WAIVER AND TERMINATION
THIS WAIVER AND TERMINATION OF SHAREHOLDERS' AGREEMENT (the "Agreement") is entered
into effective as of July 16, 2005 (the "Effective Date"), by and among Jagen Pty, Ltd. ("Jagen") and Anthony
Rawlinson ("Rawlinson" and together with Jagen, the "Purchasers"), Carl D. Perry ("Perry") and Enova Systems.,
Inc. (formerly U.S. Electricar, Inc.), a California corporation (the "Company"). Any Capitalized terms not
otherwise defined herein shall have the meanings set forth in that certain Placing Agreement by and among
Investec Bank (UK) Limited, the Company and the Directors of the Company (including but not limited to
Rawlinson as a Director) attached hereto as Exhibit A and incorporated herein by reference (the "Placing
Agreement") or as set forth in the Shareholders' Agreement (as defined below).
R E C I T A L S:
A. On June 1, 1999 the Purchasers, Perry and the Company entered into a Shareholders' Agreement (the
"Shareholders' Agreement") which provided for, among other matters, the granting of certain preemptive and
corporate governance rights to the Purchasers which the parties now desire to waive and/or terminate.
B. The Company has engaged Investec Bank (UK) Limited to act as its agent for the Company in respect of the
Company proposing to sell up to 5,350,000 new Common Shares of the Company (the "Placing Shares")
pursuant to Regulation S under the Securities Act of 1933, as amended, to persons subscribing for Placing
Shares pursuant to the Placing Agreement;
C. In connection with the Placing, among other matters set forth below, the Company desires that the Purchasers
waive their preemptive rights set forth in Article III of the Shareholders' Agreement effective as of the Effective
Date and terminate the Shareholders' Agreement effective immediately prior to the "Admission".
NOW THEREFORE, the parties hereto agree as follows:
So long as the Admission becomes effective on, or prior to, August 31, 200