Sample Business Contracts

Letter - City of Austin and Global Electric

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Austin Energy              City of Austin
                           Austin's Community-Owned Electric Utility
                           Town Lake Center 721 Baron Springs Road Austin Texas
                           78704-1194  (512) 322-9800

February 27, 2004

Salim Rana
Chief Executive Officer
Suite 144
5001 East Bonanza Road
Las Vegas, NV 89110

Dear Salim:

I am  writing to follow up on our  meeting  at the  office of  Lithium  House on
February 16, 2004. As I mentioned,  the City of Austin and its municipally-owned
electric  utility,  Austin  Energy,  have been  exploring  the electric  vehicle
industry  in an  effort to  identify  a  possible  supplier  of  battery-powered
vehicles for the City's fleet.  Austin has two objectives in this  endeavor:  1)
reducing  atmospheric  emissions  from  vehicle  exhaust,  and  2)  substituting
electric  power for  petroleum.  Over the coming  years,  Austin  Energy will be
generating electricity  increasingly from renewable sources such as wind. At the
same time, America is becoming more dependent on imported oil.

We have  determined  that a practical  electric  vehicle must have a range of at
least  100  miles  per  full  battery  charge,  and  performance  comparable  to
conventional  internal  combustion  engines.  The life cycle cost of an electric
vehicle would have to be comparable to that of gasoline-fueled  vehicles, taking
into account total lifetime projected energy costs,  maintenance costs, and also
factoring in the value of zero emissions for electric  vehicles.  With regard to
clean air value of EVs, the Texas Emissions Reduction Program currently provides
a subsidy for zero-emission vehicles.

We are  delighted  that  Global  Electric  and  Lithium  House  have a plan  for
manufacturing  battery-powered  electric  vehicles that meet these  requirements
using the  demonstrated  capabilities  of the  lithium  battery.  We  envision a
collaboration  between the Austin Energy and Global Electric that would entail a
testing  phase  followed by a  multi-vehicle  demonstration  phrase.  During the
testing phase,  Austin Energy would purchase a single  battery-powered  electric
vehicle  from Global  Electric for use in our vehicle  fleet.  We will work with
Global  Electric  to  develop a  monitoring  program  to  measure  and  document
performance,  maintenance and other essential data.  These data would be used by
Global  Electric to refine  designs of future  vehicles.  Contingent  on success
during the testing phrase, the City of Austin would purchase additional vehicles
from Global  Electric.  The number and price are to be determined  following the
testing  phase.  Since these City of Austin  vehicles will be clearly  marked as
electric-powered,  we expect the  demonstration  phase to  attract  considerable
public  attention.  Needless to say,  growing  awareness of  practical  electric
vehicles would accelerate the creation of a private sector market for EVs.

At this time, we can express  interest in this plan,  but Austin Energy can only
commit funds for the test phase  following  approval of our coming year's budget
by the Austin City Council in September.  We are requesting funding for purchase
of an electric PT Cruiser using lithium batteries.  If the City Council approves
this budget  request,  we would  purchase  the vehicle  this  October.  It is my
understanding   that  Global  Electric   acknowledges  that  this  agreement  is
contingent  upon  approval  by the  Austin  City  Council in  September.  In the
meantime, Global Electric will proceed with the test phase of the plan.

Please call me if you have any questions. We look forward to working with Global
Electric  and  Lithium  House  to  demonstrate  the  value  of  electric-powered


/s/ Mark Kapner
Mark Kapner
Senior Strategy Planner