TRANSITION SERVICES AGREEMENT

         THIS TRANSITION SERVICES AGREEMENT (this “ Agreement ”), dated as of October 20, 2004 (the “Effective Date ”), is entered into by and between DELPHI AUTOMOTIVE SYSTEMS LLC, a Delaware limited liability company ( “Delphi ”), and ENERDEL, INC. a Delaware corporation (“ EnerDel ”).

W I T N E S S E T H:

         WHEREAS, Delphi and Ener1, Inc. (“ Ener1 ”) are parties to a Formation, Subscription and Stockholders’ Agreement dated October 20, 2004 (the “ Formation Agreement ”), pursuant to which Delphi and Ener1 Have agreed to form EnerDel and Delphi has agreed to contribute certain assets of Delphi’s lithium battery systems business to EnerDel (the “ Assets ”); and

         WHEREAS, in order to facilitate the orderly transfer and continuation of use of the Assets by EnerDel for a transitional period not to exceed ninety (90) days after the Effective Date, Delphi has agreed to provide to EnerDel certain administrative and transfer services.

         NOW, THEREFORE, in consideration of the premises and the agreements of Delphi and EnerDel set forth below, Delphi and EnerDel agree as follows:

ARTICLE 1
INCORPORATION OF DEFINITIONS
FROM FORMATION AGREEMENT

        Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Formation Agreement.

ARTICLE 2
SERVICES

         2.1 Types of Services . For a period not to exceed ninety (90) days from the Effective Date (the “ Term ”), Delphi and/or any of its affiliates (collectively, the “ Delphi Group ” and each individually, a “ Service Provider ”) will provide to EnerDel, certain information, technology and telephone services (each singularly, a “ Service ”; collectively, “ Services ”), in each case: (i) only as described on Schedule A to this Agreement and subject to the limitations in Schedule A ; (ii) only to the extent necessary to support the continued operation of the Assets in the ordinary course of business; and (iii) only as offered by Delphi and the relevant members of the Delphi Group to their own operations at the time the applicable Services are provided to EnerDel. In no event shall Services include any services that are not expressly set forth on Schedule A to this Agreement. All services not expressly identified on Schedule A as included Services are hereinafter referred to as “ Excluded Services ”.

         2.2 Price of Services . Services shall be provided, and EnerDel shall pay Delphi for the Services, based on Cost. “ Cost ” shall mean the actual cost incurred by Delphi and/or the relevant Service Provider in providing the applicable Service, including any allocated overhead, as further specified in Schedule A.

EnerDel shall be responsible for payment of all value added tax, sales tax or other similar taxes payable in respect to the Services.

         2.3 Terms of Payment . Prior to the start of each month during the Term, EnerDel will pay Delphi the monthly estimated Cost for each Service as set forth on Schedule A . Within thirty (30) days after the end of the Term, Delphi will present a written statement to EnerDel detailing the actual Services used and Costs incurred by EnerDel for the Services used during the Term (the “ Actual Cost ”). If the Actual Cost exceeds the amount paid by EnerDel to Delphi under this Agreement during the Term (the “ Excess Amount ”), then within thirty (30) days of receipt of the statement from Delphi, EnerDel will pay the Excess Amount to Delphi. If the Actual Cost is less than the amount paid by EnerDel under this Agreement during the Term (the “ Deficiency Amount ”), then within thirty (30) days of the date of the statement from Delphi, Delphi will pay such Deficiency Amount to EnerDel.

         2.4 Indemnification . Delphi and each member of the Delphi Group shall be indemnified against, and defended and held harmless by EnerDel from, any losses, costs and expenses incurred by Delphi or any other member of the Delphi Group in connection with any and all claims, investigations, audits, actions, causes of action and suits arising from or relating to: (i) the Services provided pursuant to this Agreement; (ii) any actions taken by Delphi or any other member of the Delphi Group in connection with such Services or this Agreement; and (iii) EnerDel Employees (including death, personal injury and property damage); except to the extent that such Losses arose from the intentional malfeasance or gross negligence of Delphi or any other member of the Delphi Group.

         2.5 Performance of Excluded Services . EnerDel shall, at its sole cost and expense, perform all Excluded Services which are necessary to the continued operation of the Assets.

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ARTICLE 3
EnerDel EQUIPMENT, SOFTWARE AND OPERATIONAL FEATURES

        EnerDel shall: (i) maintain in good operating condition all equipment, software and operational features necessary to allow the applicable Service Provider to provide the Services in a manner consistent with the practice for such Services prior to the Effective Date; (ii) as soon as practicable after the applicable Service Provider has determined that an enhancement or modification is necessary (but in any event not later than thirty (30) days after receipt of notice thereof by EnerDel) enhance or modify, at EnerDel’s sole cost and expense, in a manner consistent with practices of the applicable Service Provider, such equipment, software and operational features as may be necessary to remain compatible with any systems used by the applicable Service Provider in connection with providing the Services; (iii) be solely responsible for all costs and expenses associated with migration off of Delphi systems, including, but not limited to, software licenses, data extraction and system deinstallation; and (iv) comply with any reasonable instructions provided by the applicable Service Provider that are necessary or desirable for the Service Provider to provide the Services in accordance with this Agreement. Subject to the foregoing, Delphi will cooperate with EnerDel to facilitate EnerDel’s migration off of the systems and services included in the Services. The parties will use commercially reasonable efforts to effect the assignment of applicable existing leases between Delphi and EDS for the computers contemplated by this Agreement to be used for the benefit of EnerDel, provided that the price and other terms of such leases are competitive.

ARTICLE 4
SOFTWARE

         4.1 Required Consents . EnerDel shall pay, or, at the request of the applicable Service Provider, reimburse the applicable Service Provider for, the cost of obtaining any consents, approvals or amendments to existing agreements of any Service Provider necessary to allow each Service Provider to provide Services to EnerDel (the “Consents”) and any fees or charges associated with the Consents or with any transfers of computer equipment leases or software licenses to EnerDel or any additional fees or changes associated with the provision of access and benefits to EnerDel to such equipment and software as part of the Services, including, without limitation, any additional license, sublicense, access or transfer fees.

         4.2 Additional Hardware and Software . No Service Provider shall be obligated to purchase, license, lease or otherwise obtain the right to use any hardware or software in addition to that used prior to the Effective Date in connection with providing the Services.

ARTICLE 5
DISCLAIMER

        THE SERVICES SHALL BE PROVIDED BY DELPHI AND THE MEMBERS OF THE DELPHI GROUP “AS-IS, WHERE-IS”, AND DELPHI AND THE MEMBERS OF THE DELPHI GROUP EXPRESSLY DISCLAIM TO THE FULL EXTENT PERMISSIBLE BY LAW ALL WARRANTIES, EXPRESS OR IMPLIED, AS TO THE NATURE OR STANDA