Document:

Contract Number 11072001

ENOVA SYSTEMS
      Digital Power Management(TM)

                        CONFIDENTIAL TREATMENT REQUESTED
      * Redacted portion has been omitted and filed seperately 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 November 19, 2001 (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
Tomoe   Electro-Mechanical   Engineering  and  Manufacturing   Inc.  a  Japanese
corporation  ("Purchaser") with its principal place of business located in Tokyo
Japan.

         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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         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.

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         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,  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

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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 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 [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. [REDACTED]*

         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. [REDACTED]*

         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. [REDACTED]*

                  4.10.2 Fees and Expenses. [REDACTED]*

5 Order, Delivery and Payment. [REDACTED]*

         5.1 Prices. [REDACTED]*

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         5.2 Rolling Forecast. [REDACTED]*

         5.3 Calculation of Annual Volume Pricing. [REDACTED]*

         5.4 Purchase Orders and Shipment Terms. [REDACTED]*

         5.5 Procedures[REDACTED]*

         5.6 Reschedule/Cancellation. [REDACTED]*

         5.7 Delivery. [REDACTED]*

         5.8 Title And Risk Of Loss. [REDACTED]*

         5.9 Inspection; Acceptance. [REDACTED]*

         5.10 Payment Terms[REDACTED]*

         5.11 Late Payments. [REDACTED]*

         5.12 Changes. [REDACTED]*

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,

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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.

8 Term and Termination

         8.1 Term:  This  Agreement  shall  commence on the  Effective  Date and
continue in full force and effect for  [REDACTED]*.  Thereafter,  this Agreement
automatically  shall renew for  subsequent  terms of  [REDACTED]*  each,  unless
either party  provides the other party with notice of its intention not to renew
this  Agreement  no  fewer  than  90  calendar  days  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.

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         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 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[REDACTED]*

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.

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         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  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. [REDACTED]*

12 Intellectual Property Infringement Protection. [REDACTED]*

13 Limitation of Liability In General. [REDACTED]*

14 Dispute Resolution: [REDACTED]*

15 Miscellaneous:

         15.1 Governing Law [REDACTED]*

         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. [REDACTED]*

         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.

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

ENOVA SYSTEMS, INC.                          PURCHASER

By:  ______________________________          By:  ______________________________

Name: [REDACTED]*                            Name: [REDACTED]*

Title:  President & CEO                      Title:  President & CEO

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16 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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                                   Appendix 1

                          Panther Drive System Products

[REDACTED]*

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                                   Appendix 2

                               Purchaser Products

1. [REDACTED]*

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                                   Appendix 3

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

1.0 Development Program Responsibilities.

[REDACTED]*

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2.0      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.

2. Enova and Purchaser  will complete the  acceptance  criteria  table within 30
days of execution of this contract.

         Parameter                 Target                     Responsible

[REDACTED]*

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

None

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                           Attachment 1 to Appendix 3

              Panther Drive System and Other Purchased Deliverables

                      In support of the Development Program

This  attachment  will be completed upon receipt of drive system  purchase order
from Purchaser.

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                           Attachment 2 to Appendix 3

                Prototype Components to be Supplied by Purchaser

Prototype  Vehicle,  and all systems and components not included in the purchase
order to Enova for the drive system described in Attachment 2 to Appendix 3.

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                                   Appendix 4

               Warranty Acceptance Criteria for Purchaser Product

1 Vehicle Application

[REDACTED]*

2 Prototype Installation

[REDACTED]*

3 Installation Approval Inspection

[REDACTED]*

4 Beginning of warranty coverage.

[REDACTED]*

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                                   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]*

This labor rate and replacement time list is valid for orders placed by December
31, 2001. A new labor rate and  replacement  time list will be provided no later
than December 15th of each year for the following year.

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                                   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]*

     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, [REDACTED]*

     3.  Panther(TM)Propulsion  System  Parts.  Parts  covered by this  warranty
         include [REDACTED]*

     4.  Warranty Period. The "Warranty Period" begins on [REDACTED]*

     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 an Enova  Qualified  Service  Provider,  using  only new,
         remanufactured,  or rebuilt Enova  Panther(TM)  Propulsion System parts
         supplied or approved by Enova.  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 Qualified  Service Provider within 30
         days of the malfunction of the Panther Drive System. All parts replaced
         under this warranty shall become the property of Enova.

Exclusions to Warranty.  [REDACTED]*

     1.  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.

     2.  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.

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                                                        Contract Number 11072001

                                   Appendix 7

                        Prices and Other Commercial Terms

1. Prices.

[REDACTED]*

2. LEAD TIME

[REDACTED]*

3. RESCHEDULE AND CANCELLATION TERMS

[REDACTED]*

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                                   Appendix 8

                            Non-Disclosure Agreement

Enova Systems,  a corporation  organized  under the laws of California and Tomoe
Electro-Mechanical Engineering and Manufacturing Inc. a Tokyo Japan 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.

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         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.

Tomoe Electro-Mechanical Engineering        ENOVA SYSTEMS
and Manufacturing Inc.

By:_______________________________          By:_______________________________

[REDACTED]*                                                   [REDACTED]*

Date:                                       Date:
      ----------------------------                ----------------------------

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                                   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

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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 thereof.

         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  thereof,  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).

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                                   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.

None

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                                      Enova Systems Proprietary and ConfidentialContract Number 11072001

ENOVA SYSTEMS
      Digital Power Management(TM)

                        CONFIDENTIAL TREATMENT REQUESTED
      * Redacted portion has been omitted and filed seperately 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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         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.

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         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,  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

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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 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 [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.

                  4.5.1 Compensation for Warranty Repairs. [REDACTED]*

         4.6 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.

                  4.6.1 Availability of Parts. [REDACTED]*

         4.7 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.

4.8      Manufacturer Support.

                  4.8.1 Scope of Support. [REDACTED]*

                  4.8.2 Fees and Expenses. [REDACTED]*

5 Order, Delivery and Payment. [REDACTED]*

         5.1 Prices. [REDACTED]*

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         5.2 Rolling Forecast. [REDACTED]*

         5.3 Calculation of Annual Volume Pricing. [REDACTED]*

         5.4 Purchase Orders and Shipment Terms. [REDACTED]*

         5.5 Procedures[REDACTED]*

         5.6 Reschedule/Cancellation. [REDACTED]*

         5.7 Delivery. [REDACTED]*

         5.8 Title And Risk Of Loss. [REDACTED]*

         5.9 Inspection; Acceptance. [REDACTED]*

         5.10 Payment Terms[REDACTED]*

         5.11 Late Payments. [REDACTED]*

         5.12 Changes. [REDACTED]*

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,

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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.

8 Term and Termination

         8.1 Term:  This  Agreement  shall  commence on the  Effective  Date and
continue in full force and effect for  [REDACTED]*.  Thereafter,  this Agreement
automatically  shall renew for  subsequent  terms of  [REDACTED]*  each,  unless
either party  provides the other party with notice of its intention not to renew
this  Agreement  no  fewer  than  90  calendar  days  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.

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         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 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[REDACTED]*

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.

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         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  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. [REDACTED]*

12 Intellectual Property Infringement Protection. [REDACTED]*

13 Limitation of Liability In General. [REDACTED]*

14 Dispute Resolution: [REDACTED]*

15 Miscellaneous:

         15.1 Governing Law [REDACTED]*

         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. [REDACTED]*

         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.

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

ENOVA SYSTEMS, INC.                         PURCHASER

By:  ______________________________         By:  ______________________________

Name: [REDACTED]*                           Name: [REDACTED]*

Title:  President & CEO                     Title:  President & CEO

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16 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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                                   Appendix 1

                          Panther Drive System Products

[REDACTED]*

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                                   Appendix 2

                               Purchaser Products

1. [REDACTED]*

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                                   Appendix 3

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

1.0 Development Program Responsibilities.

[REDACTED]*

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2.0      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.

2. Enova and Purchaser  will complete the  acceptance  criteria  table within 30
days of execution of this contract.

         Parameter                 Target                     Responsible

[REDACTED]*

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

None

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                           Attachment 1 to Appendix 3

              Panther Drive System and Other Purchased Deliverables

                      In support of the Development Program

This  attachment  will be completed upon receipt of drive system  purchase order
from Purchaser.

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                           Attachment 2 to Appendix 3

                Prototype Components to be Supplied by Purchaser

Prototype  Vehicle,  and all systems and components not included in the purchase
order to Enova for the drive system described in Attachment 2 to Appendix 3.

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                                   Appendix 4

               Warranty Acceptance Criteria for Purchaser Product

1 Vehicle Application

[REDACTED]*

2 Prototype Installation

[REDACTED]*

3 Installation Approval Inspection

[REDACTED]*

4 Beginning of warranty coverage.

[REDACTED]*

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                                   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]*

This labor rate and replacement time list is valid for orders placed by December
31, 2001. A new labor rate and  replacement  time list will be provided no later
than December 15th of each year for the following year.

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                                   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]*

     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, [REDACTED]*

     3.  Panther(TM)Propulsion  System  Parts.  Parts  covered by this  warranty
         include [REDACTED]*

     4.  Warranty Period. The "Warranty Period" begins on [REDACTED]*

     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 an Enova  Qualified  Service  Provider,  using  only new,
         remanufactured,  or rebuilt Enova  Panther(TM)  Propulsion System parts
         supplied or approved by Enova.  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 Qualified  Service Provider within 30
         days of the malfunction of the Panther Drive System. All parts replaced
         under this warranty shall become the property of Enova.

Exclusions to Warranty.  [REDACTED]*

     1.  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.

     2.  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.
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                                                        Contract Number 11072001

                                   Appendix 7

                        Prices and Other Commercial Terms

1. Prices.

[REDACTED]*

2. LEAD TIME

[REDACTED]*

3. RESCHEDULE AND CANCELLATION TERMS

[REDACTED]*

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                                   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.

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         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:_______________________________
[REDACTED]*                                    [REDACTED]*

Date:                                       Date:
      ----------------------------                ----------------------------

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                                   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

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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 thereof.

         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  thereof,  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).

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                                   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.

None

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