DEFA14A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): October 29, 2009

Enova Systems, Inc.

(Exact name of registrant as specified in its charter)

California	1-33001	95-3056150
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	Identification No.)
1560 West 190th Street,
Torrance, California		90501
(Address of principal executive		(Zip Code)
offices)

Registrant’s telephone number, including area code:                    310-527-2800

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

þ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 1.01 Entry into a Material Definitive Agreement.
	Item 3.02 Unregistered Sales of Equity Securities.
	Item 9.01 Financial Statements and Exhibits.
SIGNATURES
Exhibit Index
EX-99.1
EX-99.2
EX-99.3
EX-99.4

Item 1.01 Entry into a Material Definitive Agreement.

Enova Systems, Inc. (the “Company” or “Enova”) has agreed to sell a total of 10,347,960 shares of the Company’s common stock, no par value (“Common Stock”), at $1.00 (U.S.) per share for gross proceeds of approximately $10,347,960 (based on current exchange rates as described below) pursuant in part to a Purchase Agreement and in part to a Placing Agreement as more particularly described below.

The transactions contemplated by the Purchase Agreement and the Placing Agreement are subject to shareholder approval of the issuance of shares.

Purchase Agreement

On October 29, 2009, Enova entered into a Purchase Agreement (“Purchase Agreement”) with certain of the Special Situations Funds, Stitching Shell Pensioenfonds, Shell Contributory Pension Fund, Shell Overseas Contributory Pension Fund, a fund managed by Swiss Global Asset Management Ltd., Silicon Prairie Partners, LLP (an affiliate of one of our Directors, John Micek) and Eruca Limited (collectively, the “Investors”), pursuant to which the Investors have agreed to purchase 9,024,960 shares of Common Stock (“Investor Shares”). It is anticipated that Enova will receive $9,024,960 in gross proceeds from the offering under the Purchase Agreement.

The closing of the offering is contingent on, among other things, the approval by the shareholders of the Company of the issuance of a number of shares of Common Stock at least equal to the total of the Investor Shares and the Placing Shares (as defined below) in order to satisfy certain requirements under the NYSE Amex Rules to which the Company is subject. The closing is further conditional upon the Investor Shares having been approved for listing on the NYSE Amex (subject to official notice of issuance) and there being minimum gross proceeds of at least $8,000,000 from the sale of the Investor Shares and/or the Placing Shares.

The Purchase Agreement may be terminated (a) by consent of the parties or (b) by the Company or any Investor (with respect to itself only) if the closing has not occurred by December 31, 2009 or any of the conditions to closing are not met or waived by the appropriate party. Because the closing is subject to various conditions, there can be no assurance that the closing will occur.

In connection with the offering, a finder’s fee of 7% on up to $1,750,000 of gross proceeds under the Purchase Agreement will be paid by the Company.

Under the terms of the Purchase Agreement, Enova is obligated to enter into a Registration Rights Agreement with each of the Investors no later than the closing of the sale of the Investor Shares. The Registration Rights Agreement will require the Company to file with the SEC a registration statement to cover the resale of the Investor Shares covered by the Registration Rights Agreement no later than thirty days of the closing of the sale of the Investor Shares. If such registration statement is not filed with the SEC on a timely basis, is not declared effective within the time periods specified in the Registration Rights Agreement or, after having been declared effective, is not available for sales of the Investor Shares for any reason (with certain limited exceptions), then the Company is required to pay the Investors, as liquidated damages, monetary penalties of 1.5% of the amount invested for each 30-day period (or pro rata portion

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thereof) during which such failure continues. The Company will have certain customary obligations with respect to the required registration statement. The Investors will be entitled to certain inspection rights under the Registration Rights Agreement and will be required to provide the Company with certain information to assist in the registration of the Investor Shares. The Registration Rights Agreement will contain customary indemnification and contribution provisions.

Each of the Investors is an “accredited” investor (as such term is defined under Regulation D promulgated by the Securities and Exchange Commission (“SEC”)). The Investor Shares are expected to be sold in a transaction exempt from the registration requirements under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(2) thereof and in reliance upon Rule 506 of Regulation D promulgated by the SEC.

Placing Agreement

On October 29, 2009, the Company entered into a Placing Agreement (the “Placing Agreement”) to which Investec Bank (UK) Limited (“Investec”) will act as Enova’s agent to use its reasonable endeavors to procure subscribers for 1,323,000 shares of the Common Stock (the “Placing Shares”) at 62.5 Pence (the “Placing Price”), or approximately the equivalent of $1.00 (U.S. Dollars) per share as of such date based on the exchange rate on October 29, 2009 as reported by Fidessa. The Placing Price will remain at this fixed Pence per share price. The actual amount per share in US Dollars will be determined based upon the conversion rate in effect as of the closing. Investec, on behalf of Enova, has conditionally placed the Placing Shares with institutional and certain other investors (the “UK and Other Investors”) at the Placing Price to raise $1,323,000 (U.S. Dollars) in gross proceeds (subject to adjustment as described above based on the conversion rate as of the closing).

Investec will earn a selling commission of 7% of the proceeds from the offering under the Placing Agreement.

The placing and the subscription for the Placing Shares are conditional upon, among other things, the Company having received written confirmation from the NYSE Amex that the Placing Shares will be listed on NYSE Amex by 4:00 p.m. (London time) on December 14, 2009 (or such later date as the Company and Investec may agree, but in any event not later than 4:00 p.m. (London time) on December 30, 2009) and admission to trading of the Placing Shares on the London Stock Exchange AIM Market, by not later than 8:00 a.m. on December 15, 2009 (or such later date as the Company and Investec may agree, but in any event not later than 8:00 a.m. on December 31, 2009) and the receipt of no less than $8,424,960 (U.S. Dollars) in respect of the sale of the Investor Shares.

The Placing Agreement contains warranties given by the Company with respect to the Company, its business and certain matters connected with the placing. Investec is entitled to terminate the Placing Agreement in certain circumstances prior to admission to trading with the AIM Market, principally to the extent that any of the warranties contained in the Placing Agreement are, or become, materially untrue, inaccurate or misleading or if a force majeure type event arises. In addition, the Company has given a customary type indemnity to Investec in respect of, among other things, the performance by Investec of its services in connection with the placing of the

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Placing Shares. The Placing Agreement also provides that the Company will not issue any shares of Common Stock or warrants or options to subscribe for Common Stock or convertibles that carry a right to convert into Common Stock or any other class of equity share capital or other securities pursuant to any transaction to raise additional finance for the Company during the twelve month period following the date of admission of the Placing Shares to trading on AIM becoming effective in accordance with the AIM Rules except with the prior written approval of Investec (such approval not to be unreasonably withheld or delayed), subject to limited exceptions for equity related compensation by the Company to its directors, employees or otherwise.

The Placing Shares to be sold pursuant to the Placing Agreement will not have been registered under the Securities Act of 1933, as amended, and there is no obligation on the part of the Company to so register such shares.

The offer and sale of the shares will be been made pursuant to Regulation S under the Securities Act. Among other things, each investor purchasing Placing Shares in the offering will represent that the investor is not a United States person as defined in Regulation S. In addition, neither Enova nor Investec has conducted or will conduct any selling efforts directed at the United States in connection with the offering. All Placing Shares to be issued in the offering will include a restrictive legend indicating that the shares are being issued pursuant to Regulation S under the Securities Act and are deemed to be “restricted securities.” As a result, the purchasers of such shares will not be able to resell the shares unless, in accordance with Regulation S, pursuant to a registration statement or upon reliance of an applicable exemption from registration under the Securities Act.

General Information

This Current Report on Form 8-K does not constitute an offer of any securities for sale. The securities to be sold pursuant to the Purchase Agreement and/or the Placing Agreement have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Enova intends to seek approval of the issuance of the additional shares of Common Stock at the Annual Meeting of Shareholders currently scheduled for the second week of December 2009 and intends to send to shareholders a Proxy Statement relating thereto when available. Enova advises each of its shareholders to read the Proxy Statement when it becomes available because it will contain important information. Once the Proxy Statement is available, shareholders can get the Proxy Statement and any relevant documents for free at the SEC’s web site or free of charge by writing to Enova Systems, Inc., 1560 West 190th Street, Torrance, California 90501, Attention: Chief Financial Officer and requesting a copy thereof.

The Purchase Agreement, the Registration Rights Agreement and the Placing Agreement are filed with this report as Exhibits 99.1, 99.2 and 99.3, respectively, and are incorporated herein by reference. The foregoing summary of terms is qualified in its entirety by such agreements.

A press release issued by the Company in connection with these proposed private placements is filed with this report as Exhibit 99.4.

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Item 3.02 Unregistered Sales of Equity Securities.

The information contained in Item 1.01 above is incorporated by reference in response to this Item 3.02.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

99.1	Purchase Agreement
99.2	Form of Registration Rights Agreement
99.3	Placing Agreement
99.4	Press release dated October 30, 2009

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ENOVA SYSTEMS, INC.
Date: October 30, 2009	By:	/s/ Jarett Fenton
		Name:	Jarett Fenton
		Title:	Chief Financial Officer

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Exhibit Index

Exhibits	Description
99.1	Purchase Agreement
99.2	Form of Registration Rights Agreement
99.3	Placing Agreement
99.4	Press release dated October 30, 2009

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EX-99.1

Exhibit 99.1

PURCHASE AGREEMENT

          THIS PURCHASE AGREEMENT (“Agreement”) is made as of the 29th day of October, 2009 by and among Enova Systems, Inc., a California corporation (the “Company”), and the Investors set forth on the signature pages affixed hereto (each an “Investor” and collectively the “Investors”).

Recitals

          A. The Company and each of the Investors are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the provisions of Regulation D (“Regulation D”), as promulgated by the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended; and

          B. Each of the Investors wishes to purchase from the Company, and the Company wishes to sell and issue to the Investors, upon the terms and conditions stated in this Agreement, the shares (the “Shares”) of the Company’s Common Stock, no par value (together with any securities into which such shares may be reclassified, whether by merger, charter amendment or otherwise, the “Common Stock”) set forth opposite the respective names of the Investors on the signature pages affixed hereto, at purchase price of $1.00 per share; and

          C. Contemporaneous with the sale of the Shares, the parties hereto will execute and deliver a Registration Rights Agreement, in the form attached hereto as Exhibit A (the “Registration Rights Agreement”), pursuant to which the Company will agree to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, and applicable state securities laws.

          In consideration of the mutual promises made herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

     1. Definitions. In addition to those terms defined above and elsewhere in this Agreement, for the purposes of this Agreement, the following terms shall have the meanings set forth below:

          “Affiliate” means, with respect to any Person, any other Person which directly or indirectly through one or more intermediaries Controls, is controlled by, or is under common control with, such Person.

          “AIM Offering” means the simultaneous offering of shares Common Stock to non-U.S. persons made through the facilities of the London Stock Exchange’s AIM Market in accordance with Regulation S under the 1933 Act on terms and conditions no more favorable to the investors than those set forth in the Transaction Documents.

          “Business Day” means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business.

          “Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

          “Company’s Knowledge” means the actual knowledge of the executive officers (as defined in Rule 405 under the 1933 Act) of the Company, after due inquiry.

          “Confidential Information” means trade secrets, confidential information and know-how (including but not limited to ideas, formulae, compositions, processes, procedures and techniques, research and development information, computer program code, performance specifications, support documentation, drawings, specifications, designs, business and marketing plans, and customer and supplier lists and related information).

          “Control” (including the terms “controlling”, “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

          “Effective Date” means the date on which the initial Registration Statement is declared effective by the SEC.

          “Effectiveness Deadline” means the date on which the initial Registration Statement is required to be declared effective by the SEC under the terms of the Registration Rights Agreement.

          “Intellectual Property” means all of the following: (i) patents, patent applications, patent disclosures and inventions (whether or not patentable and whether or not reduced to practice); (ii) trademarks, service marks, trade dress, trade names, corporate names, logos, slogans and Internet domain names, together with all goodwill associated with each of the foregoing; (iii) copyrights and copyrightable works; (iv) registrations, applications and renewals for any of the foregoing; and (v) proprietary computer software (including but not limited to data, data bases and documentation).

          “Lien” means any lien, charge, claim, encumbrance, security interest, right of first refusal, preemptive right or other restrictions of any kind.

          “Material Adverse Effect” means a material adverse effect on (i) the assets, liabilities, results of operations, condition (financial or otherwise), business, or prospects of the Company and its Subsidiaries taken as a whole, or (ii) the ability of the Company to perform its obligations under the Transaction Documents.

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          “Material Contract” means any contract of the Company that has been filed or was required to have been filed as an exhibit to the SEC Reports pursuant to Item 601(b)(4) or Item 601(b)(10) of Regulation S-K.

          “NYSE Amex” means The NYSE Amex.

          “Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.

          “Proposal” has the meaning set forth in Section 7.9.

          “Purchase Price” means the aggregate purchase prices to be paid by the Investors set forth opposite the respective names of the Investors on the signature pages affixed hereto.

          “Registration Statement” has the meaning set forth in the Registration Rights Agreement.

          “Required Investors” has the meaning set forth in the Registration Rights Agreement.

          “SEC Filings” has the meaning set forth in Section 4.6.

          “Subsidiary” of any Person means another Person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its Board of Directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first Person.

          “Transaction Documents” means this Agreement and the Registration Rights Agreement.

          “1933 Act” means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

          “1934 Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

     2. Purchase and Sale of the Shares. Subject to the terms and conditions of this Agreement, on the Closing Date, each of the Investors shall severally, and not jointly, purchase, and the Company shall sell and issue to the Investors, the Shares in the respective amounts set forth opposite the Investors’ names on the signature pages attached hereto in exchange for the portion of the Purchase Price set forth opposite the Investors’ names on the signature pages attached hereto as specified in Section 3 below.

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     3. Closing. Unless other arrangements have been made with a particular Investor, upon confirmation that the other conditions to closing specified herein have been satisfied or duly waived by the Investors, the Company shall deliver to Lowenstein Sandler PC, in trust, a certificate or certificates, registered in such name or names as the Investors may designate, representing the Shares, with instructions that such certificates are to be held for release to the Investors only upon payment in full of the Purchase Price to the Company by all the Investors. Unless other arrangements have been made with a particular Investor, upon such receipt by Lowenstein Sandler PC of the certificates, each Investor shall promptly, but no more than one Business Day thereafter, cause a wire transfer in same day funds to be sent to the account of the Company as instructed in writing by the Company, in an amount representing such Investor’s pro rata portion of the Purchase Price as set forth on the signature pages to this Agreement. On the date (the “Closing Date”) the Company receives the Purchase Price, the certificates evidencing the Shares shall be released to the Investors (the “Closing”). The Closing of the purchase and sale of the Shares shall take place at the offices of Lowenstein Sandler PC, 1251 Avenue of the Americas, 18th Floor, New York, New York 10020 (or remotely via the exchange of documents and signatures), or at such other location and on such other date as the Company and the Investors shall mutually agree.

     4. Representations and Warranties of the Company. The Company hereby represents and warrants to the Investors that, except as set forth in the schedules delivered herewith (collectively, the “Disclosure Schedules”), which Disclosure Schedules shall be deemed a part hereof:

          4.1 Organization, Good Standing and Qualification. Each of the Company and its Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all requisite corporate power and authority to carry on its business as now conducted and to own or lease its properties. Each of the Company and its Subsidiaries is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property makes such qualification or leasing necessary unless the failure to so qualify has not had and could not reasonably be expected to have a Material Adverse Effect. The Company’s Subsidiaries are listed on Schedule 4.1 hereto.

          4.2 Authorization. The Company has full power and authority and, except for approval of the Proposal by its stockholders as contemplated in Section 7.9, has taken all requisite action on the part of the Company, its officers, directors and stockholders necessary for (i) the authorization, execution and delivery of the Transaction Documents, (ii) the authorization of the performance of all obligations of the Company hereunder or thereunder, and (iii) the authorization, issuance (or reservation for issuance) and delivery of the Shares. The Transaction Documents constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally and to general equitable principles.

          4.3 Capitalization. Schedule 4.3 sets forth as of the date hereof (a) the authorized capital stock of the Company; (b) the number of shares of capital stock issued and

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outstanding; (c) the number of shares of capital stock issuable pursuant to the Company’s stock plans; and (d) the number of shares of capital stock issuable and reserved for issuance pursuant to securities exercisable for, or convertible into or exchangeable for any shares of capital stock of the Company. All of the issued and outstanding shares of the Company’s capital stock have been duly authorized and validly issued and are fully paid, nonassessable and free of pre-emptive rights and were issued in full compliance with applicable state and federal securities law and any rights of third parties. Except as described on Schedule 4.3, all of the issued and outstanding shares of capital stock of each Subsidiary have been duly authorized and validly issued and are fully paid, nonassessable and free of pre-emptive rights, were issued in full compliance with applicable state and federal securities law and any rights of third parties and are owned by the Company, beneficially and of record, subject to no Lien or other adverse claim. Except as described on Schedule 4.3, no Person is entitled to pre-emptive or similar statutory or contractual rights with respect to any securities of the Company. Except as described on Schedule 4.3, there are no outstanding warrants, options, convertible securities or other rights, agreements or arrangements of any character under which the Company or any of its Subsidiaries is or may be obligated to issue any equity securities of any kind and except as contemplated by this Agreement and the AIM Offering, neither the Company nor any of its Subsidiaries is currently in negotiations for the issuance of any equity securities of any kind. Except as described on Schedule 4.3 and except for the Registration Rights Agreement, there are no voting agreements, buy-sell agreements, option or right of first purchase agreements or other agreements of any kind among the Company and any of the securityholders of the Company relating to the securities of the Company held by them. Except as described on Schedule 4.3 and except as provided in the Registration Rights Agreement, no Person has the right to require the Company to register any securities of the Company under the 1933 Act, whether on a demand basis or in connection with the registration of securities of the Company for its own account or for the account of any other Person.

          Except as described on Schedule 4.3, the issuance and sale of the Shares hereunder will not obligate the Company to issue shares of Common Stock or other securities to any other Person (other than the Investors) and will not result in the adjustment of the exercise, conversion, exchange or reset price of any outstanding security.

          Except as described on Schedule 4.3, the Company does not have outstanding stockholder purchase rights or “poison pill” or any similar arrangement in effect giving any Person the right to purchase any equity interest in the Company upon the occurrence of certain events.

          4.4 Valid Issuance. The Shares have been duly and validly authorized and, when issued and paid for pursuant to this Agreement, will be validly issued, fully paid and nonassessable, and shall be free and clear of all Liens (other than those created by the Investors), except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws.

          4.5 Consents. Except for approval of the Proposal by its stockholders as contemplated in Section 7.9, the execution, delivery and performance by the Company of the Transaction Documents and the offer, issuance and sale of the Shares require no consent of,

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action by or in respect of, or filing with, any Person, governmental body, agency, or official other than (i) those that have been obtained and are in full force and effect and (ii) filings that have been made pursuant to applicable state securities laws and post-sale filings pursuant to applicable state and federal securities laws which the Company undertakes to file within the applicable time periods. Subject to the accuracy of the representations and warranties of each Investor set forth in Section 5 hereof, the Company has taken all action necessary to exempt (i) the issuance and sale of the Shares, and (ii) the other transactions contemplated by the Transaction Documents from the provisions of any stockholder rights plan or other “poison pill” arrangement, any anti-takeover, business combination or control share law or statute binding on the Company or to which the Company or any of its assets and properties may be subject and any provision of the Company’s Amended and Restated Articles of Incorporation or Amended and Restated Bylaws that is or could reasonably be expected to become applicable to the Investors as a result of the transactions contemplated hereby, including without limitation, the issuance of the Shares and the ownership, disposition or voting of the Shares by the Investors or the exercise of any right granted to the Investors pursuant to this Agreement or the other Transaction Documents.

          4.6 Delivery of SEC Filings; Business. The Company has made available to the Investors through the EDGAR system, true and complete copies of the Company’s most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2008 (the “10-K”), and all other reports filed by the Company pursuant to the 1934 Act since the filing of the 10-K and prior to the date hereof, as amended to date (collectively, the “SEC Filings”). The SEC Filings are the only filings required of the Company pursuant to the 1934 Act for such period. The Company and its Subsidiaries are engaged in all material respects only in the business described in the SEC Filings and the SEC Filings contain a complete and accurate description in all material respects of the business of the Company and its Subsidiaries, taken as a whole.

          4.7 Use of Proceeds. The net proceeds of the sale of the Shares hereunder shall be used by the Company only for working capital and general corporate purposes and shall not be used for the satisfaction of any portion of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business and prior practices).

          4.8 No Material Adverse Change. Since December 31, 2008, except as identified and described in the SEC Filings or as described on Schedule 4.8, there has not been:

               (i) any change in the consolidated assets, liabilities, financial condition or operating results of the Company from that reflected in the financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, except for changes in the ordinary course of business which have not had and could not reasonably be expected to have a Material Adverse Effect, individually or in the aggregate;

               (ii) any declaration or payment of any dividend, or any authorization or payment of any distribution, on any of the capital stock of the Company, or any redemption or repurchase of any securities of the Company;

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               (iii) any material damage, destruction or loss, whether or not covered by insurance to any assets or properties of the Company or its Subsidiaries;

               (iv) any waiver, not in the ordinary course of business, by the Company or any Subsidiary of a material right or of a material debt owed to it;

               (v) any satisfaction or discharge of any lien, claim or encumbrance or payment of any obligation by the Company or a Subsidiary, except in the ordinary course of business and which is not material to the assets, properties, financial condition, operating results or business of the Company and its Subsidiaries taken as a whole (as such business is presently conducted and as it is proposed to be conducted);

               (vi) any change or amendment to the Company’s Amended and Restated Articles of Incorporation or Amended and Restated Bylaws, or material change to any material contract or arrangement by which the Company or any Subsidiary is bound or to which any of their respective assets or properties is subject;

               (vii) any material labor difficulties or labor union organizing activities with respect to employees of the Company or any Subsidiary;

               (viii) any material transaction entered into by the Company or a Subsidiary other than in the ordinary course of business, except for the AIM Offering;

               (ix) the loss of the services of any key employee, or material change in the composition or duties of the senior management of the Company or any Subsidiary;

               (x) the loss or threatened loss of any customer which has had or could reasonably be expected to have a Material Adverse Effect; or

               (xi) any other event or condition of any character that has had or could reasonably be expected to have a Material Adverse Effect.

          4.9 SEC Filings; S-3 Eligibility.

               (a) Except as described on Schedule 4.9, at the time of filing thereof, the SEC Filings complied as to form in all material respects with the requirements of the 1934 Act and did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.

               (b) Each registration statement and any amendment thereto filed by the Company since January 1, 2006 pursuant to the 1933 Act and the rules and regulations thereunder, as of the date such statement or amendment became effective, complied as to form in all material respects with the 1933 Act and did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein not misleading; and each prospectus filed pursuant to Rule 424(b)

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under the 1933 Act, as of its issue date and as of the closing of any sale of securities pursuant thereto did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.

               (c) The Company is eligible to use Form S-3 to register the Registrable Securities (as such term is defined in the Registration Rights Agreement) for sale by the Investors as contemplated by the Registration Rights Agreement.

          4.10 No Conflict, Breach, Violation or Default. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby or thereby including the issuance and sale of the Shares will not conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a default under (i) the Company’s Amended and Restated Articles of Incorporation or the Company’s Amended and Restated Bylaws, both as in effect on the date hereof (true and complete copies of which have been made available to the Investors through the EDGAR system), (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any Material Contract or (iii)(a) any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company, any Subsidiary or any of their respective assets or properties, or (b) any agreement or instrument to which the Company or any Subsidiary is a party or by which the Company or a Subsidiary is bound or to which any of their respective assets or properties is subject.

          4.11 Tax Matters. The Company and each Subsidiary has timely filed all tax returns required to have been filed by the Company or such Subsidiary with all appropriate governmental agencies and timely paid all taxes shown thereon or otherwise owed by it. The charges, accruals and reserves on the books of the Company in respect of taxes for all fiscal periods are adequate in all material respects, and there are no material unpaid assessments against the Company or any Subsidiary nor, to the Company’s Knowledge, any basis for the assessment of any additional taxes, penalties or interest for any fiscal period or audits by any federal, state or local taxing authority except for any assessment which is not material to the Company and its Subsidiaries, taken as a whole. All taxes and other assessments and levies that the Company or any Subsidiary is required to withhold or to collect for payment have been duly withheld and collected and paid to the proper governmental entity or third party when due. There are no tax liens or claims pending or, to the Company’s Knowledge, threatened against the Company or any Subsidiary or any of their respective assets or property. Except as described on Schedule 4.11, there are no outstanding tax sharing agreements or other such arrangements between the Company and any Subsidiary or other corporation or entity.

          4.12 Title to Properties. Except as disclosed in the SEC Filings, the Company and each Subsidiary has good and marketable title to all real properties and all other properties and assets owned by it, in each case free from liens, encumbrances and defects that would materially affect the value thereof or materially interfere with the use made or currently planned

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to be made thereof by them; and except as disclosed in the SEC Filings, the Company and each Subsidiary holds any leased real or personal property under valid and enforceable leases with no exceptions that would materially interfere with the use made or currently planned to be made thereof by them.

          4.13 Certificates, Authorities and Permits. The Company and each Subsidiary possess adequate certificates, authorities or permits issued by appropriate governmental agencies or bodies necessary to conduct the business now operated by it except those that the failure to possess have not had and could not reasonably be expected to have a Material Adverse Effect, individually or in the aggregate, and neither the Company nor any Subsidiary has received any written notice of proceedings relating to the revocation or modification of any such certificate, authority or permit that, if determined adversely to the Company or such Subsidiary, could reasonably be expected to have a Material Adverse Effect, individually or in the aggregate.

          4.14 Labor Matters.

          (a) Except as set forth on Schedule 4.14, the Company is not a party to or bound by any collective bargaining agreements or other agreements with labor organizations. The Company has not violated in any material respect any laws, regulations, orders or contract terms, affecting the collective bargaining rights of employees, labor organizations or any laws, regulations or orders affecting employment discrimination, equal opportunity employment, or employees’ health, safety, welfare, wages and hours.

          (b) (i) There are no labor disputes existing, or to the Company’s Knowledge, threatened, involving strikes, slow-downs, work stoppages, job actions, disputes, lockouts or any other disruptions of or by the Company’s employees, (ii) there are no unfair labor practices or petitions for election pending or, to the Company’s Knowledge, threatened before the National Labor Relations Board or any other federal, state or local labor commission relating to the Company’s employees, (iii) no demand for recognition or certification heretofore made by any labor organization or group of employees is pending with respect to the Company and (iv) to the Company’s Knowledge, the Company enjoys good labor and employee relations with its employees and labor organizations.

          (c) The Company is, and at all times has been, in compliance with all applicable laws respecting employment (including laws relating to classification of employees and independent contractors) and employment practices, terms and conditions of employment, wages and hours, and immigration and naturalization except for such instances of noncompliance as have not had and could not reasonably be expected to have a Material Adverse Effect, individually or in the aggregate. There are no claims pending against the Company before the Equal Employment Opportunity Commission or any other administrative body or in any court asserting any violation of Title VII of the Civil Rights Act of 1964, the Age Discrimination Act of 1967, 42 U.S.C. §§ 1981 or 1983 or any other federal, state or local Law, statute or ordinance barring discrimination in employment.

          (d) Except as disclosed in the SEC Filings or as described on Schedule 4.14, the Company is not a party to, or bound by, any employment or other contract or agreement that

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contains any severance, termination pay or change of control liability or obligation, including, without limitation, any “excess parachute payment,” as defined in Section 280G(b) of the Internal Revenue Code.

          (e) Except as specified in Schedule 4.14, each of the Company’s employees is a Person who is either a United States citizen or a permanent resident entitled to work in the United States. To the Company’s Knowledge, the Company has no liability for the improper classification by the Company of such employees as independent contractors or leased employees prior to the Closing.

          4.15 Intellectual Property.

               (a) All Intellectual Property of the Company and its Subsidiaries is currently in compliance with all legal requirements (including timely filings, proofs and payments of fees) and is valid and enforceable except for such instances of noncompliance as have not had and could not reasonably be expected to have a Material Adverse Effect, individually or in the aggregate. No Intellectual Property of the Company or its Subsidiaries which is necessary for the conduct of Company’s and each of its Subsidiaries’ respective businesses as currently conducted or as currently proposed to be conducted has been or is now involved in any cancellation, dispute or litigation, and, to the Company’s Knowledge, no such action is threatened. No patent of the Company or its Subsidiaries has been or is now involved in any interference, reissue, re-examination or opposition proceeding.

               (b) All of the licenses and sublicenses and consent, royalty or other agreements concerning Intellectual Property which are necessary for the conduct of the Company’s and each of its Subsidiaries’ respective businesses as currently conducted or as currently proposed to be conducted to which the Company or any Subsidiary is a party or by which any of their assets are bound (other than generally commercially available, non-custom, off-the-shelf software application programs having a retail acquisition price of less than $10,000 per license) (collectively, “License Agreements”) are valid and binding obligations of the Company or its Subsidiaries that are parties thereto and, to the Company’s Knowledge, the other parties thereto, enforceable in accordance with their terms, except to the extent that enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting the enforcement of creditors’ rights generally, and, to the Company’s Knowledge, there exists no event or condition which will result in a material violation or breach of or constitute (with or without due notice or lapse of time or both) a default by the Company or any of its Subsidiaries under any such License Agreement.

               (c) The Company and its Subsidiaries own or have the valid right to use all of the Intellectual Property that is necessary for the conduct of the Company’s and each of its Subsidiaries’ respective businesses as currently conducted and for the ownership, maintenance and operation of the Company’s and its Subsidiaries’ properties and assets, free and clear of all liens, encumbrances, adverse claims or obligations to license all such owned Intellectual Property and Confidential Information, other than licenses entered into in the ordinary course of the Company’s and its Subsidiaries’ businesses. The Company and its Subsidiaries have a valid and enforceable right to use all third party Intellectual Property and

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Confidential Information used or held for use in the respective businesses of the Company and its Subsidiaries.

               (d) To the Company’s Knowledge, the conduct of the Company’s and its Subsidiaries’ businesses as currently conducted does not infringe or otherwise impair or conflict with (collectively, “Infringe”) any Intellectual Property rights of any third party or any confidentiality obligation owed to a third party, and, to the Company’s Knowledge, the Intellectual Property and Confidential Information of the Company and its Subsidiaries which are necessary for the conduct of Company’s and each of its Subsidiaries’ respective businesses as currently conducted or as currently proposed to be conducted are not being Infringed by any third party. There is no litigation or order pending or outstanding or, to the Company’s Knowledge, threatened or imminent, that seeks to limit or challenge or that concerns the ownership, use, validity or enforceability of any Intellectual Property or Confidential Information of the Company and its Subsidiaries and the Company’s and its Subsidiaries’ use of any Intellectual Property or Confidential Information owned by a third party, and, to the Company’s Knowledge, there is no valid basis for the same.

               (e) The consummation of the transactions contemplated hereby and by the other Transaction Documents will not result in the alteration, loss, impairment of or restriction on the Company’s or any of its Subsidiaries’ ownership or right to use any of the Intellectual Property or Confidential Information which is necessary for the conduct of Company’s and each of its Subsidiaries’ respective businesses as currently conducted or as currently proposed to be conducted.

               (f) The Company and its Subsidiaries have taken reasonable steps to protect the Company’s and its Subsidiaries’ rights in their Intellectual Property and Confidential Information. Each employee, consultant and contractor who has had access to Confidential Information which is necessary for the conduct of Company’s and each of its Subsidiaries’ respective businesses as currently conducted or as currently proposed to be conducted has executed an agreement to maintain the confidentiality of such Confidential Information and has executed appropriate agreements that are substantially consistent with the Company’s standard forms thereof. Except under confidentiality obligations, there has been no material disclosure of any of the Company’s or its Subsidiaries’ Confidential Information to any third party.

          4.16 Environmental Matters. Neither the Company nor any Subsidiary is in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), owns or operates any real property contaminated with any substance that is subject to any Environmental Laws, is liable for any off-site disposal or contamination pursuant to any Environmental Laws, or is subject to any claim relating to any Environmental Laws, which violation, contamination, liability or claim has had or could reasonably be expected to have a Material Adverse Effect, individually or in the aggregate; and, to the Company’s Knowledge, there is no pending or threatened investigation that might lead to such a claim.

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          4.17 Litigation. Except as described on Schedule 4.17, there are no pending actions, suits or proceedings against or affecting the Company, its Subsidiaries or any of its or their properties; and to the Company’s Knowledge, no such actions, suits or proceedings are threatened or contemplated. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty that is material or that is otherwise required to be disclosed in the SEC Filings. There has not been, and to the Company’s Knowledge, there is not pending or contemplated, any investigation by the SEC involving the Company or any current or former director or officer of the Company. The SEC has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the 1933 Act or the 1934 Act.

          4.18 Financial Statements. The financial statements of the Company included in each SEC Filing comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing (or to the extent corrected by a subsequent restatement) and present fairly, in all material respects, the consolidated financial position of the Company as of the dates shown and its consolidated results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with United States generally accepted accounting principles (“GAAP”) applied on a consistent basis during the periods involved (except as may be disclosed therein or in the notes thereto, and, in the case of quarterly financial statements, as permitted by Form 10-Q under the 1934 Act). Except as set forth in the financial statements of the Company included in the SEC Filings filed prior to the date hereof or as described on Schedule 4.18, neither the Company nor any of its Subsidiaries has incurred any liabilities, contingent or otherwise, except those incurred in the ordinary course of business, consistent (as to amount and nature) with past practices since the date of such financial statements, none of which, individually or in the aggregate, have had or could reasonably be expected to have a Material Adverse Effect.

          4.19 Insurance Coverage. The Company and each Subsidiary maintains in full force and effect insurance coverage that is customary for comparably situated companies for the business being conducted and properties owned or leased by the Company and each Subsidiary, and the Company reasonably believes such insurance coverage to be adequate against all liabilities, claims and risks against which it is customary for comparably situated companies to insure.

          4.20 Compliance with NYSE Amex Continued Listing Requirements. The Company is in compliance with applicable NYSE Amex continued listing requirements. There are no proceedings pending or, to the Company’s Knowledge, threatened against the Company relating to the continued listing of the Common Stock on NYSE Amex and the Company has not received any written notice of, nor to the Company’s Knowledge is there any basis for, the delisting of the Common Stock from NYSE Amex.

          4.21 Brokers and Finders. No Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company, any Subsidiary or an Investor for any commission, fee or other compensation

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pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company, other than as described in Schedule 4.21.

          4.22 No Directed Selling Efforts or General Solicitation. Neither the Company nor any Person acting on its behalf has conducted any “general solicitation” or “general advertising” (as those terms are used in Regulation D) in connection with the offer or sale of any of the Shares.

          4.23 No Integrated Offering. Neither the Company nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, at any time within the past six months, made any offers or sales of any Company security or solicited any offers to buy any security, under circumstances that would adversely affect reliance by the Company on Section 4(2) for the exemption from registration for the transactions contemplated hereby or would require registration of the Shares under the 1933 Act.

          4.24 Private Placement. The offer and sale of the Shares to the Investors as contemplated hereby is exempt from the registration requirements of the 1933 Act.

          4.25 Questionable Payments. Neither the Company nor any of its Subsidiaries nor, to the Company’s Knowledge, any of their respective current or former stockholders, directors, officers, employees, agents or other Persons acting on behalf of the Company or any Subsidiary, has on behalf of the Company or any Subsidiary or in connection with their respective businesses: (a) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (b) made any direct or indirect unlawful payments to any governmental officials or employees from corporate funds; (c) established or maintained any unlawful or unrecorded fund of corporate monies or other assets; (d) made any false or fictitious entries on the books and records of the Company or any Subsidiary; or (e) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment of any nature.

          4.26 Transactions with Affiliates. Except as disclosed in the SEC Filings or as disclosed on Schedule 4.26, none of the officers or directors of the Company and, to the Company’s Knowledge, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than as holders of stock options and/or warrants, and for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the Company’s Knowledge, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

          4.27 Internal Controls. The Company is in material compliance with the provisions of the Sarbanes-Oxley Act of 2002 currently applicable to the Company. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit

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preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has established disclosure controls and procedures (as defined in 1934 Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that material information relating to the Company, including the Subsidiaries, is made known to the certifying officers by others within those entities, particularly during the period in which the Company’s most recently filed periodic report under the 1934 Act, as the case may be, is being prepared. The Company’s certifying officers have evaluated the effectiveness of the Company’s controls and procedures as of the end of the period covered by the most recently filed periodic report under the 1934 Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the 1934 Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no significant changes in the Company’s internal controls (as such term is defined in Item 308 of Regulation S-K) or, to the Company’s Knowledge, in other factors that could significantly affect the Company’s internal controls. The Company maintains and will continue to maintain a standard system of accounting established and administered in accordance with GAAP and the applicable requirements of the 1934 Act.

          4.28 Disclosures. Neither the Company nor any Person acting on its behalf has provided the Investors or their agents or counsel with any information that constitutes or might constitute material, non-public information, other than the terms of the transactions contemplated hereby. The written materials delivered to the Investors in connection with the transactions contemplated by the Transaction Documents do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

          4.29 Investment Company. The Company is not required to be registered as, and is not an Affiliate of, and immediately following the Closing will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

     5. Representations and Warranties of the Investors. Each of the Investors hereby severally, and not jointly, represents and warrants to the Company that:

          5.1 Organization and Existence. Such Investor is a validly existing corporation, foundation, trust, limited partnership or limited liability company and has all requisite corporate, partnership or limited liability company power and authority to invest in the Shares pursuant to this Agreement.

          5.2 Authorization. The execution, delivery and performance by such Investor of the Transaction Documents to which such Investor is a party have been duly authorized and each will constitute the valid and legally binding obligation of such Investor, enforceable against such Investor in accordance with their respective terms, subject to bankruptcy, insolvency,

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fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally.

          5.3 Purchase Entirely for Own Account. The Shares to be received by such Investor hereunder will be acquired for such Investor’s own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the 1933 Act, and such Investor has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the 1933 Act without prejudice, however, to such Investor’s right at all times to sell or otherwise dispose of all or any part of such Shares in compliance with applicable federal and state securities laws. Nothing contained herein shall be deemed a representation or warranty by such Investor to hold the Shares for any period of time. Such Investor is not a broker-dealer registered with the SEC under the 1934 Act or an entity engaged in a business that would require it to be so registered.

          5.4 Investment Experience. Such Investor acknowledges that it can bear the economic risk and complete loss of its investment in the Shares and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment contemplated hereby.

          5.5 Disclosure of Information. Such Investor has had an opportunity to receive all information related to the Company requested by it and to ask questions of and receive answers from the Company regarding the Company, its business and the terms and conditions of the offering of the Shares. Such Investor acknowledges receipt of copies of the SEC Filings. Neither such inquiries nor any other due diligence investigation conducted by such Investor shall modify, limit or otherwise affect such Investor’s right to rely on the Company’s representations and warranties contained in this Agreement.

          5.6 Restricted Securities. Such Investor understands that the Shares are characterized as “restricted securities” under the U.S. federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the 1933 Act only in certain limited circumstances.

          5.7 Legends. It is understood that, except as provided below, certificates evidencing the Shares may bear the following or any similar legend:

               (a) “The securities represented hereby may not be transferred unless (i) such securities have been registered for sale pursuant to the Securities Act of 1933, as amended, (ii) such securities may be sold without restriction pursuant to Rule 144, or (iii) the Company has received an opinion of counsel reasonably satisfactory to it that such transfer may lawfully be made without registration under the Securities Act of 1933 or qualification under applicable state securities laws.”

               (b) If required by the authorities of any state in connection with the issuance of sale of the Shares, the legend required by such state authority.

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          5.8 Accredited Investor. Such Investor is an accredited investor as defined in Rule 501(a) of Regulation D, as amended, under the 1933 Act.

          5.9 No General Solicitation. Such Investor did not learn of the investment in the Shares as a result of any general solicitation or general advertising.

          5.10 Brokers and Finders. No Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company, any Subsidiary or an Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of such Investor.

          5.11 Prohibited Transactions. Since the earlier of (a) such time as such Investor was first contacted by the Company or any other Person acting on behalf of the Company regarding the transactions contemplated hereby or (b) thirty (30) days prior to the date hereof, neither such Investor nor any Affiliate of such Investor which (x) had knowledge of the transactions contemplated hereby, (y) has or shares discretion relating to such Investor’s investments or trading or information concerning such Investor’s investments, including in respect of the Shares, or (z) is subject to such Investor’s review or input concerning such Affiliate’s investments or trading (collectively, “Trading Affiliates”) has, directly or indirectly, effected or agreed to effect any short sale, whether or not against the box, established any “put equivalent position” (as defined in Rule 16a-1(h) under the 1934 Act) with respect to the Common Stock, granted any other right (including, without limitation, any put or call option) with respect to the Common Stock or with respect to any security that includes, relates to or derived any significant part of its value from the Common Stock or otherwise sought to hedge its position in the Shares (each, a “Prohibited Transaction”). Prior to the earliest to occur of (i) the termination of this Agreement, (ii) the Effective Date or (iii) the Effectiveness Deadline, such Investor shall not, and shall cause its Trading Affiliates not to, engage, directly or indirectly, in a Prohibited Transaction. Such Investor acknowledges that the representations, warranties and covenants contained in this Section 5.11 are being made for the benefit of the Investors as well as the Company and that each of the other Investors shall have an independent right to assert any claims against such Investor arising out of any breach or violation of the provisions of this Section 5.11.

     6. Conditions to Closing.

          6.1 Conditions to the Investors’ Obligations. The obligation of each Investor to purchase the Shares at the Closing is subject to the fulfillment to such Investor’s satisfaction, on or prior to the Closing Date, of the following conditions, any of which may be waived by such Investor (as to itself only):

               (a) The representations and warranties made by the Company in Section 4 hereof qualified as to materiality shall be true and correct at all times prior to and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date, and, the representations and warranties made by the Company in Section 4 hereof

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not qualified as to materiality shall be true and correct in all material respects at all times prior to and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct in all material respects as of such earlier date. The Company shall have performed in all material respects all obligations and covenants herein required to be performed by it on or prior to the Closing Date.

               (b) The Company shall have obtained any and all consents, permits, approvals, registrations and waivers (including, without limitation, approval of the Proposal by its stockholders in accordance with applicable law and the applicable requirements of the NYSE Amex) necessary or appropriate for consummation of the purchase and sale of the Shares and the consummation of the other transactions contemplated by the Transaction Documents, all of which shall be in full force and effect.

               (c) The Company shall have executed and delivered the Registration Rights Agreement.

               (d) The Shares shall have been approved for listing on the NYSE Amex, subject to official notice of issuance.

               (e) The Company shall have received gross proceeds of at least Eight Million Dollars ($8,000,000) from either or both of (i) the sale of the Shares as contemplated hereby and (ii) the AIM Offering.

               (f) No judgment, writ, order, injunction, award or decree of or by any court, or judge, justice or magistrate, including any bankruptcy court or judge, or any order of or by any governmental authority, shall have been issued, and no action or proceeding shall have been instituted by any governmental authority, enjoining or preventing the consummation of the transactions contemplated hereby or in the other Transaction Documents.

               (g) The Company shall have delivered a Certificate, executed on behalf of the Company by its Chief Executive Officer or its Chief Financial Officer, dated as of the Closing Date, certifying to the fulfillment of the conditions specified in subsections (a), (b), (e), (f) and (j) of this Section 6.1.

               (h) The Company shall have delivered a Certificate, executed on behalf of the Company by its Secretary, dated as of the Closing Date, certifying the resolutions adopted by the Board of Directors of the Company approving the transactions contemplated by this Agreement and the other Transaction Documents and the issuance of the Shares, certifying the current versions of the Amended and Restated Articles of Incorporation and Amended and Restated Bylaws of the Company and certifying as to the signatures and authority of persons signing the Transaction Documents and related documents on behalf of the Company.

               (i) The Investors shall have received an opinion from ReedSmith LLP, the Company’s counsel, dated as of the Closing Date, substantially in the form of Exhibit B attached hereto.

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               (j) No stop order or suspension of trading shall have been imposed by NYSE Amex, the London Stock Exchange, the SEC or any other governmental or regulatory body with respect to public trading in the Common Stock.

          6.2 Conditions to Obligations of the Company. The Company’s obligation to sell and issue the Shares at the Closing is subject to the fulfillment to the satisfaction of the Company on or prior to the Closing Date of the following conditions, any of which may be waived by the Company:

               (a) The representations and warranties made by the Investors in Section 5 hereof, other than the representations and warranties contained in Sections 5.3, 5.4, 5.5, 5.6, 5.7, 5.8 and 5.9 (the “Investment Representations”), shall be true and correct in all material respects when made, and shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had been made on and as of said date. The Investment Representations shall be true and correct in all respects when made, and shall be true and correct in all respects on the Closing Date with the same force and effect as if they had been made on and as of said date. The Investors shall have performed in all material respects all obligations and covenants herein required to be performed by them on or prior to the Closing Date.

               (b) The Investors named as parties thereto shall have executed and delivered the Registration Rights Agreement.

               (c) The Investors shall have delivered the Purchase Price to the Company.

               (d) The Company shall have obtained the approval of the Proposal by its stockholders in accordance with applicable law and the applicable requirements of the NYSE Amex.

               (e) No stop order or suspension of trading shall have been imposed by NYSE Amex, the London Stock Exchange, the SEC or any other governmental or regulatory body with respect to public trading in the Common Stock.

          6.3 Termination of Obligations to Effect Closing; Effects.

               (a) The obligations of the Company, on the one hand, and the Investors, on the other hand, to effect the Closing shall terminate as follows:

                    (i) Upon the mutual written consent of the Company and the Investors;

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                    (ii) By the Company if any of the conditions set forth in Section 6.2 shall have become incapable of fulfillment, and shall not have been waived by the Company;

                    (iii) By an Investor (with respect to itself only) if any of the conditions set forth in Section 6.1 shall have become incapable of fulfillment, and shall not have been waived by the Investor; or

                    (iv) By either the Company or any Investor (with respect to itself only) if the Closing has not occurred on or prior to December 31, 2009;

provided, however, that, except in the case of clause (i) above, the party seeking to terminate its obligation to effect the Closing shall not then be in breach of any of its representations, warranties, covenants or agreements contained in this Agreement or the other Transaction Documents if such breach has resulted in the circumstances giving rise to such party’s seeking to terminate its obligation to effect the Closing.

          (b) In the event of termination by the Company or any Investor of its obligations to effect the Closing pursuant to this Section 6.3, written notice thereof shall forthwith be given to the other Investors by the Company and the other Investors shall have the right to terminate their obligations to effect the Closing upon written notice to the Company and the other Investors. Nothing in this Section 6.3 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents.

     7. Covenants and Agreements of the Company. So long as the Investors own any Shares and subject to the provisions of Section 7.6:

          7.1 Reports. From and after the Closing, the Company will furnish to the Investors and/or their assignees such information relating to the Company and its Subsidiaries as from time to time may reasonably be requested by the Investors and/or their assignees; provided, however, that the Company shall not disclose material nonpublic information to the Investors, or to advisors to or representatives of the Investors, unless prior to disclosure of such information the Company identifies such information as being material nonpublic information and provides the Investors, such advisors and representatives with the opportunity to accept or refuse to accept such material nonpublic information for review and any Investor wishing to obtain such information enters into an appropriate confidentiality agreement with the Company with respect thereto.

          7.2 No Conflicting Agreements. The Company will not take any action, enter into any agreement or make any commitment that would conflict or interfere in any material respect with the Company’s obligations to the Investors under the Transaction Documents.

          7.3 [reserved]

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          7.4 [reserved]

          7.5 Listing of Underlying Shares and Related Matters. Promptly following the date hereof, the Company shall take all necessary action to cause the Shares to be listed on the NYSE Amex Global Market no later than the Closing Date. Further, if the Company applies to have its Common Stock or other securities traded on any other principal stock exchange or market in the United States, it shall include in such application the Shares and will take such other action as is necessary to cause such Common Stock to be so listed. So long as the Common Stock is publicly traded in the United States, the Company will use commercially reasonable efforts to continue the listing and trading of its Common Stock on the NYSE Amex or the Nasdaq Stock Market and, in accordance, therewith, will use commercially reasonable efforts to comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of such market or exchange, as applicable.

          7.6 Termination of Covenants. The provisions of Sections 7.1 through 7.4 shall terminate and be of no further force and effect on the date on which the Shares no longer constitute Registrable Securities (as such term is defined in the Registration Rights Agreement).

          7.7 Removal of Legends. In connection with any sale or disposition of the Shares by an Investor pursuant to Rule 144 or pursuant to any other exemption under the 1933 Act such that the purchaser acquires freely tradable shares and upon compliance by the Investor with the requirements of this Agreement, the Company shall cause the transfer agent for the Common Stock (the “Transfer Agent”) to issue replacement certificates representing the Shares sold or disposed of without restrictive legends. Upon the earlier of (i) registration for resale pursuant to the Registration Rights Agreement or (ii) the Shares becoming freely tradable by a non-affiliate pursuant to Rule 144 the Company shall (A) deliver to the Transfer Agent irrevocable instructions that the Transfer Agent shall reissue a certificate representing shares of Common Stock without legends upon receipt by such Transfer Agent of the legended certificates for such shares, together with either (1) a customary representation by the Investor that Rule 144 applies to the shares of Common Stock represented thereby or (2) a written statement by the Investor in customary form that such Investor has sold the shares of Common Stock represented thereby in accordance with the Plan of Distribution contained in the Registration Statement, and (B) cause its counsel to deliver to the Transfer Agent one or more blanket opinions to the effect that the removal of such legends in such circumstances may be effected under the 1933 Act (except, in the case of clause (ii) only, during any Blackout Period (as defined in the Registration Rights Agreement). From and after the earlier of such dates, upon an Investor’s written request, the Company shall promptly cause certificates evidencing the Investor’s Shares to be replaced with certificates which do not bear such restrictive legends. When the Company is required to cause an unlegended certificate to replace a previously issued legended certificate, if: (1) the unlegended certificate is not delivered to an Investor within three (3) Business Days of submission by that Investor of a legended certificate and supporting documentation to the Transfer Agent as provided above and (2) prior to the time such unlegended certificate is received by the Investor, the Investor, or any third party on behalf of such Investor or for the Investor’s account, purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Investor of shares represented by such certificate (a “Buy-In”), then the Company shall pay in cash to the Investor (for costs incurred either

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directly by such Purchaser or on behalf of a third party) the amount by which the total purchase price paid for Common Stock as a result of the Buy-In (including brokerage commissions, if any) exceeds the proceeds received by such Investor as a result of the sale to which such Buy-In relates. The Investor shall provide the Company written notice indicating the amounts payable to the Investor in respect of the Buy-In.

          7.8 Subsequent Equity Sales.

          (a) From the date hereof until the earlier of (i) 270 days after the Closing Date and (ii) thirty (30) days after the Effective Date, without the consent of the Required Investors, neither the Company nor any Subsidiary shall issue shares of Common Stock or Common Stock Equivalents. Notwithstanding the foregoing, the provisions of this Section 7.8(a) shall not apply to (i) the issuance of Common Stock or Common Stock Equivalents upon the conversion or exercise of any securities of the Company or a Subsidiary outstanding on the date hereof, provided that the terms of such security are not amended after the date hereof to decrease the exercise price or increase the Common Stock or Common Stock Equivalents receivable upon the exercise, conversion or exchange thereof, (ii) the issuance of any Common Stock or Common Stock Equivalents pursuant to any Company equity incentive plan approved by the Company’s stockholders and in place as of the date hereof, (iii) the issuance of Common Stock or Common Stock Equivalents pursuant to acquisitions of other entities by the Company by merger, purchase of substantially all of the assets or other reorganization, (iv) the issuance of Common Stock or Common Stock Equivalents in connection with strategic transactions or joint ventures approved by a majority of the disinterested directors of the Company (but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities), (v) the issuance of Common Stock or Common Stock Equivalents to banks or other regulated financial institutions, or to real or personal property lessors, pursuant to a debt financing, equipment leasing or real property leasing transaction, or (vi) the issuance of Common Stock pursuant to the AIM Offering.

          (b) From the date hereof until the earlier of (i) three years from the Closing Date or (ii) such time as no Investor holds any of the Shares, the Company shall be prohibited from effecting or entering into an agreement to effect any “Variable Rate Transaction”. The term “Variable Rate Transaction” shall mean a transaction in which the Company issues or sells (i) any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock either (A) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may sell securities at a future determined price. For the avoidance of doubt, the issuance of a security which is subject to customary anti-dilution protections, including where the conversion, exercise or exchange price is subject to adjustment as a result of stock splits, reverse stock splits and other similar

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recapitalization or reclassification events, shall not be deemed to be a “Variable Rate Transaction.”

          (c) The Company shall not, and shall use its commercially reasonable efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the 1933 Act) that will be integrated with the offer or sale of the Shares in a manner that would require the registration under the 1933 Act of the sale of the Shares to the Investors, or that will be integrated with the offer or sale of the Shares for purposes of the rules and regulations of any trading market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.

          7.9 Proxy Statement; Stockholders Meeting. (a) Promptly following the execution and delivery of this Agreement the Company shall take all action necessary to call a meeting of its stockholders (the “Stockholders Meeting”), which shall occur not later than December 28, 2009 (the “Stockholders Meeting Deadline”), for the purpose of seeking approval of the Company’s stockholders for the issuance and sale to the Investors of the Shares (the “Proposal”). In connection therewith, the Company will promptly prepare and file with the SEC proxy materials (including a proxy statement and form of proxy) for use at the Stockholders Meeting and, after receiving and promptly responding to any comments of the SEC thereon, shall promptly mail such proxy materials to holders of record of the Company’s voting equity securities as of the record date for the Stockholders Meeting. Each Investor shall promptly furnish in writing to the Company such information relating to such Investor and its investment in the Company as the Company may reasonably request for inclusion in the Proxy Statement. The Company will comply in all material respects with Section 14(a) of the 1934 Act and the rules promulgated thereunder in relation to any proxy statement (as amended or supplemented, the “Proxy Statement”) and any form of proxy to be sent to the stockholders of the Company in connection with the Stockholders Meeting, and the Proxy Statement shall not, on the date that the Proxy Statement (or any amendment thereof or supplement thereto) is first mailed to stockholders or at the time of the Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein not false or misleading, or omit to state any material fact necessary to correct any statement in any earlier communication with respect to the solicitation of proxies or the Stockholders Meeting which has become false or misleading. If the Company should discover at any time prior to the Stockholders Meeting, any event relating to the Company or any of its Subsidiaries or any of their respective affiliates, officers or directors that is required to be set forth in a supplement or amendment to the Proxy Statement, in addition to the Company’s obligations under the 1934 Act, the Company will promptly inform the Investors thereof.

          (b) Subject to their fiduciary obligations under applicable law (as determined in good faith by the Company’s Board of Directors after consultation with the Company’s outside counsel), the Company’s Board of Directors shall recommend to the Company’s stockholders that the stockholders vote in favor of the Proposal (the “Company Board Recommendation”) and take all commercially reasonable action (including, without limitation, soliciting shareholders to vote for the Proposal to the extent permitted pursuant to applicable law) to solicit the approval of the stockholders for the Proposal unless the Board of Directors

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shall have modified, amended or withdrawn the Company Board Recommendation pursuant to the provisions of the immediately succeeding sentence. The Company covenants that the Board of Directors of the Company shall not modify, amend or withdraw the Company Board Recommendation unless the Board of Directors (after consultation with the Company’s outside counsel) shall determine in the good faith exercise of its business judgment that maintaining the Company Board Recommendation would violate its fiduciary duty to the Company’s stockholders. Whether or not the Company’s Board of Directors modifies, amends or withdraws the Company Board Recommendation pursuant to the immediately preceding sentence, the Company shall (i) take all action necessary to convene the Stockholders Meeting as promptly as practicable, but no later than the Stockholders Meeting Deadline, to consider and vote upon the approval of the Proposal and (ii) submit the Proposal at the Stockholders Meeting to the stockholders of the Company for their approval.

          7.10 Equal Treatment of Investors. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents. For clarification purposes, this provision constitutes a separate right granted to each Investor by the Company and negotiated separately by each Investor, and is intended for the Company to treat the Investors as a class and shall not in any way be construed as the Investors acting in concert or as a group with respect to the purchase, disposition or voting of Shares or otherwise.

          7.11 Form D and Blue Sky. The Company shall timely file a Form D with respect to the Shares as required under Regulation D and provide a copy thereof to each Investor who requests a copy in writing promptly after such filing. The Company, on or before the Closing Date, shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify the Shares for sale to the Investor at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to each Investor who requests in writing such evidence on or prior to the Closing Date. The Company shall make all filings and reports relating to the offer and sale of the Shares required under applicable securities or “Blue Sky” laws of the states of the United States following the Closing Date.

     8. Survival and Indemnification.

          8.1 Survival. The representations, warranties, covenants and agreements contained in this Agreement shall survive the Closing of the transactions contemplated by this Agreement.

          8.2 Indemnification. The Company agrees to indemnify and hold harmless each Investor and its Affiliates and their respective directors, officers, trustees, managers, members, employees and agents, and their respective successors and assigns, from and against any and all losses, claims, damages, liabilities and expenses (including without limitation reasonable attorney fees and disbursements and other expenses incurred in connection with investigating, preparing or defending any action, claim or proceeding, pending or threatened

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and the costs of enforcement thereof) (collectively, “Losses”) to which such Person may become subject as a result of any breach of representation, warranty, covenant or agreement made by, or to be performed on the part of, the Company under the Transaction Documents, and will reimburse any such Person for all such amounts as they are incurred by such Person.

          8.3 Conduct of Indemnification Proceedings. Any person entitled to indemnification hereunder shall (i) give prompt notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided that any person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such person unless (a) the indemnifying party has agreed to pay such fees or expenses, or (b) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such person or (c) in the reasonable judgment of any such person, based upon written advice of its counsel, a conflict of interest exists between such person and the indemnifying party with respect to such claims (in which case, if the person notifies the indemnifying party in writing that such person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such person); and provided, further, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the defense of any such claim or litigation. It is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified parties. No indemnifying party will, except with the consent of the indemnified party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.

     9. Miscellaneous.

          9.1 Successors and Assigns. This Agreement may not be assigned by a party hereto without the prior written consent of the Company or the Investors, as applicable, provided, however, that an Investor may assign its rights and delegate its duties hereunder in whole or in part to an Affiliate or to a third party acquiring some or all of its Shares in a transaction complying with applicable securities laws without the prior written consent of the Company or the other Investors. The provisions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties. Without limiting the generality of the foregoing, in the event that the Company is a party to a merger, consolidation, share exchange or similar business combination transaction in which the Common Stock is converted into the equity securities of another Person, from and after the effective time of such transaction, such Person shall, by virtue of such transaction, be deemed to have assumed the obligations of the Company hereunder, the term “Company” shall be deemed to refer to such Person and the term “Shares” shall be deemed to refer to the securities received by the Investors in connection with such transaction. Nothing in this Agreement, express or implied, is intended

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to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

          9.2 Counterparts; Faxes. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may also be executed via facsimile, which shall be deemed an original.

          9.3 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

          9.4 Notices. Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given as hereinafter described (i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii) if given by telex or telecopier, then such notice shall be deemed given upon receipt of confirmation of complete transmittal, (iii) if given by mail, then such notice shall be deemed given upon the earlier of (A) receipt of such notice by the recipient or (B) three days after such notice is deposited in first class mail, postage prepaid, and (iv) if given by an internationally recognized overnight air courier, then such notice shall be deemed given one Business Day after delivery to such carrier. All notices shall be addressed to the party to be notified at the address as follows, or at such other address as such party may designate by ten days’ advance written notice to the other party:

If to the Company:

Enova Systems, Inc.
1560 West 190th Street
Torrance, California 90501
Attention: Jarrett Fenton
Fax: (310) 755-6173

With a copy to:

ReedSmith LLP
101 Second Street, Suite 2000
San Francisco, California 94105
Attention: Donald C. Reinke, Esq.
Fax: (415) 391-8269

If to the Investors:

to the addresses set forth on the signature pages hereto.

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          9.5 Expenses. The parties hereto shall pay their own costs and expenses in connection herewith, except that the Company shall pay the reasonable fees and expenses of (i) Lowenstein Sandler PC not to exceed $30,000, and (ii) Proskauer Rose LLP not to exceed $5,000, subject to the Closing; it being understood that Lowenstein Sandler PC has only rendered legal advice to the Special Situations Funds participating in this transaction, and that Proskauer Rose LLP has only rendered legal advice to Stichting Shell Pensioenfonds, Shell Pensions Trust Limited and Shell Trust (Bermuda) Limited participating in this transaction, and in each case not to the Company or any other Investor in connection with the transactions contemplated hereby, and that each of the Company and each Investor has relied for such matters on the advice of its own respective counsel. Such expenses shall be paid upon demand. The Company shall reimburse the Investors upon demand for all reasonable out-of-pocket expenses incurred by the Investors, including without limitation reimbursement of attorneys’ fees and disbursements, in connection with any amendment, modification or waiver of this Agreement or the other Transaction Documents requested by the Company. In the event that legal proceedings are commenced by any party to this Agreement against another party to this Agreement in connection with this Agreement or the other Transaction Documents, the party or parties which do not prevail in such proceedings shall severally, but not jointly, pay their pro rata share of the reasonable attorneys’ fees and other reasonable out-of-pocket costs and expenses incurred by the prevailing party in such proceedings.

          9.6 Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Required Investors. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any Shares purchased under this Agreement at the time outstanding, each future holder of all such Shares, and the Company.

          9.7 Publicity. Except as set forth below, no public release or announcement concerning the transactions contemplated hereby shall be issued by the Company or the Investors without the prior consent of the Company (in the case of a release or announcement by the Investors) or the Investors (in the case of a release or announcement by the Company) (which consents shall not be unreasonably withheld), except as such release or announcement may be required by law or the applicable rules or regulations of any securities exchange or securities market, in which case the Company or the Investors, as the case may be, shall allow the Investors or the Company, as applicable, to the extent reasonably practicable in the circumstances, reasonable time to comment on such release or announcement in advance of such issuance. By 8:30 a.m. (New York City time) on the trading day immediately following the Closing Date, the Company shall issue a press release disclosing the consummation of the transactions contemplated by this Agreement. No later than the fourth trading day following the Closing Date, the Company will file a Current Report on Form 8-K attaching the press release described in the foregoing sentence as well as copies of the Transaction Documents. In addition, the Company will make such other filings and notices in the manner and time required by the SEC or NYSE Amex. Notwithstanding the foregoing, neither the Company nor any other Investor shall issue a press release or announcement concerning the transactions contemplated under the Transaction Documents that names any other Investor or any Affiliate of such Investor or which

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utilize such Investor’s registered symbol or trademark without such Investor’s prior written approval.

          9.8 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect.

          9.9 Entire Agreement. This Agreement, including the Exhibits and the Disclosure Schedules, and the other Transaction Documents constitute the entire agreement among the parties hereof with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter hereof and thereof.

          9.10 Further Assurances. The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

          9.11 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to the choice of law principles thereof. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located in New York County and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby. Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

          9.12 Independent Nature of Investors’ Obligations and Rights. The obligations of each Investor under any Transaction Document are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under any Transaction Document. The decision of each Investor to purchase Shares pursuant to the Transaction Documents has been made by such Investor independently of any other Investor. Nothing contained herein or in any Transaction Document, and no action taken by any Investor pursuant thereto, shall be deemed to constitute

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the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Investor acknowledges that no other Investor has acted as agent for such Investor in connection with making its investment hereunder and that no Investor will be acting as agent of such Investor in connection with monitoring its investment in the Shares or enforcing its rights under the Transaction Documents. Each Investor shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose. The Company acknowledges that each of the Investors has been provided with the same Transaction Documents for the purpose of closing a transaction with multiple Investors and not because it was required or requested to do so by any Investor.

[signature page follows]

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          IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.

The Company:	ENOVA SYSTEMS, INC.
	By: /s/ Jarett Fenton
	Name: Jarett Fenton
	Title: Chief Financial Officer

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The Investors:	SPECIAL SITUATIONS FUND III QP, L.P.
	By: /s/ David M. Greenhouse
	Name: David M. Greenhouse
	Title: General Partner

Aggregate Purchase Price: $3,000,000
Number of Shares: 3,000,000

Address for Notice:
	527 Madison Avenue
	Suite 2600
	New York, NY 10022
	with a copy to:
	Lowenstein Sandler PC
	65 Livingston Avenue
	Roseland, NJ 07068
	Attn: John D. Hogoboom, Esq.
	Telephone:      973.597.2500
	Facsimile:        973.597.2400

SPECIAL SITUATIONS CAYMAN FUND, L.P.

By: /s/ David M. Greenhouse

Name: David M. Greenhouse

Title: General Partner

Aggregate Purchase Price: $1,000,000
Number of Shares: 1,000,000

Address for Notice:
	527 Madison Avenue
	Suite 2600
	New York, NY 10022

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with a copy to:

Lowenstein Sandler PC

65 Livingston Avenue

Roseland, NJ 07068

Attn: John D. Hogoboom, Esq.

Telephone:      973.597.2500

Facsimile:        973.597.2400

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STICHTING SHELL PENSIOENFONDS,

duly represented by SHELL ASSET MANAGEMENT

COMPANY B.V.

By: /s/P.J. Roelant

Name: P.J. Roelant

Title: Chief Investment Officer

/s/ A.J. van der Steenstraten 

Authorized signatory 

Aggregate Purchase Price: $494,960
Number of Shares: 494,960

Address for Notice:
	Sir Winston Churchilllaan 366H
	P.O. Box 575
	2501 CN The Hague
	The Netherlands
	with a copy to:
	Proskauer Rose LLP
	One International Place
	Boston, MA 02110
	Attn: David W. Tegeler, Esq.
	Telephone:      617.526.9795
	Facsimile:        617.526.9899

SHELL PENSIONS TRUST LIMITED,

acting as trustee of SHELL CONTRIBUTORY PENSION

FUND, duly represented by SHELL ASSET

MANAGEMENT COMPANY B.V.

By:/s/P.J. Roelant

Name: P.J. Roelant

Title: Chief Investment Officer

/s/ A.J. van der Steenstraten 

Authorized signatory 

Aggregate Purchase Price: $1,210,000
Number of Shares: 1,210,000

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Address for Notice:
	Sir Winston Churchilllaan 366H
	P.O. Box 575
	2501 CN The Hague
	The Netherlands
	with a copy to:
	Proskauer Rose LLP
	One International Place
	Boston, MA 02110
	Attn: David W. Tegeler, Esq.
	Telephone:      617.526.9795
	Facsimile:        617.526.9899

SHELL TRUST (BERMUDA) LIMITED, acting as trustee

of SHELL OVERSEAS CONTRIBUTORY PENSION

FUND, duly represented by SHELL ASSET

MANAGEMENT COMPANY B.V.

By: /s/P.J. Roelandt

Name: P.J. Roelandt

Title: Chief Investment Officer

/s/ A.J. van der Steenstraten 

Authorized signatory

Aggregate Purchase Price: $1,500,000
Number of Shares: 1,500,000

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Address for Notice:
	Sir Winston Churchilllaan 366H
	P.O. Box 575
	2501 CN The Hague
	The Netherlands
	with a copy to:
	Proskauer Rose LLP
	One International Place
	Boston, MA 02110
	Attn: David W. Tegeler, Esq.
	Telephone:      617.526.9795
	Facsimile:        617.526.9899

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Swiss Global Asset Management Ltd.

On behalf of the

Julius Baer Multipartner

Sam Smart Energy Fund*

By: /s/ C. Windhauser

Name: C. Windhauser

Title: authorized signatory

Aggregate Purchase Price: $1,500,000
Number of Shares: 1,500,000

Address for Notice:

*With its registered seat at 69, route d’ Esch, L- 1470 Luxembourg

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ERUCA LIMITED

By: /s/ Tang Chon Luang

Name: Tang Chon Luang

Title: Director

Aggregate Purchase Price: $250,000
Number of Shares: 250,000

Address for Notice:
	50 Raffles Place
	#17-01 Singapore Land Tower
	Singapore 048623

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SILICON PRARIE PARTNERS LP

By: /s/ John Micek

Name: John Micek

Title: Principal

Aggregate Purchase Price: $100,000
Number of Shares: 100,000

Address for Notice:
	130 Lytton Avenue
	Suite 210
	Palo Alto, CA 94301

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EX-99.2

Exhibit 99.2

REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement (the “Agreement”) is made and entered into as of this ___ day of                     , 2009 by and among Enova Systems, Inc., a California corporation (the “Company”), and the Investors set forth on the signature pages affixed hereto (each an “Investor” and collectively the “Investors”). This Agreement is being executed and delivered in connection with the transactions contemplated by that certain Purchase Agreement among the Company, the Investors and the other parties thereto (the “Purchase Agreement”). Capitalized terms used herein have the respective meanings ascribed thereto in the Purchase Agreement unless otherwise defined herein.

     The parties hereby agree as follows:

     1. Certain Definitions.

     As used in this Agreement, the following terms shall have the following meanings:

     “Investors” means the Investors and any Affiliate or permitted transferee of any Investor who is a subsequent holder of any Registrable Securities.

     “Common Stock” means the Company’s common stock, no par value (together with any securities into which such shares may be reclassified, whether by merger, charter amendment or otherwise.

     “Prospectus” means (i) the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus, and (ii) any “free writing prospectus” as defined in Rule 405 under the 1933 Act.

     “Register,” “registered” and “registration” refer to a registration made by preparing and filing a Registration Statement or similar document in compliance with the 1933 Act (as defined below), and the declaration or ordering of effectiveness of such Registration Statement or document.

     “Registrable Securities” means (i) the Shares and (ii) any other securities issued or issuable with respect to or in exchange for Registrable Securities, whether by merger, charter amendment or otherwise; provided, that, a security shall cease to be a Registrable Security upon (A) sale pursuant to a Registration Statement or Rule 144 under the 1933 Act, or (B) such security becoming eligible for sale without restriction by the Investors pursuant to Rule 144.

     “Registration Statement” means any registration statement of the Company filed under the 1933 Act that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.

     “Required Investors” means (i) each Investor who, together with its Affiliates, holds more than 20% of the Registrable Securities, and (ii) the Investors holding a majority of the Registrable Securities.

     “SEC” means the U.S. Securities and Exchange Commission.

     “Shares” means the shares of Common Stock issued pursuant to the Purchase Agreement.

     “1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

     “1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

     2. Registration.

               (a) Registration Statement. Promptly following the closing of the purchase and sale of the securities contemplated by the Purchase Agreement (the “Closing Date”) but no later than thirty (30) days after the Closing Date (the “Filing Deadline”), the Company shall prepare and file with the SEC a Registration Statement on Form S-3 (or, if Form S-3 is not then available to the Company, on such form of registration statement as is then available to effect a registration for resale of the Registrable Securities), covering the resale of all of the Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415 or, if Rule 415 is not available for offers and sales of the Registrable Securities, by such other means of distribution of Registrable Securities as the Required Investors may reasonably specify. Subject to any SEC comments and subject to any change in applicable law, rule, regulation or legal or regulatory interpretation occurring prior to the time of filing, such Registration Statement shall include the plan of distribution attached hereto as Exhibit A; provided, however, that no Investor shall be named as an “underwriter” in the Registration Statement without the Investor’s prior written consent. Such Registration Statement also shall cover, to the extent allowable under the 1933 Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the Registrable Securities. Such Registration Statement shall not include any shares of Common Stock or other securities for the account of any other holder without the prior written consent of the Required Investors. The Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided in accordance with Section 3(c) to the Investors and their counsel prior to its filing or other submission. If a Registration Statement covering the Registrable Securities is not filed with the SEC on or prior to the Filing Deadline, the Company will make pro rata payments to each Investor, as liquidated damages and not as a penalty, in an amount equal to 1.5% of the aggregate amount invested by such Investor for each 30-day period or pro rata for any portion thereof following the Filing Deadline for which no Registration Statement is filed with respect to the Registrable Securities; provided, however, that such damages shall cease to accrue in favor of any Investor once such Investor no longer holds any Registrable Securities; and provided, further, that any such cessation shall not affect the Company’s obligation to pay any liquidated damages to such Investor which have accrued and remain unpaid. Such payments shall constitute the Investors’ exclusive monetary remedy for such events, but shall not affect the right of the Investors to seek injunctive relief. Such payments shall be made to each Investor in cash no later than three (3) Business Days after the end of each 30-day period.

               (b) Expenses. The Company will pay (i) all expenses associated with each registration, including filing and printing fees, the Company’s counsel and accounting fees

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and expenses, costs associated with clearing the Registrable Securities for sale under applicable state securities laws, listing fees, fees and (ii) expenses of one counsel to the Investors and the Investors’ reasonable expenses in connection with the registration not to exceed $15,000 in the aggregate, but excluding discounts, commissions, fees of underwriters, selling brokers, dealer managers or similar securities industry professionals with respect to the Registrable Securities being sold.

               (c) Effectiveness.

               (i) The Company shall use commercially reasonable efforts to cause the Registration Statement to be declared effective as soon as practicable. The Company shall notify the Investors by facsimile or e-mail as promptly as practicable, and in any event, within twenty-four (24) hours, after any Registration Statement is declared effective and shall simultaneously provide the Investors with copies of any related Prospectus to be used in connection with the sale or other disposition of the securities covered thereby. If (x) a Registration Statement covering the Registrable Securities is not declared effective by the SEC prior to the earlier of (i) five (5) Business Days after the SEC shall have informed the Company that no review of the Registration Statement will be made or that the SEC has no further comments on the Registration Statement or (ii) the 90^th day after the Closing Date (the 120th day in the event the SEC reviews the Registration Statement), or (y) after a Registration Statement has been declared effective by the SEC, sales cannot be made pursuant to such Registration Statement for any reason (including without limitation by reason of a stop order, or the Company’s failure to update the Registration Statement), but excluding any Allowed Delay (as defined below), then the Company will make pro rata payments to each Investor, as liquidated damages and not as a penalty, in an amount equal to 1.5% of the aggregate amount invested by such Investor for each 30-day period or pro rata for any portion thereof following the date by which such Registration Statement should have been effective (the “Blackout Period”); provided, however, that such damages shall cease to accrue in favor of any Investor once such Investor no longer holds any Registrable Securities; and provided, further, that any such cessation shall not affect the Company’s obligation to pay any liquidated damages to such Investor which have accrued and remain unpaid. Such payments shall constitute the Investors’ exclusive monetary remedy for such events, but shall not affect the right of the Investors to seek injunctive relief. The amounts payable as liquidated damages pursuant to this paragraph shall be paid monthly within three (3) Business Days of the last day of each 30-day period following the commencement of the Blackout Period until the termination of the Blackout Period. Such payments shall be made to each Investor in cash.

               (ii) For not more than twenty (20) consecutive days or for a total of not more than forty-five (45) days in any twelve (12) month period, the Company may suspend the use of any Prospectus included in any Registration Statement contemplated by this Section in the event that the Company determines in good faith that such suspension is necessary to (A) delay the disclosure of material non-public information concerning the Company, the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company or (B) amend or supplement the affected Registration Statement or the related Prospectus so that such Registration Statement or Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the case of the Prospectus in light of the

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circumstances under which they were made, not misleading (an “Allowed Delay”); provided, that the Company shall promptly (a) notify each Investor in writing of the commencement of and the reasons for an Allowed Delay, but shall not (without the prior written consent of an Investor) disclose to such Investor any material non-public information giving rise to an Allowed Delay, (b) advise the Investors in writing to cease all sales under the Registration Statement until the end of the Allowed Delay and (c) use commercially reasonable efforts to terminate an Allowed Delay as promptly as practicable.

               (d) Rule 415; Cutback If at any time the SEC takes the position that the offering of some or all of the Registrable Securities in a Registration Statement is not eligible to be made on a delayed or continuous basis under the provisions of Rule 415 under the 1933 Act or requires any Investor to be named as an “underwriter”, the Company shall use its best efforts to persuade the SEC that the offering contemplated by the Registration Statement is a valid secondary offering and not an offering “by or on behalf of the issuer” as defined in Rule 415 and that none of the Investors is an “underwriter”. The Investors shall have the right to participate or have their counsel participate in any meetings or discussions with the SEC regarding the SEC’s position and to comment or have their counsel comment on any written submission made to the SEC with respect thereto. No such written submission shall be made to the SEC to which the Investors’ counsel reasonably objects. In the event that, despite the Company’s best efforts and compliance with the terms of this Section 2(d), the SEC refuses to alter its position, the Company shall (i) remove from the Registration Statement such portion of the Registrable Securities (the “Cut Back Shares”) and/or (ii) agree to such restrictions and limitations on the registration and resale of the Registrable Securities as the SEC may require to assure the Company’s compliance with the requirements of Rule 415 (collectively, the “SEC Restrictions”); provided, however, that the Company shall not agree to name any Investor as an “underwriter” in such Registration Statement without the prior written consent of such Investor. Any cut-back imposed on the Investors pursuant to this Section 2(d) shall be allocated among the Investors on a pro rata basis, unless the SEC Restrictions otherwise require or provide or the Investors otherwise agree. No liquidated damages shall accrue as to any Cut Back Shares until such date as the Company is able to effect the registration of such Cut Back Shares in accordance with any SEC Restrictions (such date, the “Restriction Termination Date” of such Cut Back Shares). From and after the Restriction Termination Date applicable to any Cut Back Shares, all of the provisions of this Section 2 (including the liquidated damages provisions) shall again be applicable to such Cut Back Shares; provided, however, that (i) the Filing Deadline for the Registration Statement including such Cut Back Shares shall be ten (10) Business Days after such Restriction Termination Date, and (ii) the date by which the Company is required to obtain effectiveness with respect to such Cut Back Shares under Section 2(c) shall be the 90^th day immediately after the Restriction Termination Date.

     3. Company Obligations. Subject to the provisions of Sections 2(c)(ii) and 2(d) above, the Company will use commercially reasonable efforts to effect the registration of the Registrable Securities in accordance with the terms hereof, and pursuant thereto the Company will, as expeditiously as possible:

               (a) use commercially reasonable efforts to cause such Registration Statement to become effective and to remain continuously effective for a period that will terminate upon the earlier of (i) the date on which all Registrable Securities covered by such

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Registration Statement as amended from time to time, have been sold, and (ii) the date on which all Registrable Securities covered by such Registration Statement may be sold without restriction pursuant to Rule 144 (the “Effectiveness Period”) and advise the Investors in writing when the Effectiveness Period has expired;

               (b) prepare and file with the SEC such amendments and post-effective amendments to the Registration Statement and the Prospectus as may be necessary to keep the Registration Statement effective for the Effectiveness Period and to comply with the provisions of the 1933 Act and the 1934 Act with respect to the distribution of all of the Registrable Securities covered thereby;

               (c) provide copies to and permit counsel designated by the Investors to review each Registration Statement and all amendments and supplements thereto no fewer than seven (7) days prior to their filing with the SEC and not file any document to which such counsel reasonably objects;

               (d) furnish to the Investors and their legal counsel (i) promptly after the same is prepared and publicly distributed, filed with the SEC, or received by the Company (but not later than two (2) Business Days after the filing date, receipt date or sending date, as the case may be) one (1) copy of any Registration Statement and any amendment thereto, each preliminary prospectus and Prospectus and each amendment or supplement thereto, and each letter written by or on behalf of the Company to the SEC or the staff of the SEC, and each item of correspondence from the SEC or the staff of the SEC, in each case relating to such Registration Statement (other than any portion of any thereof which contains information for which the Company has sought confidential treatment), and (ii) such number of copies of a Prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as each Investor may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Investor that are covered by the related Registration Statement;

               (e) use commercially reasonable efforts to (i) prevent the issuance of any stop order or other suspension of effectiveness and, (ii) if such order is issued, obtain the withdrawal of any such order at the earliest possible moment;

               (f) prior to any public offering of Registrable Securities, use commercially reasonable efforts to register or qualify or cooperate with the Investors and their counsel in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or blue sky laws of such jurisdictions requested by the Investors and do any and all other commercially reasonable acts or things necessary or advisable to enable the distribution in such jurisdictions of the Registrable Securities covered by the Registration Statement; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (i) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(f), (ii) subject itself to general taxation in any jurisdiction where it would not otherwise be so subject but for this Section 3(f), or (iii) file a general consent to service of process in any such jurisdiction;

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               (g) use commercially reasonable efforts to cause all Registrable Securities covered by a Registration Statement to be listed on each U.S. securities exchange, interdealer quotation system or other market in the U.S. on which similar securities issued by the Company are then listed;

               (h) immediately notify the Investors, at any time prior to the end of the Effectiveness Period, upon discovery that, or upon the happening of any event as a result of which, the Prospectus includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and promptly prepare, file with the SEC and furnish to such holder a supplement to or an amendment of such Prospectus as may be necessary so that such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; and

               (i) otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC under the 1933 Act and the 1934 Act, including, without limitation, Rule 172 under the 1933 Act, file any final Prospectus, including any supplement or amendment thereof, with the SEC pursuant to Rule 424 under the 1933 Act, promptly inform the Investors in writing if, at any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof, the Investors are required to deliver a Prospectus in connection with any disposition of Registrable Securities and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder; and make available to its security holders, as soon as reasonably practicable, but not later than the Availability Date (as defined below), an earnings statement covering a period of at least twelve (12) months, beginning after the effective date of each Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the 1933 Act, including Rule 158 promulgated thereunder (for the purpose of this subsection 3(i), “Availability Date” means the 45th day following the end of the fourth fiscal quarter that includes the effective date of such Registration Statement, except that, if such fourth fiscal quarter is the last quarter of the Company’s fiscal year, “Availability Date” means the 90th day after the end of such fourth fiscal quarter).

               (j) With a view to making available to the Investors the benefits of Rule 144 (or its successor rule) and any other rule or regulation of the SEC that may at any time permit the Investors to sell shares of Common Stock to the public without registration, the Company covenants and agrees to: (i) make and keep public information available, as those terms are understood and defined in Rule 144, until the earlier of (A) six months after such date as all of the Registrable Securities may be sold without restriction by the holders thereof pursuant to Rule 144 or any other rule of similar effect or (B) such date as all of the Registrable Securities shall have been resold; (ii) file with the SEC in a timely manner all reports and other documents required of the Company under the 1934 Act; and (iii) furnish to each Investor upon request, as long as such Investor owns any Registrable Securities, (A) a written statement by the Company that it has complied with the reporting requirements of the 1934 Act, (B) a copy of the Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other information as may be reasonably requested in order to avail such Investor of any

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rule or regulation of the SEC that permits the selling of any such Registrable Securities without registration.

     4. Due Diligence Review; Information. So long as the Company is required to effect and/or maintain the registration of the Registrable Securities hereunder, the Company shall make available, during normal business hours, for inspection and review by the Investors, advisors to and representatives of the Investors (who may or may not be affiliated with the Investors and who are reasonably acceptable to the Company), all financial and other records, all SEC Filings (as defined in the Purchase Agreement) and other filings with the SEC, and all other corporate documents and properties of the Company as may be reasonably necessary for the purpose of such review, and cause the Company’s officers, directors and employees, within a reasonable time period, to supply all such information reasonably requested by the Investors or any such representative, advisor or underwriter in connection with such Registration Statement (including, without limitation, in response to all questions and other inquiries reasonably made or submitted by any of them), prior to and from time to time after the filing and effectiveness of the Registration Statement for the sole purpose of enabling the Investors and such representatives, advisors and underwriters and their respective accountants and attorneys to conduct initial and ongoing due diligence with respect to the Company and the accuracy of such Registration Statement.

          Notwithstanding the foregoing, the Company shall not disclose and shall not be obligated to disclose material nonpublic information to the Investors, or to advisors to or representatives of the Investors, unless prior to disclosure of such information the Company identifies such information as being material nonpublic information and provides the Investors, such advisors and representatives with the opportunity to accept or refuse to accept such material nonpublic information for review and any Investor wishing to obtain such information enters into an appropriate confidentiality agreement with the Company with respect thereto.

     5. Obligations of the Investors.

               (a) Each Investor shall furnish in writing to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably required to effect the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request. At least five (5) Business Days prior to the first anticipated filing date of any Registration Statement, the Company shall notify each Investor of the information the Company requires from such Investor if such Investor elects to have any of the Registrable Securities included in the Registration Statement. An Investor shall provide such information to the Company at least two (2) Business Days prior to the first anticipated filing date of such Registration Statement if such Investor elects to have any of the Registrable Securities included in the Registration Statement.

               (b) Each Investor, by its acceptance of the Registrable Securities agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of a Registration Statement hereunder, unless such Investor has notified the Company in writing of its election to exclude all of its Registrable Securities from such Registration Statement.

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               (c) Each Investor agrees that, upon receipt of any notice from the Company of either (i) the commencement of an Allowed Delay pursuant to Section 2(c)(ii) or (ii) the happening of an event pursuant to Section 3(h) hereof, such Investor will immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities, until the Investor is advised by the Company that such dispositions may again be made.

     6. Indemnification.

               (a) Indemnification by the Company. The Company will indemnify and hold harmless each Investor and its Affiliates and their respective officers, directors, trustees, managers, members, employees and agents, successors and assigns, and each other person, if any, who controls such Investor within the meaning of the 1933 Act, and the officers, directors, partners, members, managers, stockholders, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, against any and all losses, claims, damages, costs, or liabilities, joint or several (including, without limitation, reasonable costs of preparation and investigation and reasonable, documented attorney’s fees), to which they may become subject under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement or omission or alleged omission of any material fact contained in any Registration Statement, any preliminary Prospectus or final Prospectus, or any amendment or supplement thereof; (ii) any blue sky application or other document executed by the Company specifically for that purpose or based upon written information furnished by the Company filed in any state or other jurisdiction in order to qualify any or all of the Registrable Securities under the securities laws thereof (any such application, document or information herein called a “Blue Sky Application”); (iii) the omission or alleged omission to state in a Blue Sky Application a material fact required to be stated therein or necessary to make the statements therein not misleading; (iv) any violation by the Company or its agents of any rule or regulation promulgated under the 1933 Act applicable to the Company or its agents and relating to action or inaction required of the Company in connection with such registration; or (v) any failure to register or qualify the Registrable Securities included in any such Registration Statement in any state where the Company or its agents has affirmatively undertaken or agreed in writing that the Company will undertake such registration or qualification on an Investor’s behalf and will reimburse such Investor, and each such officer, director or member and each such controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by such Investor or any such controlling person in writing specifically for use in such Registration Statement or Prospectus.

               (b) Indemnification by the Investors. Each Investor agrees, severally but not jointly, to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors, officers, employees, stockholders and each person who controls the Company (within the meaning of the 1933 Act) against any losses, claims, damages, liabilities and expense (including reasonable attorney fees) resulting from any untrue statement of a

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material fact or any omission of a material fact required to be stated in the Registration Statement or Prospectus or preliminary Prospectus or amendment or supplement thereto or necessary to make the statements therein not misleading, to the extent, but only to the extent that such untrue statement or omission is contained in any information regarding such Investor furnished in writing by such Investor to the Company specifically for inclusion in such Registration Statement or Prospectus or amendment or supplement thereto. In no event shall the liability of an Investor be greater in amount than the dollar amount of the proceeds (net of all expense paid by such Investor in connection with any claim relating to this Section 6 and the amount of any damages such Investor has otherwise been required to pay by reason of such untrue statement or omission) received by such Investor upon the sale of the Registrable Securities included in the Registration Statement giving rise to such indemnification obligation.

               (c) Conduct of Indemnification Proceedings. Any person entitled to indemnification hereunder shall (i) give prompt notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided that any person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such person unless (a) the indemnifying party has agreed to pay such fees or expenses, or (b) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such person or (c) in the reasonable judgment of any such person, based upon written advice of its counsel, a conflict of interest exists between such person and the indemnifying party with respect to such claims (in which case, if the person notifies the indemnifying party in writing that such person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such person); and provided, further, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the defense of any such claim or litigation. It is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified parties. No indemnifying party will, except with the consent of the indemnified party (which shall not be unreasonably withheld or delayed), consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.

               (d) Contribution. If for any reason the indemnification provided for in the preceding paragraphs (a) and (b) is unavailable to an indemnified party or insufficient to hold it harmless, other than as expressly specified therein, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. No person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution from any person not guilty of such fraudulent misrepresentation. In no event shall the contribution obligation of a holder of Registrable Securities be greater in amount than the dollar amount of the proceeds (net of all

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expenses paid by such holder in connection with any claim relating to this Section 6 and the amount of any damages such holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission) received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.

     7. Miscellaneous.

               (a) No Piggyback on Registrations. Neither the Company nor any of its security holders (other than the Investors in such capacity pursuant hereto) may include securities of the Company in a Registration Statement other than the Registrable Securities, and the Company shall not prior to the effective date of the Registration Statement enter into any agreement providing any such right to any of its security holders.

               (b) Amendments and Waivers. Any term of this Agreement may be amended or terminated and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a writing signed by the Company and the Required Investors existing at the time of such amendment, termination or waiver. The Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company shall have obtained the written consent of such Required Investors to such action or omission to act.

               (c) Notices. All notices and other communications provided for or permitted hereunder shall be made as set forth in Section 9.4 of the Purchase Agreement.

               (d) Assignments and Transfers by Investors. The provisions of this Agreement shall be binding upon and inure to the benefit of the Investors and their respective successors and assigns. An Investor may transfer or assign, in whole or from time to time in part, to one or more persons its rights hereunder in connection with the transfer of Registrable Securities by such Investor to such person, provided that such Investor complies with all laws applicable thereto and provides written notice of assignment to the Company promptly after such assignment is effected.

               (e) Assignments and Transfers by the Company. Except in connection with a Reorganization (as defined below), this Agreement may not be assigned by the Company (whether by operation of law or otherwise) without the prior written consent of the Required Investors existing at the time of such assignment, provided, however, that in the event that the Company is a party to a merger, consolidation, share exchange or similar business combination transaction in which the Common Stock is converted into the equity securities of another Person (each, a “Reorganization”), from and after the effective time of such transaction, such Person shall, by virtue of such transaction, be deemed to have assumed the obligations of the Company hereunder, the term “Company” shall be deemed to refer to such Person and the term “Registrable Securities” shall be deemed to include the securities received by the Investors in connection with such transaction unless such securities are otherwise freely tradable by the Investors after giving effect to such transaction.

               (f) Benefits of the Agreement. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors

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and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

               (g) Counterparts; Faxes. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may also be executed via facsimile, which shall be deemed an original.

               (h) Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

               (i) Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provisions hereof prohibited or unenforceable in any respect.

               (j) Further Assurances. The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

               (k) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

               (l) Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to the choice of law principles thereof. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located in New York County and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in

-11-

any such court has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

-12-

          IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.

The Company:	ENOVA SYSTEMS, INC.
	By:
	Name:
	Title:

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The Investors:	SPECIAL SITUATIONS FUND III QP, L.P.
	SPECIAL SITUATIONS CAYMAN FUND, L.P.
	By:
	Name:	David M. Greenhouse
	Title:	General Partner

-14-

STICHTING SHELL PENSIOENFONDS, duly represented by SHELL ASSET MANAGEMENT COMPANY, B.V.

By:

Name:

Title:

SHELL PENSIONS TRUST LIMITED on behalf of SHELL CONTRIBUTORY PENSION FUND, duly represented by SHELL ASSET MANAGEMENT COMPANY, B.V.

By:

Name:

Title:

SHELL TRUST (BERMUDA) LIMITED on behalf of SHELL OVERSEAS CONTRIBUTORY PENSION FUND, duly represented by SHELL ASSET MANAGEMENT COMPANY, B.V.

By:

Name:

Title:

-15-

Swiss Global Asset Management Ltd.
On behalf of the
Julius Baer Multipartner
Sam Smart Energy Fund

By:

Name:

Title:

-16-

ERUCA LIMITED
By:
Name:	GK Goh
Title:

-17-

SILICON PRARIE PARTNERS LP
By:
Name:	John Micek
Title:	Principal

-18-

Exhibit A

Plan of Distribution

     The selling stockholders, which as used herein includes donees, pledgees, transferees or other successors-in-interest selling shares of common stock or interests in shares of common stock received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of common stock or interests in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.

     The selling stockholders may use any one or more of the following methods when disposing of shares or interests therein:

     – ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

     – block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;

     – purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

     – an exchange distribution in accordance with the rules of the applicable exchange;

     – privately negotiated transactions;

     – short sales effected after the date the registration statement of which this Prospectus is a part is declared effective by the SEC;

     – through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

     – broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share; and

     – a combination of any such methods of sale.

     The selling stockholders may, from time to time, pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as

19

selling stockholders under this prospectus. The selling stockholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

     In connection with the sale of our common stock or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume. The selling stockholders may also sell shares of our common stock short and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

     The aggregate proceeds to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less discounts or commissions, if any. Each of the selling stockholders reserves the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents. We will not receive any of the proceeds from this offering.

     The selling stockholders also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act of 1933, provided that they meet the criteria and conform to the requirements of that rule.

     The selling stockholders and any underwriters, broker-dealers or agents that participate in the sale of the common stock or interests therein may be “underwriters” within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of the shares may be underwriting discounts and commissions under the Securities Act. Selling stockholders who are “underwriters” within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities Act.

     To the extent required, the shares of our common stock to be sold, the names of the selling stockholders, the respective purchase prices and public offering prices, the names of any agents, dealer or underwriter, any applicable commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement that includes this prospectus.

     In order to comply with the securities laws of some states, if applicable, the common stock may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition, in some states the common stock may not be sold unless it has been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.

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     We have advised the selling stockholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to the activities of the selling stockholders and their affiliates. In addition, to the extent applicable we will make copies of this prospectus (as it may be supplemented or amended from time to time) available to the selling stockholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling stockholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.

     We have agreed to indemnify the selling stockholders against liabilities, including liabilities under the Securities Act and state securities laws, relating to the registration of the shares offered by this prospectus.

     We have agreed with the selling stockholders to keep the registration statement of which this prospectus constitutes a part effective until the earlier of (1) such time as all of the shares covered by this prospectus have been disposed of pursuant to and in accordance with the registration statement or (2) the date on which the shares may be sold without restriction pursuant to Rule 144 of the Securities Act.

21

EX-99.3

Exhibit 99.3

Date: 29 October 2009

Enova Systems, Inc.

Investec Bank (UK) Limited

Placing Agreement

Field Fisher Waterhouse LLP 35 Vine Street London EC3N 2AA

Contents
No	Heading	Page
	Clauses
1.	Interpretation		1
2.	Conditions		7
3.	Delivery and Registration of Documents		8
4.	Authority of Investec as Agent		8
5.	Application for Admission		8
6.	The Placing		9
7.	Commissions, Fees, Costs and Expenses		11
8.	Warranties		12
9.	Indemnities		13
10.	Warranties and Indemnities: General Provisions		16
11.	Termination		16
12.	Continuing Obligations		17
13.	Effect of Termination		18
14.	Withholding and Grossing-Up		18
15.	Time of Essence		19
16.	Assignment		19
17.	Variations		20
18.	Partial Invalidity		20
19.	Counterparts		20
20.	Governing Law		20
21.	General		20
22.	Notices		21

Schedules		Page
Schedule 1	22
Documents to be delivered	22
Schedule 2	23
The Warranties	23
Schedule 3	32
The Certificate	32

THIS AGREEMENT is made the 29th day of  October , 2009

BETWEEN:

(1) ENOVA SYSTEMS, INC. (a corporation incorporated in California, USA with corporation no. CO775424) whose principal offices are at 1560 West 190th Street, Torrance, California 90501, USA (the “Company”);

(2) INVESTEC BANK (UK) LIMITED whose registered office is at 2 Gresham Street, London EC2V 7QP, acting through its divisions Investec Investment Banking and Investec Securities (“Investec”).

BACKGROUND

(A)	On or about the date of this Agreement the Company has entered into a number of agreements with, inter alia, Special Situations Fund III QP, L.P., Special Situations Fund III, L.P., Special Situations Cayman Fund, L.P., Special Situations Private Equity Fund, L.P., Special Situations Technology Fund, L.P., Special Situations Technology Fund II, L.P., Shell Asset Management BV, G K Goh and Sustainable Asset Management A.G. or parties connected with it (the “US Investors”) in relation to the acquisition of, in aggregate, 8,774,960 Common Shares at US$1 per Common Share (the ‘US Placing’).
(B)	The Company intends to raise £827,000 from institutional investors through the Placing as described in this Agreement.
(C)	The Placing and US Placing are conditional on, inter alia, approval by the shareholders of the Company.

IT IS AGREED:

1.	Interpretation
1.1	In this Agreement the following words and expressions shall (save where the context otherwise requires) have the following meanings:

Expression	Meaning
“Admission”	means admission of the Placing Shares to trading on AIM becoming effective in accordance with the AIM Rules;

1

Expression	Meaning
“AIM”	means AIM, a market of the London Stock Exchange;
“AIM Rules”	means the AIM Rules for Companies published by the London Stock Exchange as amended from time to time;
“Board”	means the board of directors of the Company or a duly authorised committee thereof;
“Business Day”	means any day on which banks in the City of London are open for business;
“California Corporations Code”	means the California Corporations Code;
“Circular”	means the proxy statement to be filed with the SEC and delivered to shareholders of the Company containing notice of a general meeting in the form prescribed by the SEC;
“Common Shares”	means shares of common stock, no par value, in the capital of the Company;
“Company’s Solicitors”	means Reed Smith LLP of The Broadgate Tower, 20 Primrose Street, London EC2A 2RS;
“Conditions”	means the conditions set out in Clause 2.1;
“Directors”	means the Directors of the Company;

2

Expression	Meaning
“Distributor”	has the meaning set out in Regulation S;
“Environmental Laws”	means any existing United States of America, United Kingdom or European Community legislation or other laws having application to the operations of any company in the Group and in relation to environmental and health and safety matters, including without limitation, directives, regulations, ordinances, orders and notices, and including judicial and administrative interpretation of each of the foregoing;
“FSMA”	means the Financial Services and Markets Act 2000 (as amended) including any regulations made pursuant thereto;
“Group”	means the Company and its subsidiaries;
“Intellectual Property Rights”	means patents, registered designs, trade marks and service marks (whether registered or not), trade names, business names (including internet domain names), database rights, and all similar property rights including those subsisting (in any part of the world) in inventions, designs, drawings, performances, computer programs, semi-conductor topographies, confidential information, know-how, trade secrets, business names, goodwill and the style of presentation of goods and services and in applications for the protection thereof;
“Nomad Agreement”	means the nominated adviser agreement (as amended) between the Company and Investec dated 19 July 2005;
“NYSE AMEX”	means the NYSE American Stock Exchange;

3

Expression	Meaning
“NYSE AMEX Rules”	means the rules and regulations applicable to a company whose shares are traded on the NYSE AMEX;
“PD Regulation”	means Regulation 809/2004 of the European Commission;
“Placees”	means persons procured by Investec to subscribe for the Placing Shares in accordance with the provisions of this Agreement who have each entered into Placing Letters prior to the entry by the parties into this Agreement;
“Placing”	means the placing of the Placing Shares by Investec as herein described;
“Placing Letters”	means the placing letters, in the agreed form, pursuant to which the Placees have irrevocably undertaken, conditionally upon the Conditions being satisfied or waived and this Agreement not being terminated, to acquire the number of Placing Shares set out therein;
“Placing Price”	means £0.625 per Placing Share;
“Placing Shares”	means the 1,323,200 new Common Shares proposed to be issued by the Company to Placees pursuant to the Placing;
“Presentation”	means the investor presentation prepared by the Company in connection with the Placing;

4

Expression	Meaning
“Press Announcement”	means the press announcement relating, inter alia, to the Placing in the agreed form;
“Purchase Agreements”	means the proposed agreements between the Company and each of the US Investors in substantially the form of Appendix A to this Agreement;
“Regulation S”	means Regulation S of the US Securities Act;
“Regulatory Information Service”	means a service approved by the London Stock Exchange for the distribution to the public of regulatory announcements in accordance with the AIM Rules;
“Reporting Issuer”	has the meaning set out in Regulation S;
“SEC”	means the US Securities and Exchange Commission;
“SEC Regulations”	means the rules and regulations of the SEC in so far as they apply to the Company;
“US”	means the United States of America;
“US Person”	has the meaning set out in Regulation S;
“US Securities Act”	means the US Securities Act of 1933 (as amended);
“VAT”	means United Kingdom value added tax;

5

Expression	Meaning
“Verification Notes”	means the verification notes in the agreed form incorporating the answers thereto confirming the accuracy of the information contained in the Presentation and the Press Announcement; and
“Warranties”	means the warranties set out in Clause 8 and Schedule 2.

1.2	References in this Agreement to Clauses and Schedules are to the Clauses and Schedules of this Agreement.
1.3	Any document stated to be “in agreed form” shall be in the form agreed by the Company and Investec and initialled on behalf of the Company and Investec for the purposes of identification.
1.4	Headings are included in this Agreement for convenience only and shall be disregarded in its interpretation.
1.5	In this Agreement the expressions “subsidiary undertaking” and “subsidiary” shall have the meanings given thereto in the Companies Act 2006.
1.6	A reference to a statute or statutory provision includes a reference:-

(a)	to that statute or provision as from time to time modified or re-enacted (but in the case of a modification or re-enactment effected after the date of Admission, only so far as it applies in relation to a period before Admission);
(b)	to any repealed statute or statutory provision which it re-enacts (with or without modification); and
(c)	to any subordinate legislation made under the relevant statute.

6

2.	Conditions
2.1	The obligations of Investec under this Agreement are conditional upon:

(a)	an AIM application form in respect of the Placing Shares signed on behalf of the Company and all other documents to be submitted therewith having been delivered to the London Stock Exchange;
(b)	the passing of all necessary resolutions by the shareholders of the Company to permit the allotment and issue of the Placing Shares at the general shareholders meeting convened by the notice set out in the Circular;
(c)	the Company having complied in all material respects with its obligations under Clauses 3, 5 and 6 (to the extent that such obligations fall to be performed prior to Admission);
(d)	receipt by Investec of evidence to the reasonable satisfaction of Investec of the receipt by or on behalf of the Company of cleared funds amounting to not less than US$8,424,960 in respect of subscriptions for new Common Shares under the US Placing by no later than 4.00 p.m. London time on 14 December 2009 or such later date as the Company and Investec may reasonably agree, but in any event not later than 4.00 p.m. on 30 December 2009;
(e)	the delivery by the Company to Investec immediately prior to Admission of a certificate signed on behalf of the Company in the form set out in Schedule 3;
(f)	the Company having received written confirmation from NYSE AMEX that the Placing Shares will be issued on NYSE AMEX by not later than 4.00 p.m. on 14 December 2009 or such later date as the Company and Investec may reasonably agree, but in any event not later than 4.00 p.m. 30 December 2009; and
(g)	Admission having occurred not later than 8.00 a.m. on 15 December 2009 or such later date as the Company and Investec may reasonably agree, but in any event not later than 8.00 a.m. on 31 December 2009,

2.2 If, in the event that any of the Conditions is not fulfilled (or waived by Investec in its absolute discretion), as the case may be, by the time (if any) specified, the respective obligations of the parties in connection with this Agreement shall, ipso facto, cease and determine and except in relation to any prior breach of any provision of this Agreement, no party shall have any claim against any other party save that:

(a) the Company shall promptly pay or reimburse to Investec such of the expenses, charges and disbursements referred to in Clause 7.3 which have been

7

	incurred by Investec on behalf of the Company together in each case with any applicable VAT; and
(b)	Clauses 1, 9, 10 (in respect of the indemnities only), 14, 16, 17, 18, 19, 20 and 21 shall remain in full force and effect.

2.3	The Company shall use its reasonable endeavours to ensure that the Conditions are satisfied in accordance with this Agreement and Investec shall provide such reasonable assistance in relation to the Company’s obligations as it may reasonably be expected to provide as nominated adviser to the Company.
3.	Delivery and Registration of Documents
3.1	Forthwith upon the execution of this Agreement by the parties the Company shall cause to be delivered to Investec the documents listed in Schedule 1 as soon as reasonably practicable after the same are produced, signed or despatched to shareholders (as the case may be).
3.2	The Company hereby authorises and requests Investec to deliver the Press Announcement to a Regulatory Information Service for release as appropriate.
3.3	The Company shall, from time to time, procure to be communicated or delivered to Investec all such information and documents (signed by the appropriate person where so required) as Investec may reasonably require to enable it to discharge its obligations hereunder and pursuant to the Placing or as may be required to comply with the requirements of the London Stock Exchange.
4.	Authority of Investec as Agent
	The Company hereby irrevocably and unconditionally appoints Investec as its agent for the purposes of carrying out the Placing of the Placing Shares on the terms of this Agreement and confers on Investec all powers, authorities and discretions on behalf of the Company which are necessary for or reasonably incidental to the making of the Placing on the basis set out in this Agreement and in the Placing Letters and hereby agrees to ratify and confirm everything which Investec shall lawfully and properly do in the exercise of and in accordance with, such appointment, powers, authorities and discretions.
5.	Application for Admission
	The Company confirms to Investec that the Company will formally apply to the London Stock Exchange for Admission. Each of the Company and Investec agrees and undertakes to execute or cause to be executed all such documents, to provide or cause to be provided all such information and to do or cause to be done everything

8

required to be executed provided or done by them respectively, or necessary to comply with the requirements of, the London Stock Exchange for the purposes of, or in connection with, such application. Each of the Company and Investec agrees to use all reasonable endeavours to procure that Admission occurs not later than 8.00 am on 15 December 2009 (or such later date as may be reasonably agreed being a date not later than 8.00 am on 31 December 2009).

6.	The Placing
6.1	Investec relying on the covenants, undertakings, indemnities, and warranties contained in this Agreement, hereby undertakes, subject to the Conditions being satisfied, as agent for the Company,, on the terms set out in this Agreement and in the Placing Letters to use reasonable endeavours to procure subscribers for all the Placing Shares at the Placing Price.
6.2	Upon satisfaction of all the Conditions, other than that set out in Clause 2.1(g), the Company will allot pursuant to a resolution of the Board of Directors of the Company or a duly authorised committee thereof (and in a form reasonably acceptable to Investec), conditionally on the satisfaction of the Condition set out in Clause 2.1(g), the Placing Shares to the Placees in such number as is set out in each Placee’s Placing Letter. Such allotments will be made on the terms set out in this Agreement. The allotment of such Placing Shares shall become wholly unconditional immediately upon the satisfaction of the Condition set out in Clause 2.1(g).
6.3	Provided the Conditions are satisfied, the Company will duly register as holders of the Placing Shares those Placees who have duly paid in full their subscription amounts to Investec as agent for the Company and will procure the despatch of definitive certificates in respect of such shares as soon as reasonably practicable following Admission.
6.4	Subject to the allotment referred to in Clause 6.2 having taken place Investec shall, in full discharge of its obligations under this Clause, as soon as practicable, and in any event within two Business Days following Admission, transfer in cleared funds to the Company’s bank account (of which the relevant details shall be notified in writing by the Company to Investec) the aggregate proceeds of the Placing Shares received by Investec (less the sums specified in Clause 7.2).
6.5	The parties to this Agreement agree and acknowledge that the Placing Shares have not been and will not be registered under the US Securities Act, and may not be offered or sold within the US or to, or for the account or benefit of, US Persons except in accordance with Regulation S or pursuant to an exemption from the registration requirements of the US Securities Act. It is acknowledged that the Placing Letters will contain a confirmation from Placees (and share certificates for the Placing Shares will bear a legend to the similar effect) to the following effect:

9

“THE COMMON SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (3) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVING THE COMMON SHARES OF THE COMPANY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.

6.6 Each of the parties hereby warrants, acknowledges and agrees to and with the other party that it, any Distributor engaged by it, any affiliate of it or a Distributor engaged by it, or any person acting on behalf of the foregoing:

(a)	has not engaged and will not engage in any directed selling efforts (within the meaning of Regulation S) in connection with the Placing;
(b)	will offer or sell the Placing Shares only in offshore transactions to non-US persons (terms used in this paragraph (b) being used as used in Regulation S); and
(c)	has not offered or sold and will not offer or sell any of the Placing Shares in the United States by any form of general solicitation or general advertising (within the meaning of Regulation D under the US Securities Act) or in any manner involving a public offering within the meaning of Section 4(2) of the US Securities Act.

6.7 Investec, any Distributor engaged by Investec, any affiliate of Investec or a Distributor engaged by Investec, or any person acting on behalf of the foregoing further undertakes and agrees with respect to any solicitations of offers for and offers and sales of the Placing Shares that:

(a) except pursuant to an effective registration statement or pursuant to an available exemption from the registration requirements of the Securities Act, it will not offer, sell or deliver any Placing Shares until six-months provided the Company is a Reporting Issuer, or otherwise until one-year, after the later of (1) the time when the Placing Shares are first offered to persons other than distributors in reliance upon Regulation S or (2) the date of closing the Placing, within the United States or to, or for the account or benefit of, a US Person; and

10

(b) until six-months provided the Company is a Reporting Issuer, or otherwise until one-year, after the later of the commencement and the date of closing of the offering, it will not engage in hedging transactions with regard to the Placing Shares unless in compliance with the Securities Act.

6.8	In exercising its authority to procure Placees for the Placing Shares, Investec confirms to the Company that it has complied, and will comply, with all applicable provisions of the AIM Rules and, where applicable, FSMA and that it has not sought and will not seek to procure any person as a subscriber for the Placing Shares in contravention by Investec of section 21(1) FSMA or the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or in circumstances which would require the production of an approved prospectus pursuant to section 85 FSMA or any equivalent law or regulation in any other relevant jurisdiction and that it will comply with all relevant overseas securities laws.
6.9	The Company undertakes that following Admission it will not register any transfer of Placing Shares in the register of stockholders of the Company not made in accordance with the provisions of Regulation S, pursuant to registration under the US Securities Act or pursuant to an available exemption from the registration requirements under the US Securities Act.
6.10	Investec has effected the Placing by sending Placing Letters to all Placees which have been completed and counter-signed by such Placees by way of confirmation of the commitments of such Placees to subscribe for Placing Shares on the basis set out therein. Investec undertakes to use all reasonable endeavours to enforce the terms of the Placing Letter with each Placee.
7.	Commissions, Fees, Costs and Expenses
7.1	In consideration of Investec’s agreement to use its reasonable endeavours to procure subscribers for the Placing Shares and Investec’s services in connection with the Placing and Admission the Company shall pay to Investec conditional upon Admission:

(a)	a commission of 7% (seven per cent) on the aggregate value at the Placing Price of the Placing Shares; and
(b)	a commission of 7 per cent. (seven per cent.) on the aggregate value at the price of US$1 per Common Share of the 1,500,000 new Common Shares to be issued to a fund managed by Sustainability Asset Management (or its affiliates) pursuant to the US Placing.

7.2 The Company authorises the deduction of the commission provided in Clause 7.1 and the expenses provided in Clause 7.3 including in each case any applicable VAT

11

thereon together with any sums payable under Clause 7.4 from the sums otherwise payable to the Company pursuant to Clause 6.4.

7.3

In addition to the commission referred to in this Clause 7, the Company shall pay or bear all costs, charges and expenses properly and reasonably incurred and arising out of, or incidental to, the Placing and Admission and the arrangements referred to or contemplated in this Agreement, including (but without limitation) (i) all expenses of Investec (ii) the fees and expenses of the Company’s and Investec’s legal advisers and any other professional adviser (iii) all fees and expenses payable in connection with the Placing and Admission (iv) the expenses of the Registrars and (v) printing and advertising expenses and postage, subject in all cases to Investec having received the Company’s prior written consent to incurring aggregate expenses in excess of £20,000 (excluding any applicable VAT). The Company shall forthwith upon request by Investec reimburse to Investec the amount of any such costs, charges and expenses which Investec may have paid.

7.4

Where, pursuant to Clauses 7.1 or 7.3 a sum is payable to Investec by the Company, the Company shall in addition pay to Investec in respect of VAT:

(a)	where the payment (or any part of it) constitutes the consideration (or any part thereof) for any supply of goods or services by Investec to the Company, including (without limitation) a payment that constitutes (in whole or in part) the reimbursement of a cost, charge or expense falling within sub-paragraph 7.4(b), such amount as equals any VAT chargeable on any such supply; and
(b)	(except where the payment falls within sub-paragraph 7.4(c)) such amount as equals any VAT charged to or incurred by Investec in respect of any cost, charge or expense which gives rise to or is reflected in the payment and which Investec certifies is not recoverable by Investec by repayment or credit (such certificate to be conclusive in the absence of manifest error); and
(c)	where the payment is in respect of costs, charges or expenses incurred by Investec as agent for the Company such amount as equals the amount included in the costs, charges or expenses in respect of VAT.

8. Warranties

8.1

The Company hereby warrants to Investec as at the date hereof and at all times during the period up to and including Admission as if repeated by reference to the facts and circumstances existing at all such times in the terms set out in Schedule 2 hereto. The Parties acknowledge that to the extent that any of the Warranties relate to the Circular, such Warranties shall only be given from the date upon which the Circular is posted to the Company’s shareholders.

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8.2	The Company hereby undertakes to Investec to disclose to Investec in writing if it becomes aware prior to Admission of any fact or circumstance which constitutes a breach of Warranty or would constitute a breach of warranty if such Warranty were repeated immediately prior to Admission becoming effective, forthwith upon becoming aware of the same.
8.3	If, at any time prior to Admission, Investec receives notification pursuant to Clause 8.2 or otherwise becomes aware of any breach of the Warranties which, in the reasonable opinion of Investec, is material in the context of the Admission, Investec may (without prejudice to its right to terminate its obligations under this Agreement pursuant to Clause 11) require the Company at its expense to make or cause to be made such announcement and/or despatch such communication as Investec shall, after consultation with the Company, reasonably consider necessary.
8.4	Where any Warranty contained in this Agreement is expressed to be qualified by reference to the awareness and/or knowledge and/or information and/or belief of any person or words to similar effect, such representation, warranty or undertaking shall be deemed to include a statement to the effect that it has been made after the making of, or after being satisfied that there have been made by others duly qualified to do so, reasonable enquiries and there having been made all such investigations as could reasonably be expected to be made or considered in the context of the Placing and Admission.
9.	Indemnities
9.1	No claim shall be made by the Company against Investec, or any subsidiary undertaking or holding company of Investec or any of their respective directors, officers, or employees (each, together with Investec, for the purposes of this Clause 9 an Indemnified Person) to recover any loss, damage, cost, charge or expense which the Company may suffer or incur by reason of or arising out of the carrying out by Investec, or on its behalf, of its obligations and services under and in accordance with this Agreement except to the extent that such loss, damage, cost, charge or expense arises as a result of: (i) the fraud, bad faith, negligence or wilful default of an Indemnified Person; or (ii) from a material breach of the terms of this Agreement by Investec; or (iii) from a contravention by an Indemnified Person of the regulatory system (as defined in the handbook and rules of the Financial Services Authority) or breach or contravention of the provisions of the FSMA or the AIM Rules; or (iv) is of such a nature that liability may not be excluded pursuant to the FSMA.
9.2	Without prejudice to the rights of Investec as agent of the Company under the general law, the Company hereby undertakes to Investec (for itself and as a trustee (but on terms that it shall be entitled in its own discretion to waive any entitlement hereunder (or otherwise make settlements with respect hereto) to such extent as it may think fit having regard to its own and any other interest it may determine) for each and every

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other Indemnified Person) to indemnify each Indemnified Person against all or any claims (whether or not successful, compromised or settled), actions, liabilities, demands, proceedings or judgements brought or established against any Indemnified Person in any jurisdiction by any subscriber or purchaser of the Placing Shares pursuant to the Placing or by any subsequent purchaser or transferee of Placing Shares or by any governmental agency or regulatory body or any other person whatsoever and against all losses, costs, charges, expenses (including legal fees reasonably incurred) or taxes (including, VAT, stamp duty and SDRT but excluding corporation tax on normal trading profits) which any Indemnified Person may suffer or incur (including, but not limited to, all such losses, costs, charges, reasonable expenses or taxes suffered or incurred in disputing any claim, action, liability, demand or proceedings aforesaid and/or in establishing its right to be indemnified pursuant to this Clause 9.2) and which in any such case arises, directly or indirectly, out of or is attributable to or is in connection with:

(a)	the neglect or default of the Company; and/or
(b)	Investec acting as agent or adviser to the Company in connection with the Placing or Admission in accordance with the terms of this Agreement; and/or
(c)	any statement in the Circular or Presentation being or being alleged to be untrue, inaccurate, misleading or not based on reasonable grounds; and/or
(d)	any breach or alleged breach by the Company of any of its obligations hereunder or any breach or alleged breach by the Company of the Warranties; and/or
(e)	the issue or approval by Investec for the purpose of Section 21 of the FSMA of any financial promotion in connection with the Placing and Admission; and/or
(f)	any failure or alleged failure by the Company or any of the Directors or their agents, employees or professional advisers to comply with the FSMA, the AIM Rules, the NYSE AMEX Rules, the SEC Regulations, the Rules of the London Stock Exchange or any other requirements of statute or statutory regulation in any jurisdiction in relation to the Placing or Admission;
	unless and to the extent that any of them arises as a result of: (i) the fraud, bad faith, negligence or wilful default of an Indemnified Person; or (ii) from a material breach of the terms of this Agreement by Investec; or (iii) from a contravention by an Indemnified Person of the regulatory system (as defined in the handbook and rules of the Financial Services Authority) or breach or contravention of the provisions of the FSMA or the AIM Rules; or (iv) is of such a nature that liability may not be excluded pursuant to the FSMA.

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9.3	For the avoidance of doubt, the indemnity pursuant to Clause 9.2 shall not relate to any loss, cost, charge, expense or tax which any Indemnified Person may suffer or incur, arising directly or indirectly out of, or is attributable to or is in connection with, the subscription for Placing Shares by Investec pursuant to Clause 6.1 or the acquisition or disposal by any Indemnified Person of any Common Shares.
9.4	If Investec becomes aware of any claim made or threatened within the scope of the indemnity set out in this Clause 9, Investec shall promptly notify the Company thereof and shall thereafter (subject to the Indemnified Person being indemnified and secured to their reasonable satisfaction by the Company against all costs, charges, damages and expenses the Indemnified Person may suffer or incur as a result of so doing), subject to the requirements (if any) of the Indemnified Person’s insurers, consult with the Company regarding the Indemnified Person’s conduct of the Claim and shall provide the Company with such information and copies of such documents relating to the claim as the Company may reasonably require provided that the Indemnified Person shall not be under any obligation to take into account any requirements of the Company in connection with such conduct nor to provide the Company with a copy of any document which is, or in the reasonable opinion of the Indemnified Person’s advisers, is likely to be privileged in the context of the claim.
9.5	If the Company becomes aware of any claim made or threatened within the scope of the indemnity set out in this Clause 9 or any matter which may give rise to a claim the Company shall notify Investec and shall provide the Indemnified Person with such information and copies of such documents relating to the claim as they may reasonably require provided that the Company shall not be required to do so to the extent that:-

(a)	the Company in good faith considers a relevant document to be subject to a bona fide duty of confidentiality owed by it to a third party or to be privileged in the context of any litigation by the Company against the Indemnified Person (or vice versa) connected with the claim; or
(b)	it would prejudice any insurance cover to which the Company may from time to time be entitled.

9.6 The Company agrees that it will not without the prior written consent of Investec settle or compromise or consent to the entry of any judgement with respect to any pending or threatened claim in respect of which indemnification may be sought by any Indemnified Person under this Clause 9 (whether or not the Indemnified Person is an actual or potential party to such claim) unless such settlement, compromise or consent includes an unconditional release of the Indemnified Person from all liability arising out of such claim.

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9.7	Investec may defend, compromise, settle or deal with any claim made or threatened within the scope of the indemnity set out in this Clause 9 as it sees fit (having considered the Company’s reasonable requests).
10.	Warranties and Indemnities: General Provisions
10.1	Each of the Warranties and each of the indemnities set out or referred to in this Agreement shall remain in full force and effect notwithstanding Admission. For the avoidance of doubt, this Clause 10.1 shall be without prejudice to the time limits expressly set out in this Agreement.
10.2	The indemnities set out or referred to in this Agreement shall be in addition to and shall not be construed to limit, affect or prejudice any other right or remedy available to any Indemnified Person.
10.3	No neglect, delay or indulgence on the part of Investec in enforcing the Warranties or the indemnities set out or referred to in this Agreement or in enforcing any other term or condition of this Agreement shall be construed as a waiver thereof.
11.	Termination
11.1	If at any time before Admission:

(a)	the Company fails, in any material respect, to comply with any of its obligations under this Agreement; or
(b)	it comes to the notice of Investec that any statement contained in the Circular or the Presentation has become untrue, incorrect or misleading in any respect which Investec considers in good faith to be material in the context of the Placing or that any matter which Investec considers to be material in the context of the Placing has arisen which would, if the Placing were made at that time, constitute a material omission therefrom; or
(c)	in the reasonable opinion of Investec any of the Warranties was not at the date of this Agreement true and accurate in any material respect in the context of the Placing by reference to the facts subsisting at the time when the notice referred to below is given; or
(d)	in the reasonable opinion of Investec any of the Warranties by reference to the circumstances prevailing from time to time has ceased to be true and accurate in any material respect in the context of the Placing by reference to the facts subsisting at the time when the notice referred to below is given.

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	Investec may in its absolute discretion by notice in writing to the Company prior to Admission terminate its obligations under this Agreement (save to the extent specified in Clause 13).
11.2	If prior to Admission there happens, develops or comes into effect:

(a)	a general moratorium on commercial banking activities in London declared by the relevant authorities or a material disruption in commercial banking or securities settlement or clearance services in the United Kingdom or the US; or
(b)	the outbreak or escalation of hostilities or acts of terrorism involving the United Kingdom or the US or the declaration by the United Kingdom or the US of a national emergency or war; or
(c)	any other occurrence of any kind which (by itself or together with any other such occurrence) in Investec’s reasonable opinion is likely to materially and adversely affect the market’s position or prospects of the Group taken as a whole; or
(d)	any other crisis of international or national effect or any change in any currency exchange rates or controls or in any financial, political, economic or market conditions

	which, in any such case, in Investec’s reasonable opinion is materially adverse to the success of the Placing and Admission and distribution of the Placing Shares. Then in any such case Investec may, after having to the extent practicable in the circumstances consulted with the Company, give notice in writing to the Company prior to Admission to rescind this Agreement without incurring any liability to the other parties to this Agreement or any of them.
12.	Continuing Obligations
12.1	The Company undertakes to Investec that except for the release of the Press Announcements in the agreed form or as may be expressly required by the London Stock Exchange or any applicable laws whether of England or elsewhere, or the rules of any other regulatory body having jurisdiction, neither it nor any of its subsidiaries nor any person on its or their behalf will at any time prior to Admission make any public announcement, public statement or public communication regarding the Company or any subsidiary or associate of the Company, whether in response to enquiries or otherwise, without the prior written consent of Investec, such consent not to be unreasonably withheld or delayed. Any announcement, statement or communication which prior to Admission the Company is required to make by the London Stock Exchange or any other regulatory authority or under any applicable laws or by any provision of this Agreement shall not be released unless the contents and manner of making thereof have first been approved by Investec, such approval not

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to be unreasonably withheld or delayed. Any such consent or approval shall not constitute a waiver of a breach of any of the Warranties unless expressed to do so.

12.2	The Company undertakes that it shall not issue any Common Shares or warrants or options to subscribe for Common Shares or convertibles that carry a right to convert into Common Shares or any other class of equity share capital or other securities pursuant to any transaction to raise additional finance for the Company during the twelve month period following the date of Admission save with the prior written approval of Investec (such approval not to be unreasonably withheld or delayed). For the avoidance of doubt, no prior approval from Investec shall be required in relation to the awarding of equity related compensation by the Company to its Directors, employees or otherwise.
12.3	Pursuant to clause 2 of schedule 2 of the Nomad Agreement, Investec hereby consents to the Placing and the US Placing, including the allotment of up to 11 million Common Shares in aggregate under the Placing and the US Placing. For the avoidance of doubt, the proceeds of the Placing and the US Placing shall not be aggregated with any subsequent placing within 12 months after the date of the Placing and the US Placing for the purpose of calculating whether the 10 per cent. threshold referred to in clause 2 of schedule 2 of the Nomad Agreement has been exceeded.
13.	Effect of Termination
	If the obligations of Investec under this Agreement (save to the extent specified in this Clause 13) shall be terminated or rescinded pursuant to Clause 11, no party shall have any claim against any other party hereto for compensation, costs, damages or otherwise, save that the provisions of Clauses 1, 7.3, 7.4, 9, 10, 16, 17, 18, 19, 20 and 21 shall continue to apply notwithstanding such termination and Clause 12.1 shall continue to apply for a period of 30 days from the date of such termination insofar as any public announcement, statement or communication refers to Investec.
14.	Withholding and Grossing-Up
14.1	All sums payable to Investec under this Agreement shall be paid free and clear of all deductions or withholdings unless the deduction or withholding is required by law, in which event the relevant person shall pay such additional amount as shall be required to ensure that the net amount received by Investec will equal the full amount which would have been received by it had no such deduction or withholding been made.
14.2	If HM Revenue & Customs or any other tax authority brings into charge to tax (or into any computation of income, profit or gains for the purposes of any charge to tax) any sum payable to Investec under this Agreement (other than the fees and commissions due under Clause 7.1), then the person liable to make such payment shall pay such additional amount as shall be required to ensure that the total amount paid, less the tax

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chargeable thereon (or that would be so chargeable but for the availability of relief in respect of that charge to tax), is equal to the amount that would otherwise be payable to Investec under this Agreement (additional payments being made on demand of Investec).

14.3 If, on payment of an additional amount to Investec under Clause 14.1 or 14.2 Investec determines that it has received or been granted (and has derived full use and benefit from) a credit against, relief or remission for, or repayment of, any tax in respect of or calculated with reference to the additional amount paid, Investec shall, to the extent that it can do so without prejudice to the retention of such credit, relief, remission or repayment, pay to the Company such amount as Investec shall, acting reasonably, determine to be the proportion of such credit, relief, remission or repayment as will leave Investec after such payment in the same after tax position it would have been in (after taking into account all reasonable expenses incurred in determining or, if necessary, claiming the appropriate credit, relief, remission or repayment) if no additional amount has been required to be paid. Provided always that:

(a)	Investec’s determination of any amount payable under this Clause 14.3 and the date by which it shall be paid shall be final and binding (subject to Investec’s right to adjust the amount determined should the initial determination prove to be correct);
(b)	Investec shall have absolute discretion as to the order and manner in which it employs or claims tax credits and allowances available to it and generally as to the conduct of its tax affairs; and
(c)	Investec shall not be obliged to disclose any information regarding its tax affairs or tax computations.

15.	Time of Essence
	Any time, date or period mentioned in this Agreement may be extended by mutual agreement between the parties hereto but as regards any time, date or period originally fixed or any time, date or period so extended time shall be of the essence.
16.	Assignment
	The benefit of this Agreement may not be assigned or charged by the Company or any of the Warrantors without the prior written consent of Investec but subject thereto this Agreement shall be binding upon and ensure for the benefit of the respective executors, administrators, heirs, successors and assignees of the parties.

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17.	Variations
	No purported variation of this Agreement shall be effective unless made in writing and signed by each of the parties to this Agreement.
18.	Partial Invalidity
	If at any time any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions, nor the legality, validity or enforceability of such provision under the law of any other jurisdiction shall be affected or impaired in any way.
19.	Counterparts
	This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which when so executed and delivered shall be an original, but all of the counterparts shall together constitute one and the same instrument.
20.	Governing Law
20.1	The construction, validity and performance of this Agreement shall be governed by English Law and the parties irrevocably submit to the non-exclusive jurisdiction of the Courts of England.
20.2	The Company hereby irrevocably appoints the Company’s Solicitors as its agent to receive on its behalf service of proceedings issued out of the English Courts in any action or proceedings arising out of or in connection with this Agreement. The Company warrants that the Company’s Solicitors have agreed to act as its agent as aforesaid and agrees that failure by such agent to notify the Company of such service shall not adversely affect the validity of such service or any judgement based on it. Such service shall become effective seven (7) days after despatch. Nothing contained in this Agreement shall affect the right to serve process in any other manner permitted by law.
21.	General
21.1	This Agreement constitutes the entire agreement between the parties in relation to the Placing and except to the extent repeated in this Agreement or in the case of any fraud supersedes and extinguishes all previous drafts, agreements, arrangements, undertakings, representations, warranties or proposals (whether written or oral).
21.2	All payments provided for in this Agreement shall be made in pounds sterling.

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21.3	The Contracts (Rights of Third Parties) Act 1999 shall not apply to this Agreement and unless specifically herein provided no person other than the partner to this Agreement shall have any rights under it nor shall it be enforceable by any person other than the parties to it.
22.	Notices
22.1	Any notices or other communication requiring to be given or served under or in connection with this Agreement shall be in writing and shall be sufficiently given or served if delivered:
	in the case of the Company to:

Address:	1560 West 190th Street
	Torrance
	California 90501
	USA
Fax:	001 310 527 7888
Attention:	Mike Staran
if to Investec:
Address:	2 Gresham Street
	London
	EC2V 7QP
Fax:	020 7597 5120
Attention:	James Grace

22.2 Any such notice shall be delivered by hand or sent by fax transmission or overnight courier delivery and if delivered by fax shall conclusively be deemed to have been given or served at the time of printout of a transmission report showing that the correct number of pages has been sent without error and if sent by overnight courier delivery shall conclusively be deemed to have been received on the next Business Day in the UK or USA (as the case may be) following the day of despatch.

IN WITNESS whereof this Agreement has been executed the day and year first above written.

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Schedule 1

Documents to be delivered

Document

1.	one certified copy of the Press Announcement;
2.	one certified copy of the Presentation;
3.	one certified copy of the Circular;
4.	one certified copy of the Verification Notes signed by or on behalf of the Company with copies of such annexures thereto or material referred to therein as Investec may reasonably require;
5.	one certified copy of the Minutes of the Meeting of the Directors, or a duly authorised Committee thereof, in agreed form approving and authorising, inter alia, the signing of the AIM application form in respect of the Placing Shares and the execution of this Agreement by the Company; and
6.	the AIM application form signed on behalf of the Company.

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Schedule 2

The Warranties

1.	Circular, Presentation and Press Announcement
1.1	All statements of fact contained in the Circular, Presentation and the Press Announcement are true and accurate in all material respects and are not misleading in any material respect.
1.2	All expressions of opinion, intention or expectation contained in the Circular, Presentation and the Press Announcement are honestly given, expressed or held and have been the subject of due care and attention and are fairly based upon facts within the knowledge of the Company or any of the Directors and are made on reasonable grounds after due and proper consideration.
1.3	There are no facts known to the Company (having made reasonable enquiry) which are not disclosed in the Circular or the Press Announcement which by their omission would or might reasonably be considered to:

(a)	materially affect the import of the information contained therein; or
(b)	make any statement therein (whether of fact or opinion) false or misleading in any material respect; or
(c)	materially invalidate or qualify any assumption made in support of any statement therein (whether of fact or opinion).

1.4 The issue of the Placing Shares will insofar as applicable comply with the requirements of the AIM Rules, the PD Regulation, the FSMA, the California Corporations Code, SEC Regulations, the NYSE AMEX Rules and all other applicable laws, rules and regulations.

2. Financial Statements

2.1 The audited balance sheet, profit and loss account and statement of cash flows of the Company together with the notes, directors’ report and auditors’ certificate thereon as at and in respect of the accounting reference periods ended on 31 December for the three years ended 31 December 2008 (“the Financial Statements”):

(a) have been prepared in accordance with all relevant Statements of Standard Accounting Practice, International Accounting Standards and generally accepted accountancy principles and the California Corporations Code and,

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either make proper provision for or, where appropriate, include a note in accordance with good accounting practice in respect of all liabilities, whether actual, deferred, contingent or disputed including (i) financial lease commitments and pension liabilities; (ii) all capital commitments, whether actual or contingent, of the relevant company as at the relevant date; and (iii) all liabilities, whether actual, deferred, contingent or disputed of the relevant company for tax measured by reference to income, profits or gains, earned, accrued or received during the relevant financial period or arising in respect of an event occurring or deemed to occur during the financial period; and

(b)

give a true and fair view of the state of affairs of the Company as at the end of each such period and of the loss for each such period.

2.2 The unaudited quarterly results of the Company for each of the three month periods ended 31 March 2009, 30 June 2009 and 30 September 2009 save for the fact that they are or will be, in the case of the period ended 30 September 2009, unaudited, have been or will be prepared on bases and in accordance with policies consistent with those adopted in preparing the Financial Statements.

3. Current Financial Period

Since 31 December 2008, save as publicly announced through the Regulatory Information Service:

(a)	each member of the Group has carried on its respective businesses in the ordinary and usual course;
(b)	there has been no material depletion in the net assets of the Group and there has been no material adverse change in the financial or trading position or prospects of the Group that does not accord with the usual annual pattern of trading;
(c)	no member of the Group has entered into any contract or commitment of a long term or unusual nature or which involves an obligation of a material nature or magnitude otherwise than in the ordinary and usual course which is material for disclosure;
(d)	no member of the Group has, other than in the normal course of business, acquired or disposed of or agreed to acquire or to dispose of any business, company or asset which is material for disclosure;
(e)	no dividends or other distributions have been declared, made or paid by any member of the Group; and

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(f) no member of the Group has incurred any material liability for taxation otherwise than in the ordinary course of business.

4.	Working Capital
	The cash flow and working capital projections which form the basis of the working capital forecast document in the agreed form have been properly and carefully compiled by the Company on the basis of the assumptions set out in the projections (and no other material assumptions) and such assumptions are fair and reasonable and there are no facts known to the Company which have not been taken into account in the preparation of such projections and which could reasonably be expected to have a material effect thereon.
5.	Events of Default — Indebtedness
	No circumstances have arisen or, to the best of the knowledge, information and belief of the Company, are reasonably foreseeable by reason of any default by the Company or any other member of the Group such that any person is, or will, or would with the giving of notice and/or lapse of time and/or the satisfaction of any other condition become, entitled to require payment before its stated maturity of, or security for, any indebtedness in respect of borrowed money of the Company or any other member of the Group which has not been satisfied in full and, to the best of the knowledge, information and belief of the Company no person to whom any material indebtedness for borrowed money of the Company or any other member of the Group which is payable on demand is owed presently proposes to demand payment of, or security for, the same, and no overdraft facility of the Company or any other member of the Group has been or is reasonably foreseen to be about to be, withdrawn.
6.	Events of Default — General
	No event has occurred or is subsisting or, to the best of the knowledge, information and belief of the Company is reasonably foreseeable which constitutes or results in or would with the giving of notice and/or lapse of time and/or the satisfaction of any other condition constitute or result in a default or the acceleration of any obligation of any member of the Group under any agreement, instrument or arrangement to which any member of the Group is a party or by which they or any of their properties, revenues or assets are bound and which would in any such case have a material adverse effect on the businesses, assets or prospects of the Group taken as a whole.
7.	Insolvency
	No member of the Group has taken any action nor, to the best of the knowledge, information and belief of the Company have any other steps been taken or legal proceedings started or threatened against any member of the Group for its

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administration, winding up or dissolution or for it to enter into any arrangement or composition for the benefit of creditors or for the appointment of an administrative receiver, an administrator or a receiver, trustee or similar officer of it or any of their respective properties, revenues or assets nor have any orders been made for any of the foregoing.

8.	Licences and compliance with laws
8.1	Each member of the Group has obtained all licences, permissions, authorisations and consents required for the carrying on of its business and which are, alone or together with one or more other such licences, permissions, authorisations and consents, material and such licences, permissions, authorisations and consents are in full force and effect and there are no circumstances of which any of the Directors is aware which indicate that any of such licences, permissions, authorisations or consents may be revoked or not renewed or withdrawn or (except to an immaterial or beneficial extent) amended, in whole or in part, in the ordinary course of events.
8.2	To the best of the knowledge, information and belief of the Company, each member of the Group has complied in all material respects with all legal requirements applicable to its business.
9.	Litigation
	No member of the Group nor any Director, nor any person for whom any member of the Group is or may be vicariously liable, has any claim outstanding against them or is engaged in or has been engaged in any legal or arbitration or similar proceedings which, individually or collectively, are of material importance in relation to the Group and, so far as the Company is aware, no such legal or arbitration or similar proceedings are threatened or pending nor, to the best of the knowledge, information and belief of the Company are circumstances reasonably foreseen which are likely to be about to give rise to any such legal or arbitration or similar proceedings; for this purpose “similar proceedings” includes any civil or criminal proceedings and any action by any governmental, public or regulatory authority (including any investment exchange and any authority or body which regulates investment business or takeovers or which is concerned with mergers or taxation matters) which did or could result in public censure.
10.	Shares
10.1	Save as previously announced to the Regulatory Information Service, there are in force no options or other agreements which call for the issue of or accord to any person the right to call for the issue of any shares or other securities in the capital of the Company or any of its subsidiaries now or at any time hereafter.

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10.2	None of the shareholders of the Company has any rights, in their capacity as such, other than as set out in the restated Articles of Incorporation and By-laws of the Company.
10.3	The Placing Shares will, upon allotment be free from all claims, charges, liens, encumbrances and equities whatsoever and will rank pari passu in all respects with the existing Common Shares.
11.	Effect of the Placing on Group obligations
	Neither the creation, allotment or issue of the Placing Shares nor the permission to trade therein on AIM nor the performance of this Agreement by the Company will, so far as the Directors are aware, infringe any powers or restrictions of, or the terms of any contract, indenture, security, obligation, commitment or arrangement binding upon the Company or any other member of the Group or any of their respective properties, revenues or assets or result in the implementation of any right of pre-emption or any other material provision thereof.
12.	Capacity
	The Company has the power and has taken or will take all corporate action required to create, allot and issue the Placing Shares in the manner proposed and to enter into and perform this Agreement and all authorisations, approvals, consents and licences required for the allotment and issue of the Placing Shares and the entering into this Agreement by the Company have been obtained or will be obtained prior to Admission and will at all material times be and remain in full force and effect.
13.	Insurance
	The businesses, undertaking and other assets of each member of the Group are insured to reasonably prudent levels having regard to the businesses carried on by the Company or any other member of the Group and against all risks against which the Company or any other member of the Group might reasonably be expected to insure in the particular circumstances of the businesses carried on by them and such insurances include all the insurances which the Company or any other member of the Group are required under the terms of any leases or any contracts to undertake and such insurances are in full force and effect and the Company is not aware of any circumstances which could render any of such insurances void or voidable and there is no material insurance claim made by or against any member of the Group, threatened, in writing or outstanding or, so far as the Company is aware, pending and all due premiums in respect thereof have been paid.
14.	Taxation

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14.1	Any provision for taxation contained in the Financial Statements for the period ended 31 December 2008, is or was sufficient at the time of the signing of such accounts to cover all taxation of any nature and in any jurisdiction for which the Group is or was liable.
14.2	Since 31 December 2008 no member of the Group has incurred any liability for taxation which has arisen otherwise than in the ordinary course of normal trading.
14.3	No member of the Group has been party to any contract or arrangement the principal purpose of which or one of the principal purposes of which was an avoidance or reduction of taxation.
15.	Intellectual Property
15.1	The Group has all necessary intellectual property rights, licences and permits required from any third party to enable it to carry on its business in all material respects as presently carried on. So far as the Company is aware, no member of the Group presently carries on any act which infringes any third party’s rights which were it to be required to stop, would be material.
15.2	The Group has taken all steps reasonably necessary to protect all Intellectual Property Rights currently used by the Group which are, or could through registration or the taking of any other steps, become its property; and all agreements whereby the Group is authorised to use any such Intellectual Property Rights are in full force and effect nor, so far as the Company is aware, has there been any infringement by any member of the Group of Intellectual Property Rights held by third parties which would have a material adverse effect on the business, assets or prospects of the Group.
16.	Environmental Matters
	Each company in the Group is and always has been in compliance in all material respects with all Environmental Laws and in particular has obtained and complied with the terms and conditions of all necessary permits and licences and other authorisations required in relation to the operations of its business and has filed all notifications that are required, and, so far as the Company is aware, there are in relation to each company in the Group no past or present events, conditions, circumstances, activities, practices or incidents which materially interfere with or prevent compliance with or which give rise to any liability under Environmental Laws or otherwise form the basis of any claim, action, suit, proceedings, hearing or investigations relating to the environment or any breach of Environmental Laws, nor has any company in the Group been notified of any such liability or breach.
17.	Employment

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17.1	No company in the Group is aware that (i) any executive, key employee or significant group of employees of the relevant company plans to terminate employment with the company; or (ii) any such executive or key employee is subject to any non-compete, non-disclosure, confidentiality, employment, consulting or similar agreement which would be violated by the present or proposed business activities of the relevant company.
17.2	There are no amounts owing or promised to any present or former director or employee of any company in the Group other than remuneration accrued due or for reimbursement of business expenses and no liability has been incurred by any company in the Group for breach of any contract of service, contract for services or consultancy agreement.
18.	Previous announcements and AIM Rule Compliance
18.1	Each statement of fact in the Financial Statements for the financial period ended 31 December 2008 or in any announcement made by or on behalf of the Company through the Regulatory Information Service since the date of publication of such Financial Statements (such Financial Statements and each such announcement being a “previous announcement”) was true and accurate and not misleading (by itself or in its context).
18.2	Each expression of opinion or intention or expectation in each previous announcement was made on reasonable grounds after due and careful enquiry and was truly and honestly held by the Directors and was fairly based There was no other fact known or which could on reasonable enquiry have been known to the Directors omitted to be disclosed in any previous announcement which, by such omission, would make any such statement or expression in any previous announcement misleading (by itself or in its context).
18.3	Each previous announcement complied in all respects with the AIM Rules (as in force at the relevant time) and FSMA.
18.4	Since the publication of the Financial Statements for the financial period ended 31 December 2008, the Company has notified the Regulatory Information Service of all information required to be notified by it in accordance with the AIM Rules (as in force at the relevant time).
18.5	The Company has complied and continues to comply in all respects with the AIM Rules.
19.	US Securities Legislation

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19.1	None of the Company, its affiliates or any persons acting on its or their behalf have engaged or will engage in any ‘directed selling efforts’, as defined in Regulation S, with respect to the Placing Shares.
19.2	None of the Company, its affiliates or any persons acting on its or their behalf, directly or indirectly, (a) has made or will make offers or sales of any of the Placing Shares, (b) has solicited or will solicit offers to buy any of the Placing Shares or (c) otherwise has negotiated or will negotiate in respect of any of the Placing Shares, in any case, under circumstances that would require the registration of the Placing Shares under the US Securities Act.
19.3	The Company, its affiliates and any persons acting on its or their behalf have and will comply with the offering restrictions requirements of Regulation S.
19.4	The offering of the Placing Shares to Placees pursuant to the Placing in the manner contemplated in this Agreement will not cause the Company or any of the Directors to be in violation or breach of any provision of the US Securities Act or of the SEC Regulations or the NYSE AMEX Rules.
19.5	The Company has since the date of admission of its common shares to trading on NYSE AMEX complied in all respects with all disclosure and notification requirements under the NYSE AMEX Rules and under the Rules of the SEC.
19.6	The Company is a Reporting Issuer.
19.7	If it expects to cease its status as, or ceases to be, a Reporting Issuer within one-year after the later of the commencement and the date of closing of the Placing, the Company will notify Investec as soon as reasonably possible.
20.	Verification
	All reasonable enquiries have been made to ascertain and verify the accuracy of all statements of fact and the reasonableness of all other statements contained in the Presentation and Placing Press Announcement and in particular the replies in the Verification Notes have been prepared or approved by persons having appropriate knowledge and responsibility to enable them properly to provide such replies and the replies therein for which an officer or employee of the Group or an adviser to the Company is responsible have been provided with due care and attention.
21.	Purchase Agreements

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21.1	The Purchase Agreements and the agreements referred to therein contain all the terms and conditions attaching to the subscription of the new Common Shares provided for therein, there are no other terms and conditions applicable to such subscription and all investors subscribing for new Common Shares pursuant thereto are subscribing on the terms set out in such agreements.
21.2	The Company is not in breach of any of the Purchase Agreements or any of the agreements referred to therein, in particular the representations and warranties of the Company contained in clause 4 of the Purchase Agreements, and the Company is not aware of any facts or circumstances likely to give rise to any breach of any of such agreements.

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Schedule 3

The Certificate

Letterhead of Enova Systems, Inc.

Investec Bank (UK) Limited
2 Gresham Street
London
EC2V 7QP

Dear Sirs

Placing Agreement dated [ • ] 2009

We refer to the above Agreement. Words and expressions in the above Agreement have the same meanings herein. We hereby confirm to you that:

(a)	each of the conditions referred to in Clause 2.1 of the above Agreement (other than that in sub-clauses 2.1(e) and 2.1(g)) has been fulfilled in accordance with its terms; and
(b)	none of the Warranties was breached or untrue or inaccurate or misleading at the date of the said Agreement and there has been no change of circumstances such that if repeated at the date hereof by reference to the facts and circumstances subsisting at the date hereof any of such warranties would be breached or untrue or inaccurate or misleading.

Yours faithfully

Director
duly authorised for and on behalf of
Enova Systems Inc.

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APPENDIX A

[Purchase Agreement]

33

SIGNED by /s/Jarett Fenton, Chief Financial Officer   )
for and on behalf of ENOVA SYSTEMS INC.)
in the presence of: /s/John Mullins, Chief Operating Officer      )

SIGNED by /s/James Grace      )
for and on behalf of INVESTEC BANK (UK))
LIMITED in the presence of: /s/Alex Thomas      )

34

EX-99.4

Exhibit 99.4

Enova Announces Fundraise Agreements for $10.3M in New Capital

TORRANCE, CA, October 29, 2009 — Enova Systems, Inc. (NYSE AMEX: ENA and AIM: ENV and ENVS), a production company in the emerging alternative energy industry and a leading developer of proprietary electric, hybrid and fuel cell digital power management systems today announced it had entered into a Purchase Agreement for the sale of 9,024,960 shares of Common Stock at a purchase price of $1.00 per share. As required by the Purchase Agreement, at the closing of the stock sale, Enova will enter into a Registration Rights Agreement pursuant to which it will be required to register such shares. Enova also entered into a Placing Agreement for the placement of 1,323,000 shares of common stock at a purchase price of 62.5 pence per share (approximately equal to $1.00 (U.S.) per share at the exchange rate on October 29, 2009 as reported by Fidessa).

The consummation of the stock sale transactions contemplated by both the Purchase Agreement and the Placing Agreement are subject to a number of conditions, including in both cases shareholder approval of the issuance of the shares. Enova intends to seek approval of the issuance of the additional shares of Common Stock at the Annual Meeting of Shareholders, currently scheduled for the second week of December, and intends to send to shareholders a Proxy Statement relating thereto when available. Enova advises each of its shareholders to read the Proxy Statement when it becomes available because it will contain important information. Once the Proxy Statement is available, shareholders can get the Proxy Statement and any relevant documents for free at the SEC’s web site or free of charge by writing to Enova Systems, Inc., 1560 West 190th Street, Torrance, California 90501, Attention: Chief Financial Officer and requesting a copy thereof.

This press release does not constitute an offer of any securities for sale. The securities to be sold pursuant to the Purchase Agreement and the Placing Agreement have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Copies of the documents relating to these transactions, together with a more detailed explanation of the agreements and the terms of the transactions, are being filed by the Company with the Securities and Exchange Commission under cover of a Current Report on Form 8-K with date of earliest event reported of October 29, 2009.

About Enova:
Enova Systems (http://www.enovasystems.com) is a leading supplier of efficient, environmentally friendly digital power components and systems products. The Company’s core competencies are focused on the development and commercialization of power management and conversion systems for mobile applications. Enova applies unique ‘enabling technologies’ in the areas of alternative energy propulsion systems for light and heavy-duty vehicles as well as power conditioning and management systems for distributed generation systems. The Company develops, designs and produces non-invasive drive systems and related components for electric, hybrid-electric, and fuel cell powered vehicles in both the “new” and “retrofit” vehicle sales market. For further information, contact Enova Systems directly, or visit its Web site at http://www.enovasystems.com.

ENOVA SYSTEMS, Inc.
1560 West 190th Street
Torrance, CA 90501
310-527-2800
Contact: Jarett Fenton CFO/Investor Relations

Additional Information:

This news release contains forward-looking statements relating to Enova Systems and its products that are intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as “believe,” “expect,” “may,” “will,” “should,” “could,” “project,” “plan,” “seek,” “intend,” or “anticipate” or the negative thereof or comparable terminology and statements about industry trends and Enova’s future performance, operations and products. These forward-looking statements are subject to and qualified by certain risks and uncertainties. These and other risks and uncertainties are detailed from time to time in Enova Systems’ periodic filings with the Securities and Exchange Commission, including but not limited to Enova’s annual report on Form 10-K for the year ended December 31, 2008.