COMMON STOCK SUBSCRIPTION AGREEMENT

 No._______                                 Offeree Name_______________________

                              U.S. ELECTRICAR, INC.

                                  REGULATION S

                       COMMON STOCK SUBSCRIPTION AGREEMENT

                                   May 1, 1996

THE SECURITIES TO WHICH THIS AGREEMENT  RELATES HAVE NOT BEEN  REGISTERED  UNDER
THE SECURITIES ACT OF 1933, AS AMENDED  ("SECURITIES  ACT"),  OR UNDER ANY STATE
SECURITIES LAWS ("BLUE SKY LAWS"),  AND MAY NOT BE OFFERED OR SOLD IN THE UNITED
STATES OR TO U.S.  PERSONS (AS  DEFINED IN  REGULATION  S) WITHOUT  REGISTRATION
UNDER THE SECURITIES  ACT, AND AS REQUIRED BY BLUE SKY LAWS IN EFFECT AS TO SUCH
TRANSFER, UNLESS AN EXEMPTION FROM SUCH REGISTRATION UNDER STATE AND FEDERAL LAW
IS AVAILABLE.

                          INSTRUCTIONS FOR SUBSCRIPTION

                              U.S. ELECTRICAR, INC.
                            A California Corporation

                                  To Subscribe:

1.        Offeree Questionnaire/Subscription Agreement.

          Please complete the Offeree Questionnaire and execute the Subscription
          Agreement at Page 10 and return all originals to the Corporation along
          with the purchase price for the common stock shares being acquired.

2.        Please make Check payable to:

                              U.S. ELECTRICAR, INC.

or request wire transfer instructions from the Corporation.

                              OFFEREE QUESTIONNAIRE

                              U.S. ELECTRICAR, INC.

                              U.S. Electricar, Inc.
                          San Francisco Executive Park
                             5 Thomas Mellon Circle
                                    Suite 305
                         San Francisco, California 94134

Gentlemen:

The undersigned understands that: (i) you will rely on the information contained
herein for purposes of securities law compliance and determination; and (ii) the
securities  will not be registered  under the Securities Act of 1933, as amended
(the "Securities Act") in reliance upon the exemption from registration provided
by Regulation S promulgated under the Securities Act.

The undersigned  further  represents to you that: (i) the information  contained
herein is complete  and  accurate  and may be relied  upon by you;  and (ii) the
undersigned  will notify you  immediately of any material  change in any of such
information occurring prior to the purchase of such securities,  if any purchase
is made, by the undersigned.

THE UNDERSIGNED  UNDERSTANDS AND AGREES THAT ALTHOUGH THIS QUESTIONNAIRE WILL BE
KEPT STRICTLY CONFIDENTIAL, U.S. ELECTRICAR, INC. MAY PRESENT THIS QUESTIONNAIRE
TO  SUCH  PARTIES  AS IT  DEEMS  ADVISABLE  IF  CALLED  UPON  TO  ESTABLISH  THE
AVAILABILITY  UNDER ANY FEDERAL OR STATE  SECURITIES  LAWS OF AN EXEMPTION  FROM
REGISTRATION  OF THIS  OFFERING  OR ANY OTHER  COMPLIANCE  WITH STATE OR FEDERAL
SECURITIES LAWS.

THIS  QUESTIONNAIRE  BY ITSELF IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY BUT MERELY A REQUEST FOR INFORMATION FOR COMPLIANCE WITH APPLICABLE
SECURITIES  REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION AND STATE BLUE
SKY LAWS.

                  (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)

                              U.S. ELECTRICAR, INC.

             Please complete and return along with the Subscription
                         Agreement attached hereto to:

                                     U.S. Electricar, Inc.
                                     Attn:  Corporate Secretary
                                     San Francisco Executive Park
                                     5 Thomas Mellon Circle
                                     Suite 305
                                     San Francisco, California  94134

TOTAL SUBSCRIPTION:  Dollar Amount $                   Number of Shares
                                    -----------------                  --------
Make Check or Wire Transfer Payable to: U.S. Electricar, Inc.

REGISTRATION:

Please print name in which your Common Stock shares are to be registered 
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RESIDENT  ADDRESS:  Investors must complete  resident  address for  registration
purposes 
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 City                                   Country    Postal Code

MAILING ADDRESS: if different from resident address
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 Corporation name (if applicable)
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 City                                    Country    Postal Code

- - -------------------------------------------------------
Home Phone                          Business Phone
(     )                             (     )
- - ------------------------------      ---------------------------------------   
CHECK ONE:
         ___ Individual Ownership
         ___ Corporate Ownership
         ___ Partnership Ownership

FOR TRUST:
                  ______________________ Trust
                  ___________ Date Established

- - --------------------------------------
Name of Trustee or other Administrator

FOR ANY ENTITY:

- - --------------------------------------
(Name of Person With Right To Control
the Voting of Securities on Behalf of Entity)

                              U.S. ELECTRICAR, INC.

The following  information is to be provided by either (i) the individual who is
making the investment decision on behalf of the corporate, partnership, trust or
other entity  investor or (ii) by the  individual  purchasing the Shares for his
own account:

- - --------------------------------------------------------------------------------
Print Name (and title if applicable)

1.  Business or Professional Education:

                                    Field of
School                               Study                           Degree
- - ------                              --------                         ------

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

2.  Current employment positions:

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

3.  Details of any training or experience in financial or business matters not
 disclosed above:

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

4. I have previously purchased securities on behalf of the Investor or on my own
behalf  which  were sold in  reliance  on  Regulation  S or a  private  offering
exemption from registration under the Securities Act of 1933, as amended:

                  ------- Yes               ------- No
                  Initial                   Initial

         If yes, please give several examples.

Name of                 Type of                 Year of            Amount
Corporation           Investment               Investment         Invested
- - -----------           ----------               ----------         --------

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

(For Entity Investors)
5.   Total assets if Investor is an entity:  $_________________________________.

(For Individual Investors)
6.   Net Worth (excess of total assets over total liabilities) and income if 
Investor is an individual:

Net Worth: $____________________  Income: $_______________________.

         THE SECURITIES TO WHICH THIS AGREEMENT RELATES HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES  ACT OF 1933, AS AMENDED  ("SECURITIES  ACT"),  OR
         UNDER ANY STATE  SECURITIES  LAWS  ("BLUE  SKY  LAWS"),  AND MAY NOT BE
         OFFERED OR SOLD IN THE UNITED STATES OR TO U.S.  PERSONS (AS DEFINED IN
         REGULATION S) WITHOUT  REGISTRATION  UNDER THE  SECURITIES  ACT, AND AS
         REQUIRED  BY BLUE SKY LAWS IN  EFFECT  AS TO SUCH  TRANSFER,  UNLESS AN
         EXEMPTION  FROM  SUCH  REGISTRATION  UNDER  STATE  AND  FEDERAL  LAW IS
         AVAILABLE.

                             SUBSCRIPTION AGREEMENT

         THIS  SUBSCRIPTION  AGREEMENT is made effective for reference  purposes
only as of May 1, 1996,  by and between  U.S.  Electricar,  Inc.,  a  California
corporation (the  "Corporation") and the Investor whose signature appears on the
signature page to this Agreement (the "Investor").

                                  R E C I T A L

         The  Investor  desires  to  purchase  from  the  Corporation,  and  the
Corporation desires to sell to the Investor,  certain common stock shares of the
Corporation, on the terms and conditions hereinafter set forth.

                                A G R E E M E N T

         NOW, THEREFORE,  in consideration of the mutual agreements,  covenants,
representations and warranties  contained in this Agreement,  the parties hereby
agree as follows:

          1.      Purchase and Sale of Shares.

                  a.   Sale and  Issuance  of  Shares.  Subject to the terms and
conditions of this Agreement, the undersigned Investor agrees to purchase at the
Closing (as defined below) and the  Corporation  agrees to sell and issue to the
Investor at the Closing,  that number of common stock shares (the  "Shares") set
forth under  Schedule 1 of the  signature  page  attached  to this  Subscription
Agreement at a price of thirty cents ($0.30) per share (the "Purchase Price").

                  b.   Payment and  Delivery.  The Investor  shall  purchase the
Shares by  making  payment  to U.S.  Electricar,  Inc.  in cash by check or wire
transfer of funds of the  Purchase  Price  delivered to the  Corporation  on, or
before,  the date set forth on Schedule 1 attached to the signature  page hereto
(the "Closing").

          2.  Delivery of Shares.  Upon the Investor's  delivery of the Purchase
Price in full and a fully executed and completed  original of this  Subscription
Agreement  and  Offeree   Questionnaire  to  the  Corporation,   and  after  the
Corporation  determines that all applicable securities laws have been satisfied,
the  Corporation  will  deliver to the  Investor  within ten (10) days after the
Closing a share certificate for the Shares.

          3.  Corporation's  Representations,   Warranties  and  Covenants.  The
Corporation  hereby  represents,  warrants  and  covenants  to the  Investor  as
follows:

                   a. Corporate  Organization and Standing. The Corporation is a
corporation  duly  organized,  validity  existing and in good standing under the
laws of the State of California.  The  Corporation  has the requisite  corporate
power to carry on its  business  as  presently  conducted,  and as  proposed  or
contemplated to be conducted in the future,  and to enter into and carry out the
provisions of this Agreement and the transactions contemplated hereby.

                   b.  Authorization.  All  corporate  action on the part of the
Corporation,  its directors and  shareholders  necessary for the  authorization,
execution, delivery and performance of this Agreement by the Corporation and the
performance of all of the  Corporation's  obligations  hereunder has been taken.
This Agreement, when executed and delivered by the Corporation, shall constitute
a valid and binding  obligation of the  Corporation,  enforceable  in accordance
with its terms,  except as may be limited by  principles of public  policy,  and
subject to laws of general  application  relating to bankruptcy,  insolvency and
the  relief  of  debtors  and  rules  of  law  governing  specific  performance,
injunctive  relief or other  equitable  remedies.  The  Shares,  when  issued in
compliance with the provisions of this Agreement,  will be validly issued, fully
paid and  nonassessable.  The  Corporation is, and at all times during the offer
and sale of the  Shares,  will be a  "reporting  issuer" as that term is defined
under Regulation S.

                   c.  No  Breach.  The  issue  and  sale of the  Shares  by the
Corporation does not and will not conflict with and does not and will not result
in a breach of any of the terms of the Corporation's  incorporating documents or
any  agreement  or  instrument  to  which  the  Corporation  is  a  party.   The
consummation of the transactions or performance of the obligations  contemplated
by this  Agreement  will not result in a breach of any term of, or  constitute a
default  under,  any  statute,  indenture,   mortgage,  or  other  agreement  or
instrument to which the Corporation or any of its subsidiaries is or are a party
or by which any of them is or are bound.

                   d. Pending or Threatened Claims.  Neither the Corporation nor
any of its subsidiaries is a party to any action, suit or proceeding which could
materially  affect its business or  financial  condition,  and no such  actions,
suits or proceedings are contemplated or have been threatened.

                   e. No Preemptive  Rights.  There are no preemptive  rights of
any shareholder of the Corporation with respect to the Shares.

          4. Investor  Representations  and Warranties.  The Investor represents
and warrants to the Corporation that:

                   a. Account/Regulation S. The Investor is acquiring the Shares
for  investment  for its own  account,  and not with a view to, or for resale in
connection with, any distribution  thereof,  and it has no present  intention of
selling or distributing  any of the Shares.  The Investor  understands  that the
Shares have not been  registered  under the  Securities  Act of 1933, as amended
(the "Securities  Act") by reason of a specific  exemption from the registration
provisions of the  Securities  Act which depends upon,  among other things,  the
bona fide nature of the investment as expressed herein. The Investor understands
that the  Corporation is relying on the rules and regulations  governing  offers
and sales made  outside  the United  States to  non-"U.S.  Persons"  pursuant to
Regulation S under the Securities Act.

                   b.  Access to Data.  The Investor has had an  opportunity  to
discuss the  Corporation's  business,  management and financial affairs with its
management  and to obtain any  additional  information  which the  Investor  has
deemed  necessary or  appropriate  for  deciding  whether or not to purchase the
Shares,   including  an  opportunity  to  receive,  review  and  understand  the
disclosures and information  regarding the Corporation's  financial  statements,
capitalization  and other  business  information  as set forth in  Corporation's
Amended Form 10 filed with the  Securities  and Exchange  Commission  ("SEC") on
January 27, 1995 and subsequent  10-K and 10-KA and two 10-Qs filed with the SEC
on October 30, 1995,  November  28, 1995,  December 15, 1995 and March 18, 1996,
respectively,  all incorporated herein by reference,  together with all exhibits
referenced  therein.  Attached  hereto as Exhibit A and  incorporated  herein by
reference are copies of the  Corporation's  Private  Placement  Memorandum dated
January 2, 1996 prepared for the  Corporation's  trade  creditors.  The Investor
acknowledges that no other representations or warranties,  oral or written, have
been made by the  Corporation  or any agent thereof  except as set forth in this
Agreement.

                   c. No Fairness  Determination.  The Investor is aware that no
federal,  state or other agency has made any finding or  determination as to the
fairness of the investment,  nor made any  recommendation  or endorsement of the
Shares.

                   d. Knowledge And Experience.  The Investor has such knowledge
and experience in financial and business matters, including investments in other
start-up companies, that it is capable of evaluating the merits and risks of the
investment  in the  Shares,  and it is able to bear  the  economic  risk of such
investment.  Further, the individual executing this Agreement has such knowledge
and experience in financial and business matters that he is capable of utilizing
the  information  made  available to him in connection  with the offering of the
Shares, of evaluating the merits and risks of an investment in the Shares and of
making an informed  investment  decision  with respect to the Shares,  including
assessment  of the Risk Factors  attached  hereto as Exhibit B and  incorporated
herein by reference.

                   e. Limited Public Market. The Investor is aware that there is
currently a very limited  "over-the-counter" public market for the Corporation's
registered securities and that the Corporation became a "reporting issuer" under
the Securities  Exchange Act of 1934, as amended,  on January 27, 1995. There is
no guarantee that a more  established  public market will develop at any time in
the future.  The Investor  understands  that the Shares are all unregistered and
may not  presently  be sold in even this  limited  public  market.  The Investor
understands  that the Shares  cannot be readily sold or liquidated in case of an
emergency or other  financial  need. The Investor has  sufficient  liquid assets
available so that the purchase and holding of the Shares will not cause it undue
financial difficulties.

                   f.  Commissions/Finders  Fees. The Investor acknowledges that
the Company may issue up to 13,333,333  cashless  exercise  warrants in form and
substance as attached  hereto as Exhibit C as  investment  banking fees to third
parties if up to $2,000,000  of common stock shares are sold by the  Corporation
pursuant to this Offering.

                   g.  Investment  Experience.  The  Investor is an  "accredited
investor" as that term is defined in Regulation D promulgated  by the Securities
and Exchange  Commission.  The term  "Accredited  Investor"  under  Regulation D
refers to:

                       (i) A person or entity  who is a  director  or  executive
officer of the Corporation;

                       (ii)  Any  bank as  defined  in  Section  3(a)(2)  of the
Securities  Act, or any savings and loan  association  or other  institution  as
defined  in Section  3(a)(5)(A)  of the  Securities  Act  whether  acting in its
individual or fiduciary  capacity;  any broker or dealer registered  pursuant to
Section 15 of the Exchange Act; insurance company as defined in Section 2(13) of
the Securities Act;  investment  company registered under the Investment Company
Act of 1940;  or a  business  development  Corporation  as  defined  in  Section
2(a)(48) of that Act; Small  Business  Investment  Company  licensed by the U.S.
Small Business  Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958;  any plan  established  and  maintained by a state,  its
political  subdivisions,  or any  agency  or  instrumentality  of a state or its
political subdivisions for the benefit of its employees,  if such plan has total
assets in excess of $5,000,000;  employee benefit plan within the meaning of the
Employee  Retirement Income Security Act of 1974, if the investment  decision is
made by a plan  fiduciary,  as defined in  Section  3(21) of such Act,  which is
either a bank, savings and loan association,  insurance  company,  or registered
investment  adviser,  or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed  plan, with investment decision made solely
by persons that are accredited investors;

                       (iii)  Any   private  business  development   company  as
defined in Section 202(a)(22) of the Investment Advisers Act of 1940;

                       (iv)   Any organization described in Section 501(c)(3) of
the Internal Revenue Code, corporation, Massachusetts or similar business trust,
or  partnership,  not formed for the specific  purpose of  acquiring  the Shares
offered, with total assets in excess of $5,000,000;

                       (v)    Any natural person whose individual net worth,  or
joint net worth with that person's  spouse,  at the time of his purchase exceeds
$1,000,000;

                       (vi)   Any natural person who had an individual income in
excess of $200,000  during each of the  previous  two years or joint income with
that  person's  spouse in excess of  $300,000  in each of those  years and has a
reasonable expectation of reaching the same income level in the current year;

                       (vii)  Any  trust,  with  total   assets  in   excess  of
$5,000,000, not formed for the specific purpose of acquiring the Shares offered,
whose  purchase is directed by a person who has such knowledge and experience in
financial and business  matters that he is capable of evaluating  the merits and
risks of the prospective investment; or

                       (viii) Any  entity in which all of the equity  owners are
accredited investors.

As used in this  Section  4(g),  the term "net worth"  means the excess of total
assets over total  liabilities.  For the purpose of  determining  a person's net
worth, the principal  residence owned by an individual  should be valued at fair
market value,  including the cost of improvements,  net of current encumbrances.
As used in this Section 4(f),  "income" means actual economic income,  which may
differ from  adjusted  gross income for income tax  purposes.  Accordingly,  the
undersigned  should  consider  whether it should add any or all of the following
items to its  adjusted  gross income for income tax purposes in order to reflect
more  accurately  its  actual  economic  income:  Any  amounts  attributable  to
tax-exempt  income received,  losses claimed as a limited partner in any limited
partnership,  deductions claimed for depletion, contributions to an IRA or Keogh
retirement plan, and alimony payments.

          5.      Restrictions On Transfer Re Regulation S.

                  a. Not A "U.S. Person." The Investor hereby certifies that (i)
it is not a "U.S. Person" as defined under Rule 902, Section (o) of Regulation S
promulgated  under the  Securities  Act (a copy of which is  attached  hereto as
Schedule  2) and is not  acquiring  the Shares for the account or benefit of any
U.S. Person, and (ii) it is acquiring the Shares in an "offshore transaction" as
defined under  Section (i) of such Rule 902 (a copy of which is attached  hereto
as Schedule 3).

                  b. Transfer  Restrictions.  The Investor  shall not attempt to
have  registered  any  transfer  of the Shares not made in  accordance  with the
provisions of Regulation  S. In addition to any other  restrictions  on transfer
set forth in this Agreement, the Investor agrees to transfer the Shares only (i)
in accordance  with the  provisions  of  Regulation S, pursuant to  registration
under  the  Securities   Act,  or  pursuant  to  an  available   exemption  from
registration,  and (ii) in accordance with any applicable state securities laws.
Unless so  registered or exempt  therefrom,  such  transfer  restrictions  shall
include  but not be limited to and the  Investor  warrants  and  represents  the
following:

                           (i) The Investor  shall not sell the Shares  publicly
or privately,  or through any short sale, or other  hedging  transaction  to any
U.S. Person,  whether  directly or indirectly,  or for the account or benefit of
any such U.S. Person for the  restrictive  period mandated by Regulation S after
the purchase of the Shares unless registered or exempt from registration;

                           (ii) Any other  offer or sale of the Shares  shall be
made  only  if (A)  during  the  restrictive  period  any  subsequent  purchaser
certifies  in  writing  that it is not a U.S.  Person and is not  acquiring  the
Shares  for the  account  or  benefit  of any  U.S.  Person,  or (B)  after  the
restrictive  period the  Shares  are  purchased  in a  transaction  that did not
require registration under the Securities Act and applicable Blue Sky laws; and

                           (iii) Any  transferee  of the Shares  shall  agree in
writing  to  resell  the  Shares  only in  accordance  with  the  provisions  of
Regulation S, pursuant to registration  under the Securities Act, or pursuant to
an available exemption from registration.

                  c. Restrictions On Resales In the United States.  The Investor
understands  and  acknowledges  that the  Securities  Act  prohibits  resales of
securities  in the United States  except  pursuant to an effective  registration
statement  or an  exemption  from  registration  for  which the  Shares  and the
Investor   holding  such  Shares   qualifies.   The  Investor   understands  and
acknowledges the requirements for qualifying for an exemption from  registration
afforded by Section 4 of the  Securities  Act and that there can be no assurance
that  the  Investor  will  be  able  to  qualify  for  such  an  exemption  from
registration.

          6. Public Offering Lock-Up. For one period of up to one-hundred-eighty
(180) days (the "Stand-off Period"), Investor shall not pledge, transfer or sell
its Shares to any person or entity if requested by the Corporation upon at least
thirty (30) days prior written notice given,  on, or after,  the  termination of
the  Regulation S  restrictive  period  hereunder in  contemplation  of a public
registration.  Notwithstanding  the foregoing,  this right may be exercised only
one time by the Corporation.

          7. Restrictive  Legends.  Each certificate  evidencing the Share which
the Investor may purchase  hereunder  and any other  securities  issued upon any
stock split, stock dividend, recapitalization,  merger, consolidation or similar
event  (unless  no  longer  required  in the  opinion  of the  counsel  for  the
Corporation) shall be imprinted with legend substantially in the following form:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES  ACT OF 1933, AS AMENDED (THE "ACT"),  AND MAY NOT
         BE  OFFERED  OR SOLD  WITHOUT  REGISTRATION  UNDER THE ACT  UNLESS  THE
         CORPORATION  RECEIVES  AN  OPINION  OF  COUNSEL,  SATISFACTORY  TO  THE
         CORPORATION,  THAT AN EXEMPTION FROM SUCH  REGISTRATION IS AVAILABLE OR
         SUCH  REGISTRATION  IS NOT REQUIRED  PURSUANT TO REGULATION S UNDER THE
         ACT.

         THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE ARE SUBJECT TO CERTAIN
         RESTRICTIONS  ON  TRANSFER  SET  FORTH  IN THAT  CERTAIN  MAY 1,  1996,
         SUBSCRIPTION  AGREEMENT  BETWEEN  THE  ORIGINAL  HOLDER  HEREOF AND THE
         CORPORATION.

The Corporation shall be entitled to enter stop transfer notices on its transfer
books with respect to the Shares.

          8. Compliance with Regulation S and Removal of Restrictive Legend. The
Corporation  covenants to comply fully with Rule 903 (including  Rule 903(c)(2))
of  Regulation  S  during  the  offer  and sale of the  Shares  and  during  the
applicable restricted period under Rule 903(c)(2) (the "Restricted Period"). The
parties acknowledge that Rule 903(c)(2)--unlike Rule 903(c)(3)--does not contain
a provision  requiring the imposition of a restrictive legend on securities sold
thereunder, and that the parties have voluntarily agreed to impose such a legend
on the Shares when issued,  because certain  requirements of Regulation S remain
to be satisfied during the subsequent  Restricted Period. The Investor agrees to
cooperate  with  the   Corporation  in  providing  any   certificates  or  other
information  reasonably  necessary for the  Corporation to confirm that Rule 903
and Rule  903(c)(2)  have been  satisfied.  The  Investor  acknowledges  that no
representation,  warranty or guaranty, express or implied, has been given to the
Investor by any officer,  director,  agent, or employee of, legal counsel to, or
any other person  connected with, the Corporation  regarding the availability at
any time of an exemption  from  registration  under the  Securities  Act for any
offer, sale or other transfer or disposition of the Shares by the Investor.  The
Investor understands and agrees that the availability of any such exemption from
registration  must be determined  solely by the Investor and the  Investor's own
legal counsel based on the particular  facts and  circumstances  existing at the
time of a proposed transaction.

          9. Reliance.  The Investor is aware that the Corporation is relying on
the accuracy of the above  representations to establish  compliance with Federal
and State  securities  laws. If any such warranties or  representations  are not
true and accurate in any respect as of the Closing, Investor shall so notify the
Corporation  in writing  immediately  and shall be cause for  rescission  by the
Corporation at its sole election.  The Investor shall  indemnify the Corporation
and its affiliates,  legal counsel and agents against all losses, claims, costs,
expenses and damages or liabilities, including reasonable attorneys' fees, which
such parties may suffer or incur caused or in connection with or arising out of,
directly  or   indirectly,   from  their   reliance  on  such   warranties   and
representations.

          10.     Miscellaneous.

                 a. Survival.  The  representations,  warranties,  covenants and
agreements   made  herein  shall   survive  the  closing  of  the   transactions
contemplated hereby.

                 b.  Successors  and  Assigns.  Except  as  otherwise  expressly
provided  herein,  the  provisions  hereof shall inure to the benefit of, and be
binding upon, the successors,  assigns,  heirs,  executors and administrators of
the parties hereto.

                 c. Entire Agreement. This Agreement, Exhibits and the Schedules
attached hereto  constitute the entire agreement and  understanding  between the
parties with respect to the subject  matters  herein,  and supersede and replace
any prior  agreements and  understandings,  whether oral or written  between and
among them with respect to such matters. The provisions of this Agreement may be
waived, altered, amended or repealed, in whole or in part, only upon the written
consent of the Corporation and the Investor.

                 d.  Title  and  Subtitles.  The  titles  of  the  Sections  and
subsections of this Agreement are for the  convenience of reference only and are
not to be considered in construing this Agreement.

                 e.  Counterparts.  This Agreement may be executed in any number
of counterparts,  each of which shall be an original,  but all of which together
shall constitute one instrument.

                 f.  Applicable  Law.  This  Agreement  shall be governed by and
construed in  accordance  with laws of the State of  California,  applicable  to
contracts between California residents entered into and to be performed entirely
within the State of California.

                 g.  Venue.  Any  action,  arbitration,  or  proceeding  arising
directly or indirectly  from this Agreement or any other  instrument or security
referenced  herein shall be  litigated or  arbitrated,  as  appropriate,  in the
County of San Francisco, State of California.

                 h. Authority. If Investor is a corporation,  partnership, trust
or estate: (i) the individual  executing and delivering this Agreement on behalf
of the Investor has been duly  authorized  and is duly  qualified to execute and
deliver this Agreement on behalf of Investor in connection  with the purchase of
the Shares and (ii) the signature of such individual is binding upon Investor.

         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of the day and year hereinabove first written.

INVESTOR                                  U.S. ELECTRICAR, INC.

By:________________________                        By:_______________________
   (Signature)                                        (Signature)

- - ---------------------------                        --------------------------
(Print Name and Title)                             (Print Name and Title)

                                   SCHEDULE 1

Purchase Price Per Share:                   $0.30

Aggregate Purchase Price                    $______________

Total Number of Shares                       _______________

Purchase Date:                               ____________, 1996

                                   SCHEDULE 2
                           Definition of "U.S. Person"

         "Reg.  ss.230.902.  As used in Regulation S, the following  terms shall
have the meanings indicated: 
 . . .

         (o) U.S. Person.

         (1)      "U.S. person" means:
                  (i) any natural person resident in the United States;
                  (ii) any partnership or corporation  organized or incorporated
                  under the laws of the United States;
                  (iii) any estate of which any executor or  administrator  is a
                  U.S.  person; 
                  (iv) any trust of which any trustee is a U.S. person;  
                  (v) any  agency or branch of a foreign  entity  located in the
                  United States;
                  (vi) any  non-discretionary  account or similar account (other
than an estate or trust) held by a dealer or other  fiduciary for the benefit or
account of a U.S. person;
                  (vii) any discretionary account or similar account (other than
an estate or trust) held by a dealer or other fiduciary organized, incorporated,
or (if an individual) resident in the United States; and
                  (viii) any  partnership  or  corporation  if:
                  (A)  organized or  incorporated  under the laws of any foreign
                  jurisdiction;  and 
                  (B) formed by a U.S.  person  principally  for the  purpose of
investing in securities not registered  under the Act, unless it is organized or
incorporated,  and owned,  by  accredited  investors  (as defined in Rule 501(a)
under the Act  (ss.230.501(a)  of this  chapter))  who are not natural  persons,
estates or trusts.

         (2) Notwithstanding paragraph (o)(1) of this section, any discretionary
account or similar  account (other than an estate or trust) held for the benefit
or  account  of a non-U.S.  person by a dealer or other  professional  fiduciary
organized,  incorporated,  or (if an  individual)  resident in the United States
shall not be deemed a "U.S. person."

         (3)  Notwithstanding  paragraph  (o)(1) of this section,  any estate of
which any  professional  fiduciary acting as executor or administrator is a U.S.
person shall not be deemed a U.S. person if:

                  (i) an  executor or  administrator  of the estate who is not a
U.S. person has sole or shared investment  discretion with respect to the assets
of the estate; and

                  (ii) the estate is governed by foreign law.

         (4)  Notwithstanding  paragraph  (o)(1) of this  section,  any trust of
which any professional fiduciary acting as trustee is a U.S. person shall not be
deemed a U.S.  person if a trustee  who is not a U.S.  person has sole or shared
investment  discretion  with respect to the trust assets,  and no beneficiary of
the trust (and no settlor if the trust is revocable) is a U.S. person.

         (5)  Notwithstanding  paragraph  (o)(1) of this  section,  an  employee
benefit  plan  established  and  administered  in  accordance  with the law of a
country other than the United States and customary  practices and  documentation
of such country shall not be deemed a U.S. person.

         (6)  Notwithstanding  paragraph  (o)(1) of this section,  any agency or
branch of a U.S.  person located outside the United States shall not be deemed a
"U.S. person" if:
                 (i) the agency or branch operates for valid business  reasons;
and
                 (ii) the  agency or  branch  is  engaged  in the  business  of
insurance  or  banking  and is  subject  to  substantive  insurance  or  banking
regulation, respectively, in the jurisdiction where located.

         (7)  The  International  Monetary  Fund,  the  International  Bank  for
Reconstruction and Development,  the Inter-American  Development Bank, the Asian
Development Bank, the African  Development  Bank, the United Nations,  and their
agencies,  affiliates  and pension  plans,  and any other similar  international
organizations,  their agencies, affiliates and pension plans shall not be deemed
"U.S. persons."

                                   SCHEDULE 3

                      Definition of "Offshore Transaction"

         "Reg.  ss.230.902.  As used in Regulation S, the following  terms shall
have the meanings indicated:
 . . .

         (i) Offshore Transaction.

         (1) An offer or sale of securities is made in an "offshore transaction"
if:

                  (i) the  offer is not made to a person in the  United  States;
and
                         
                  (ii) either:

                  (A) at the time  the buy  order is  originated,  the  buyer is
outside  the United  States,  or the seller and any person  acting on its behalf
reasonably  believe  that the buyer is  outside  the United  States;  or (B) for
purposes of: (1)  ss.230.903,  the  transaction  is executed in, on or through a
physical  trading floor of an established  foreign  securities  exchange that is
located  outside  the United  States;  or (2)  ss.230.904,  the  transaction  is
executed in, on or through the  facilities of a designated  offshore  securities
market  described in paragraph (a) of this  section,  and neither the seller nor
any person acting on its behalf knows that the transaction has been pre-arranged
with a buyer in the United States.

         (2) Notwithstanding  paragraph (i)(1) of this section, offers and sales
of securities  specifically  targeted at  identifiable  groups of U.S.  citizens
abroad, such as members of the U.S. armed forces serving overseas,  shall not be
deemed to be made in "offshore transactions."

         (3) Notwithstanding  paragraph (i)(1) of this section, offers and sales
of securities to persons excluded from the definition of "U.S.  person" pursuant
to paragraph  (o)(7) of this section or persons holding  accounts  excluded from
the definition of "U.S.  person"  pursuant to paragraph  (o)(2) of this section,
solely in their  capacities as holders of such  accounts,  shall be deemed to be
made in "offshore transactions."

                    EXHIBIT A - PRIVATE PLACEMENT MEMORANDUM

                            EXHIBIT B - RISK FACTORS

INVESTMENT  IN THE COMMON STOCK OFFERED  HEREBY  INVOLVES A HIGH DEGREE OF RISK.
PROSPECTIVE  INVESTORS SHOULD CAREFULLY CONSIDER, IN ADDITION TO THE MATTERS SET
FORTH ELSEWHERE IN THIS SUBSCRIPTION AGREEMENT, THE FOLLOWING FACTORS.

         Debt  Restructuring.  In March 1995,  as a result of the  Corporation's
insolvency, the Corporation entered into agreements in March and April 1995 with
its secured creditors and largest unsecured  creditor,  to restructure this debt
in the aggregate  amount of  approximately  $22 million.  The  Corporation,  its
largest unsecured creditor,  and the holders of more than 75% of the outstanding
principal  of the secured debt agreed to add the unpaid  interest to  principal,
reset  the  maturity  dates  of the  secured  debt  and  its  largest  unsecured
creditor's debt to March and April 1996, respectively, and for substantially all
of the debt establish a new conversion  rate to common stock of $0.30 per share.
They also agreed that conversion shall occur upon (1) a  restructuring/repayment
workout plan accepted by the  Corporation's  unsecured  creditors holding 80% or
more of the  Corporation's  unsecured trade debt, which plan must be approved by
the Corporation, or (2) the sole election of the Corporation's largest unsecured
creditor to cause conversion of this debt. Subsequently, the Corporation and the
Creditors described above agreed to extend the maturity date to March 25, 1997.

         In addition,  in April 1995, an informal committee of the Corporation's
unsecured  trade creditors was  established,  and in August 1995, this committee
recommended  for  approval  a  voluntary   restructuring  of  the  Corporation's
unsecured  debt  which the  Corporation  presented  to the  creditors  for their
approval in December 1995. As of January 31, 1996,  the aggregate  amount of the
Corporation's  outstanding  unsecured  antecedent debt,  including principal and
interest, was approximately $13,940,000.

         The  terms of the  proposed  debt  restructuring  are set  forth in the
Private Placement  Memorandum dated January 2, 1996, a copy of which is attached
hereto as Exhibit B. As described  above,  the  conversion of the  Corporation's
remaining  secured debt into equity is  contingent  upon the holders of at least
80% of the outstanding  unsecured debt participating in the restructuring  plan.
As of April 2, 1996,  the  Corporation  believes it has  received  and  approved
approximately  $11,331,000  or  81%  acceptances  by its  antecedent  creditors.
Outstanding  antecedent  debt of  approximately  $2,609,000  has  not  yet  been
settled. The Corporation and its secured creditors may elect, however, to keep a
portion  of the  secured  debt  outstanding  until  substantially  all  of  this
remaining unsecured debt has accepted the Corporation's debt restructuring plan.

         THERE CAN BE NO ASSURANCE THAT THE CORPORATION WILL BE ABLE TO CONTINUE
TO EFFECTUATE  THE DEBT  RESTRUCTURING.  TO THE EXTENT THAT THE  CORPORATION  IS
UNABLE TO  CONTINUE TO  EFFECTUATE  THE  VOLUNTARY  RESTRUCTURING  OR  OTHERWISE
REFINANCE  OR CONVERT SUCH DEBT AND  ADDITIONAL  FUNDING IS NOT  AVAILABLE,  THE
CORPORATION  WOULD BE FORCED TO SEEK PROTECTION UNDER APPLICABLE  BANKRUPTCY AND
INSOLVENCY LAWS.

         Additional Funding.  The Corporation's  planned  expenditures are based
primarily  on its  internal  estimates  of  future  sales and  ability  to raise
additional  financing.  If  revenues  or  additional  financing  do not meet the
Corporation's  expectations  in any given period of time,  the adverse impact on
the Corporation's  finances will be magnified by the Corporation's  inability to
adjust   spending   quickly  enough  to  compensate  for  revenue  or  financing
shortfalls.  Significant additional funding will be required throughout 1996 and
1997 to continue operations,  and there can be no assurance that the Corporation
will be able to secure such additional  financing on favorable terms, or at all.
As of January 31, 1996, the Corporation had cash of $444,000, including $305,000
held in escrow  for  antecedent  debt and  together  with its  subsidiaries  had
receivables  which  were not more  than  sixty  days  past due of  approximately
$735,000 which the  Corporation  believes have a reasonable  likelihood of being
collected.  There is no guaranty that all or any of the Corporation's  remaining
unsecured creditors representing in excess of $2.6 million in debt will agree to
the proposed debt restructuring/repayment plan or any other plan. The holders of
the  approximately  $18.5 million of currently  outstanding  secured debt in the
Corporation  have  agreed to convert a portion or all of their debt into  equity
under specified milestones which may or may not ever occur.

         Going  Concern/NOL.  The Corporation has experienced  recurring  losses
from operations,  use of cash from operations and had an accumulated  deficit of
$72,036,000  at January 31,  1996,  which  deficit as of October 31,  1995,  was
approximately $69,580,000.  (See "Increasing and Continued Losses" below). There
is no guaranty,  however, that any net operating losses will be available to the
Corporation  in the future as an offset against  future  profits.  A substantial
portion  of the losses  are  attributable  to  research,  development  and other
start-up costs associated with the  Corporation's  changing  business focus from
retail and mail order  operations  to the  production  of electric  vehicles and
electric power-train "kit" systems. Cash flows from future operations may not be
sufficient  to enable  the  Corporation  to  achieve  profitable  operations  as
previously  disclosed in the  preceding  paragraph.  Market  conditions  and the
Corporation's  financial  position may inhibit its ability to achieve profitable
operations.  These  factors as well as others  indicate the  Corporation  may be
unable to continue as a going  concern  unless it is able to obtain  significant
additional  financing and generate sufficient cash flows to meet its obligations
as they come due and sustain its operations.  The Corporation  estimates that it
will need additional  outside  financing for at least  approximately  three more
years to continue  funding the development of its products and the growth of its
business  before cash from  operations is  sufficient to fund the  Corporation's
business operations.  The Corporation  estimates that it will need approximately
$2 million to $3 million in  additional  outside  funding  through the remaining
three  months of fiscal  year 1996,  without  the payment of past due debts owed
creditors.  The Corporation's  audited financial statements included in the Form
10-K for fiscal year 1995 also include a "Going Concern"  qualification from the
Corporation's auditors.

         Increasing and Continued  Losses.  The Corporation was founded in 1976,
but initial sales were very limited and the  Corporation  was  unprofitable as a
manufacturer  of solar powered toys. The Corporation has been profitable in only
one year,  fiscal year 1986. For the fiscal years ended July 31, 1993,  1994 and
1995,  the  Corporation  had  substantial  net operating  losses of  $2,607,000,
$25,021,000 and $37,565,000,  respectively, on sales of $863,000, $5,787,000 and
11,625,000,  respectively.  Through  the first six  months of fiscal  1996,  the
Corporation lost an additional  $4,400,000 on sales of $3,011,000.  There can be
no assurance that the Corporation will be able to achieve profitability.

         Source of  Revenues . In 1991,  the  Corporation  started to generate a
significant  portion of its  revenues  from the sale of electric  vehicles.  The
Corporation  intends to  substantially  increase  its  revenue  from the sale of
electric  vehicles.  However,  there can be no  assurance  that demand for these
products will warrant the Corporation's  anticipated  expenditures,  or that the
Corporation  will be successful in engineering  and marketing  these products or
deriving any sort of profit from such  revenues.  Due to the lack of capital and
other factors,  the Corporation has recently furloughed a significant portion of
its   production   workforce.   This  action  will   significantly   impact  the
Corporation's ability to generate revenue near term.

         General Economic  Conditions.  The financial success of the Corporation
may be  sensitive to adverse  changes in general  economic  conditions,  such as
inflation,  unemployment,  and consumer demand for the  Corporation's  products.
These changes  could cause the cost of supplies,  labor,  and other  expenses to
rise faster than the Corporation can raise prices. Such changing conditions also
could  significantly  reduce  demand in the market  place for the  Corporation's
products. The Corporation has no control over any of these changes.

         Growth Stage  Company;  Reevaluation  of Business  Plans.  Although the
Corporation was originally  founded in 1976,  many aspects of the  Corporation's
business  are still in the early  growth  stage  development,  and its  proposed
operations  are  subject to all of the risks  inherent  in a start-up or growing
business enterprise, including the likelihood of continued operating losses. The
likelihood of the success of the Corporation  must be considered in light of the
problems,   expenses,   difficulties,   complications   and  delays   frequently
encountered  in  connection  with  the  growth  of  an  existing  business,  the
development of new products and channels of distribution, and current and future
development  in several key technical  fields,  as well as the  competitive  and
regulatory environment in which the Corporation will operate.

         In response to the severe cash shortage experienced by the Corporation,
in March 1995, the Corporation  initiated steps to restructure its  organization
and operations in an effort to stabilize and improve the Corporation's financial
condition.  Since March 1995, the  Corporation  has focused its resources on the
production  of off-road  industrial  vehicles and on-road buses and has, for the
time being,  ceased ordering new inventory for its on-road conversion  business;
however,  the Corporation  intends to finish converting and selling its existing
inventory of on-road  vehicles.  The Corporation is currently  re-evaluating all
aspects of its business,  including  each of its product  lines,  in view of its
capital constraints as well as competitive market conditions.  To the extent the
Corporation  determines  to  discontinue  any of its  product  lines,  potential
sources of revenue from those product lines would be eliminated.

         Dependence on Key Personnel . The success of the Corporation is largely
dependent on its key management and technical personnel, including Roy Kusumoto,
the Corporation's Chief Executive Officer, the loss of one or more of whom could
adversely  affect  the  Corporation's  business.   Additionally,   in  order  to
successfully implement its anticipated growth, the Corporation will be dependent
upon  its  ability  to hire  additional  qualified  personnel.  There  can be no
assurance that the  Corporation  will be able to retain or hire other  necessary
personnel.  The  Corporation  does not maintain key man life insurance on any of
its key personnel.  The Corporation believes that its future success will depend
in part upon its continued  ability to attract,  retain and motivate  additional
highly skilled personnel, including engineers, who are in great demand.

         Insurance and Potential Liability. The Corporation maintains insurance,
including  insurance  relating to  personal  injury and  product  liability,  in
amounts which the Corporation  currently  considers  adequate.  Nevertheless,  a
partially or completely  uninsured claim against the Corporation,  if successful
and of  sufficient  magnitude,  could  have a  material  adverse  effect  on the
Corporation.  In addition,  the Corporation's severe cash shortage may adversely
effect its ability to continue to maintain its insurance coverage.

         Nature of Industry . The electric  vehicle  industry is in its infancy.
Although  the  Corporation  believes  that  it has  manufactured  more  electric
vehicles  than any other company in the United States based on its own knowledge
of the  industry,  there are many large and small  companies,  both domestic and
foreign, now in, poised to enter or entering this industry.  This EV industry is
subject to rapid  technological  change.  Most of the major domestic and foreign
automobile  manufacturers (i) have produced  design-concept  electric  vehicles,
and/or (ii) have developed  improved  electric  storage,  propulsion and control
systems,  and/or  (iii) are planning to enter the field.  Various  nonautomotive
companies are also developing improved electric storage,  propulsion and control
systems.  Demand for and interest in electric vehicles appears to be increasing.
However, growth in the present limited demand for electric vehicles depends upon
(A)  future  regulation  and  legislation  requiring  more use of  non-polluting
vehicles,  (B) the 

environmental  consciousness  of  customers  and (C)  the  ability  of  electric
vehicles to successfully  compete with vehicles powered with internal combustion
engines.

         Uncertainty  of Product  Market  and  Acceptance;  Changed  Legislative
Climate.   Because  vehicles  powered  by  internal   combustion  engines  cause
pollution,  there is significant public pressure in Europe and Asia, and enacted
or pending  legislation in the United States at the federal level and in certain
states,  to promote or mandate  the use of vehicles  with no tailpipe  emissions
("zero  emission   vehicles")  or  reduced  tailpipe  emissions  ("low  emission
vehicles").  To date,  substantially  all zero  emission  vehicles  designed and
produced have been electric  vehicles,  and most low emission vehicles have been
powered by natural gas or have been hybrid  vehicles  using two or more powering
systems. The Corporation  believes that legislation  requiring or promoting zero
emission  vehicles or low emission vehicles is necessary to create a significant
commercial  market for electric  vehicles.  There can be no assurance,  however,
that further legislation will be enacted or that current legislation will not be
repealed or amended,  or that a different  form of zero emission or low emission
vehicle will not be invented, developed and produced, and achieve greater market
acceptance than electric vehicles.  Following the state and federal elections in
November 1994, the Corporation  believes that the changed legislative climate in
the United  States may result in  extensions,  modifications  or  reductions  of
current  federal and state  legislation,  mandates and potential tax  incentives
which  could  adversely   affect  the   Corporation's   business   prospects  if
implemented.  In April 1996,  California  altered its  mandate  requirements  by
extending the implementation date and establishing voluntary compliance.

         Competition  .  There  are  many  companies,  including  several  major
automobile companies and electronics firms, actively engaged in the research and
development of electric vehicles.  Many have far greater resources and marketing
abilities than the  Corporation.  Although the Corporation  believes it has sold
more electric vehicles than any other company in the United States, there can be
no  assurance  that the  Corporation  will retain this  advantage  or be able to
compete in the future with the  companies in or entering  the  electric  vehicle
market.  The major automobile  manufacturers  have a distinct advantage over the
Corporation   if  they   decide  to  compete   with  the   Corporation   in  the
retrofit/conversion  EV  business,  should  the  Corporation  continue  in  this
business.  Their  vast  resources  would  pose a  distinct  disadvantage  to the
Corporation.  Direct competition from the "Big Three" could possibly inhibit the
Corporation  from obtaining the vehicles it needed without  additional cost. The
Corporation,  believes,  however,  that  the  niche  fleet  market  which it has
targeted is presently too small for the large automobile manufacturers to pursue
on a competitive basis with the Corporation.

         Dependence On Suppliers/Outside Parties. Certain components used in the
Corporation's  electric  vehicles are  available  only from a limited  number of
sources.  If such sources are unable or unwilling for any reason to  manufacture
and sell these unique components, the Corporation at the present time would have
no other  supplier.  Additionally,  the  Corporation  intends to  develop  close
relationships with other suppliers of propriety  components,  such as batteries,
which the  Corporation  will  integrate  into its  retrofitted  and OEM electric
vehicles.  The  Corporation's  reliance on these limited source  suppliers could
cause shortages of certain key  components,  or the inability to find comparable
replacements at any cost or time could  significantly  impair the  Corporation's
financial performance and relationships with its customers.

         Rapid  Technological  Change . The Corporation's  existing products are
designed  for use  with,  and are  dependent  upon,  existing  electric  vehicle
technology.  As technologies  change,  and subject to the Corporation's  limited
available  resources,  the Corporation plans to upgrade or adapt its products in
order to continue to provide products with the latest technology. However, there
can be no assurance  that the  Corporation  will be able to avoid  technological
obsolescence of its products or that the Corporation's  research and development
efforts  will  be  able  to  adapt  to  changes  in  or  create  the   necessary
"leading-edge"  technology to stay competitive.  Further proprietary  technology
development  by  others  could  prohibit  the  Corporation  from  using  its own
technology.

         Minimal  Barriers  to  Entry  .  Other  than  its  trademarks  and  its
distribution arrangements with suppliers of subcomponents,  the Corporation does
not presently  license or own any  proprietary  technology and,  therefore,  has
created  little or no barrier to entry for  competitors  other than the time and
significant  expense  required to assemble and develop  similar  production  and
design  capabilities.  Competitors of the  Corporation  may enter into exclusive
arrangements  with current or potential  suppliers for the Corporation,  thereby
potentially  giving such  competitors a competitive  edge which the  Corporation
might not be able to overcome.

         No Dividends.  To date, the  Corporation  has not paid any dividends on
its Common Stock or Preferred Stock and does not intend to declare any dividends
in the foreseeable future on its Stock.

         Preferred Stock  Preferences.  The Corporation's  Series A and Series B
Preferred Stock has preference over the Common Stock with respect to the payment
of dividends and the  distribution  of assets in the event of a  liquidation  or
dissolution  of the  Corporation.  In  addition,  the Board of  Directors of the
Corporation also has the authority to issue additional preferred stock in one or
more  series and to fix the voting and other  powers,  designations,  dividends,
preferences  and  relative  participation,   optional,   conversion,   exchange,
redemption  and  other  special  rights  and   qualifications,   limitations  or
restrictions  thereon of any such series 

of preferred  stock.  Such rights could adversely  affect the existing or future
rights of the shares of Common  Stock  with  respect  to the  existing  Series A
Preferred Stock and as to any new series of Preferred  Stock. In connection with
the  restructuring of the  Corporation's  unsecured debt, the Corporation  shall
issue shares of Series B Preferred Stock that will have certain preferences over
the Common Stock and the Series A Preferred  Stock with respect to dividends and
the  distribution  of assets in the event of a liquidation or  dissolution.  See
Risk Factors -Debt Restructuring.

         Shares  Eligible for Future Sale. No  prediction  can be made as to the
effect,  if any, that substantial and significant  sales of new shares of Common
Stock or the availability of such shares for sale will have on the market prices
prevailing from time to time.  Nevertheless,  the possibility  that  substantial
amounts  of  Common  Stock  may be  sold  in the  future  may  adversely  affect
prevailing  prices  for the  Corporation's  Common  Stock and could  impair  the
Corporation's   ability  to  raise  capital  through  the  sale  of  its  equity
securities.

         Leverage;  Cash Flow. Any indebtedness being assumed by the Corporation
in connection with its financing activities poses significant risks to potential
investors,  particularly in view of the Corporation's loss history.  The ability
of the  Corporation  to  generate  sufficient  cash flow to make  payments  with
respect to any debt of the Corporation  will depend upon the future  performance
of the  Corporation,  which will be subject to factors beyond the  Corporation's
control. No assurance can be given that the Corporation will be able to fund its
working  capital needs and to satisfy its  principal  and interest  requirements
from internally generated funds.

         Creditor Claims and Litigation/Shareholder  Claims. The Corporation has
been  threatened  with  litigation  from  certain  of  its   shareholders  if  a
restructuring  of the  shareholders'  investment  along the lines set forth in a
letter from their attorneys dated April 27, 1995 is not reached (a copy of which
has been  delivered  to and is  available  for review by the  Purchaser  and its
counsel upon request).  The informal Creditors  Committee of the Corporation has
recommended a voluntary moratorium on pursuing unsecured claims (a copy of which
is available for review by the Purchaser and its counsel upon request). There is
no guaranty,  however, that this moratorium will continue. In addition,  certain
unsecured  creditors have  nevertheless  filed or threatened to file lawsuits if
they are not paid. As of October 30, 1995,  lawsuits had been filed by unsecured
creditors  for claims  representing  an aggregate of  approximately  $650,000 in
principal and interest.

                                     WARRANT

THE  SECURITIES  REPRESENTED  BY OR  UNDERLYING  THIS  INSTRUMENT  HAVE NOT BEEN
REGISTERED  UNDER THE  SECURITIES  ACT OF 1933, AS AMENDED,  OR QUALIFIED  UNDER
APPLICABLE  STATE  SECURITIES  LAWS AND HAVE BEEN TAKEN FOR INVESTMENT  PURPOSES
ONLY  AND NOT  WITH A VIEW TO OR FOR SALE IN  CONNECTION  WITH ANY  DISTRIBUTION
THEREOF. THE SECURITIES MAY NOT BE SOLD OR OTHERWISE  TRANSFERRED IN THE ABSENCE
OF SUCH  REGISTRATION  AND  QUALIFICATION  WITHOUT AN OPINION OF COUNSEL FOR THE
HOLDER,  CONCURRED  IN BY COUNSEL FOR THE  COMPANY  THAT SUCH  REGISTRATION  AND
QUALIFICATION ARE NOT REQUIRED.

THE  SECURITIES  REPRESENTED  BY OR UNDERLYING  THIS  INSTRUMENT  ARE SUBJECT TO
RESTRICTIONS  ON  TRANSFER  PURSUANT  TO  REGULATION  S  PROMULGATED  UNDER  THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,  TRANSFERRED,  ASSIGNED
OR HYPOTHECATED EXCEPT PURSUANT TO THE PROVISIONS UNDER REGULATION S OR PURSUANT
TO REGISTRATION  UNDER SUCH ACT OR PURSUANT TO AN AVAILABLE  EXEMPTION FROM SUCH
REGISTRATION.

THE WARRANTS AND WARRANT  SHARES HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), AND (I) THE WARRANTS AND THE WARRANT SHARES
MAY NOT BE EXERCISED,  OFFERED OR SOLD BY OR ON BEHALF OF U.S. PERSONS, (II) THE
WARRANTS MAY NOT BE EXERCISED IN THE UNITED STATES AND (III) THE WARRANT  SHARES
MAY NOT BE  DELIVERED  IN THE UNITED  STATES  UNLESS,  IN EACH CASE,  THERE IS A
REGISTRATION  STATEMENT IN EFFECT  COVERING  THE WARRANTS AND WARRANT  SHARES OR
THERE IS AVAILABLE AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT.

THE  SECURITIES  REPRESENTED  BY OR UNDERLYING  THIS  INSTRUMENT  ARE SUBJECT TO
CERTAIN  RESTRICTIONS  ON  TRANSFER  SET  FORTH  IN  THAT  CERTAIN  MAY 1,  1996
SUBSCRIPTION AGREEMENT BETWEEN THE ORIGINAL HOLDER HEREOF AND THE COMPANY.

NO. SERIES C-____
                                                           ______________ SHARES

               CASHLESS EXERCISE WARRANT TO PURCHASE COMMON STOCK

         U.S.  ELECTRICAR,  INC., a California  corporation (the "Corporation"),
hereby grants to  _______________________  (the "Holder"), the right to purchase
from the Corporation  _________________________________ (________) shares of the
common stock of the Corporation (the "Warrant Shares"), subject to the terms and
conditions set forth below.  This Warrant is one of a duly authorized  series of
Warrants  of the  Corporation  (which  Warrants  are  identical  except  for the
variations  necessary  to express  the name of the Holder and number of "Warrant
Shares"),  which Warrants together are designated  "Series C Warrants"  acquired
pursuant  to the terms and  conditions  set  forth in that  certain  May 1, 1996
Subscription Agreement (the Subscription Agreement").

         1.  TERM.  This  Warrant  may be  exercised  at any time after the date
hereof through May 1, 1997 (the  "Exercise Period").

         2.  PURCHASE   PRICE.   The  purchase  price  for  each  share  of  the
Corporation's common stock purchasable  hereunder shall be Thirty Cents ($0.30),
subject to  adjustment  as  provided in Section 8 below (the  "Warrant  Exercise
Price").

         3.  EXERCISE OF WARRANT.  This  Warrant may be exercised in whole or in
part (except for a cashless exercise which shall require exercise in full) , but
not for less than one hundred thousand  (100,000) Warrant Shares (or such lesser
number of Warrant  Shares as may at the time of exercise  constitute the maximum
number  exercisable)  and in excess of 100,000  Warrant  Shares in increments of
10,000  Warrant  Shares.  It is  exercisable,  subject  to the  satisfaction  of
applicable  securities  laws,  at any time  during  the  Exercise  Period by the
surrender of the Warrant to the  Corporation  at its principal  office  together
with the Notice of Exercise annexed hereto duly completed and executed on behalf
of the  Holder,  accompanied  by payment in full of the amount of the  aggregate
purchase price of the Warrant Shares in immediately  available funds,  except if
exercised under the cashless  exercise option as provided below. The Corporation
agrees  that  the  Warrant  Shares  so  purchased  shall  be  issued  as soon as
practicable thereafter,  and that the Holder shall be deemed the record owner of
such  Warrant  Shares as of and from the close of  business on the date on which
this Warrant  shall be  surrendered,  together  with payment in full as required
above.  It shall be a condition  to the exercise of this Warrant that the Holder
or any transferee  hereof certify to the  Corporation,  at the time of exercise,
either that he or it is not a U.S.  Person (as defined in Regulation S under the
Securities Act of 1933, as amended (the "Securities  Act") and that this Warrant
is not being exercised on behalf of a U.S.  Person,  or to provide an opinion of
counsel that the Warrant and the Warrant  Shares to be delivered  upon  exercise
thereof have been registered  under the Securities Act or that an exemption from
the registration  requirements of the Securities Act is available. It shall be a
further  condition  to the  exercise of this Warrant that the Warrant may not be
exercised  in the United  States and the Warrant  Shares may not be delivered to
the United States absent  registration  under the Securities Act or an available
exemption from registration.

         4. CASHLESS EXERCISE OPTION.  Notwithstanding the foregoing,  if on the
date of exercise  the "Fair  Market  Value" of one Warrant  Share is equal to or
greater  than twice the  Warrant  Exercise  Price and during  the  preceding  20
trading  days prior to the date of  exercise  under  this  Warrant  the  average
trading  volume  was in  excess  of  100,000  shares  per  day,  then in lieu of
exercising this Warrant for cash, the Holder may elect to receive Warrant Shares
equal to the value of this  Warrant (or equal to the value of the portion of the
Warrant  Shares thereof being  cancelled)  which shall be that number of Warrant
Shares equal to the quotient  obtained by dividing (Z) the product obtained when
(i) the number of Warrant Shares being exercised/cancelled under this Warrant is
multiplied  by (ii) the value of one  Warrant  Share for which  this  Warrant is
being  cancelled on the exercise date  (determined  by  subtracting  the Warrant
Exercise  Price for one Warrant Share on the exercise date from the "Fair Market
Value" (as  hereinafter  defined) of one Warrant Share on the exercise  date) by
(ZZ) the Warrant  Exercise  Price for one  Warrant  Share on the  exercise  date
illustrated as follows:

X = Y(A-B)
    ------
      B

Where             X = the  number of  Warrant  Shares to be issued to Holder
                  Y = the number of Warrant Shares being  exercised/cancelled 
                      under  this Warrant 
                  A = the "Fair Market  Value" of one Warrant Share on the  date
                      of  exercise 
                  B =  Exercise  Price on the date of  exercise

Fair Market Value of one share of a Warrant Share shall mean:

                                      -2-

         A. If the Corporation's Common Stock is listed on a national securities
exchange or is quoted on the National  Association of Securities  Dealers,  Inc.
Automated Quotation/ National Market System (NASDAQ/NMS), then the average price
of all of the  closing  or last sales  prices,  respectively,  reported  for the
twenty (20) trading days immediately preceding the exercise date.

         B. If the  Corporation's  Common  Stock  is not  listed  on a  national
securities   exchange   or   quoted  on   NASDAQ/NMS,   but  is  traded  in  the
over-the-counter  market,  then the  average  price  of all of the  mean  prices
between the closing bid and asked prices of the  Corporation's  publicly  traded
stock as listed and traded on the NASDAQ  electronic  bulletin  board during the
twenty (20) trading days immediately preceding the exercise date.

         In the  event  of a  cashless  exercise,  the  entire  Warrant  must be
surrendered,  and no new Warrant  shall be issued.  In no event shall a cashless
exercise  entitle the Holder to exercise more than the Warrant  Shares set forth
on page 1 of this Warrant, less any number previously exercised.

         5. WARRANT CONFERS NO RIGHTS OF SHAREHOLDER.  The Holder shall not have
any rights as a shareholder of the Corporation with regard to the Warrant Shares
prior to actual exercise resulting in the purchase of the Warrant Shares.

         6. HOLDER  REPRESENTATIONS  AND WARRANTIES.  The Holder  represents and
warrants to the Corporation that:

                  A.   PURCHASE  FOR  OWN   ACCOUNT/REGULATION   S.  The  Holder
understands  that neither this Warrant nor the Warrant Shares  issuable upon the
exercise of this Warrant have been registered  under the Securities Act of 1933,
as amended (the "Securities  Act"), or any state securities laws, by reason of a
specific exemption from the registration  provisions of the Securities Act which
depends  upon,  among other  things,  the bona fide nature of the  investment as
expressed  herein.  The Holder is acquiring  this Warrant for investment for its
own  account,  and not with a view to, or for  resale in  connection  with,  any
distribution thereof, and it has no present intention of selling or distributing
this Warrant.  The Holder agrees that any Warrant Shares  issuable upon exercise
of this  Warrant will be acquired for  investment  for its own account,  and not
with a view to, or for resale in connection with, any distribution  thereof, and
such  Warrant  Shares  will  not be  registered  under  the  Securities  Act and
applicable  state  securities  laws and that such Warrant  Shares may have to be
held indefinitely unless they are subsequently registered or qualified under the
Securities Act and applicable  state  securities laws or, based on an opinion of
counsel  reasonably  satisfactory  to the  Corporation,  an exemption  from such
registration and qualification is available. The Holder further understands that
the  Corporation is relying on the rules and  regulations  governing  offers and
sales  made  outside  the  United  States  to  non-"U.S.  Persons"  pursuant  to
Regulation  S under the  Securities  Act.  The  Holder,  by  acceptance  hereof,
consents to the  placement  of the  following  restrictive  legends,  or similar
legends,  on each  certificate to be issued to the Holder by the  Corporation in
connection with the issuance of such Warrant Shares:

                                      -3-

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE  SECURITIES ACT OF 1933, AS AMENDED,  OR QUALIFIED  UNDER ANY
         STATE  SECURITIES  LAW, AND MAY NOT BE SOLD,  TRANSFERRED,  ASSIGNED OR
         HYPOTHECATED  UNLESS (A) THERE IS AN EFFECTIVE  REGISTRATION  STATEMENT
         UNDER  SUCH ACT OR LAWS  COVERING  SUCH  SECURITIES,  OR (B) THE HOLDER
         RECEIVES  AN  OPINION  OF  COUNSEL  FOR THE  HOLDER  OF THE  SECURITIES
         SATISFACTORY  TO THE  CORPORATION,  STATING  THAT SUCH SALE,  TRANSFER,
         ASSIGNMENT  OR  HYPOTHECATION  IS  EXEMPT  FROM  THE  REGISTRATION  AND
         PROSPECTUS  DELIVERY  REQUIREMENTS  OF SUCH  ACT AND THE  QUALIFICATION
         REQUIREMENTS UNDER APPLICABLE STATE LAW.

         THE  SECURITIES   REPRESENTED  BY  THIS   CERTIFICATE  ARE  SUBJECT  TO
         RESTRICTIONS ON TRANSFER PURSUANT TO REGULATION S PROMULGATED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED,  AND MAY NOT BE SOLD,  TRANSFERRED,
         ASSIGNED  OR  HYPOTHECATED  EXCEPT  PURSUANT  TO THE  PROVISIONS  UNDER
         REGULATION S OR PURSUANT TO REGISTRATION  UNDER SUCH ACT OR PURSUANT TO
         AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.

         THE SECURITIES  REPRESENTED HEREBY ARE SUBJECT TO CERTAIN  RESTRICTIONS
         ON TRANSFER  SET FORTH IN THAT CERTAIN MAY 1, 1996  INVESTMENT  BANKING
         AGREEMENT BETWEEN THE ORIGINAL HOLDER HEREOF AND THE COMPANY.

                  B.  ACCESS  TO DATA.  The  Holder  has had an  opportunity  to
discuss the  Corporation's  business,  management and financial affairs with its
management and to obtain any additional  information which the Holder has deemed
necessary or  appropriate  for deciding  whether or not to purchase this Warrant
and  the  Warrant  Shares,  including  the  information  provided  or  otherwise
disclosed under the  Subscription  Agreement.  The Holder  acknowledges  that no
other  representations  or  warranties,  oral or written,  have been made by the
Corporation or any agent thereof except as set forth in this Agreement.

                  C. NO  FAIRNESS  DETERMINATION.  The  Holder is aware  that no
federal,  state or other agency has made any finding or  determination as to the
fairness of the investment,  nor made any  recommendation or endorsement of this
Warrant or the Warrant Shares.

                  D. KNOWLEDGE AND EXPERIENCE. The Holder has such knowledge and
experience in financial and business  matters,  including  investments  in other
start-up companies, that it is capable of evaluating the merits and risks of the
investment  in this Warrant and the Warrant  Shares,  and it is able to bear the
economic risk of such  investment.  Further,  the Holder has such  knowledge and
experience in financial and business matters that he is capable of utilizing the
information  made  available  to him in  connection  with the  offering  of this
Warrant  and the  Warrant  Shares,  of  evaluating  the  merits  and risks of an
investment  in this  Warrant  and the  Warrant  Shares and of making an informed
investment decision with respect to this Warrant and the Warrant Shares.

                                      -4-

                  E. LIMITED  PUBLIC  MARKET.  The Holder is aware that there is
currently a very limited  "over-the-counter" public market for the Corporation's
registered securities and that the Corporation became a "reporting issuer" under
the Securities  Exchange Act of 1934, as amended,  on January 27, 1995. There is
no guarantee that a more  established  public market will develop at any time in
the future.  The Holder understands that this Warrant and the Warrant Shares are
all  unregistered  and may not  presently  be sold in even this  limited  public
market.  The Holder  understands that this Warrant and the Warrant Shares cannot
be readily sold or liquidated in case of an emergency or other  financial  need.
The Holder has  sufficient  liquid  assets  available  so that the  purchase and
holding of this Warrant and the Warrant Shares will not cause it undue financial
difficulties.

                  G.  INVESTMENT  EXPERIENCE.   The  Holder  is  an  "accredited
investor" as that term is defined in Regulation D promulgated  by the Securities
and Exchange  Commission.  The term  "accredited  investor"  under  Regulation D
refers to:

         (1) A person or entity who is a director  or  executive  officer of the
         Corporation;

         (2) Any bank as defined in Section  3(a)(2) of the  Securities  Act, or
         any savings and loan  association  or other  institution  as defined in
         Section  3(a)(5)(A)  of  the  Securities  Act  whether  acting  in  its
         individual  or  fiduciary  capacity;  any  broker or dealer  registered
         pursuant  to  Section  15 of the  Exchange  Act;  insurance  company as
         defined in Section  2(13) of the  Securities  Act;  investment  company
         registered  under the  Investment  Company  Act of 1940;  or a business
         development  company as defined in Section  2(a)(48) of that Act; Small
         Business  Investment  Company  licensed  by  the  U.S.  Small  Business
         Administration  under  Section  301(c)  or (d) of  the  Small  Business
         Investment Act of 1958; any plan established and maintained by a state,
         its political subdivisions, or any agency or instrumentality of a state
         or its political subdivisions for the benefit of its employees, if such
         plan has total assets in excess of  $5,000,000;  employee  benefit plan
         within the meaning of the Employee  Retirement  Income  Security Act of
         1974,  if the  investment  decision  is  made by a plan  fiduciary,  as
         defined in Section 3(21) of such Act,  which is either a bank,  savings
         and loan  association,  insurance  company,  or  registered  investment
         adviser,  or if the employee benefit plan has total assets in excess of
         $5,000,000 or, if a self-directed  plan, with investment  decision made
         solely by persons that are accredited investors;

         (3) Any  private  business  development  company  as defined in Section
         202(a)(22) of the Investment Advisers Act of 1940;

         (4) Any  organization  described  in Section  501(c)(3) of the Internal
         Revenue Code, corporation,  Massachusetts or similar business trust, or
         partnership,  not formed for the  specific  purpose of  acquiring  this
         Warrant  or  the  Warrant  Shares,  with  total  assets  in  excess  of
         $5,000,000;

         (5) Any natural person whose  individual net worth,  or joint net worth
         with  that  person's  spouse,  at  the  time  of his  purchase  exceeds
         $1,000,000;

                                      -5-

         (6) Any  natural  person  who had an  individual  income  in  excess of
         $200,000  during each of the  previous  two years or joint  income with
         that  person's  spouse in excess of $300,000 in each of those years and
         has a reasonable  expectation  of reaching the same income level in the
         current year;

         (7) Any trust,  with total assets in excess of  $5,000,000,  not formed
         for the  specific  purpose of  acquiring  this  Warrant or the  Warrant
         Shares,  whose  purchase is directed by a person who has such knowledge
         and experience in financial and business  matters that he is capable of
         evaluating the merits and risks of the prospective investment; or

         (8) Any  entity  in  which  all of the  equity  owners  are  accredited
         investors.

         As used in this Section 6(g),  the term "net worth" means the excess of
         total assets over total  liabilities.  For the purpose of determining a
         person's net worth,  the  principal  residence  owned by an  individual
         should  be  valued  at  fair  market  value,   including  the  cost  of
         improvements,  net of  current  encumbrances.  As used in this  Section
         6(g),  "income"  means actual  economic  income,  which may differ from
         adjusted  gross  income  for  income  tax  purposes.  Accordingly,  the
         undersigned  should  consider  whether  it should add any or all of the
         following items to its adjusted gross income for income tax purposes in
         order to reflect  more  accurately  its  actual  economic  income:  Any
         amounts attributable to tax-exempt income received, losses claimed as a
         limited  partner in any  limited  partnership,  deductions  claimed for
         depletion,  contributions  to an  IRA or  Keogh  retirement  plan,  and
         alimony payments.

                  H.       RESTRICTIONS ON TRANSFER RE REGULATION S.

                         (1) NOT A "U.S.  PERSON." The Holder  hereby  certifies
that (i) it is not a "U.S.  Person" as defined  under Rule 902,  Section  (o) of
Regulation S promulgated  under the  Securities Act (a copy of which is attached
hereto as Schedule 2) and is not  acquiring  this Warrant or the Warrant  Shares
for the account or benefit of any U.S.  Person,  and (ii) it is  acquiring  this
Warrant and the Warrant  Shares in an "offshore  transaction"  as defined  under
Section (i) of such Rule 902 (a copy of which is attached hereto as Schedule 3).

                         (2) TRANSFER RESTRICTIONS. The Holder shall not attempt
to have  registered  any transfer of this Warrant or the Warrant Shares not made
in  accordance  with the  provisions  of  Regulation S. In addition to any other
restrictions  on  transfer  set  forth in this  Warrant,  the  Holder  agrees to
transfer  this  Warrant or the Warrant  Shares only (i) in  accordance  with the
provisions of Regulation S, pursuant to  registration  under the Securities Act,
or pursuant to an available exemption from registration,  and (ii) in accordance
with any  applicable  state  securities  laws.  Unless so  registered  or exempt
therefrom,  such transfer  restrictions  shall include but not be limited to and
the Holder warrants and represents the following:

                              (I) The Holder  shall not sell this Warrant or the
Warrant  Shares  publicly or  privately,  or through  any short  sale,  or other
hedging transaction to any U.S. Person,  whether directly or indirectly,  or for
the  account  or  benefit of any such U.S.  Person  for the  restrictive  period
mandated  by  Regulation  S after the  purchase  of this  Warrant or the Warrant
Shares, as applicable, unless registered or exempt from registration;

                                      -6-

                              (II) Any other  offer or sale of this  Warrant  or
the Warrant Shares shall be made only if (A) during the  restrictive  period any
subsequent  purchaser  certifies in writing that it is not a U.S.  Person and is
not acquiring  this Warrant or the Warrant  Shares for the account or benefit of
any U.S.  Person,  or (B) after the  restrictive  period  this  Warrant  and the
Warrant Shares are purchased in a transaction that did not require  registration
under the Securities Act and applicable Blue Sky laws; and

                              (III)  Any  transferee  of  this  Warrant  or  the
Warrant  Shares  shall  agree in writing to resell  this  Warrant or the Warrant
Shares,  as applicable,  only in accordance with the provisions of Regulation S,
pursuant to  registration  under the Securities Act, or pursuant to an available
exemption from registration.

                         (3)  RESTRICTIONS ON RESALES IN THE UNITED STATES.  The
Holder understands and acknowledges that the Securities Act prohibits resales of
securities  in the United States  except  pursuant to an effective  registration
statement or an exemption  from  registration  for which the  securities and the
Holder  holding  such   securities   qualifies.   The  Holder   understands  and
acknowledges the requirements for qualifying for an exemption from  registration
afforded by Section 4 of the  Securities  Act and that there can be no assurance
that the Holder will be able to qualify for such an exemption from registration.

         7.  RESERVATION OF SHARES.  The Corporation  agrees at all times during
the Exercise Period to have authorized and reserved,  for the exclusive  purpose
of issuance and delivery upon exercise of this Warrant,  a sufficient  number of
shares of its common stock to provide for the exercise of the rights represented
hereby.

         8.   ADJUSTMENT  FOR   RE-CLASSIFICATION   OF  CAPITAL  STOCK.  If  the
Corporation  at any time  during the  Exercise  Period  shall,  by  subdivision,
combination or re-classification of securities,  change any of the securities to
which  purchase  rights  under this  Warrant  exist under the same or  different
number of  securities  of any class or classes,  this Warrant  shall  thereafter
entitle the Holder to acquire such number and kind of  securities  as would have
been  issuable  as a result of such change  with  respect to the Warrant  Shares
immediately prior to such subdivision,  combination,  or  re-classification.  If
shares of the Corporation's common stock are subdivided into a greater number of
shares of common stock,  the purchase price for the Warrant Shares upon exercise
of this Warrant shall be proportionately reduced and the Warrant Shares shall be
proportionately increased; and conversely, if shares of the Corporation's common
stock are combined into a smaller number of common stock shares, the price shall
be  proportionately  increased,  and the Warrant Shares shall be proportionately
decreased.

         9. PUBLIC OFFERING  LOCK-UP.  For a period of up to  one-hundred-eighty
(180)  days (the  "Stand-off  Period"),  Holder  shall not if  requested  by the
Corporation at any time in contemplation of a public registration,  sell, pledge
or  otherwise  transfer  any  Warrant  Shares  (or any  other  shares  exchanged
therefor).  Notwithstanding  the foregoing,  the  Corporation  may exercise this
public offering lock-up only one time.

                                      -7-

         10. LOSS, THEFT,  DESTRUCTION OR MUTILATION OF WARRANT. Upon receipt by
the Corporation of evidence  reasonably  satisfactory to it of the loss,  theft,
destruction  or mutilation of any Warrant or stock  certificate,  and in case of
loss, theft or destruction,  of indemnity or security reasonably satisfactory to
it,  and  upon  reimbursement  to the  Corporation  of all  reasonable  expenses
incidental thereto, and upon surrender and cancellation of such Warrant or stock
certificate,  if mutilated,  the Corporation will make and deliver a new Warrant
or stock certificate of like tenor and dated as of such cancellation, in lieu of
this Warrant or stock certificate.

         11. ASSIGNMENT. The Holder of this Warrant shall not assign or transfer
this Warrant or any of the Warrant  Shares  without the  transferee  meeting the
suitability  requirements set forth in Section 6 (above) and without the consent
of  the  Corporation  and  in  compliance  with  applicable  state  and  federal
securities  laws. In giving its consent,  the Corporation may request an opinion
of counsel reasonably  acceptable to it that such transfer is in compliance with
all applicable state and federal securities laws.

         12.  GOVERNING  LAW. This Warrant shall be governed by and construed in
accordance  with the laws of the State of  California  applicable  to  contracts
between  California  residents entered into and to be performed  entirely within
the State of California.

         13. NOTICES.  Any notice required or permitted under this Warrant shall
be given in writing and shall be deemed effectively given upon personal delivery
to the party to be  notified  by hand or  professional  courier  service  or for
mailings  from and to any address in North  America  (Canada,  United States and
Mexico)  five (5) days after  deposit  with the United  States Post  Office,  by
registered or certified  mail,  postage prepaid and addressed to the party to be
notified at the address indicated for such party in the Subscription  Agreement,
or at such other  address as such party may  designate by ten (10) days' advance
written notice to the other parties.

         14.  ATTORNEYS' FEES. If any action at law or in equity is necessary to
enforce or interpret the terms of this Warrant,  the  prevailing  party shall be
entitled to reasonable  attorneys' fees, costs and  disbursements in addition to
any other relief to which such party may be entitled.

         15.  AMENDMENTS.  Any terms of this  Warrant  may be  amended  with the
written  consent  of the  Corporation  and the  holders  of  Series  C  Warrants
representing  not less  than 67% of the  shares of Common  Stock  issuable  upon
exercise of all Series C Warrants.

Dated: May __, 1996       U.S. ELECTRICAR, INC.

                          By:_________________________
                                   (Signature)

                          ----------------------------
                              (Print Name & Title)

                                      -8-

                               NOTICE OF EXERCISE

TO:      U.S. ELECTRICAR, INC.

         (1) The  undersigned  hereby elects to purchase ______ shares of Common
Stock of Electricar,  Inc.,  pursuant to the terms of the attached Warrant,  and
tenders herewith payment of the purchase price for such shares in full.

         (2) In exercising  this Warrant,  the  undersigned  hereby confirms and
acknowledges  that the shares of Common Stock are being acquired  solely for the
account  of the  undersigned  and not as a  nominee  for any  other  party,  for
investment,  and that the undersigned will not offer,  sell or otherwise dispose
of any such shares of Common  Stock  except  under  circumstances  that will not
result in a violation of the Securities Act of 1933, as amended (the "Securities
Act"), including,  but not limited to, Regulation S promulgated  thereunder,  or
any state securities laws.

         (3) The undersigned hereby certifies that either (i) the undersigned is
not a U.S.  Person (as such term is defined in Regulation S under the Securities
Act), or (ii) the  undersigned  has delivered to the  Corporation  an opinion of
counsel to the effect that this  Warrant and the Warrant  Shares to be delivered
upon  exercise  thereof  have been  registered  under the  Securities  Act or an
exemption from such registration is available.

         (4) The  undersigned  further  certifies that this Warrant is not being
exercised  in the United  States and  understands  and agrees  that the  Warrant
Shares may not be delivered to the United States absent  registration  under the
Securities Act or an available exemption from such registration.

         (5) Please issue a certificate representing said shares of Common Stock
in the name of the undersigned.

         (6)  Please  issue a new  Warrant  for the  unexercised  portion of the
attached Warrant in the name of the undersigned.

                                     -----------------------
                                             (Name)

- - ------------------------             -----------------------
         (Date)                           (Signature)

                                      -9- 

Basic Info X:

Name: COMMON STOCK SUBSCRIPTION AGREEMENT
Type: Subscription Agreement
Date: June 14, 1996
Company: ENOVA SYSTEMS INC
State: California

Other info:

Date:

  • November 28 , 1995
  • December 15 , 1995
  • March 18 , 1996
  • 1996 11
  • March 25 , 1997
  • April 1995
  • August 1995
  • December 1995
  • January 2 , 1996
  • April 2 , 1996
  • January 31 , 1996
  • October 31 , 1995
  • three months of fiscal year 1996
  • fiscal year 1986
  • the fiscal years ended July 31 , 1993 , 1994
  • first six months of fiscal 1996
  • March 1995
  • November 1994
  • April 1996
  • April 27 , 1995
  • October 30 , 1995
  • May 1 , 1996
  • May 1 , 1997
  • January 27 , 1995

Organization:

  • INC. U.S. Electricar , Inc. San Francisco Executive Park 5 Thomas Mellon Circle Suite
  • Control the Voting of Securities on Behalf of Entity
  • Field of School Study Degree
  • Type of Year of Amount Corporation Investment Investment Invested
  • Sale of Shares
  • Issuance of Shares
  • Limited Public Market
  • Removal of Restrictive Legend
  • Federal and State
  • The International Monetary Fund
  • International Bank for Reconstruction and Development
  • Inter-American Development Bank
  • Asian Development Bank
  • African Development Bank
  • General Economic Conditions
  • Reevaluation of Business Plans
  • Board of Directors of the Corporation
  • Creditors Committee of the Corporation
  • Notice of Exercise
  • Warrant Exercise Price
  • Corporation 's Common Stock
  • National Association of Securities Dealers , Inc
  • National Market System
  • Securities and Exchange Commission
  • Small Business Investment Company
  • U.S. Small Business Administration
  • the State of California
  • United States Post Office
  • Print Name & Title
  • Common Stock of Electricar , Inc.

Location:

  • San Francisco Executive Park
  • Europe
  • Asia
  • U.S. ELECTRICAR
  • Massachusetts
  • California
  • North America
  • Canada
  • Mexico
  • United States

Money:

  • $ Number
  • thirty cents $ 0.30
  • $ 2,000,000
  • $ 22 million
  • $ 13,940,000
  • $ 11,331,000
  • $ 2,609,000
  • $ 444,000
  • $ 305,000
  • $ 735,000
  • $ 2.6 million
  • $ 18.5 million
  • $ 72,036,000
  • $ 69,580,000
  • $ 2 million to $ 3 million
  • $ 2,607,000
  • $ 25,021,000
  • $ 37,565,000
  • $ 863,000
  • $ 5,787,000
  • $ 4,400,000
  • $ 3,011,000
  • $ 650,000
  • $ 1,000,000
  • $ 200,000
  • $ 300,000
  • $ 5,000,000

Person:

  • Roy Kusumoto

Percent:

  • 75 %
  • 80 %
  • 81 %
  • 67 %