     amendment to the Registration Statement or supplement to the
     Prospectus. No person is authorized by the Company,  and  no
     Selling Shareholder shall give or shall authorize or  permit
     any  other  person  to  give any  information  or  make  any
     representations other than as contained in the Prospectus or
     any  amendment or supplement thereto in connection with  the
     offering and sale of Covered Shares.
     
       (iii)  Compliance with Laws. The Company and each  Selling
     Shareholder agree to comply with all applicable federal  and
     state   laws   and  regulations  in  connection   with   the
     registration,  qualification, offering and sale  of  Covered
     Shares, including but not limited to the Securities Act, the
     Securities  Exchange Act of 1934 (the "Exchange  Act"),  the
     rules  and  regulations promulgated by the Commission  under
     the  Securities Act and the Exchange Act and,  particularly,
     Rules  10b-2,  10b-6 and 10b-7 of the Commission  under  the
     Exchange Act.
     
       (iv)  Prohibition Against Trading by Persons Interested in
     the Distribution. Each Selling Shareholder hereby represents
     and  warrants  to  the Company and for the benefit  of  each
     other shareholder participating in the Registration that  no
     broker,   dealer,   Underwriter,  Prospective   Underwriter,
     Affiliated  Purchaser  or other person  who  has  agreed  to
     Participate   or   is  Participating  in  the   Distribution
     contemplated hereby on behalf of or at the direction of such
     Shareholder, shall directly or indirectly, by the use of any
     means  or instrumentality of interstate commerce, or of  the
     mails,  or  of  any  facility  of  any  national  securities
     exchange,  either alone or with one or more  other  persons,
     bid  for  or  purchase for any account in  which  he  has  a
     beneficial  interest,  any shares of Common  Stock,  or  any
     right  to  purchase shares of Common Stock,  or  attempt  to
     induce any person to purchase any shares of Common Stock  or
     rights  until  after he has completed his  Participation  in
     such Distribution. A Selling Shareholder shall be deemed  to
     have completed his Participation in the Distribution when he
     has  sold all Covered Shares owned by him. So long  as  such
     transactions are not engaged in for the purpose of  creating
     actual, or apparent, active trading in or raising the  price
     of  the Common Stock, this paragraph shall not prohibit  (i)
     transactions    in   connection   with   the    Distribution
     contemplated hereby effected otherwise than on a  securities
     exchange  with  the Company or the Selling  Shareholders  on
     whose  behalf  such  distribution is  being  made  or  among
     Underwriters, Prospective Underwriters or other persons  who
     have  agreed  to  Participate or are Participating  in  such
     Distribution;  or  (ii)  unsolicited,  privately  negotiated
     purchases,  each involving at least a block of shares,  that
     are  not  effected from or through a broker  or  dealer;  or
     (iii)  purchases by the Company effected more than  40  days
     after  the  effective  date  of the  Registration  Statement
     covering  the Common Stock to be distributed hereunder,  for
     the   purpose  of  satisfying  a  sinking  fund  or  similar
     obligation to which the Company is subject and which becomes
     due as of a date that does not exceed twelve months from the
     date  of  such  purchases; or (iv) odd-lot transactions  and
     round-lot  transactions  that  offset  odd-lot  transactions
     previously   or   simultaneously  executed   or   reasonably
     anticipated in the usual course of business by a person  who
     acts  in the capacity of an odd-lot dealer; or (v) brokerage
     transactions  not involving solicitation of  the  customer's
     order;   or   (vi)  brokerage  transactions  involving   the
     solicitation of a customer's order made prior to  the  later
     of nine business days before commencement of offers or sales
     of  the  Covered Shares to be Distributed or  the  time  the
     broker-dealer becomes a Participant in the Distribution;  or
     (vii)  offers to sell or the solicitation of offers  to  buy
     Covered  Shares  being Distributed or securities  or  rights
     offered as principal by the person making such offer to sell
     or  solicitation; or (viii) the exercise  of  any  right  or
     conversion privilege set forth in the instrument governing a
     security, to acquire any security directly from the Company;
     or  (ix)  bids  or purchases by an Underwriter,  Prospective
     Underwriter,  Affiliated Purchaser or dealer,  if  all  such
     bids  or  purchases are made (a) prior to the later of  nine
     business  days prior to the commencement of offers or  sales
     of  the shares of Common Stock to be Distributed or the time
     such person becomes a Participant in the Distribution or (b)
     in  the case of unsolicited purchases, prior to the later of
     the date of commencement of offers or sales of the shares of
     Common  Stock  to  be Distributed or the  time  such  person
     becomes  a Participant in the Distribution; or (x)  bids  or
     purchases by the Company or the Selling Shareholders  or  by
     an  Affiliated Purchaser if all such bids and purchases  are
     made   (a)  nine  or  more  business  days  prior   to   the
     commencement  of  offers or sales of the  shares  of  Common
     Stock  to  be  Distributed or (b) in the case of unsolicited
     purchases,  prior to the date of commencement of  offers  or
     sales of the Covered Shares. Capitalized terms used in  this
     paragraph and not defined in this Agreement shall  have  the
     meanings  assigned  to  such terms  in  Rule  10b-6  of  the
     Commission.

   11.  Prohibition  of  Stabilizing  Transactions.  Neither  any
Selling  Shareholder  nor any broker or dealer  or  other  person
acting  for  or on behalf of the Selling Shareholder shall  place
any bid or effect any purchase for the purpose of pegging, fixing
or  stabilizing the price of the Covered Shares to be offered  as
contemplated herein.

   12. Prospectus Delivery Requirements. Each Selling Shareholder
shall comply with all applicable requirements with respect to the
delivery  of Prospectuses set forth in sections 5 and 10  of  the
Securities Act and all applicable rules thereunder.
                                
                                
                                
              SUBSCRIPTION AGREEMENT SIGNATURE PAGE

IN WITNESS WHEREOF, subject to acceptance by the Company, the
undersigned has completed this Subscription Agreement to evidence his
subscription to Electrosource, Inc. this __ day of August, 1995.

PURCHASER:


Printed Name:

Amount of Subscription: $

Number of Covered Shares:

SUBSCRIBERS ALSO MUST EXECUTE THE APPENDIX ATTACHED HERETO.



The Company has accepted this Subscription this __ day of __________,
1995.

ELECTROSOURCE, INC.


By:

Its:
                                
                 ANNEX TO SUBSCRIPTION AGREEMENT
         ALL INFORMATION WILL BE TREATED CONFIDENTIALLY
                     PURCHASER QUESTIONNAIRE
                                
                                
Electrosource, Inc.
3800B Drossett Drive
Austin, Texas 78744

Gentlemen:

     The  information contained herein is being furnished to  you  in
order  to  determine  whether ______________________________  (insert
name  of proposed purchaser) may purchase Shares of the Common  Stock
of  ELECTROSOURCE,  INC.  (the OCompanyO), pursuant  to  the  private
offering  exemption from registration provided by the Securities  Act
of   1933,   as  amended  (the  OSecurities  ActO).  The  undersigned
understands  that  (i)  the Company will rely  upon  the  information
contained herein for purposes of such determination, (ii) the  Shares
will not be registered under the Securities Act in reliance upon  the
private  offering  exemption  from  registration  provided   by   the
Securities Act, and (iii) this questionnaire is not an offer  of  the
Shares  or  any  other  securities  to  the  undersigned  or  to  the
above-named proposed purchaser.
     
     I  herewith  furnish you with the following representations  and
information:
     
1.   Name:

2.   Residence Address:

                                               
                                               
3.   Financial Data - see Subscription Agreement, Section 3(f).

     (a)     Individual income* during 1993: $ _____________
     
     (b)     Individual income* during 1994: $ _____________
     
     (c)  Estimated individual income* during 1995: $ _____________
     
     (d)     Joint income* with spouse during 1993: $ _______________
     
     (e)     Joint income* with spouse during 1994: $ _______________
     
     (f)  Estimated  joint  income*  with  spouse  during   1995:   $
          ___________
     
     (g)  Current   net   worth  of  undersigned  (including   homes,
          furnishings and automobiles)):
          $ _____________
     
     (h)  Current   net   worth  of  undersigned  (excluding   homes,
          furnishings and automobiles)):
          $ _____________
     
     (i)  Current  net  worth  of  spouse, if any  (including  homes,
          furnishings and automobiles):
          $ _______________
     
     (j)  Current  net  worth  of  spouse, if any  (excluding  homes,
          furnishings and automobiles):
          $ _______________
     
* The  term "Income" shall be deemed to mean adjusted gross income of
     the  undersigned (as shown on the undersignedOs  Federal  Income
     Tax returns).

4.    I  have such knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks of the
proposed investment. I can bear the economic risks in and can  afford
a  complete  loss  of  any investment I may  make  by  virtue  of  my
purchasing Securities and can afford to hold any such investment  for
an  indefinite period. If I acquire any Securities, such  acquisition
shall  be for my own account, for investment and not with a  view  to
the resale or distribution thereof.

5.    I represent to you that (a) the information contained herein is
complete and accurate and may be relied upon by you, and (b)  I  will
notify  you  immediately  of  any material  change  in  any  of  such
information  occurring  prior  to  the  closing  of  my  purchase  of
Securities. I agree that, notwithstanding the confidential  treatment
to be accorded the information contained herein, you may divulge such
information  in whole or in part or present all or any part  of  this
document  to  such parties as you may deem appropriate in  connection
with  establishing the availability of an exemption under any Federal
or state securities laws, rules or regulations.

IN WITNESS WHEREOF, I have executed this Purchaser Questionnaire this
__ day of August, 1995, and declare that it is truthful and correct.


PURCHASER:



Sworn to before me this __ day of August, 1995.


Notary Public in and for the State of     , County of _____________.
Printed Name:                      My Commission Expires: