Document:

[LOGO]Enova Systems                                     Contract Number 11072001
      Digital Power Management(TM)

CONFIDENTIAL TREATMENT REQESTED

* - Redacted portion has been omitted and filed separately with the SEC

              Panther(TM) Drive System Product and Services Agreement

1 Introduction and Purpose. This Product and Services Agreement ("Agreement") is
entered into as of 22 January,  2002 (the "Effective Date") by and between Enova
Systems,  Inc., a California  corporation  ("Enova") with its principal place of
business  located at 19850 S. Magellan Drive,  Torrance,  California  90502, and
Moriah  Corporation,  a Japanese  corporation  ("Purchaser")  with its principal
place of business located at 505 5F, OCC Bldg. No. 1, 2-chome,  Kanda-surugadai,
Chiyoda-ku, Tokyo, Japan 101-0062.

      1.1  Enova  manufactures  and  sells  certain  proprietary  vehicle  drive
systems, as further described in Appendix 1 (the "Panther Drive Systems").

      1.2 Purchaser manufactures and sells certain vehicles listed in Appendix 2
and wishes to incorporate  the Panther Drive Systems as an integral drive system
in those vehicles.

      1.3  Purchaser  wishes  to  obtain  Enova's   assistance  in  the  initial
incorporation  of the Enova Drive  Systems into its vehicles and Enova wishes to
provide joint development assistance to Purchaser.

      1.4  Purchaser  and Enova  wish to  address  marketing  opportunities  and
provide for the purchase of Panther Drive Systems for incorporation  Purchaser's
vehicles  and  sale  in  the  event  that  the  joint  development  efforts  are
successful.   The  Purchaser   products  listed  in  Appendix  2  developed  and
manufactured  under this  Agreement  incorporating  Panther  Drive  Systems  are
referred to herein as the "Products."

      1.4 Agreement.  This Agreement consists of the body of the Agreement,  the
Appendices,  and  any  purchase  order  issued  and  accepted  pursuant  to  the
provisions  of  this  Agreement.  Section  2  shall  only  apply  if  there  are
Development  Efforts (defined below in Section 2) and Sections 3 through 7 shall
only apply if there is Commercial  Production  (defined below in Section 3). The
terms,  conditions  and  provisions  of this  Agreement  shall be construed in a
manner that gives effect to the entire agreement to the extent  practicable.  To
the extent that any provisions  conflict,  the Agreement and Appendices  control
over any  inconsistent  purchase order terms,  Appendix 9 (Additional  Terms for
Development   Efforts)   controls  over  any  inconsistent   terms  relating  to
Development Efforts and Appendix 10 (Additional Terms for Commercial  Production
and  Additional  General  Terms)  controls  over  any  inconsistent  term in the
Agreement other than those relating to the Development Efforts.

2 Joint Technical Development and Grant of Rights

      2.1 Intention.  Purchaser intends to integrate a Panther Drive System into
a prototype vehicle (the "Prototype"), and as part of such efforts will endeavor
to combine Panther Drive System with products from manufacturers, suppliers, and
developers  other than Enova.  All efforts by  Purchaser  to combine the Panther
Drive System with other  products or otherwise  integrate  Panther  Drive System
into the  Prototype  are referred to herein as  "Development  Efforts."  Without
limiting the  generality  of the  foregoing,  Development  Efforts shall include
those  development  projects  undertaken  by  Enova  in  direct  response  to  a
Development Effort.

      2.2  Development  Effort Scope.  The parties shall perform the Development
Efforts  described  on Appendix 3. Each party  shall pay for  expenses  and make
other payments associated with the Development Efforts as provided in Appendix 3
and  Appendix 9. Any legal  terms that are  applicable  only to the  Development
Efforts are specified in Appendix 9.

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       Enova Panther(TM) Propulsion System Product and Services Agreement

      2.3  Out-of-Scope  Efforts.  The parties  shall  endeavor in good faith to
establish their respective  rights and duties in any Development  Effort that is
not within the Development  Effort scope defined in Appendix 3. These rights and
duties may include, but are not limited to, assignment of intellectual  property
and payment for additional  hardware or services  delivered.  Unless the parties
agree otherwise in writing,  an out-of-scope  Development Effort that results in
new technology or improvement to existing  technology  will be owned as provided
in Attachment 9.

      2.4 Prototype Hardware  Restrictions.  The Prototype shall be considered a
prototype  product until such time as both parties  mutually agree  otherwise in
writing.  Enova and Purchaser agree that neither party shall publicly display at
trade  shows or  otherwise  promote,  market,  or sell any  prototype  Purchaser
Product without the other party's prior written approval.

      2.5 Commercial  Production.  Promptly  following the date (the  Acceptance
Date") on which Enova and Purchaser mutually agree that successful completion of
the development and testing of Purchaser Product has occurred as contemplated by
Appendix 3, then  Purchaser  shall  engage in  commercial  production,  sale and
support of Products ("Commercial Production").

3 Purchase and Sale of  Products.  If  Commercial  Production  commences,  Enova
agrees to sell and Purchaser  agrees to purchase  Panther Drive Systems pursuant
to the terms, conditions and provisions of this Agreement.

      3.1 Purpose.  Purchaser may purchase the Panther Drive Systems and related
spare and replacement parts for the sole purpose of incorporating  them into the
Purchaser  products  listed in Appendix 2 to create  Products and as replacement
parts for the  Products.  Purchaser  may use the  resulting  Products or sell or
lease them,  either  directly to purchasers  or  indirectly  through one or more
levels of distribution.

      3.2 Nonexclusivity. Enova reserves the right to select and authorize other
businesses  to sell and service Enova  products and parts,  to sell products and
parts directly to direct  accounts of Enova, to sell products and parts to other
purchasers or original  equipment  manufacturers  for use as an integral part of
assembled equipment, or to any other customers.

      3.3 Trained Sales Staff. Purchaser shall maintain a staff of trained sales
personnel in order to ensure maximum market penetration and fulfillment of sales
potential of the Products.

      3.4 Promotion of Products.  Following the Acceptance Date, Purchaser shall
develop a market and promote the sale of the Products  actively,  and  advertise
with a program of  advertising  to create  awareness of Enova products and their
associated value proposition. Such promotion and advertising may include, but is
not limited  to,  participation  in trade  shows,  presentations  at seminars or
industry  meetings,  direct mailings to key customer groups and market segments,
direct sales calls,  and other  appropriate  means.  Enova reserves the right to
review and disapprove all advertising  that contains Enova's name or products as
to form and substance.  Purchaser shall deliver to Enova prior to its use a copy
(translated   into   English  if  the   original  is  not  in  English)  of  any
advertisement,  promotion,  trademark listing,  or display with respect to Enova
products, and Enova shall have the right to review and approve or disapprove the
form and substance of each.

      3.5 Sales  Literature.  Enova  shall  provide  Purchaser  with an adequate
supply of Panther Drive System sales literature ("Promotional Materials") at the
prevailing  price.  Enova shall have no  obligation  to provide any  Promotional
Materials or other materials or documentation to Purchaser in any language other
than  English.  Enova  grants to  Purchaser  the right to  translate  or to have
translated  into other  languages any materials or  documentation  received from
Enova and  relating to the Enova  products  (including,  but not limited to, the
Promotional  Materials).   Purchaser  may  use,  reproduce,   and/or  sell  such
translations,  but only to the extent  necessary to support and market Products.
Enova shall not be responsible  or liable for the accuracy of such  translations
and  Purchaser  shall  indemnify  Enova and hold it harmless  from all  damages,
expenses and liabilities resulting from any translation inaccuracies.

      3.6 Press Releases. The relationship  established by this Agreement is one
that the parties hereto will want to announce,  either jointly or independently,
in the form of press releases, the contents,

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       Enova Panther(TM) Propulsion System Product and Services Agreement

format,  and timing of which will be subject to the prior  written  approval  of
Purchaser and Enova.  Such approval will not  unreasonably be withheld by either
party. No such prior written  approval shall be required for disclosure  reports
and filings, which either party is required to make as a matter of law.

      3.7  Professional  Standards.  Purchaser  shall  ensure  that  all  of its
personnel comply with professional  sales standards of conduct typical of a well
run business in order to maintain and promote responsible and ethical conduct on
the part of such  personnel and thereby  enhance and support the  reputation and
goodwill of Enova products.

      3.8  Records.  Purchaser  shall keep records of the  incorporation  of all
Enova products and parts into Purchaser products.

      3.9  Inspection.  Enova shall have the right during normal business hours,
at its cost with reasonable prior written notice,  to inspect all of Purchaser's
facilities, written policies and procedures, and books and records, which relate
to the fulfillment of Purchaser's  duties hereunder.  Purchaser shall cooperate,
and cause its personnel to cooperate, with any such inspection.

4 Service and Support.

      4.1 Qualified Service Provider Appointment.  Enova appoints Purchaser as a
Qualified  Service  Provider  ("QSP")  with  the  rights  and   responsibilities
described in this Section 4.

      4.2 Description of QSP Services.  Purchaser shall provide  services in any
location in which a Product is maintained,  used,  leased, or sold by Purchaser.
Services to be provided by Purchaser shall include, but are not limited to:

            4.2.1 providing to end users operating and maintenance  instructions
and advice with respect to Panther Drive Systems. Upon request,  Purchaser shall
provide  the  location  and the use of each unit to Enova.  Upon  commissioning,
Purchaser shall explain the provisions of Enova's  warranty to the end user, and
shall instruct the end user in the proper  operation of the Panther Drive System
incorporated into the Product.

            4.2.2  providing  services at such times  following  installation of
Panther  Drive  Systems  as may be  necessary  to ensure  proper  and  efficient
operation thereof,  including but not limited to commissioning the Panther Drive
System,  making  installation   inspections  and  necessary   adjustments,   and
performing  all other  services  reasonably  necessary  at the time of  delivery
thereof.

            4.2.3  providing  warranty  services  with respect to Panther  Drive
Systems consistent with Enova's Warranty Policy and Procedures.

            4.2.4  providing   adequate  service  facilities  and  vehicles  and
providing  an adequate  staff of trained  service  personnel in order to provide
service for those Enova products in a professional and timely manner.

      4.3 Service  Certification.  Purchaser shall cause a sufficient  number of
its qualified  employees to obtain and maintain QSP certification to provide the
services  described  above.  Purchaser shall send such employees,  at reasonable
intervals,  to Enova's  QSP  certification  seminars  in  Torrance,  California.
Thereafter,  Purchaser  shall send all such employees to periodic  refresher and
new Enova certification seminars so that such employees may maintain their Enova
QSP  Certifications.  Enova shall bear the cost of  preparing  such  courses and
Purchaser  shall bear all travel,  lodging,  and related  costs for sending such
employees  to attend  such  seminars,  including  a fee to Enova for each course
attended.  At Purchaser's  request,  Enova shall, subject to availability and at
such time upon which the Parties mutually agree, send Enova personnel to present
training  seminars  for  Purchaser's  employees at a location to be specified by
Purchaser, provided that Purchaser shall pay all documented travel, lodging, and
related costs, plus a fee to Enova for each course taught.

      4.4 Service  Parts.  Purchaser  shall  purchase  and maintain a sufficient
inventory of service parts as prescribed by Enova  according to Enova's  uniform
parts inventory stocking guidelines in effect

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       Enova Panther(TM) Propulsion System Product and Services Agreement

from time to time and based on the field  population  of Products to be serviced
by  Purchaser,  so as to be able to fulfill  its service  responsibilities  in a
timely and professional  manner.  Purchaser may sell or deliver Enova parts only
to end users who  purchased  Products  from  Purchaser or to another  Enova QSP.
Under no circumstances  shall Purchaser sell,  lease,  distribute,  deliver,  or
transfer  Enova parts unless done in  connection  with a specific  Panther Drive
System warranty repair or replacement.

            4.4.1 Parts.  In  providing  services on Enova  products,  Purchaser
shall use only authorized Enova parts, unless Enova agrees otherwise in writing.

            4.4.2  Service Part  Discount.  The discount from list price for all
service parts will be <REDACTED>*

            4.4.3 Service Facilities, Prices. All services billable to end users
or submitted  as a warranty  claim to Enova shall be provided at the same rates.
Service parts prices charged by Purchaser shall not exceed the Enova list price,
plus applicable freight or taxes in the location of service.

      4.5 Purchaser's  Basic Warranty Service  Obligation.  Purchaser's  primary
warranty service duty as a QSP is to identify and replace  malfunctioning  parts
under warranty  promptly and  efficiently in accordance  with Enova's  technical
service policies and parts stocking guide in effect from time to time. Purchaser
shall make  reasonable  efforts to  determine  whether  the end user has a valid
warranty claim.  Purchaser shall not recondition or retrofit any product or part
and shall keep in a central location for Enova's  inspection all defective Enova
products and parts.  At Enova's  direction and expense,  Purchaser  shall return
promptly to Enova all such  defective  products and parts.  Purchaser  shall not
instruct an end user to return any Enova product or part directly to Enova.

      4.6 Compensation for Warranty  Repairs.  Enova shall compensate  Purchaser
for services  associated  with  warranty  repairs upon receipt and approval of a
valid warranty claim form pursuant to Enova's Warranty Procedure. As part of the
warranty claim  procedure,  Purchaser  comply with Enova's  warranty  acceptance
criteria,  as set  forth in  Appendix  4 and  submit  to Enova  the  information
required  by Enova  to  demonstrate  compliance  with  the  warranty  acceptance
criteria.  <REDACTED>* Enova shall pay Purchaser for its labor on the Enova flat
rate schedule  attached as Appendix 5 for removal and replacement of serviceable
components. Enova shall reimburse Purchaser for the price of service parts owned
and used by Purchaser to provide  warranty  service at the rate of  <REDACTED>*.
Enova  reserves  the right to verify  any  claims  that a Panther  Drive  System
requires warranty service under the product  warranty.  If Enova determines that
any Panther  Drive System is free from defects or otherwise  conforms to Enova's
obligations  and  warranties  under this  Agreement,  <REDACTED>*  shall pay all
reasonable   costs  of  such   determination,   including  any  labor,   travel,
transportation  and shipping  expenses.  In the event that Enova determines that
the  service or repair is not  covered  under the terms of the  warranty,  Enova
shall not be required to reimburse  Purchaser for labor,  parts,  or other costs
incurred in such service or repair.

      4.7 System  Upgrades.  Enova may change  the design of the  Panther  Drive
System from time to time and, at its sole  discretion,  provide  upgraded parts,
including without limitation  hardware,  firmware and software,  for the Panther
Drive Systems (collectively, "Upgrades") shipped to Purchaser but which have not
yet been incorporated in Products and shipped to an end user. In the event Enova
decides to provide such an Upgrade,  Enova will notify Purchaser of the Upgrade,
and Enova and Purchaser  will  mutually  agree upon a time for the Upgrade to be
installed and the party or parties who will do the installation.

      4.8  Availability  of Parts.  During the term of this  Agreement and for a
period of  <REDACTED>*  thereafter,  Enova  shall  maintain  the  capability  to
manufacture or otherwise  provide to Purchaser spare parts for the Panther Drive
Systems that it purchases hereunder, <REDACTED>*; provided that in response to a
request by Purchaser  to supply such spare parts during this period,  Enova may,
at its option,  instead provide to Purchaser all necessary information to enable
Purchaser to acquire each spare part from component suppliers.  At any time that
Enova is still  manufacturing  or otherwise  providing  spare parts to Purchaser
under this Agreement,  Enova may, at its option, make substitutions in the spare
parts it provides so long as the substitute  part has equivalent or better form,
fit and function.

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       Enova Panther(TM) Propulsion System Product and Services Agreement

      4.9  Support  Documentation.  Enova will make  available  for  purchase by
Purchaser  comprehensive  training,  repair,  and  service  manuals  for  use in
maintaining and servicing the Panther Drive Systems.

      4.10 Manufacturer Support.

            4.10.1  Scope  of  Support.  Enova  will use  reasonable  commercial
efforts to make its technical  personnel  available as  reasonably  necessary to
provide  after-sale  assistance to Purchaser  technical and service personnel to
resolve  technical  support  issues.  Such support shall consist  principally of
making  appropriate Enova technical  personnel  available to <REDACTED>*.  Enova
will endeavor to respond to Purchaser inquiries within <REDACTED>* after receipt
and will endeavor to assist Purchaser in resolving  technical  support issues as
soon as practicable through the exercise of diligent efforts. Enova will provide
such support to Purchaser personnel only and shall have no obligation to provide
any support whatsoever directly to any Purchaser customer.

            4.10.2 Fees and Expenses.  Enova will provide <REDACTED>*.  Hours in
excess of that amount shall be billed at Enova's standard  consulting rate as in
effect at the time services are  rendered.  Except for on-site  visits,  if any,
that  Enova  personnel  make in  connection  with the  performance  of  warranty
services,  Purchaser shall reimburse Enova for expenses that its personnel incur
in  performing  on-site  support and shall,  in addition,  pay Enova's  standard
consulting  rate for such  personnel  as in  effect  at the  time  services  are
rendered.

5 Order, Delivery and Payment.

      5.1  Prices.  The prices of all Enova goods and  services to be  delivered
hereunder  for  Development  Efforts  shall be as set forth on  Appendix  3. The
prices of all Enova goods and services to be delivered  hereunder for Commercial
Production purposes shall be as set forth on Appendix 7. In addition, and except
to  the  extent  that  Purchaser  may  provide  proper  exemption  certificates,
Purchaser  shall  reimburse  Enova in the amount of any federal,  state or local
excise,  sales, use and other taxes, duties,  tariffs or other governmental fees
withheld and/or payable with respect to the manufacture, transportation, use, or
sale of each Panther Drive System or component that Purchaser purchases, whether
such taxes are imposed on Purchaser  or required to be  collected  by Enova,  or
imposed on Enova  products,  Enova,  or Purchaser in connection with the sale of
Enova  products,  and whether such taxes are on receipts and gross income or are
occupation or excise  taxes;  provided,  however,  that  Purchaser  shall not be
responsible  for taxes upon the income that Enova receives for its sale of Enova
products, parts and services to Purchaser hereunder. Whenever possible, such tax
or taxes shall be added to the invoice for the  applicable  Enova  products as a
separate charge or invoiced separately.

      5.2 Rolling  Forecast.  With respect to Panther  Drive Systems and related
spare parts,  Purchaser  shall deliver to Enova,  <REDACTED>*.  Forecasts  shall
reflect  Purchaser's good faith  expectations of end user demand,  and Purchaser
shall  act in a  commercially  reasonable  manner to avoid  creating  production
capacity problems for Enova.

      5.3  Calculation  of Annual  Volume  Pricing.  <REDACTED>*  following  the
Effective Date during the term of this  Agreement,  Enova shall sell products to
Purchaser  at  <REDACTED>*  as set  forth  in  Appendix  7.  <REDACTED>*  of the
Effective  Date,  the parties  will confer and  mutually  agree upon  production
volumes for the following  year. At the end of  <REDACTED>*  in which  Purchaser
does not  release  for  shipment  the  forecasted  amounts,  Enova will  invoice
Purchaser <REDACTED>*

      5.4 Purchase Orders and Shipment Terms.  Purchaser shall order and release
Enova products and services for delivery by delivering to Enova a purchase order
("Purchase Order").  This Agreement will apply to every Purchase Order for Enova
products  issued to Enova by  Purchaser  unless the parties  expressly  agree in
writing that this Agreement does not apply.  Subject to the following  sentence,
each  Purchase  Order  accepted by Enova,  together with this  Agreement,  shall
constitute the entire agreement  between Purchaser and Enova with respect to the
purchase,  sale and delivery of the Enova  products  described in such  Purchase
Order. Any terms or conditions  stated in any Purchase Order,  acknowledgment or
invoice  (except for details of price,  quantity,  delivery  schedule  and other
details of delivery which are not inconsistent with the terms of this Agreement)
shall be of no force and

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       Enova Panther(TM) Propulsion System Product and Services Agreement

effect, and no course of dealing, usage of trade, or course of performance shall
be relevant to explain or modify any term expressed in the Agreement.

      5.5  Procedures.  From  time to time  during  the term of this  Agreement,
Purchaser  may order  quantities  of Enova  products from Enova by submitting to
Enova,  at least the number of days in advance of the requested  delivery  dates
specified in Appendix 7 hereto as the required  "Lead Time," a written  Purchase
Order stating the items and quantities of Enova products which Purchaser  wishes
to purchase  from Enova and the  requested  delivery  dates for such  items.  As
permitted below, Purchaser may also request adjustments to the delivery dates in
a previously  accepted  Purchase  Order by  submitting  a new Purchase  Order (a
"Modified Purchase Order") specifying the requested changes.  Enova shall accept
any  Purchase  Order  issued by  Purchaser  within the scope of the most  recent
forecast  submitted  to Enova  pursuant to Section 5.2 above and in  conformance
with the terms of this  Agreement,  including  the  provision  of adequate  Lead
Times.  Lead Times are estimates and are subject to change,  except with respect
to any Purchase Order previously  accepted by Enova. Unless canceled or deferred
as permitted below (via a Modified Purchase Order), Purchaser shall be obligated
to purchase the  quantities of Enova  products on the schedule  specified in any
Purchase  Order  accepted by Enova.  Enova  shall  acknowledge  in writing  each
Purchase Order within  <REDACTED>* of receipt,  and such Purchase Order shall be
deemed  accepted  by Enova  unless,  within  ten (10)  days of  receipt  of such
Purchase  Order,  Enova  submits to Purchaser,  in writing,  an objection to the
Purchase Order based upon the failure of Purchaser to comply with this Agreement
in submitting the Purchase Order (including,  without limitation, the obligation
to submit monthly rolling  forecasts in accordance  with Section 5.2 above).  If
Enova so objects to any Purchase Order, such Purchase Order shall not be binding
on either  party until a compliant  Purchase  Order is submitted by Purchaser to
Enova. A Purchase Order becomes a part of this Agreement in accordance with this
Section 5 only after it is accepted in writing by Enova or is deemed accepted in
accordance with the above provisions.

      5.6   Reschedule/Cancellation.   Purchaser  and  Enova   acknowledge  that
substantial lead-times are involved in the manufacture and delivery of the Enova
products and that Enova would likely suffer  significant  loss in the event that
Purchaser seeks to cancel an order for Enova products within such lead-times. In
recognition of these factors, any initial Purchase Order accepted by Enova shall
be subject to the terms regarding  cancellation or deferral of delivery of Enova
products by Purchaser set forth in Appendix 7.

      5.7 Delivery.  All deliveries of Enova products shall be made <REDACTED>*,
California facility or such other facility as Enova may designate ("FOB Point").
In the  absence of written  shipping  instructions  from  Purchaser,  Enova will
select the carrier and use best ground  transportation and ensure that the Enova
products are adequately insured. In the event Enova pays any shipping,  freight,
or insurance charges on behalf of Purchaser,  Purchaser shall promptly reimburse
Enova for all such shipping,  freight or insurance charges incurred on behalf of
Purchaser.  If shipment of any Enova products is delayed at Purchaser's request,
Purchaser shall bear <REDACTED>* of holding such Product,  and Enova may invoice
Purchaser  for such Enova  products  on the date when Enova is  prepared to make
shipment.

      5.8 Title And Risk Of Loss. <REDACTED>*

      5.9  Inspection;  Acceptance.  Purchaser  shall inspect and may reject all
Enova  products that are  defective  <REDACTED>*  after the date of  Purchaser's
receipt thereof.  If Purchaser fails to effectively reject any Enova products in
a written  document  delivered  to Enova  within  <REDACTED>*  (other than those
described in the  following  sentence must  thereafter  be remedied  through the
product  warranty  in  Appendix  6).  This  provision  shall  in no  way  impair
Purchaser's  rights with respect to latent or other defects which would not have
been readily ascertainable upon inspection of the Enova products within
<REDACTED>*.

      5.10  Payment  Terms.  Enova will  invoice  Purchaser  for Enova  products
purchased upon delivery of such products to the FOB Point,  and Purchaser  shall
pay all such invoices by check or wire  transfer  within  <REDACTED>*  after the
invoice  date.  Enova  reserves the right to require  reasonable  assurances  of
payment by  Purchaser  (for  example,  the issuance of a letter of credit from a
reputable bank provided by Purchaser to Enova not later <REDACTED>* prior to the
scheduled  delivery date).

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       Enova Panther(TM) Propulsion System Product and Services Agreement

Enova may, from time to time, evaluate  Purchaser's credit standing and, on that
basis, establish a credit limit to accommodate  Purchaser's issuance of Purchase
Orders as herein  provided.  Purchaser  shall provide any reasonable  assistance
requested by Enova to make such evaluation.

      5.11 Late Payments. Regardless of what payment terms apply to any Purchase
Order,  Purchaser shall pay to Enova  <REDACTED>* or part thereof or the maximum
amount permitted by law, whichever is less.  Purchaser hereby agrees to make all
payments when due for the purchase of any and all Products accepted by Purchaser
regardless of any offset or claim which Purchaser might otherwise be entitled to
assert. Such agreement shall be without prejudice to Purchaser's right to pursue
any claim or remedy  except as an offset  against any payment  owed by Purchaser
under this Agreement.

      5.12 Changes.  Enova expects to be able to provide  Purchaser with advance
notice regarding  changes in the design of any Enova products.  Enova shall have
the right, however, to change the design of Enova products at the same time that
Enova provides  notice to Purchaser and shall have the right at any time to make
changes in materials and to improve Enova products,  provided that the resulting
modified  product  meets or exceeds  any  applicable  specifications  under this
Agreement for such product and the  modifications  do not materially  affect the
form, fit, or function of such products.

6 Warranties to End Users.

      6.1 Enova's End User Product Warranty. Purchaser shall include Enova's End
User Product  Warranty in each  agreement  for sale or lease of the products and
parts  entered into by Purchaser  with end users and  Purchaser  shall furnish a
copy of such End User  Product  Warranty  to the end user upon  delivery of each
product.  Enova's End User Product  Warranty in effect on the Effective  Date is
attached as Appendix 6. Enova reserves the right to modify, change or revise the
product warranty at any time upon notice to Purchaser,  with such modifications,
changes or revisions applicable for any products or parts that are ordered after
the revision  date. If any such  modification  substantially  changes any of the
discussions  or  agreements  Purchaser  may have had  with its then  current  or
prospective  customers,  Enova and  Purchaser  will discuss and determine how to
resolve such modifications.

      6.2 Any Additional  Purchaser  Warranties.  Enova shall have no obligation
with  respect  to,  and  Purchaser  shall be  solely  responsible  for and shall
indemnify and hold harmless Enova with respect to, any warranties beyond Enova's
End User License and  Warranty  that  Purchaser  may provide with respect to any
product or part.

7 Trademarks and Branding.

      7.1 License to Use Enova Trademarks.  Purchaser acknowledges that Enova is
the owner of all right,  title, and interest in and to Enova  trademarks.  Enova
hereby grants to Purchaser a license,  for so long as this Agreement  remains in
effect,  to use  Enova  trademarks,  provided  that  Purchaser  uses  the  Enova
trademarks solely in marketing,  distributing, and selling Panther Drive Systems
as integrated in Products  under the terms and  conditions of this Agreement and
in accordance with the  specifications as to style,  color, and typeface for the
Enova trademarks.  Upon termination of this Agreement,  Purchaser shall take all
action  necessary to transfer and assign to Enova or Enova's  nominee any right,
title,  or  interest  in or to any  Enova  trademarks  that  Purchaser  may have
acquired  in any manner as a result of the  marketing,  distribution,  sale,  or
resale  of any  Enova  product,  and  Purchaser  shall  cease  using  any  Enova
trademarks.

      7.2 Branding. Purchaser shall prominently display on the Products, as well
as on all  promotional  and other  collateral  materials  relating  to,  and all
packaging  for  Products,   such   trademarks,   trade  names,   service  marks,
designations  that Enova may adopt to identify it or any Enova products,  or any
patent, patent application, or other proprietary markings in the size and manner
that Enova designates from time to time. Under no circumstances  shall Purchaser
remove  any such  proprietary  notice or marking  affixed to any Enova  product,
parts, or related materials.

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       Enova Panther(TM) Propulsion System Product and Services Agreement

8 Term and Termination

      8.1 Term: This Agreement shall commence on the Effective Date and continue
in full force and effect for a period of <REDACTED>*. Thereafter, this Agreement
automatically  shall renew for subsequent  terms of  <REDACTED>*,  unless either
party  provides the other party with notice of its  intention  not to renew this
Agreement no fewer <REDACTED>* prior to the end of the then-current term.

      8.2  Termination by Either Party:  Each party may terminate this Agreement
immediately by delivering to the other party written notice of such  termination
in the event of any of the following:

            8.2.1 failure of the Prototype or the Panther Drive System  provided
as part of the Development  Efforts to pass acceptance test criteria as outlined
in Appendix 3;

            8.2.2 a material  breach of this  Agreement  by the other party that
continues uncured for thirty (30) calendar days following written notice thereof
from the non-breaching party;

            8.2.3  a  material  breach  of   confidentiality   or  nondisclosure
agreements by the other party, including,  without limitation,  Section 9 below;
8.2.4  the  other  party's  failure  to pay  when due any  indebtedness  owed by
Purchaser to Enova for Enova products or parts;

            8.2.5 the  execution  by the other  party of an  assignment  for the
benefit of  creditors,  or the  commencement  by or against  the other  party of
voluntary or involuntary proceedings (which are not dismissed within 60 calendar
days) under any bankruptcy, reorganization, or similar laws of any jurisdiction,
or if any order  shall be made or any  resolution  passed  for the  winding  up,
liquidation or dissolution of the other party, if a receiver be appointed for it
for all or substantially all of its assets,  or if a substantial  portion of its
goods or properties shall be taken in execution; or

            8.2.6 the other party ceases to do business or otherwise  terminates
its business operations relevant to this Agreement.

      8.3  Termination by Enova.  In addition to the grounds for termination set
forth in Section 8.2, Enova may terminate this Agreement upon

            8.3.1  Any  attempted  or  actual  transfer  or  assignment  of this
Agreement  or any  right  or  obligation  hereunder  by  Purchaser,  whether  by
operation  of law,  change of control or  otherwise,  without the prior  written
approval of Enova; or if

            8.3.2 Purchaser merges into any entity, or the Sale of a Controlling
Stock Interest in Purchaser  occurs, in each case other than in a transaction in
which the person or persons  controlling the surviving,  continuing or acquiring
person after the transaction is or are substantially  identical to the person or
persons controlling Purchaser before the transaction;  provided that, "Sale of a
Controlling  Stock  Interest" of Purchaser means the acquisition by any "person"
or "group," as such terms are defined under the Securities Exchange Act of 1934,
of 50% or more of the voting securities of Purchaser.

      8.4 Termination of Purchase Orders.  Either party may terminate a Purchase
Order under this Agreement under the same  circumstances as would give rise to a
right to terminate this Agreement.

      8.5 Payment. Any termination of this Agreement shall not release Purchaser
or Enova from paying any amount that it may then owe to the other party.  In the
event of termination of this Agreement, all of Purchaser's debt to Enova and all
of Enova's  obligations  to Purchaser  pursuant to this  Agreement  shall become
immediately  due and payable on the date of  termination.  Termination  does not
relieve  Purchaser of the  obligation to pay for Enova products or parts ordered
but not shipped prior to termination.

      8.6 Survival of  Obligations.  In addition to any provisions  that survive
the termination of this Agreement by their express terms and any provisions that
would be necessary or useful to the parties in

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       Enova Panther(TM) Propulsion System Product and Services Agreement

enforcing their respective rights under the Agreement,  the following provisions
shall survive the termination of this Agreement:  3.8, 3.9, 4.8 (for a period of
five years),  5.10,  5.11,  6, 8.5,  8.6, 9, 10-15,  and Sections 4.0 and 5.0 in
Appendix 3.

9 Confidential Information and Intellectual Property.

      9.1 Confidential  Information.  Confidential information shall be governed
by the standard Enova Nondisclosure Agreement, pursuant to Appendix 8, the terms
and  provisions of which are  incorporated  herein by this reference and binding
upon the parties hereto.

      9.2  Intellectual  Property.  The sale of Enova products to Purchaser does
not convey to Purchaser any intellectual property rights in such Enova products,
including but not limited to any rights under any patent, trademark,  copyright,
or trade secret.  Except as expressly provided in Section 9.3 of this Agreement,
Purchaser may not use or sell any Enova product,  alone or in  combination  with
other  products,  without a separate  license  from Enova  under all  applicable
patents,  copyrights  and  trademarks.  Purchaser's  use and  sale of any  Enova
products  shall be solely in  accordance  with the terms and  conditions of this
Agreement.  Neither  the sale of any Enova  Product  nor any  provision  of this
Agreement  shall be  construed  to  grant to  Purchaser,  either  expressly,  by
implication  or by way of  estoppel,  any  license  under any  patents  or other
intellectual  property rights of Enova covering or relating to any other product
or  invention  or any  combination  of Enova  products  with any other  product.
Purchaser  shall use the Enova products  furnished by Enova solely in accordance
with  the  terms  of this  Agreement,  and  Purchaser  shall  not,  directly  or
indirectly,  disassemble,  decompile,  reverse engineer, or analyze the physical
construction of any of the Enova products for any purpose.

      9.3 License  Grant.  Enova hereby  grants to Purchaser  <REDACTED>*  under
Enova's  intellectual  property  rights to use the Panther Drive Systems and any
hardware, firmware, and software embodied therein, in combination with Purchaser
products  and/or the  technology  of a third person for the specific  purpose of
providing primary propulsion power in Products as listed in Appendix 2.

10 Legal Compliance.

      10.1 Compliance with Applicable Law. Purchaser shall ensure that all Enova
products and parts,  and  Purchaser's  services with respect to them,  including
without limitation the sale, leasing,  rental,  installation,  commissioning and
warranty  service,  comply with all  applicable  laws,  rules,  regulations  and
standards  within the sales territory.  Purchaser shall obtain and maintain,  at
its sole expense, any and all certifications,  licenses,  other  authorizations,
ratings  and  approvals  required  or  advisable  under  the  laws of the  sales
territory   and   elsewhere  in   connection   with   Purchaser's   integration,
distribution,  sales,  and  provision of services for Enova  products and parts.
Without limiting the generality of the foregoing, Purchaser shall (a) supply and
fit all signs and safety  notices to the Enova units and provide all manuals and
instructions so that they comply with all applicable laws and  regulations,  and
(b) obtain all necessary governmental approvals and licenses. Enova shall assist
Purchaser where possible in obtaining such approvals and compliance.

      10.2 Improper  Payments.  Purchaser  and Enova  represent and warrant that
they have not made, or promised to make,  any payment to any public  official in
violation of the United States Foreign Corrupt Practices Act or other applicable
laws.  Purchaser  and Enova  represent  and  warrant  that they are aware of the
applicable United States regulations  governing bribery,  agency, and government
purchases  and any other  relevant  regulations  and that they shall comply with
such rules and regulations.  Each party hereto agrees to hold the other harmless
from and against the consequences of a violation by it of this provision.

      10.3 Export Regulations. Purchaser represents and warrants that it has and
will comply in all material respects with all provisions of United States export
regulations and laws.  Purchaser  acknowledges  that it has read and is familiar
with  these  regulations  and laws and  shall,  for a period of at least two (2)
years after the  expiration  or earlier  termination  of this  Agreement,  fully
comply  with all  provisions  of these  regulations  and  shall  permit  Enova's
representatives  and/or  representatives  of the  United  States  government  to
inspect all such records as may be required.  Purchaser  represents and warrants
that it shall  provide  Enova,  upon  Enova's  request,  with copies of bills of
lading and other

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       Enova Panther(TM) Propulsion System Product and Services Agreement

shipping  documentation in order to demonstrate  Purchaser's compliance with the
foregoing.  Purchaser  represents  and  warrants  that it shall  obtain  written
assurance from end users of the Panther Drive Systems that they are not intended
to be used  for any  purposes  prohibited  by  United  States  export  laws  and
regulations and shall provide Enova with such  information and  documentation as
Enova  reasonably  requests  in order to verify that  Purchaser's  export of the
Panther Drive Systems complies with applicable United States export  regulations
and laws.

11 DISCLAIMER.  EXCEPT FOR THE LIMITED WARRANTY GIVEN ONLY TO END USERS PURSUANT
TO ENOVA'S END USER LICENSE AND WARRANTY,  ENOVA GIVES NO  WARRANTIES  REGARDING
ENOVA  AND  THIRD-PARTY  PRODUCTS,  PARTS,  AND  SERVICES  THAT  ENOVA  PROVIDES
HEREUNDER AND, TO THE EXTENT  PERMITTED BY LAW,  DISCLAIMS ALL EXPRESS,  IMPLIED
AND STATUTORY WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF
MERCHANTABILITY,   FITNESS  FOR  A  PARTICULAR  PURPOSE,   AND  NONINFRINGEMENT.
SPECIFICALLY,  BUT WITHOUT LIMITING THE APPLICATION OF THE FOREGOING DISCLAIMER,
THE PARTIES  RECOGNIZE AND AGREE THAT THE ENOVA PRODUCTS AND PARTS MAY ENCOUNTER
OPERATIONAL DIFFICULTIES. ENOVA DOES NOT WARRANT <REDACTED>*. EXCEPT FOR ACTIONS
FOR  NONPAYMENT  OR BREACH OF  CONFIDENTIALITY  OR IP RIGHTS,  ANY ACTION FOR AN
ALLEGED BREACH OF ANY CONTRACT OF SALE OR OF WARRANTY MUST BE COMMENCED WITHIN
<REDACTED>* AFTER THE DATE ON WHICH THE CAUSE OF ACTION ACCRUES.

12 Intellectual Property Infringement Protection. Enova shall have the liability
expressed in this  paragraph  with  respect to a claim that an Enova  product or
part  infringes any  intellectual  property  right of any third party,  provided
that:  <REDACTED>* necessary to perform Enova's duties under this paragraph.  In
no event shall Enova be liable for any claim of infringement based on the use of
any Enova product  altered in whole or in part by Purchaser  and/or its end user
or used in  connection  with  absolutely  any  equipment,  process,  software or
technology other than that necessary for use of the Enova product in the Product
pursuant to specifications  expressly  approved by Enova. If an Enova product or
part is held,  or  believed  by Enova,  to  infringe,  Enova shall have the sole
option in its sole  discretion  and at its sole  expense to  <REDACTED>*.  Enova
shall  have the right to refuse to supply  additional  Enova  products  or parts
subject to a claim or threatened claim of infringement. THE FOREGOING STATES THE
SOLE AND EXCLUSIVE  LIABLITY OF ENOVA FOR INFRINGEMENT OF INTELLECTUAL  PROPERTY
RIGHTS UNDER THIS AGREEMENT, AND IS IN LIEU OF ALL WARRANTIES,  EXPRESS, IMPLIED
OR STATUTORY IN REGARD TO THOSE ITEMS, INCLUDING WITHOUT LIMITATION THE WARRANTY
AGAINST INFRINGEMENT SPECIFIED IN THE UNIFORM COMMERCIAL CODE.

13 Limitation of Liability In General. Independent of, severable from, and to be
enforced  independently of any other  enforceable or unenforceable  provision of
this  Agreement,  <REDACTED>*,  WHETHER  SUCH  CLAIM  IS BASED  ON  THEORIES  OF
CONTRACT,  NEGLIGENCE,  TORT  (INCLUDING  STRICT  LIABILITY) OR OTHERWISE - AS A
RESULT OF BREACH OF ANY WARRANTY OR OTHER TERM OF THIS AGREEMENT,  REGARDLESS OF
WHETHER  ENOVA WAS  ADVISED,  HAD OTHER  REASON TO KNOW,  OR IN FACT KNEW OF THE
POSSIBILITY  OF SUCH  DAMAGES.  Purchaser  shall  indemnify,  defend,  and  hold
harmless Enova and its directors,  shareholders,  officers,  agents,  employees,
successors,  and assigns from and against any and all claims  arising  from,  in
connection with, or related in any way,  directly or indirectly,  to Purchaser's
or end user's  improper  use or operation  of the Panther  Drive  Systems or any
other products provided  hereunder,  including without  limitation,  all damages
resulting from any products liability claim.

14 Dispute  Resolution:  All  disputes,  controversies,  claims for temporary or
permanent  redress or relief  arising out of or with reference to this Agreement
and  relating  to  the  ownership,  licensing,  use,  sublicensing,   violation,
infringement  or  performance  hereunder with respect to  intellectual  property
rights shall be brought by either party  <REDACTED>* or other court of competent
jurisdiction.  All  other  disputes,  controversies,  claims  for  temporary  or
permanent  redress or relief  arising out of or with reference to this Agreement
shall be  settled  by  arbitration  by a panel of three  arbitrators  under  the
commercial arbitration rules of the American Arbitration Association,  Endispute
or  the  Judicial  Arbitration  and  Mediation  Service.  The  location  of  the
arbitration  shall be <REDACTED>*.  Such arbitration shall be conducted by three
arbitrators,  one chosen by Enova, one chosen by Purchaser and a third,  neutral
arbitrator,  selected by the first two.  The award of the  arbitrators  shall be
final and binding and the parties

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       Enova Panther(TM) Propulsion System Product and Services Agreement

consent  to the  exclusive  jurisdiction  of any  <REDACTED>*  for  purposes  of
enforcing any decision of the arbitration panel. By this Agreement,  the parties
do not intend to deprive any court of its  jurisdiction  to issue a  prearbitral
injunction,  prearbitral  attachment  or  other  order  in  aid  of  arbitration
proceedings  and  enforcement  of  the  award,   including  without  limitation,
injunctive relief for the protection of intellectual property rights.

15 Miscellaneous:

      15.1 Governing Law. This Agreement will be governed in all respects by the
laws of the State of <REDACTED>*  as such laws are applied to contracts  between
<REDACTED>* residents entered into and to be performed entirely within the State
of  <REDACTED>*.  The parties agree to exclude  entirely the  application of the
United Nations  Convention on Contracts for the International Sale of Goods from
this  Agreement  and from any agreement or  transaction  that may be executed or
carried out pursuant to this Agreement.

      15.2 Entire and Sole Agreement. This document,  together with the attached
exhibits specifically referenced in this document,  constitutes the complete and
exclusive  statement of the mutual  understanding of the parties with respect to
its  subject   matter.   This   Agreement   supersedes  any  and  all  prior  or
contemporaneous understandings,  representations, or other communication between
the parties of any sort,  whether  written or oral,  with respect to its subject
matter.  The terms of this Agreement shall supersede any inconsistent  terms and
conditions of any Purchase  Order,  regardless  of form,  issued by Purchaser to
Enova.  In any  proceeding  brought to enforce  or  interpret  the terms of this
Agreement,  the  nonprevailing  party  shall  pay to the  prevailing  party  the
prevailing party's attorneys' fees and costs incurred.

      15.3 Assignment. Neither party shall assign this Agreement or any right or
interest under this  Agreement or delegate any obligation to be performed  under
this Agreement  without the other party's prior written  consent,  which consent
shall not be unreasonably withheld, and any attempt to do so shall be void.

      15.4 Force  Majeure.  Each party's  performance  under this  Agreement (i)
shall be  suspended  (other  than the  obligation  to pay monies  already due to
either party or becoming due as a result of filling  orders placed and accepted)
for so  long  as  such  performance  is  hindered  or  prevented  by  events  or
occurrences beyond its reasonable  control ("Force  Majeure"),  such as, but not
limited to, riots,  labor disputes of a general  nature,  national or civil wars
(declared or undeclared), insurrections,  rebellions, terrorist acts, embargoes,
civil  disturbances,  dispositions or orders of governmental  authority (whether
such  authority  be actual or  assumed),  acts of civil or  military  authority,
fires, strikes,  delays in transportation,  inability to obtain necessary labor,
manufacturing  facilities  or materials  from usual  sources and acts of God and
(ii) any  delays  resulting  from  any  such  cause  shall  extend  the time for
performance correspondingly. If a failure to perform results from a governmental
law, rule, regulation,  disposition or order and the affected party is unable to
perform,  after  making  reasonable  efforts  to comply  with  such  law,  rule,
regulation, disposition or order, the matter shall be deemed a Force Majeure. IN
NO EVENT SHALL EITHER  PARTY BE LIABLE TO THE OTHER FOR GENERAL,  CONSEQUENTIAL,
INDIRECT OR SPECIAL DAMAGES DUE TO ANY FORCE MAJEURE.

      15.5 Counterparts.  This Agreement may be executed and delivered in one or
more counterparts and by facsimile  transmission,  each of which shall be deemed
an  original,  but all of  which  together  shall  constitute  one and the  same
instrument.

      15.6 Severability. In the event any provision of this Agreement is held to
be invalid or unenforceable, the remaining provisions shall remain in full force
and effect.

      15.7 Relationship of the Parties.  Purchaser shall conduct its business in
the purchase,  distribution,  marketing,  sale, installation,  commissioning and
provision of services with respect to Enova  products  hereunder as a principal,
for its own account and at its own expense and risk.  Nothing  contained in this
Agreement shall be construed as creating a joint venture,  partnership,  agency,
or  employment  relationship  between the parties  hereto nor shall either party
have the right, power, or authority to create any obligation or duty, express or
implied,  on behalf of the other  party.  Purchaser  shall

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       Enova Panther(TM) Propulsion System Product and Services Agreement

not act or represent itself, either directly or by implication,  as an agent for
Enova and will not attempt to create any obligation, or make any representation,
warranty,  or covenant that Enova has not specifically  authorized in working on
behalf, or in the name, of Enova.

      15.8 No Third Party Beneficiaries. Unless otherwise expressly provided, no
provisions  of this  Agreement are intended or shall be construed to confer upon
or give to any  person or entity  other  than Enova or  Purchaser,  any  rights,
remedies or other benefits under or by reason of this Agreement.

      15.9  Notices.  All notices or other  communications  that shall or may be
given  pursuant  to  this  Agreement,  shall  be in  writing,  shall  be sent by
certified or registered air mail with postage prepaid, return receipt requested,
by facsimile,  e-mail,  reputable overnight or other rapid courier with tracking
capabilities,  or by hand delivery; provided, however, that if a notice or other
communication  is sent via  facsimile  or e-mail,  such notice or  communication
shall also sent by one of the other means of transmittal  (with the exception of
facsimile or e-mail,  as the case may be). Such  communications  shall be deemed
given and received upon delivery if sent by overnight courier or hand delivered,
within three business days of mailing,  if sent by certified or registered mail,
and within the time period set forth above for such method other than  facsimile
or e-mail if sent by facsimile or e-mail,  and shall be addressed to the Parties
as set forth in the preamble to this  Agreement  or such other  addresses as the
Parties  may  designate  and provide  notice of in writing  from time to time in
accordance with this Section.

      15.10  Waiver.  No waiver of any  provision  of this  Agreement  or of any
rights or obligations  of either party  hereunder  shall be effective  unless in
writing and signed by the party waiving compliance, and any such waiver shall be
effective only in the specific  instance and for the specific  purpose stated in
such writing.

      15.11 Amendments. This Agreement shall not be modified, amended, or in any
way altered except by an instrument in writing signed by the parties hereto.

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       Enova Panther(TM) Propulsion System Product and Services Agreement

IN WITNESS  WHEREOF,  the parties  have  entered  into this  Agreement as of the
Effective Date.

ENOVA SYSTEMS, INC.                              PURCHASER

By:  ______________________________              By:  __________________________

Name: Carl Dean Perry                            Name: Isao Yamamoto

Title:  President & CEO                          Title:  President & CEO

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       Enova Panther(TM) Propulsion System Product and Services Agreement

List of Appendixes

16.1     Appendix 1.  Panther Drive System Products covered by this agreement.

16.2     Appendix 2.  Purchaser Products covered by this agreement.

16.3     Appendix 3.  Development Program Responsibilities, Acceptance Criteria,
                      and Payments and Expenses

16.4     Appendix 4.  Warranty Acceptance Criteria for Purchaser Product

16.5     Appendix 5.  Warranty Labor Flat Rate Schedule

16.6     Appendix 6.  End User Product Warranty

16.7     Appendix 7.  Prices and Other Commercial Terms

16.8     Appendix 8.  Non-Disclosure Agreement

16.9     Appendix 9.  Additional Terms for Development Efforts.

16.10    Appendix 10. Additional Terms for Commercial Production and Additional
                      General Terms.

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       Enova Panther(TM) Propulsion System Product and Services Agreement

                                   Appendix 1

                          Panther Drive System Products

<REDACTED>*

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       Enova Panther(TM) Propulsion System Product and Services Agreement

                                   Appendix 2

                               Purchaser Products

Rail Bus and  30-Foot  Street  Bus with  GVWR  less than  35,000  pounds.  First
Prototype vehicle will be a Mitsubishi ROSA microbus.

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       Enova Panther(TM) Propulsion System Product and Services Agreement

                                   Appendix 3

  Development Program Responsibilities, Acceptance Criteria, Special Terms, and
                              Payments and Expenses

1.0 Development Program Responsibilities.

      1.1 Joint  Responsibilities.  In  addition  to the joint  responsibilities
described  in  Appendix  9,  the  parties   shall  have  the   following   joint
responsibilities in performing the Development Efforts;

            1.1.1 None.

      1.2   Enova   Responsibilities.   Enova   shall,   in   addition   to  the
responsibilities described in Section 1.1 to Appendix 3, do the following:

            1.2.1 Panther Drive System and Other Purchased  Deliverables.  Enova
Shall be  responsible  for  providing  to  Purchaser  material  and  services as
outlined  Attachment  1 to  Appendix 3 to support  the  development  program and
prototype vehicle build.

Personnel and  Equipment.  Make  available at the Purchaser  facility in Toyama,
Kanagawa and Shizuoka Prefectures,  Japan, the following personnel and equipment
to support the assembly and testing of the Prototype:

                  Engineering   and  Technical   personnel  to  support  vehicle
                  integration  and drive system  tuning,  including  appropriate
                  diagnostic tools.

            1.2.2 Consulting Services.  Advise Purchaser on the components to be
used by Purchaser in the Prototype and incorporate  these into the Panther Drive
System control system where applicable,  and provide support and guidance in the
total integration of the Panther Drive System into the Prototype, as needed.

            1.2.3  Training.  Provide  the  following  training  services to the
number of Purchaser personnel at the times and locations specified below:

            <REDACTED>*

            1.2.4 Documentation.  Develop and provide to Purchaser in connection
with the sale of Panther Drive Systems training,  service and repair manuals for
the Panther Drive Systems as follows:

            <REDACTED>*

      1.3  Purchaser  Responsibilities.  Purchaser  shall,  in  addition  to the
responsibilities  described in Section 1.1 to Appendix 3, be responsible for the
design of the Prototype and the  procurement  and assembly of all components for
the Prototype, as further specified on Attachment 2 to Appendix 3.

2.0 Deliverables Schedule.  Each party will use reasonable commercial efforts to
deliver  the  products  and  materials  and to perform  the  services  and other
obligations within the period specified below:

      2.1 Enova  will ship the 120kW  drive  system  for the  prototype  vehicle
within <REDACTED>* of signing this agreement.

      2.2 Purchaser will complete prototype vehicle build, complete drive system
integration,  and begin field trials within  <REDACTED>* of receipt of the Enova
Drive System.

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       Enova Panther(TM) Propulsion System Product and Services Agreement

3.0 Acceptance Criteria.

1. Enova and Purchaser  will work together to complete the  acceptance  criteria
table below.  Drive system  performance  will not be required to exceed  product
specifications.

         Parameter                          Target                   Responsible

         Acceleration 0 - 30mph             __________               Enova

         Top Speed                          __________               Enova

         Drive System Efficiency kWhr/mile  __________               Enova

         Battery Peak Power                 __________               Enova

         Gen Set Peak Power                 28kW______               Enova

         Vehicle GVWR                       5,800 kg                 Purchaser

         Rear Axle Ratio                    4.444                    Purchaser

         Tire Size                          205/85R16-111/109LT      Purchaser

         Drag Coefficient                   __________               Purchaser

2. Enova and  Purchaser  will  complete  the  acceptance  criteria  table within
<REDACTED>* of execution of this contract.

4.0 Special Terms.  Special terms that apply to the Development  Efforts are set
forth in Appendix 9.

None

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       Enova Panther(TM) Propulsion System Product and Services Agreement

                           Attachment 1 to Appendix 3

              Panther Drive System and Other Purchased Deliverables

                      In support of the Development Program

<REDACTED> *

                                    19 of 32
<PAGE>
       Enova Panther(TM) Propulsion System Product and Services Agreement

                           Attachment 2 to Appendix 3

                Prototype Components to be Supplied by Purchaser

Vehicle for  prototype  build,  batteries,  wire  harnessing,  and other similar
mechanical and electrical system interconnections.

                                    20 of 32
<PAGE>
       Enova Panther(TM) Propulsion System Product and Services Agreement

                                   Appendix 4

               Warranty Acceptance Criteria for Purchaser Product

1 Vehicle Application

      1.1 The Purchaser  will submit a technical  paper to Enova  describing the
application. The document shall include:

            1.1.1 Overall description of the product.

            1.1.2 Panther  Drive System load profile and drive cycle,  including
maximum grade, maximum speed, and average power.

            1.1.3 General description of the Panther Drive System  installation,
including:

            <REDACTED>*

            1.1.4 Product regulatory requirements

            1.1.5 Product safety features and options

            1.1.6 Product monitoring and/or diagnostics

      1.2 Enova review of the  technical  paper and written  approval from Enova
will complete this step.

2 Prototype Installation

      2.1 The  Purchaser  will submit  engineering  drawings.  The drawings will
detail:

            <REDACTED>*

      2.2 The Purchaser will submit a  specification  for the control system and
system interface to the Panther Drive System. The specification will include:

            2.2.1 <REDACTED>*

      2.3 Enova review of the drawings and  specification  and written  approval
from Enova will complete this step.

3 Installation Approval Inspection

      3.1 At its  discretion,  Enova  will  arrange to visit the  purchaser  and
physically  inspect  the  completed  installation  to  ensure  that it meets the
descriptions and specifications provided above.

      3.2 Written  approval of the  installation  from Enova will  complete this
step.

4 Beginning of warranty coverage.

      4.1 When the three steps above are completed, the Purchaser's installation
is approved  and the Enova End User  Product  Warranty is  applicable.  Material
changes  in  the   installation   of  Purchaser's   installation   will  require
re-approval.

      4.2 Enova  will  provide  written  confirmation  that the  warranty  is in
effect.

                                    21 of 32
<PAGE>
       Enova Panther(TM) Propulsion System Product and Services Agreement

                                   Appendix 5

                        Warranty Labor Flat Rate Schedule

The following  schedule covers the maximum allowed  reimbursable  labor expenses
under warranty for The Panther Drive System and components.

                   ---------------------------------------------------
                   <REDACTED>*                 <REDACTED>*
                   ---------------------------------------------------
                   <REDACTED>*                 <REDACTED>*
                   ---------------------------------------------------
                   <REDACTED>*                 <REDACTED>*
                   ---------------------------------------------------
                   <REDACTED>*                 <REDACTED>*
                   ---------------------------------------------------
                   <REDACTED>*                 <REDACTED>*
                   ---------------------------------------------------
                   <REDACTED>*                 <REDACTED>*
                   ---------------------------------------------------
                   <REDACTED>*                 <REDACTED>*
                   ---------------------------------------------------

The labor rate will be <REDACTED>*. To calculate the reimbursable labor expense,
multiply the replacement time by the labor rate.

This labor rate and replacement time list is valid for orders placed by December
31, 2002. A new labor rate and  replacement  time list will be provided no later
than December 15th of each year for the following year.

                                    22 of 32
<PAGE>
       Enova Panther(TM) Propulsion System Product and Services Agreement

                                   Appendix 6

                            End User Product Warranty

Enova Panther(TM) Propulsion System Warranty

Terms of Coverage:

      1.    Users. Enova Systems, Inc. ("Enova") provides the following warranty
            for the Panther(TM)Propulsion Systems and for the optional parts and
            systems   available   for   the    Panther(TM)Propulsion    Systems,
            <REDACTED>*. This warranty applies to the first user only during the
            warranty period and is not transferable.

      2.    Coverage.  Enova warrants that any standard part of the  Panther(TM)
            Propulsion  System  and any  optional  part or  system  (as  defined
            below),   that  is  properly   installed   and   operated   per  the
            specifications  provided by Enova,  and found by Enova under  normal
            use and service to malfunction during the warranty period, solely as
            a result of defects in materials or workmanship, will be repaired or
            replaced,  at Enova's option.  This coverage  includes  <REDACTED>*.
            Warranty  coverage will only become  effective upon  completion of a
            Warranty   Acceptance   Criteria  Checklist  covering  the  specific
            application.

      3.    Panther(TM)Propulsion  System Parts.  Parts covered by this warranty
            include <REDACTED>*,  and any optional parts or systems manufactured
            or supplied by Enova. Without limitation of the foregoing,  excluded
            are  any  optional  parts  or  accessories  or  interface   controls
            manufactured  or purchased by others to meet  customer  installation
            requirements.

      4.    Warranty Period.  The "Warranty Period" begins on the date the parts
            are shipped to the customer and <REDACTED>*, whichever comes first.

      5.    Panther(TM)  Propulsion  System  Replacement  Part Warranty  Period.
            Panther(TM)  Propulsion  System  parts  supplied by Enova under this
            warranty for  replacement  or repair of any  workmanship or material
            defect will carry a Warranty  Period that is equal to the  remaining
            Warranty  Period and Coverage of the Original  Panther  Drive System
            parts.

      6.    Repairs  Under  Warranty.  All repairs  under this  warranty must be
            conducted by <REDACTED>*.  During the warranty period, any use of or
            substitution of parts other than Panther(TM) Propulsion System parts
            supplied  or approved  by Enova will void the  warranty.  All claims
            under  this  warranty  must  be  made  to  the  <REDACTED>*  of  the
            malfunction  of the Panther Drive System.  All parts  replaced under
            this warranty shall become the property of Enova.

      7.    Exclusions to Warranty.

            a.    Internal   Combustion   Engines   used  as  part  of  internal
                  combustion hybrid systems.  Enova will make reasonable efforts
                  to  arrange  a  pass  through  of the  original  manufacturers
                  warranty terms and conditions.

            b.    Turbine   Generator  sets  used  as  part  of  turbine  hybrid
                  propulsion  systems.  Enova  will make  reasonable  efforts to
                  arrange a pass through of the original  manufacturers warranty
                  terms and conditions.

            c.    Fuel  Cell  Power  Systems  used as part of fuel  cell  hybrid
                  propulsion  systems.  Enova  will make  reasonable  efforts to
                  arrange a pass through of the original  manufacturers warranty
                  terms and conditions.

                                    23 of 32
<PAGE>
       Enova Panther(TM) Propulsion System Product and Services Agreement

            d.    Traction  Batteries used in pure electric and hybrid  electric
                  propulsion  systems.  Enova  will make  reasonable  efforts to
                  arrange a pass through of the original  manufacturers warranty
                  terms and conditions.

            e.    Connectors  and  Receptacles  used to complete  the vehicle to
                  charger connection for Rapid Charging systems (power levels in
                  excess of  6.6kW).  Enova  will  make  reasonable  efforts  to
                  arrange a pass through of the original  manufacturers warranty
                  terms and conditions.

            f.    Firmware  and  software  used for  operation  and  maintenance
                  reporting.  Notwithstanding  the  foregoing,  Enova  will make
                  reasonable efforts to resolve firmware or software problems.

            g.    Parts and labor for repairs  that are due to shipping  damage,
                  vandalism, accidents, misuse, misapplication,  storage damage,
                  acts of God or nature, negligence, or modification to products
                  that are not authorized in writing by Enova.

            h.    Parts and labor for  repairs to parts or  components  that are
                  not manufactured <REDACTED>*.

            i.    Parts and labor for routinely scheduled maintenance or repairs
                  that result from <REDACTED>*.

            j.    Parts and labor and any costs to investigate  problems  and/or
                  repair  products  that  are  caused  by any  operation  of the
                  product outside the operating specifications defined by Enova.
                  Without limitation of the foregoing,  specifically excluded is
                  damage caused by power quality  disturbances (sags, surges and
                  harmonics) in grid connected  operation,  and operation of the
                  Gas  Compression  System outside the pressure and  temperature
                  specifications provided by Enova.

            k.    Any incidental or  consequential  damages or expenses that the
                  owner  or user  may  incur as a  result  of a  malfunction  or
                  failure covered by this warranty.

      8.    Other Exclusions. Parts and labor reimbursement by Enova is the only
            remedy to owners  and users  under  this  warranty.  Enova  does not
            authorize  any  person or party to assume or create for it any other
            obligation or liability in connection  with the products or any part
            of the products.  Enova's  warranties  shall not be enlarged by, nor
            shall any  obligation  or  liability  of Enova  arise due to,  Enova
            providing  technical  advice,  facilities,  or service in connection
            with any Product or Contract.

      9.    THIS  WARRANTY IS THE  EXCLUSIVE AND ONLY WARRANTY FOR ENOVA PANTHER
            PROPULSION SYSTEMS. ENOVA SYSTEMS MAKES NO OTHER WARRANTIES, EXPRESS
            OR IMPLIED,  INCLUDING,  WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF
            MERCHANTABILITY,    FITNESS   FOR   A   PARTICULAR    PURPOSE,    OR
            NONINFRINGEMENT.   ENOVA   SYSTEMS  SHALL  NOT  BE  LIABLE  FOR  ANY
            INCIDENTAL OR CONSEQUENTIAL DAMAGES.

                                    24 of 32
<PAGE>
                                                        Contract Number 11072001

                                   Appendix 7

                        Prices and Other Commercial Terms

1. Prices.

    <REDACTED>*

                                    25 of 32
<PAGE>

       Enova Panther(TM) Propulsion System Product and Services Agreement

<REDACTED>*

                                    26 of 32
<PAGE>
                                                        Contract Number 11072001

2. LEAD TIME

The lead-time for delivery of Panther Drive Systems under a Purchase Order shall
be <REDACTED>* from the date of Purchase Order submission.

3. RESCHEDULE AND CANCELLATION TERMS

Orders scheduled for delivery at or within <REDACTED>* of the committed date may
not be rescheduled. A charge of <REDACTED>* of the purchase price may be made to
Purchaser for non-acceptance of delivery.

Orders  scheduled  for  delivery  between  <REDACTED>*  and  <REDACTED>*  may be
<REDACTED>*, but not beyond <REDACTED>* of the originally scheduled ship date.

Orders scheduled for delivery at or  within<REDACTED>* of the request may not be
canceled. A charge of <REDACTED>* of the purchase price may be made to Purchaser
for non-acceptance of delivery.

Orders scheduled for delivery between <REDACTED>* may be canceled at a charge to
Purchaser based upon <REDACTED>*, and any cancellation charges assessed to Enova
by its vendors.

Purchaser must notify Enova in writing with the cancellation request.

Orders scheduled for delivery beyond  <REDACTED>* may be canceled or rescheduled
as requested.

This price list is valid for orders  placed by December  31,  2002.  A new price
list will be provided no later than December 15th of each year for the following
year.

                                    27 of 32
<PAGE>
       Enova Panther(TM) Propulsion System Product and Services Agreement

                                   Appendix 8

                            Non-Disclosure Agreement

Enova Systems,  a corporation  organized under the laws of California and Moriah
Corporation. a Japanese Corporation, desire to explore certain possible business
transactions and in facilitating  that, it is understood and agreed that certain
business  and trade  information  which the  parties  deem  confidential  may be
provided or disclosed by one to the other:

In consideration of the receiving party being granted access or continued access
to such information, it is agreed as follows:

      1.  "INFORMATION"  shall mean any information,  technical data or know-how
relating to the  business,  services or  products of the  disclosing  party or a
third party,  including  without  limitation any research,  products,  services,
developments,  inventions,  processes,  techniques,  designs, components, parts,
documents,   drawings,   electronic  files,  data  sketches,   plans,  programs,
specifications,   software,   and/or   distribution,   engineering,   marketing,
financial,  merchandising,  sales, and salary information and/or other materials
(hereinafter  collectively  referred to as "INFORMATION")  which is disclosed by
such party or on its behalf, before or after the date hereof, to the other party
or its  employees  or  agents,  directly  or  indirectly,  in  writing,  orally,
electronically,  or by drawings or  inspection.  "INFORMATION"  does not include
information,  technical data or know-how which the receiving party  establishes:
(i) is already  published  or  available to the public other than by a breach of
this Agreement or any  confidentiality  obligation owed to the disclosing party;
(ii) is rightfully  received from a third party  without,  and not in breach of,
any obligation of confidentiality; (iii) is independently developed by personnel
or agents of the receiving party without access to the INFORMATION of the other;
(iv) is  known to the  receiving  party at the  time of  disclosure  without  an
obligation of confidentiality;  or (v) is produced in compliance with applicable
law or a court  order,  provided  that  the  receiving  party  first  gives  the
disclosing party reasonable notice of such law or order and gives the disclosing
party opportunity to oppose and/or attempt to limit such production.

      2. The  receiving  party  shall  hold in  trust  and  confidence,  and not
disclose to others,  by any means, any and all INFORMATION  disclosed under this
Agreement.  INFORMATION  may be used by the receiving party only for the purpose
of considering or pursuing a business  relationship or business transaction with
the disclosing  party.  The receiving  party may disclose  INFORMATION  received
under this Agreement to persons within its  organization who have a need to know
such  information and only if such persons are bound in writing  (pursuant,  for
example to a general employee  non-disclosure  agreement  protecting third party
confidential information as well as the employer's confidential  information) to
protect the  confidentiality  of such  INFORMATION.  The receiving party further
agrees it shall take the same  measures,  but no less than  reasonable  security
measures,  and use the same care, but no less than a reasonable  degree of care,
to preserve and protect the secrecy of, and to avoid  disclosure or unauthorized
use of, the disclosing  party's  INFORMATION as it uses with its own information
of  similar  importance.   With  respect  to  tangible  materials   constituting
INFORMATION  the  receiving  party agrees not to analyze any such  materials for
composition or structure.

      3.  Title  to all  property  received  by the  receiving  party  from  the
disclosing party, including all INFORMATION,  shall remain at all times the sole
property of the disclosing  party,  and this Agreement shall not be construed to
grant to  receiving  party any  licenses or similar  rights to such  property or
INFORMATION  (including all  intellectual  property)  disclosed to the receiving
party hereunder. Nothing in this Agreement shall limit or restrict the rights of
the  disclosing  party to assert  infringement  or other  intellectual  property
claims  against the receiving  party or to impose on either party any obligation
to disclose any INFORMATION or to purchase or sell any products.

                                    28 of 32
<PAGE>
       Enova Panther(TM) Propulsion System Product and Services Agreement

      4. The receiving party shall,  upon request of the disclosing  party:  (i)
return to the  disclosing  party all  documents,  drawings,  equipment and other
tangible  materials,  including all INFORMATION and all manifestations  thereof,
delivered  to the  receiving  party  under  this  Agreement,  and all copies and
reproductions  thereof;  and (ii) certify to the disclosing  party that all such
INFORMATION has been returned.

      5. The receiving  party's duties under Section 2 of this Agreement  expire
with respect to any particular item of INFORMATION  five years after the date of
disclosure hereunder to the receiving party, or three years after the expiration
or  termination  of the  relationship  between  the  parties to this  Agreement,
whichever is later.

      6. The parties further agree to the following terms and conditions:

            (a) Neither  party shall  without the prior  written  consent of the
other party disclose to a third party any aspect of the commercial  relationship
between the parties including,  but not limited to, pricing, items or quantities
offered  or sold,  payment  terms,  production  methods or  schedules,  delivery
locations  and means and  suppliers.  Each  party  agrees not to issue any press
release or make any  statement  on the  Internet,  America on Line,  CompuServe,
Prodigy or any other public electronic  network, or to any analysts or reporters
concerning  the other  party or its  products  or  services,  without  the other
party's prior written authorization.

            (b) Receiving party shall adhere to the U.S.  Export  Administration
Laws and  Regulations  and shall not export or re-export any  technical  data or
products  received from the  disclosure or the direct  product of such technical
data to any proscribed countries.

            (c) Any breach by the receiving party of its obligations  under this
Agreement  will result in irreparable  injury to the disclosing  party for which
damages and other legal remedies will be inadequate.  In seeking  enforcement of
any of these obligations,  the disclosing party will be entitled (in addition to
other  remedies) to preliminary  and permanent  injunctive  and other  equitable
relief.

            (d) If any provision of this Agreement is invalid or  unenforceable,
then such provision shall be construed and limited to the extent  necessary,  or
severed if necessary, in order to eliminate such invalidity or unenforceability,
and the other provisions of this Agreement shall not be affected thereby.

            (e) No delay or omission  by either  party in  exercising  any right
under this  Agreement  will  operate as a waiver of that or any other  right.  A
waiver or consent given by either party on any one occasion is effective only in
that  instance  and will not be  construed as a bar to or waiver of any right on
any other occasion.

            (f) This  Agreement  shall  be  binding  upon and will  inure to the
benefit of the parties hereto, and their respective successors and assigns.

            (g)  This  Agreement  is  governed  by  and  will  be  construed  in
accordance  with the laws of the State of California,  and the state and federal
courts of California shall be the exclusive forum.

            (h) This Agreement supersedes all prior agreements, written or oral,
between  the  disclosing   party  and  receiving  party  (or  their   respective
predecessors in interest) relating to the subject matter of this Agreement. This
Agreement  may not be amended  except by an agreement in writing  signed by both
parties that specifically refers to this Agreement.

Moriah Corporation                          ENOVA SYSTEMS

By:_______________________________          By:_______________________________

Isao Yamamoto                               Carl Dean Perry

Date:_____________________________          Date:_____________________________

                                    29 of 32
<PAGE>
       Enova Panther(TM) Propulsion System Product and Services Agreement

                                   Appendix 9

                    Additional Terms for Development Efforts

The following provisions pertain solely to the Development Efforts and supersede
any different or inconsistent  provisions elsewhere in the Agreement,  including
those in Appendix 10.

1.0 Development Program Responsibilities.

      1.1 Joint  Responsibilities.  In performing the Development Efforts,  each
party shall

            1.1.1 Cooperate and  collaborate  fully with the other and use their
commercially reasonable efforts to develop the Prototype;

            1.1.2 Devote such amount of materials, number of personnel and other
physical and available  financial  resources as shall  reasonably be required to
complete the  development of the Prototype  within the  time-frame  specified in
this Agreement;

            1.1.3 Keep the other party  timely  informed of (i) the  progress of
the  development  of Prototype  or part  thereof  that such party is  separately
undertaking,  and (ii)  immediately  communicate to the other party all material
matters  relating  to or  arising  from the  development  of  Prototype  or part
thereof;  including but not limited arranging and attending  quarterly  business
and technical review meetings;

            1.1.4 Conduct  collaboration  and review meetings on a regular basis
and upon the reasonable request of the other party; and

            1.1.5  Upon the  reasonable  request of the other  party,  disclose,
pursuant,  and subject, to this Agreement,  such information as shall reasonably
be required by each party to complete the development of the Prototype.

            1.1.6 Perform such other joint  responsibilities as may be described
in Appendix 3.

2.0  Warranty  Disclaimer.  EACH  PARTY  ACKNOWLEDGES  TO  THE  OTHER  THAT  THE
DEVELOPMENT  EFFORTS ARE EXPERIMENTAL IN NATURE AND THAT NO WARRANTY IS PROVIDED
FOR THE SERVICES OR THE  PRODUCTS  AND  MATERIALS  PROVIDED  HEREUNDER.  WITHOUT
LIMITATION,   EACH  PARTY  DISCLAIMS,  TO  THE  EXTENT  PERMITTED  BY  LAW,  ALL
WARRANTIES,  WHETHER EXPRESS, IMPLIED, OR STATUTORY,  INCLUDING, BUT NOT LIMITED
TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
AND NONINFRINGEMENT.

3.0 Intellectual Property Rights and Work Product Ownership.

      3.1 Intellectual  Property Rights Defined. For purposes of this Agreement,
"Intellectual  Property  Rights"  means  a  party's  intellectual  property  and
proprietary rights, however characterized,  including, but not limited to ideas,
processes,  techniques,  inventions,  formulas,  technologies,  know-how,  data,
discoveries,  works of authorship,  copyrightable  works,  patent rights,  trade
secret rights,  copyright rights, trademark rights, service mark rights, and any
enhancements,  improvements,  derivative  works, and other  derivations  thereof
(whether  now  in  existence  or  hereafter  developed,  invented  or  otherwise
derived).

      3.2 Ownership of  Intellectual  Property  Rights.  Each party shall retain
ownership of all its pre-existing  Intellectual Property Rights  notwithstanding
their  disclosure  and use  hereunder.  To the extent that  Development  Efforts
result in the creation of new Intellectual Property Rights,  Purchaser shall own
all new Intellectual  Property Rights relating to the Prototype (excluding those
relating to the Panther  Drive System but  including  the unique  data,  if any,
concerning  the interface of the drive system to the

                                    30 of 32
<PAGE>
       Enova Panther(TM) Propulsion System Product and Services Agreement

Prototype) and Enova shall own all new Intellectual  Property Rights relating to
electric and hybrid drive systems,  including,  without limitation,  the Panther
Drive Systems.  To the extent that a new Intellectual  Property Right is created
that cannot be described by the  foregoing  sentence,  it shall be jointly owned
with no obligation to account to the other party therefor.

      3.3 Materials and Work Product.  Except for items described in Section 5.0
to Appendix 3, which Purchaser is to purchase in connection with the Development
Efforts and which shall become the property of Purchaser upon payment  therefor,
all materials and equipment that a party uses in connection with the Development
Efforts  and  all  work  product  produced  a party  during  the  course  of the
Development Efforts shall remain the sole and exclusive property of that party.

4.0 Payments and Expenses.

      4.1  Expenses.  Except as  otherwise  specified  below or in  Appendix  3,
Purchaser  shall be  responsible  for all expenses  incurred by it in connection
with  the  Development  Efforts,  including,  without  limitation,  the  travel,
lodging,   and  living  expenses  of  Purchaser  personnel  traveling  to  Enova
facilities,  and Enova shall be responsible  for all expenses  incurred by it in
connection with the Development  Efforts,  including,  without  limitation,  the
travel,  lodging,  and living expenses of Enova personnel traveling to Purchaser
facilities.

            4.1.1 Panther Drive System.  Purchaser will pay the amount specified
in Appendix 3 for any Panther Drive System,  parts, or equipment to be purchased
at the prices set forth in Appendix 3.

            4.1.2 Training and Technical  Materials.  Purchaser will pay Enova's
cost,  plus ten percent  (10%) for training and technical  materials  that Enova
delivers to Purchaser  for use by Purchaser  personnel  in  connection  with the
Development Efforts.

      4.2 Freight and Taxes.  The  foregoing  price is inclusive of shipping and
insurance to Purchaser's  designated  facility,  but does not include any taxes,
fees,  duties or  assessments  incurred by either party in  connection  with the
purchase,  shipment and delivery of the Panther Drive System, all of which shall
be paid by Purchaser  (except for those imposed on Enova for the income received
in the sale).

                                    31 of 32
<PAGE>
       Enova Panther(TM) Propulsion System Product and Services Agreement

                                   Appendix 10

                   Additional Terms for Commercial Production
                                       and
                            Additional General Terms

The following provisions amend and modify the provisions of the Agreement except
for those  relating to the  Development  Efforts and supersede any  inconsistent
provisions therein.

Appendix 5, Warranty Labor Flat Rate Schedule - Enova will reimburse Purchaser,
at our standard rate, for service  technician time spent  traveling  to-from job
site in order to carry out an  authorized  warranty  repair that resulted from a
failure of an Enova component.

Purchaser may change from time to time the selection of the parts and components
for each drive  system.  Each drive system order will,  as a minimum,  include a
Motor Controller and a Motor.

                                    32 of 32EXHIBIT 4.1

                             FIXED RATE SENIOR NOTE

REGISTERED                                                        REGISTERED
No. FXR                                                           $
                                                                  CUSIP:

     Unless this certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
issuer or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of The Depository Trust Company
and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered
owner hereof, Cede & Co., has an interest herein.

                                      A-1
<PAGE>

                        MORGAN STANLEY DEAN WITTER & CO.
                    SENIOR GLOBAL MEDIUM-TERM NOTE, SERIES C
                                  (Fixed Rate)

                      BRIDGES DUE                 , 200[ ]
                  BASED ON THE VALUE OF THE RUSSELL 2000 INDEX

<TABLE>
=======================================================================================================================
<S>                           <C>                         <C>                          <C>
ORIGINAL ISSUE DATE:          INITIAL REDEMPTION          INTEREST RATE: N/A           MATURITY DATE:
                                DATE: N/A                                                See "Maturity Date"
                                                                                         below.
-----------------------------------------------------------------------------------------------------------------------
INTEREST ACCRUAL              INITIAL REDEMPTION          INTEREST PAYMENT             OPTIONAL
  DATE: N/A                     PERCENTAGE:                 DATE(S): N/A                 REPAYMENT
                                N/A                                                      DATE(S):  N/A
-----------------------------------------------------------------------------------------------------------------------
SPECIFIED CURRENCY:           ANNUAL REDEMPTION           INTEREST PAYMENT             APPLICABILITY OF
  U.S. Dollars                  PERCENTAGE                  PERIOD: N/A                  MODIFIED
                                REDUCTION:  N/A                                          PAYMENT
                                                                                         UPON
                                                                                         ACCELERATION:
                                                                                         See "Alternate
                                                                                         Exchange Calculation
                                                                                         in Case of an Event of
                                                                                         Default" below.
-----------------------------------------------------------------------------------------------------------------------
IF SPECIFIED                  REDEMPTION NOTICE           APPLICABILITY OF             If yes, state Issue Price:
  CURRENCY                      PERIOD: N/A                 ANNUAL                       N/A
  OTHER THAN                                                INTEREST
  U.S. DOLLARS,                                             PAYMENTS: N/A
  OPTION TO
  ELECT
  PAYMENT IN
  U.S. DOLLARS:
  N/A
-----------------------------------------------------------------------------------------------------------------------
EXCHANGE RATE                                                                          ORIGINAL YIELD TO
  AGENT:  N/A                                                                            MATURITY: N/A
-----------------------------------------------------------------------------------------------------------------------
OTHER PROVISIONS:
  (see below)
=======================================================================================================================
</TABLE>

Maturity Date.......................       , 200[ ], subject to extension in the
                                      event of a Market Disruption Event on
                                      the sixth Determination Date for
                                      calculating the Final Average Index
                                      Value.

                                      A-2

<PAGE>
                                      If, due to a Market Disruption Event or
                                      otherwise, the sixth Determination Date
                                      is postponed so that it falls less than
                                      two scheduled Trading Days prior to the
                                      scheduled Maturity Date, the Maturity
                                      Date will be the second scheduled
                                      Trading Day following that sixth
                                      Determination Date as postponed. See
                                      "--Determination Dates" below.

                                      In the event that the sixth
                                      Determination Date is postponed due to a
                                      Market Disruption Event or otherwise,
                                      the Issuer shall give notice of such
                                      postponement as promptly as possible,
                                      and in no case later than one Business
                                      Day following the scheduled sixth
                                      Determination Date, (i) to the holder of
                                      this BRIDGES by mailing notice of such
                                      postponement by first class mail,
                                      postage prepaid, to the holder's last
                                      address as it shall appear upon the
                                      registry books, (ii) to the Trustee by
                                      telephone or facsimile confirmed by
                                      mailing such notice to the Trustee by
                                      first class mail, postage prepaid, at
                                      its New York office and (iii) to The
                                      Depository Trust Company (the
                                      "Depositary") by telephone or facsimile
                                      confirmed by mailing such notice to the
                                      Depositary by first class mail, postage
                                      prepaid. Any notice that is mailed in
                                      the manner herein provided shall be
                                      conclusively presumed to have been duly
                                      given, whether or not the holder of this
                                      BRIDGES receives the notice.

Minimum Denominations...........      $

Russell 2000 Index..............      The Russell 2000 Index published by Frank
                                      Russell Company.

Maturity Redemption Amount......      At maturity the holder of this BRIDGES
                                      shall receive the principal amount of
                                      this BRIDGES plus the Supplemental
                                      Redemption Amount, if any.

Supplemental Redemption Amount..      The Supplemental Redemption Amount payable
                                      with respect to this BRIDGES at maturity
                                      shall be equal to the greater of (i)
                                      zero and (ii) the product of the
                                      principal amount of this BRIDGES times
                                      the Russell 2000 Index Percent Change.
                                      The Calculation Agent shall calculate
                                      the Supplemental Redemption Amount on
                                      the sixth Determination Date.

                                     A-3

<PAGE>

                                      The Issuer shall cause the Calculation
                                      Agent to provide written notice to the
                                      Trustee at its New York office, on which
                                      notice the Trustee may conclusively
                                      rely, of the Supplemental Redemption
                                      Amount, on or prior to 11:00 a.m. on the
                                      Business Day preceding the Maturity
                                      Date.

Russell 2000 Index Percent
  Change........................      The Russell 2000 Index Percent Change is
                                      a fraction, the numerator of which shall
                                      be the Final Average Index Performance
                                      and the denominator of which shall be
                                      the Initial Index Value. The Russell
                                      2000 Index Percent Change is described
                                      by the following formula:

                                      Final Average Index Performance
                                      -------------------------------
                                            Initial Index Value

Initial Index Value.............

Final Average Index
  Performance...................      The Final Average Index Value minus the
                                      Benchmark Index Value.

Benchmark Index Value...........      The lesser of (i) the Initial Index Value
                                      and (ii) the Index Closing Value on
                                                   , 200[ ], as determined by
                                      the Calculation Agent.

Final Average Index Value.......      The arithmetic average of the Index
                                      Closing Values on each of the
                                      Determination Dates, as determined by the
                                      Calculation Agent.

Index Closing Value.............      The Index Closing Value on any Trading Day
                                      shall equal the closing value of the
                                      Russell 2000 Index or any Successor
                                      Index (as defined under
                                      "--Discontinuance of the Russell 2000
                                      Index; Alteration of Method of
                                      Calculation" below) at the regular
                                      official weekday close of the principal
                                      trading session of the New York Stock
                                      Exchange (the "NYSE") on that Trading
                                      Day. In certain circumstances, the Index
                                      Closing Value shall be based on the
                                      alternate calculation of the Russell
                                      2000 Index described under
                                      "--Discontinuance of the Russell 2000
                                      Index; Alteration of Method of
                                      Calculation."

                                      References to the Russell 2000 Index
                                      shall include any Successor Index,
                                      unless the context requires otherwise.

                                            A-4

<PAGE>

Determination Dates.............      The Determination Dates shall be         ,
                                      200[ ],               , 200[ ],
                                            , 200[ ],                  , 200[ ],
                                            , 200[ ] and               , 200[ ],
                                      in each such case subject to
                                      adjustment for Market Disruption Events
                                      as described in the two following
                                      paragraphs.

                                      If any of the first five scheduled
                                      Determination Dates is not a Trading Day
                                      or if a Market Disruption Event occurs
                                      on any such date, such Determination
                                      Date shall be the immediately succeeding
                                      Trading Day during which no Market
                                      Disruption Event shall have occurred;
                                      provided that if a Market Disruption
                                      Event has occurred on each of the five
                                      Trading Days immediately succeeding any
                                      of the first five scheduled
                                      Determination Dates, then (i) such fifth
                                      succeeding Trading Day shall be deemed
                                      to be the relevant Determination Date,
                                      notwithstanding the occurrence of a
                                      Market Disruption Event on such day, and
                                      (ii) with respect to any such fifth
                                      Trading Day on which a Market Disruption
                                      Event occurs, the Calculation Agent
                                      shall determine the value of the Russell
                                      2000 Index on such fifth Trading Day in
                                      accordance with the formula for and
                                      method of calculating the value of the
                                      Russell 2000 Index last in effect prior
                                      to the commencement of the Market
                                      Disruption Event, using the closing
                                      price (or, if trading in the relevant
                                      securities has been materially suspended
                                      or materially limited, its good faith
                                      estimate of the closing price that would
                                      have prevailed but for such suspension
                                      or limitation) on such Trading Day of
                                      each security most recently comprising
                                      the Russell 2000 Index.

                                      If               , 200[ ] (the sixth
                                      scheduled Determination Date) is
                                      not a Trading Day or if there is a
                                      Market Disruption Event on such
                                      day, the sixth Determination Date
                                      shall be the immediately succeeding
                                      Trading Day during which no Market
                                      Disruption Event shall have
                                      occurred.

Trading Day.....................      A day, as determined by the Calculation
                                      Agent, on which trading is generally
                                      conducted on the New York Stock Exchange
                                      ("NYSE"), the American Stock Exchange,
                                      Inc. ("AMEX"), the Nasdaq National
                                      Market, the Chicago Mercantile Exchange
                                      and the Chicago Board of Options
                                      Exchange and in the over-the-counter
                                      market for equity securities in the
                                      United States.

                                      A-5

<PAGE>

Market Disruption Event.........      "Market Disruption Event" means, with
                                      respect to the Russell 2000 Index, the
                                      occurrence or existence of a suspension,
                                      absence or material limitation of
                                      trading of stocks then constituting 20%
                                      or more of the level of the Russell 2000
                                      Index (or the relevant Successor Index)
                                      on the Relevant Exchanges for such
                                      securities for more than two hours of
                                      trading or during the one-half hour
                                      period preceding the close of the
                                      principal trading session on such
                                      Relevant Exchange; or a breakdown or
                                      failure in the price and trade reporting
                                      systems of any Relevant Exchange as a
                                      result of which the reported trading
                                      prices for stocks then constituting 20%
                                      or more of the level of the Russell 2000
                                      Index (or the relevant Successor Index)
                                      during the last one-half hour preceding
                                      the close of the principal trading
                                      session on such Relevant Exchange are
                                      materially inaccurate; or the
                                      suspension, material limitation or
                                      absence of trading on any major U.S.
                                      securities market for trading in futures
                                      or options contracts related to the
                                      Russell 2000 Index (or the relevant
                                      Successor Index) for more than two hours
                                      of trading or during the one-half hour
                                      period preceding the close of the
                                      principal trading session on such
                                      market, in each case as determined by
                                      the Calculation Agent in its sole
                                      discretion.

                                      For the purpose of determining whether a
                                      Market Disruption Event exists at any
                                      time, if trading in a security included
                                      in the Russell 2000 Index is materially
                                      suspended or materially limited at that
                                      time, then the relevant percentage
                                      contribution of that security to the
                                      level of the Russell 2000 Index shall be
                                      based on a comparison of (x) the portion
                                      of the level of the Russell 2000 Index
                                      attributable to that security relative
                                      to (y) the overall level of the Russell
                                      2000 Index, in each case immediately
                                      before that suspension or limitation.

                                      For purposes of determining whether a
                                      Market Disruption Event has occurred:
                                      (1) a limitation on the hours or number
                                      of days of trading shall not constitute
                                      a Market Disruption Event if it results
                                      from an announced change in the regular
                                      business hours of the relevant exchange
                                      or market, (2) a decision to permanently
                                      discontinue trading in the relevant
                                      futures or options contract shall not
                                      constitute a Market Disruption Event,
                                      (3) limitations pursuant to the rules of
                                      any Relevant Exchange similar to

                                      A-6

<PAGE>

                                      NYSE Rule 80A (or any applicable rule or
                                      regulation enacted or promulgated by any
                                      other self-regulatory organization or
                                      any government agency of scope similar
                                      to NYSE Rule 80A as determined by the
                                      Calculation Agent) on trading during
                                      significant market fluctuations shall
                                      constitute a suspension, absence or
                                      material limitation of trading, (4) a
                                      suspension of trading in futures or
                                      options contracts on the Russell 2000
                                      Index by the primary securities market
                                      trading in such contracts by reason of
                                      (a) a price change exceeding limits set
                                      by such exchange or market, (b) an
                                      imbalance of orders relating to such
                                      contracts or (c) a disparity in bid and
                                      ask quotes relating to such contracts
                                      shall constitute a suspension, absence
                                      or material limitation of trading in
                                      futures or options contracts related to
                                      the Russell 2000 Index and (5) a
                                      "suspension, absence or material
                                      limitation of trading" on any Relevant
                                      Exchange or on the primary market on
                                      which futures or options contracts
                                      related to the Russell 2000 Index are
                                      traded shall not include any time when
                                      such market is itself closed for trading
                                      under ordinary circumstances.

Relevant Exchange...............      "Relevant Exchange" means the primary
                                      U.S. organized exchange or market of
                                      trading for any security then included
                                      in the Russell 2000 Index or any
                                      Successor Index.

Alternative Exchange
Calculation in Case of an
Event of Default ...............      In case an Event of Default with respect
                                      to this BRIDGES shall have occurred and
                                      be continuing, the amount declared due
                                      and payable for this BRIDGES upon any
                                      acceleration of this BRIDGES shall be
                                      determined by the Calculation Agent and
                                      shall be equal to the principal amount
                                      of this BRIDGES plus the Supplemental
                                      Redemption Amount, if any, determined as
                                      though the Index Closing Value for any
                                      Determination Date scheduled to occur on
                                      or after such date of acceleration were
                                      the Index Closing Value on the date of
                                      acceleration.

Calculation Agent...............      Morgan Stanley & Co. Incorporated and its
                                      successors ("MS & Co.")

                                      All determinations made by the
                                      Calculation Agent shall be at the sole
                                      discretion of the Calculation Agent and
                                      shall, in the absence of manifest error,
                                      be conclusive for

                                      A-7

<PAGE>

                                      all purposes and binding on the holder
                                      of this BRIDGES and on the Issuer.

                                      All calculations with respect to the
                                      Final Average Index Value and the
                                      Supplemental Amount, if any, will be
                                      rounded to the nearest one
                                      hundred-thousandth, with five
                                      one-millionths rounded upward (e.g.,
                                      .876545 would be rounded to .87655); all
                                      dollar amounts related to determination
                                      of the amount of cash payable per
                                      BRIDGES will be rounded to the nearest
                                      ten-thousandth, with five one
                                      hundred-thousandths rounded upward (e.g.
                                      .76545 would be rounded up to .7655);
                                      and all dollar amounts paid on the
                                      aggregate number of BRIDGES will be
                                      rounded to the nearest cent, with
                                      one-half cent rounded upward.

Discontinuance of the
Russell 2000 Index; Alteration
of Method of Calculation........      If Frank Russell Company discontinues
                                      publication of the Russell 2000 Index
                                      and Frank Russell Company or another
                                      entity publishes a successor or
                                      substitute index that MS & Co., as the
                                      Calculation Agent, determines, in its
                                      sole discretion, to be comparable to the
                                      discontinued Russell 2000 Index (such
                                      index being referred to herein as a
                                      "Successor Index"), then any subsequent
                                      Index Closing Value shall be determined
                                      by reference to the value of such
                                      Successor Index at the close of trading
                                      on the NYSE, the AMEX, the Nasdaq
                                      National Market or the relevant exchange
                                      or market for the Successor Index on the
                                      date that any Index Closing Value is to
                                      be determined.

                                      Upon any selection by the Calculation
                                      Agent of a Successor Index, the
                                      Calculation Agent shall cause written
                                      notice thereof to be furnished to the
                                      Trustee, to the Issuer and to the holder
                                      of this BRIDGES within three Trading
                                      Days of such selection.

                                      If Frank Russell Company discontinues
                                      publication of the Russell 2000 Index
                                      prior to, and such discontinuance is
                                      continuing on, any Determination Date or
                                      December 30, 2002 and MS & Co., as the
                                      Calculation Agent, determines, in its
                                      sole discretion, that no Successor Index
                                      is available at such time, then the
                                      Calculation Agent shall determine the
                                      Index Closing Value for such date. The

                                      A-8

<PAGE>

                                      Index Closing Value shall be computed by
                                      the Calculation Agent in accordance with
                                      the formula for and method of
                                      calculating the Russell 2000 Index last
                                      in effect prior to such discontinuance,
                                      using the closing price (or, if trading
                                      in the relevant securities has been
                                      materially suspended or materially
                                      limited, its good faith estimate of the
                                      closing price that would have prevailed
                                      but for such suspension or limitation)
                                      at the close of the principal trading
                                      session on such date of each security
                                      most recently comprising the Russell
                                      2000 Index. Notwithstanding these
                                      alternative arrangements, discontinuance
                                      of the publication of the Russell 2000
                                      Index may adversely affect the value of
                                      this BRIDGES.

                                      If at any time the method of calculating
                                      the Russell 2000 Index or a Successor
                                      Index, or the value thereof, is changed
                                      in a material respect, or if the Russell
                                      2000 Index or a Successor Index is in
                                      any other way modified so that such
                                      index does not, in the opinion of MS &
                                      Co., as the Calculation Agent, fairly
                                      represent the value of the Russell 2000
                                      Index or such Successor Index had such
                                      changes or modifications not been made,
                                      then, from and after such time, the
                                      Calculation Agent shall, at the close of
                                      business in New York City on each date
                                      on which the Index Closing Value is to
                                      be determined, make such calculations
                                      and adjustments as, in the good faith
                                      judgment of the Calculation Agent, may
                                      be necessary in order to arrive at a
                                      value of a stock index comparable to the
                                      Russell 2000 Index or such Successor
                                      Index, as the case may be, as if such
                                      changes or modifications had not been
                                      made, and the Calculation Agent shall
                                      calculate the Final Average Index Value
                                      and the Benchmark Index Value, if
                                      necessary, with reference to the Russell
                                      2000 Index or such Successor Index, as
                                      adjusted. Accordingly, if the method of
                                      calculating the Russell 2000 Index or a
                                      Successor Index is modified so that the
                                      value of such index is a fraction of
                                      what it would have been if it had not
                                      been modified (e.g., due to a split in
                                      the index), then the Calculation Agent
                                      shall adjust such index in order to
                                      arrive at a value of the Russell 2000
                                      Index or such Successor Index as if it
                                      had not been modified (e.g., as if such
                                      split had not occurred).

                                      A-9

<PAGE>

       Morgan Stanley Dean Witter & Co., a Delaware corporation (together with
its successors and assigns, the "Issuer"), for value received, hereby promises
to pay to CEDE & CO., or registered assignees, the amount of cash, as
determined in accordance with the provisions set forth under "Maturity
Redemption Amount" above, due with respect to the principal sum of
U.S.$                (UNITED STATES DOLLARS                   ), on the Maturity
Date specified above (except to the extent redeemed or repaid prior to
maturity) and to pay interest thereon at the Interest Rate per annum specified
above, from and including the Interest Accrual Date specified above until the
principal hereof is paid or duly made available for payment weekly, monthly,
quarterly, semiannually or annually in arrears as specified above as the
Interest Payment Period on each Interest Payment Date (as specified above),
commencing on the Interest Payment Date next succeeding the Interest Accrual
Date specified above, and at maturity (or on any redemption or repayment date);
provided, however, that if the Interest Accrual Date occurs between a Record
Date, as defined below, and the next succeeding Interest Payment Date, interest
payments will commence on the second Interest Payment Date succeeding the
Interest Accrual Date to the registered holder of this Note on the Record Date
with respect to such second Interest Payment Date; and provided, further, that
if this Note is subject to "Annual Interest Payments," interest payments shall
be made annually in arrears and the term "Interest Payment Date" shall be
deemed to mean the first day of March in each year.

       Interest on this Note will accrue from and including the most recent
date to which interest has been paid or duly provided for, or, if no interest
has been paid or duly provided for, from and including the Interest Accrual
Date, until, but excluding the date the principal hereof has been paid or duly
made available for payment. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, subject to certain
exceptions described herein, be paid to the person in whose name this Note (or
one or more predecessor Notes) is registered at the close of business on the
date 15 calendar days prior to such Interest Payment Date (whether or not a
Business Day (as defined below)) (each such date, a "Record Date"); provided,
however, that interest payable at maturity (or any redemption or repayment
date) will be payable to the person to whom the principal hereof shall be
payable. As used herein, "Business Day" means any day, other than a Saturday or
Sunday, (a) that is neither a legal holiday nor a day on which banking
institutions are authorized or required by law or regulation to close (x) in
The City of New York or (y) if this Note is denominated in a Specified Currency
other than U.S. dollars, euro or Australian dollars, in the principal financial
center of the country of the Specified Currency, or (z) if this Note is
denominated in Australian dollars, in Sydney and (b) if this Note is
denominated in euro, that is also a day on which the Trans-European Automated
Real-time Gross Settlement Express Transfer System ("TARGET") is operating (a
"TARGET Settlement Day").

       Payment of the principal of this Note, any premium and the interest due
at maturity (or any redemption or repayment date), unless this Note is
denominated in a Specified Currency other than U.S. dollars and is to be paid
in whole or in part in such Specified Currency, will be made in immediately
available funds upon surrender of this Note at the office or agency of the
Paying Agent, as defined on the reverse hereof, maintained for that purpose in
the Borough of Manhattan, The City of New York, or at such other paying agency
as the Issuer may determine, in U.S. dollars. U.S. dollar payments of interest,
other than interest due at maturity or on any date of redemption or repayment,
will be made by U.S. dollar check mailed to the address of the person entitled
thereto

                                      A-10

<PAGE>

as such address shall appear in the Note register. A holder of U.S. $10,000,000
(or the equivalent in a Specified Currency) or more in aggregate principal
amount of Notes having the same Interest Payment Date, the interest on which is
payable in U.S. dollars, shall be entitled to receive payments of interest,
other than interest due at maturity or on any date of redemption or repayment,
by wire transfer of immediately available funds if appropriate wire transfer
instructions have been received by the Paying Agent in writing not less than 15
calendar days prior to the applicable Interest Payment Date.

       If this Note is denominated in a Specified Currency other than U.S.
dollars, and the holder does not elect (in whole or in part) to receive payment
in U.S. dollars pursuant to the next succeeding paragraph, payments of
interest, principal or any premium with regard to this Note will be made by
wire transfer of immediately available funds to an account maintained by the
holder hereof with a bank located outside the United States if appropriate wire
transfer instructions have been received by the Paying Agent in writing, with
respect to payments of interest, on or prior to the fifth Business Day after
the applicable Record Date and, with respect to payments of principal or any
premium, at least ten Business Days prior to the Maturity Date or any
redemption or repayment date, as the case may be; provided that, if payment of
interest, principal or any premium with regard to this Note is payable in euro,
the account must be a euro account in a country for which the euro is the
lawful currency, provided, further, that if such wire transfer instructions are
not received, such payments will be made by check payable in such Specified
Currency mailed to the address of the person entitled thereto as such address
shall appear in the Note register; and provided, further, that payment of the
principal of this Note, any premium and the interest due at maturity (or on any
redemption or repayment date) will be made upon surrender of this Note at the
office or agency referred to in the preceding paragraph.

       If so indicated on the face hereof, the holder of this Note, if
denominated in a Specified Currency other than U.S. dollars, may elect to
receive all or a portion of payments on this Note in U.S. dollars by
transmitting a written request to the Paying Agent, on or prior to the fifth
Business Day after such Record Date or at least ten Business Days prior to the
Maturity Date or any redemption or repayment date, as the case may be. Such
election shall remain in effect unless such request is revoked by written
notice to the Paying Agent as to all or a portion of payments on this Note at
least five Business Days prior to such Record Date, for payments of interest,
or at least ten days prior to the Maturity Date or any redemption or repayment
date, for payments of principal, as the case may be.

       If the holder elects to receive all or a portion of payments of
principal of and any premium and interest on this Note, if denominated in a
Specified Currency other than U.S. dollars, in U.S. dollars, the Exchange Rate
Agent (as defined on the reverse hereof) will convert such payments into U.S.
dollars. In the event of such an election, payment in respect of this Note will
be based upon the exchange rate as determined by the Exchange Rate Agent based
on the highest bid quotation in The City of New York received by such Exchange
Rate Agent at approximately 11:00 a.m., New York City time, on the second
Business Day preceding the applicable payment date from three recognized
foreign exchange dealers (one of which may be the Exchange Rate Agent unless
such Exchange Rate Agent is an affiliate of the Issuer) for the purchase by the
quoting dealer of U.S. dollars for the Specified Currency for settlement on
such payment date in the amount of the Specified Currency

                                      A-11

<PAGE>

payable in the absence of such an election to such holder and at which the
applicable dealer commits to execute a contract. If such bid quotations are not
available, such payment will be made in the Specified Currency. All currency
exchange costs will be borne by the holder of this Note by deductions from such
payments.

       Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

       Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit under the Senior Indenture, as defined on the
reverse hereof, or be valid or obligatory for any purpose.

                                      A-12

<PAGE>

       IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed.

DATED:       , 200[ ]                       MORGAN STANLEY DEAN WITTER & CO.

                                            By:
                                              ----------------------------------
                                              Name:   Alexander C. Frank
                                              Title:  Treasurer

TRUSTEE'S CERTIFICATE
     OF AUTHENTICATION

This is one of the Notes referred
     to in the within-mentioned
     Senior Indenture.

JPMORGAN CHASE BANK,
     as Trustee

By:
  ------------------------------
        Authorized Officer

                                      A-13

<PAGE>

                              REVERSE OF SECURITY

       This Note is one of a duly authorized issue of Senior Global Medium-Term
Notes, Series C, having maturities more than nine months from the date of issue
(the "Notes") of the Issuer. The Notes are issuable under an Amended and
Restated Senior Indenture, dated as of May 1, 1999, between the Issuer and
JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as Trustee
(the "Trustee," which term includes any successor trustee under the Senior
Indenture) (as may be amended or supplemented from time to time, the "Senior
Indenture"), to which Senior Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities of the Issuer, the Trustee and holders of the
Notes and the terms upon which the Notes are, and are to be, authenticated and
delivered. The Issuer has appointed JPMorgan Chase Bank at its corporate trust
office in The City of New York as the paying agent (the "Paying Agent," which
term includes any additional or successor Paying Agent appointed by the Issuer)
with respect to the Notes. The terms of individual Notes may vary with respect
to interest rates, interest rate formulas, issue dates, maturity dates, or
otherwise, all as provided in the Senior Indenture. To the extent not
inconsistent herewith, the terms of the Senior Indenture are hereby
incorporated by reference herein.

       Unless otherwise indicated on the face hereof, this Note will not be
subject to any sinking fund and, unless otherwise provided on the face hereof
in accordance with the provisions of the following two paragraphs, will not be
redeemable or subject to repayment at the option of the holder prior to
maturity.

       If so indicated on the face hereof, this Note may be redeemed in whole
or in part at the option of the Issuer on or after the Initial Redemption Date
specified on the face hereof on the terms set forth on the face hereof,
together with interest accrued and unpaid hereon to the date of redemption. If
this Note is subject to "Annual Redemption Percentage Reduction," the Initial
Redemption Percentage indicated on the face hereof will be reduced on each
anniversary of the Initial Redemption Date by the Annual Redemption Percentage
Reduction specified on the face hereof until the redemption price of this Note
is 100% of the principal amount hereof, together with interest accrued and
unpaid hereon to the date of redemption. Notice of redemption shall be mailed
to the registered holders of the Notes designated for redemption at their
addresses as the same shall appear on the Note register not less than 30 nor
more than 60 days prior to the date fixed for redemption or within the
Redemption Notice Period specified on the face hereof, subject to all the
conditions and provisions of the Senior Indenture. In the event of redemption
of this Note in part only, a new Note or Notes for the amount of the unredeemed
portion hereof shall be issued in the name of the holder hereof upon the
cancellation hereof.

       If so indicated on the face of this Note, this Note will be subject to
repayment at the option of the holder on the Optional Repayment Date or Dates
specified on the face hereof on the terms set forth herein. On any Optional
Repayment Date, this Note will be repayable in whole or in part in increments
of $1,000 or, if this Note is denominated in a Specified Currency other than
U.S. dollars, in increments of 1,000 units of such Specified Currency (provided
that any remaining principal amount hereof shall not be less than the minimum
authorized denomination

                                      A-14

<PAGE>

hereof) at the option of the holder hereof at a price equal to 100% of the
principal amount to be repaid, together with interest accrued and unpaid hereon
to the date of repayment. For this Note to be repaid at the option of the
holder hereof, the Paying Agent must receive at its corporate trust office in
the Borough of Manhattan, The City of New York, at least 15 but not more than
30 days prior to the date of repayment, (i) this Note with the form entitled
"Option to Elect Repayment" below duly completed or (ii) a telegram, telex,
facsimile transmission or a letter from a member of a national securities
exchange or the National Association of Securities Dealers, Inc. or a
commercial bank or a trust company in the United States setting forth the name
of the holder of this Note, the principal amount hereof, the certificate number
of this Note or a description of this Note's tenor and terms, the principal
amount hereof to be repaid, a statement that the option to elect repayment is
being exercised thereby and a guarantee that this Note, together with the form
entitled "Option to Elect Repayment" duly completed, will be received by the
Paying Agent not later than the fifth Business Day after the date of such
telegram, telex, facsimile transmission or letter; provided, that such
telegram, telex, facsimile transmission or letter shall only be effective if
this Note and form duly completed are received by the Paying Agent by such
fifth Business Day. Exercise of such repayment option by the holder hereof
shall be irrevocable. In the event of repayment of this Note in part only, a
new Note or Notes for the amount of the unpaid portion hereof shall be issued
in the name of the holder hereof upon the cancellation hereof.

       Interest payments on this Note will include interest accrued to but
excluding the Interest Payment Dates or the Maturity Date (or any earlier
redemption or repayment date), as the case may be. Unless otherwise provided on
the face hereof, interest payments for this Note will be computed and paid on
the basis of a 360-day year of twelve 30-day months.

       In the case where the Interest Payment Date or the Maturity Date (or any
redemption or repayment date) does not fall on a Business Day, payment of
interest, premium, if any, or principal otherwise payable on such date need not
be made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on the Interest Payment Date or on the
Maturity Date (or any redemption or repayment date), and no interest on such
payment shall accrue for the period from and after the Interest Payment Date or
the Maturity Date (or any redemption or repayment date) to such next succeeding
Business Day.

       This Note and all the obligations of the Issuer hereunder are direct,
unsecured obligations of the Issuer and rank without preference or priority
among themselves and pari passu with all other existing and future unsecured
and unsubordinated indebtedness of the Issuer, subject to certain statutory
exceptions in the event of liquidation upon insolvency.

       This Note, and any Note or Notes issued upon transfer or exchange
hereof, is issuable only in fully registered form, without coupons, and, if
denominated in U.S. dollars, unless otherwise stated above, is issuable only in
denominations of U.S. $1,000 and any integral multiple of U.S. $1,000 in excess
thereof. If this Note is denominated in a Specified Currency other than U.S.
dollars, then, unless a higher minimum denomination is required by applicable
law, it is issuable only in denominations of the equivalent of U.S. $1,000
(rounded to an integral multiple of 1,000 units of such Specified Currency), or
any amount in excess thereof which is an integral multiple

                                      A-15

<PAGE>

of 1,000 units of such Specified Currency, as determined by reference to the
noon dollar buying rate in The City of New York for cable transfers of such
Specified Currency published by the Federal Reserve Bank of New York (the
"Market Exchange Rate") on the Business Day immediately preceding the date of
issuance.

       The Trustee has been appointed registrar for the Notes, and the Trustee
will maintain at its office in The City of New York a register for the
registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Trustee by surrendering this Note for cancellation,
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and duly executed by the registered holder hereof in person or by the
holder's attorney duly authorized in writing, and thereupon the Trustee shall
issue in the name of the transferee or transferees, in exchange herefor, a new
Note or Notes having identical terms and provisions and having a like aggregate
principal amount in authorized denominations, subject to the terms and
conditions set forth herein; provided, however, that the Trustee will not be
required (i) to register the transfer of or exchange any Note that has been
called for redemption in whole or in part, except the unredeemed portion of
Notes being redeemed in part, (ii) to register the transfer of or exchange any
Note if the holder thereof has exercised his right, if any, to require the
Issuer to repurchase such Note in whole or in part, except the portion of such
Note not required to be repurchased, or (iii) to register the transfer of or
exchange Notes to the extent and during the period so provided in the Senior
Indenture with respect to the redemption of Notes. Notes are exchangeable at
said office for other Notes of other authorized denominations of equal
aggregate principal amount having identical terms and provisions. All such
exchanges and transfers of Notes will be free of charge, but the Issuer may
require payment of a sum sufficient to cover any tax or other governmental
charge in connection therewith. All Notes surrendered for exchange shall be
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and executed by the registered holder in person or by the holder's
attorney duly authorized in writing. The date of registration of any Note
delivered upon any exchange or transfer of Notes shall be such that no gain or
loss of interest results from such exchange or transfer.

       In case this Note shall at any time become mutilated, defaced or be
destroyed, lost or stolen and this Note or evidence of the loss, theft or
destruction thereof (together with the indemnity hereinafter referred to and
such other documents or proof as may be required in the premises) shall be
delivered to the Trustee, the Issuer in its discretion may execute a new Note
of like tenor in exchange for this Note, but, if this Note is destroyed, lost
or stolen, only upon receipt of evidence satisfactory to the Trustee and the
Issuer that this Note was destroyed or lost or stolen and, if required, upon
receipt also of indemnity satisfactory to each of them. All expenses and
reasonable charges associated with procuring such indemnity and with the
preparation, authentication and delivery of a new Note shall be borne by the
owner of the Note mutilated, defaced, destroyed, lost or stolen.

       The Senior Indenture provides that (a) if an Event of Default (as
defined in the Senior Indenture) due to the default in payment of principal of,
premium, if any, or interest on, any series of debt securities issued under the
Senior Indenture, including the series of Senior Medium-Term Notes of which
this Note forms a part, or due to the default in the performance or breach of
any other covenant or warranty of the Issuer applicable to the debt securities
of such

                                      A-16

<PAGE>

series but not applicable to all outstanding debt securities issued under the
Senior Indenture shall have occurred and be continuing, either the Trustee or
the holders of not less than 25% in principal amount of the debt securities of
each affected series (voting as a single class) may then declare the principal
of all debt securities of all such series and interest accrued thereon to be
due and payable immediately and (b) if an Event of Default due to a default in
the performance of any other of the covenants or agreements in the Senior
Indenture applicable to all outstanding debt securities issued thereunder,
including this Note, or due to certain events of bankruptcy or insolvency of
the Issuer, shall have occurred and be continuing, either the Trustee or the
holders of not less than 25% in principal amount of all debt securities issued
under the Senior Indenture then outstanding (treated as one class) may declare
the principal of all such debt securities and interest accrued thereon to be
due and payable immediately, but upon certain conditions such declarations may
be annulled and past defaults may be waived (except a continuing default in
payment of principal (or premium, if any) or interest on such debt securities)
by the holders of a majority in principal amount of the debt securities of all
affected series then outstanding.

       If the face hereof indicates that this Note is subject to "Modified
Payment upon Acceleration," then (i) if the principal hereof is declared to be
due and payable as described in the preceding paragraph, the amount of
principal due and payable with respect to this Note shall be limited to the
aggregate principal amount hereof multiplied by the sum of the Issue Price
specified on the face hereof (expressed as a percentage of the aggregate
principal amount) plus the original issue discount amortized from the Interest
Accrual Date to the date of declaration, which amortization shall be calculated
using the "interest method" (computed in accordance with generally accepted
accounting principles in effect on the date of declaration), (ii) for the
purpose of any vote of securityholders taken pursuant to the Senior Indenture
prior to the acceleration of payment of this Note, the principal amount hereof
shall equal the amount that would be due and payable hereon, calculated as set
forth in clause (i) above, if this Note were declared to be due and payable on
the date of any such vote and (iii) for the purpose of any vote of
securityholders taken pursuant to the Senior Indenture following the
acceleration of payment of this Note, the principal amount hereof shall equal
the amount of principal due and payable with respect to this Note, calculated
as set forth in clause (i) above.

       If the face hereof indicates that this Note is subject to "Modified
Payment upon Acceleration," then (i) if the principal hereof is declared to be
due and payable as described in the preceding paragraph, the amount of
principal due and payable with respect to this Note shall be limited to the
aggregate principal amount hereof multiplied by the sum of the Issue Price
specified on the face hereof (expressed as a percentage of the aggregate
principal amount) plus the original issue discount amortized from the Interest
Accrual Date to the date of declaration, which amortization shall be calculated
using the "interest method" (computed in accordance with generally accepted
accounting principles in effect on the date of declaration), (ii) for the
purpose of any vote of securityholders taken pursuant to the Senior Indenture
prior to the acceleration of payment of this Note, the principal amount hereof
shall equal the amount that would be due and payable hereon, calculated as set
forth in clause (i) above, if this Note were declared to be due and payable on
the date of any such vote and (iii) for the purpose of any vote of
securityholders taken pursuant to the Senior Indenture following the
acceleration of payment of this Note, the

                                      A-17

<PAGE>

principal amount hereof shall equal the amount of principal due and payable
with respect to this Note, calculated as set forth in clause (i) above.

       If the face hereof indicates that this Note is subject to "Tax
Redemption and Payment of Additional Amounts," this Note may be redeemed, as a
whole, at the option of the Issuer at any time prior to maturity, upon the
giving of a notice of redemption as described below, at a redemption price
equal to 100% of the principal amount hereof, together with accrued interest to
the date fixed for redemption (except that if this Note is subject to "Modified
Payment upon Acceleration or Redemption," such redemption price would be
limited to the aggregate principal amount hereof multiplied by the sum of the
Issue Price specified on the face hereof (expressed as a percentage of the
aggregate principal amount) plus the original issue discount amortized from the
Interest Accrual Date to the date of redemption, which amortization shall be
calculated using the "interest method" (computed in accordance with generally
accepted accounting principles in effect on the date of redemption) (the
"Amortized Amount")), if the Issuer determines that, as a result of any change
in or amendment to the laws (or any regulations or rulings promulgated
thereunder) of the United States or of any political subdivision or taxing
authority thereof or therein affecting taxation, or any change in official
position regarding the application or interpretation of such laws, regulations
or rulings, which change or amendment becomes effective on or after the Initial
Offering Date hereof, the Issuer has or will become obligated to pay Additional
Amounts (as defined below) with respect to this Note as described below. Prior
to the giving of any Notice of redemption pursuant to this paragraph, the
Issuer shall deliver to the Trustee (i) a certificate stating that the Issuer
is entitled to effect such redemption and setting forth a statement of facts
showing that the conditions precedent to the right of the Issuer to so redeem
have occurred, and (ii) an opinion of independent counsel satisfactory to the
Trustee to such effect based on such statement of facts; provided that no such
notice of redemption shall be given earlier than 60 days prior to the earliest
date on which the Issuer would be obligated to pay such Additional Amounts if a
payment in respect of this Note were then due.

       Notice of redemption will be given not less than 30 nor more than 60
days prior to the date fixed for redemption or within the Redemption Notice
Period specified on face hereof, which date and the applicable redemption price
will be specified in the Notice.

       If the face hereof indicates that this Note is subject to "Tax
Redemption and Payment of Additional Amounts," the Issuer will, subject to
certain exceptions and limitations set forth below, pay such additional amounts
(the "Additional Amounts") to the holder of this Note who is a United States
Alien as may be necessary in order that every net payment of the principal of
and interest on this Note and any other amounts payable on this Note, after
withholding for or on account of any present or future tax, assessment or
governmental charge imposed upon or as a result of such payment by the United
States (or any political subdivision or taxing authority thereof or therein),
will not be less than the amount provided for in this Note to be then due and
payable. The Issuer will not, however, be required to make any payment of
Additional Amounts to any such holder for or on account of:

         (a) any such tax, assessment or other governmental charge that would
       not have been so imposed but for (i) the existence of any present or
       former connection between such holder

                                      A-18

<PAGE>

       (or between a fiduciary, settlor, beneficiary, member or shareholder of
       such holder, if such holder is an estate, a trust, a partnership or a
       corporation) and the United States and its possessions, including,
       without limitation, such holder (or such fiduciary, settlor,
       beneficiary, member or shareholder) being or having been a citizen or
       resident thereof or being or having been engaged in a trade or business
       or present therein or having, or having had, a permanent establishment
       therein or (ii) the presentation by the holder of this Note for payment
       on a date more than 15 days after the date on which such payment became
       due and payable or the date on which payment thereof is duly provided
       for, whichever occurs later;

         (b) any estate, inheritance, gift, sales, transfer or personal
       property tax or any similar tax, assessment or governmental charge;

         (c) any tax, assessment or other governmental charge imposed by reason
       of such holder's past or present status as a personal holding company or
       foreign personal holding company or controlled foreign corporation or
       passive foreign investment company with respect to the United States or
       as a corporation which accumulates earnings to avoid United States
       federal income tax or as a private foundation or other tax-exempt
       organization;

         (d) any tax, assessment or other governmental charge that is payable
       otherwise than by withholding from payments on or in respect of this
       Note;

         (e) any tax, assessment or other governmental charge required to be
       withheld by any Paying Agent from any payment of principal of, or
       interest on, this Note, if such payment can be made without such
       withholding by any other Paying Agent in a city in Western Europe;

         (f) any tax, assessment or other governmental charge that would not
       have been imposed but for the failure to comply with certification,
       information or other reporting requirements concerning the nationality,
       residence or identity of the holder or beneficial owner of this Note, if
       such compliance is required by statute or by regulation of the United
       States or of any political subdivision or taxing authority thereof or
       therein as a precondition to relief or exemption from such tax,
       assessment or other governmental charge;

         (g) any tax, assessment or other governmental charge imposed by reason
       of such holder's past or present status as the actual or constructive
       owner of 10% or more of the total combined voting power of all classes
       of stock entitled to vote of the Issuer or as a direct or indirect
       subsidiary of the Issuer; or

         (h) any combination of items (a), (b), (c), (d), (e), (f) or (g);

nor shall Additional Amounts be paid with respect to any payment on this Note
to a United States Alien who is a fiduciary or partnership or other than the
sole beneficial owner of such payment to the extent such payment would be
required by the laws of the United States (or any political subdivision
thereof) to be included in the income, for tax purposes, of a beneficiary or
settlor with respect to such fiduciary or a member of such partnership or a
beneficial owner who

                                      A-19

<PAGE>

would not have been entitled to the Additional Amounts had such beneficiary,
settlor, member or beneficial owner been the holder of this Note.

       The Senior Indenture permits the Issuer and the Trustee, with the
consent of the holders of not less than a majority in aggregate principal
amount of the debt securities of all series issued under the Senior Indenture
then outstanding and affected (voting as one class), to execute supplemental
indentures adding any provisions to or changing in any manner the rights of the
holders of each series so affected; provided that the Issuer and the Trustee
may not, without the consent of the holder of each outstanding debt security
affected thereby, (a) extend the final maturity of any such debt security, or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption or
repayment thereof, or change the currency of payment thereof, or modify or
amend the provisions for conversion of any currency into any other currency, or
modify or amend the provisions for conversion or exchange of the debt security
for securities of the Issuer or other entities (other than as provided in the
antidilution provisions or other similar adjustment provisions of the debt
securities or otherwise in accordance with the terms thereof), or impair or
affect the rights of any holder to institute suit for the payment thereof
without the consent of the holder of each debt security so affected or (b)
reduce the aforesaid percentage in principal amount of debt securities the
consent of the holders of which is required for any such supplemental
indenture.

       Except as set forth below, if the principal of, premium, if any, or
interest on, this Note is payable in a Specified Currency other than U.S.
dollars and such Specified Currency is not available to the Issuer for making
payments hereon due to the imposition of exchange controls or other
circumstances beyond the control of the Issuer or is no longer used by the
government of the country issuing such currency or for the settlement of
transactions by public institutions within the international banking community,
then the Issuer will be entitled to satisfy its obligations to the holder of
this Note by making such payments in U.S. dollars on the basis of the Market
Exchange Rate on the date of such payment or, if the Market Exchange Rate is
not available on such date, as of the most recent practicable date; provided,
however, that if the euro has been substituted for such Specified Currency, the
Issuer may at its option (or shall, if so required by applicable law) without
the consent of the holder of this Note effect the payment of principal of,
premium, if any, or interest on, any Note denominated in such Specified
Currency in euro in lieu of such Specified Currency in conformity with legally
applicable measures taken pursuant to, or by virtue of, the treaty establishing
the European Community (the "EC"), as amended by the treaty on European Union
(as so amended, the "Treaty"). Any payment made under such circumstances in
U.S. dollars or euro where the required payment is in an unavailable Specified
Currency will not constitute an Event of Default. If such Market Exchange Rate
is not then available to the Issuer or is not published for a particular
Specified Currency, the Market Exchange Rate will be based on the highest bid
quotation in The City of New York received by the Exchange Rate Agent at
approximately 11:00 a.m., New York City time, on the second Business Day
preceding the date of such payment from three recognized foreign exchange
dealers (the "Exchange Dealers") for the purchase by the quoting Exchange
Dealer of the Specified Currency for U.S. dollars for settlement on the payment
date, in the aggregate amount of the Specified Currency payable to those
holders or beneficial owners of Notes and at which

                                      A-20

<PAGE>

the applicable Exchange Dealer commits to execute a contract. One of the
Exchange Dealers providing quotations may be the Exchange Rate Agent unless the
Exchange Rate Agent is an affiliate of the Issuer. If those bid quotations are
not available, the Exchange Rate Agent shall determine the market exchange rate
at its sole discretion.

       The "Exchange Rate Agent" shall be Morgan Stanley & Co. Incorporated,
unless otherwise indicated on the face hereof.

       All determinations referred to above made by, or on behalf of, the
Issuer or by, or on behalf of, the Exchange Rate Agent shall be at such
entity's sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on holders of Notes and coupons.

       So long as this Note shall be outstanding, the Issuer will cause to be
maintained an office or agency for the payment of the principal of and premium,
if any, and interest on this Note as herein provided in the Borough of
Manhattan, The City of New York, and an office or agency in said Borough of
Manhattan for the registration, transfer and exchange as aforesaid of the
Notes. The Issuer may designate other agencies for the payment of said
principal, premium and interest at such place or places (subject to applicable
laws and regulations) as the Issuer may decide. So long as there shall be such
an agency, the Issuer shall keep the Trustee advised of the names and locations
of such agencies, if any are so designated.

       With respect to moneys paid by the Issuer and held by the Trustee or any
Paying Agent for payment of the principal of or interest or premium, if any, on
any Notes that remain unclaimed at the end of two years after such principal,
interest or premium shall have become due and payable (whether at maturity or
upon call for redemption or otherwise), (i) the Trustee or such Paying Agent
shall notify the holders of such Notes that such moneys shall be repaid to the
Issuer and any person claiming such moneys shall thereafter look only to the
Issuer for payment thereof and (ii) such moneys shall be so repaid to the
Issuer. Upon such repayment all liability of the Trustee or such Paying Agent
with respect to such moneys shall thereupon cease, without, however, limiting
in any way any obligation that the Issuer may have to pay the principal of or
interest or premium, if any, on this Note as the same shall become due.

       No provision of this Note or of the Senior Indenture shall alter or
impair the obligation of the Issuer, which is absolute and unconditional, to
pay the principal of, premium, if any, and interest on this Note at the time,
place, and rate, and in the coin or currency, herein prescribed unless
otherwise agreed between the Issuer and the registered holder of this Note.

       Prior to due presentment of this Note for registration of transfer, the
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
holder in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and none of the Issuer, the
Trustee or any such agent shall be affected by notice to the contrary.

       No recourse shall be had for the payment of the principal of, premium,
if any, or the interest on this Note, for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Senior Indenture or any
indenture supplemental thereto, against any incorporator,

                                      A-21

<PAGE>

shareholder, officer or director, as such, past, present or future, of the
Issuer or of any successor corporation, either directly or through the Issuer
or any successor corporation, whether by virtue of any constitution, statute or
rule of law or by the enforcement of any assessment or penalty or otherwise,
all such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released.

       This Note shall for all purposes be governed by, and construed in
accordance with, the laws of the State of New York.

       As used herein, the term "United States Alien" means any person who, for
United States federal income tax purposes, is a foreign corporation, a
non-resident alien individual, a non- resident alien fiduciary of a foreign
estate or trust, or a foreign partnership one or more of the members of which
is a foreign corporation, a non-resident alien individual or a non-resident
alien fiduciary of a foreign estate or trust.

       All terms used in this Note which are defined in the Senior Indenture
and not otherwise defined herein shall have the meanings assigned to them in
the Senior Indenture.

                                      A-22

<PAGE>

                                 ABBREVIATIONS

       The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

                       TEN COM   -   as tenants in common
                       TEN ENT   -   as tenants by the entireties
                       JT TEN    -   as joint tenants with right of survivorship
                                     and not as tenants in common

            UNIF GIFT MIN ACT - _________________ Custodian ___________________
                                     (Minor)                     (Cust)

            Under Uniform Gifts to Minors Act _________________________________
                                                        (State)

       Additional abbreviations may also be used though not in the above list.

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

                                      A-23

<PAGE>

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto

________________________________________
[PLEASE INSERT SOCIAL SECURITY OR OTHER
      IDENTIFYING NUMBER OF ASSIGNEE]

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
[PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]

the within Note and all rights thereunder, hereby irrevocably constituting and
appointing such person attorney to transfer such note on the books of the
Issuer, with full power of substitution in the premises.

Dated:________________________________

NOTICE:   The signature to this assignment must correspond with the
          name as written upon the face of the within Note in every
          particular without alteration or enlargement or any change
          whatsoever.

                                      A-24

<PAGE>

                           OPTION TO ELECT REPAYMENT

       The undersigned hereby irrevocably requests and instructs the Issuer to
repay the within Note (or portion thereof specified below) pursuant to its
terms at a price equal to the principal amount thereof, together with interest
to the Optional Repayment Date, to the undersigned at

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
        (Please print or typewrite name and address of the undersigned)

     If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the holder elects to have repaid:
__________________; and specify the denomination or denominations (which shall
not be less than the minimum authorized denomination) of the Notes to be issued
to the holder for the portion of the within Note not being repaid (in the
absence of any such specification, one such Note will be issued for the portion
not being repaid): _________________.

Dated: _______________________        __________________________________________
                                      NOTICE: The signature on this Option to
                                      Elect Repayment must correspond with the
                                      name as written upon the face of the
                                      within instrument in every particular
                                      without alteration or enlargement.

                                      A-25

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