# ENER1 SERVICES
AGREEMENT

THIS
ENER1 SERVICES AGREEMENT (the Agreement) is made effective
October 20, 2004 (the Effective Date) by and between EnerDel,
Inc., a corporation organized and existing under the laws of Delaware
(Customer) and Ener1, Inc., a corporation organized and existing
under laws of the State of Florida (Provider). Customer and Provider are
collectively referred in this Agreement as the Parties and individually
as a Party.

# R E C I T A L S:

WHEREAS,
Customer is a new company  formed by the Provider and Delphi  Automotive  Systems,  LLC
("Delphi"); and

WHEREAS,
the Customer has certain management and administrative resource requirements that it will
not be able to meet internally for a period of time after its formation; and

WHEREAS,
the Provider has available to it the proper management and administrative resources to
meet the Customers requirements; and

WHEREAS,
Delphi, the Customer and the Provider have agreed that the Provider is the proper source
for the management and administrative resources needed and that it is in the best
interests of and fair to the Customer that the Customer enter into this Agreement for
obtaining such services.

NOW,
THEREFORE, in consideration of the premises, the mutual covenants and conditions
herein, and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged by all of the parties hereto, such parties hereby agree as
follows.

# ARTICLE 1

# TERMS AND CONDITIONS

# 1.1Definitions:

| | A.       
               Administrative Services means the Administrative Services
               described Schedule 2.1 hereto.
| | ----------------------------------------------------------------------------------------------------------------------------------

| | B.       
               Provider Managers means the managers employed by Provider who
               possess technical knowledge, skill and experience regarding the management
               disciplines covered by this Agreement in Schedule and who are providing
               Management Services to Customer in accordance with and subject to the terms and
               conditions of this Agreement.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | C.       
               Management Services means the services provided by Provider
               Managers to Customer in accordance with and subject to the terms and conditions
               of this Agreement. These Management Services are described in greater detail in
               Schedule 2.1, attached hereto and incorporated herein.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | D.       
               Month means a calendar month.
| | --------------------------------------------------------

| | E.        Year means
a calendar year (i.e., January 1st through           December 31st).
| | -------------------------------------------------------------------------------------------

# ARTICLE 2

# MANAGEMENT SERVICES

2.1
During the term of this Agreement, Provider will provide Customer with Management and
Administrative Services as described in the attached Schedule 2.1.

2.2
The selection of the specific Provider Manager(s) who will provide Management Services to
Customer will be determined solely by Provider. Provider represents, warrants and
covenants to and with Customer that the Provider Managers who will provide Management
Services to Customer will have the necessary expertise, knowledge and training to perform
in accordance with the terms and conditions of this Agreement.

-1-

2.3
Provider will, upon the request of Customer or at Providers initiative, from time to
time review the performance of the Provider Managers providing Management Services to
Customer. As a result of such review by and in the sole opinion of Provider, Provider may
remove or replace any particular Provider Manager(s) at any time after consultation with
Customer in order to ensure the proper delivery of Management Services Customer requires.
Provider will take into consideration Customers reasonable requests regarding the
removal or replacement of the Provider Managers, or any other changes to the Management
Services required, subject to the terms and conditions of this Agreement.

# ARTICLE 3

# FEES AND EXPENSES

3.1
Within seven (7) days after the end of each Month, Provider will present to Customer a
written invoice for the fees for the Management and Administrative Services involved, in
accordance with the rates set forth in Schedule 2.1 hereto, together
with reimbursable expenses incurred by Provider in providing Management and Administrative
Services to Customer during such Month. Provider will provide Customer with sufficient
additional documentation, upon receipt of Customers reasonable request, to verify
the accuracy of the fees and expenses for which Provider is invoicing Customer.

3.2 Customer will reimburse Provider
for expenses incurred by the Provider Managers or in respect to Administrative Services,
provided such expenses are necessary and ordinary business expenses which relate to the
delivery of the Management and Administrative Services, reasonable in amount, appropriate
under the circumstances and consistent with Customers reimbursement guidelines.
Customer may require reasonable documentation verifying the expenses. Reimbursable
expenses may include but are not limited to expenses incurred by the Provider Managers
while traveling to and from, for and on behalf of Customer.

3.3
Customer pays the fees and expenses invoiced in accordance with Section 3.1 within
thirty (30) days after receipt of Provider Managers invoice. If there are any
adjustments required to the amount payable hereunder that occur subsequently to such
payment, such adjustments shall be made in the next payment following such adjustments.

# ARTICLE 4

# NO WARRANTY;
INDEMNITY; RELATED MATTERS

4.1
No guarantee or warranty of any nature, express or implied, is extended by Provider or any
Provider Manager(s) with respect to the Management or Administrative Services to be
furnished to Customer by the Provider Manager(s) under this Agreement, including the
results to be obtained from such Management or Administrative Services, unless the
liability, loss or damages are caused by or arises out of the gross negligence, willful
misconduct or intentional wrongdoing of Provider or any Provider Manager(s).

4.2
Customer will indemnify, defend and hold harmless Provider, and Providers managers,
officers, directors, employees (including any Provider Managers), to the fullest extent
permitted by law, from and against any and all claims and liabilities of any nature
whatsoever by or in the name of Customer, or by any Customer managers, officers,
directors, employees, or Provider Managers, arising out of or alleged to result in any way
from this Agreement or from the furnishing of Management or Administrative Services to
Customer, except where a Provider employee is finally adjudicated or otherwise determined
to have engaged in intentional wrongdoing by failing, during the period of this Agreement,
to meet his or her obligations under this Agreement. The indemnification authorized by
this Section 4.2 is not exclusive of and will be in addition to any other rights granted
to those seeking indemnification under this Agreement, under any other agreement, or
otherwise. This indemnification provision will continue to apply to a person who has
ceased to be a manager, member, officer, director, Provider Manager or other employee of
Provider and will inure to the benefit of his or her heirs, executors and administrators.
Indemnification obligations under this provision will survive any termination of this
Agreement.

# ARTICLE 5

# TERM AND TERMINATION

5.1
This Agreement will have force and effect as of the Effective Date and will remain in
effect unless earlier terminated in writing upon sixty (60) days advance notice by either
Party to the other Party. The parties expect the duration of this Agreement to be six
months and will work together in good faith to ensure that the Customer has no further
need for the Management and Administrative Services hereunder at the end of such period.

-2-

5.2
This Agreement may be terminated by either Party by giving thirty (30) days notice to the
other Party in the event of failure by such Party to fulfill any of its obligations under
this Agreement; provided, however, that, if during the period of such notice the
other Party remedies such failure, this Agreement will continue with the same force and
effect as if such notice had not been given.

5.3
     This Agreement may also be terminated upon mutual written agreement of the Parties.

5.4
In the event of termination by either Party, Customers only obligation to Provider
will be to pay for fees and expenses due pursuant to Section 3.2 of this Agreement for
Management Services provided prior to termination.

5.5
The following Articles will survive any expiration or termination of this Agreement:
Article 4 (No Warranty; Indemnity; Related Matters); and Article 6 (General Provisions).

# ARTICLE 6

# GENERAL PROVISIONS

6.1
This Agreement constitutes the entire agreement by and between the Parties pertaining to
the subject matter of this Agreement and supersedes all prior and contemporaneous
agreements, understandings, negotiations and discussions, whether oral or written, of the
Parties with regard to this subject matter.

6.2
No amendment, supplement, modification, waiver or termination of this Agreement may be
implied or be deemed binding including, without limitation, any alleged waiver based on a
Partys knowledge of any inaccuracy in any representation or warranty contained in
this Agreement unless in writing and signed by the Party against which such amendment,
supplement, modification, waiver, or termination is asserted. No waiver of any of the
provisions of this Agreement may be deemed or will constitute a waiver of any other
provision hereof, whether or not similar. Nor may such waiver constitute a continuing
waiver, unless otherwise expressly therein provided.

6.3
The rights and obligations provided by this Agreement may not be assigned by either Party
without the prior written consent of both Parties, except that no consent of one Party is
required for an assignment of this Agreement by the other Party to an affiliate company.
Except as expressly provided in this Agreement, nothing in this Agreement is intended to
confer upon any person other than the Parties and any of the said affiliated company any
rights or remedies under or by reason of this Agreement. For the purpose of this
Agreement, an affiliate means a company directly or indirectly controlling, controlled by,
or under common control with another company. Control shall be established by ownership of
more than fifty percent (50%) of the stock entitled to vote for directors of the company
or persons performing a function similar to that of directors.

6.4
All notices, requests, demands and other communications which are required or may be given
under this Agreement will be in writing and will be deemed to have been duly given if
personally delivered, forwarded by overnight air express and receipted for by the
recipient or an agent of the recipient or mailed by registered or certified United States
mail, postage prepaid and return receipt requested, to the following addresses or to such
other address of a Party as will have been specified to the other Parties to this
Agreement by notice:

| | If to Provider, at:With a copy to:
If to Customer, at:With a copy to: | Ener1, Inc.
                                            500 W. Cypress Creek Rd., Suite 100
                                            Ft. Lauderdale, FL 33309
                                            Attn: Chief Executive OfficerEner1, Inc.
                                            500 W. Cypress Creek Rd., Suite 100
                                            Ft. Lauderdale, FL 33309
                                            Attn: General CounselEnerDel, Inc.
                                            500 W. Cypress Creek Rd., Suite 100
                                            Ft. Lauderdale, FL 33309
                                            Attn: Chief Executive OfficerEnerDel, Inc.
                                            500 W. Cypress Creek Rd., Suite 100
                                            Ft. Lauderdale, FL 33309"
                                            Attn: General Counsel
| | --------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-3-

6.5
The section headings in this Agreement are for reference purposes only and will not affect
in any way the meaning or interpretation of this Agreement.

6.6
This Agreement may be executed in two (2) counterparts, each of which will be deemed an
original, but all of which together constitute one and the same instrument.

6.7
This Agreement will be governed by and construed under the laws of the State of Florida,
United States of America.

6.8
Except for information required to be given by law including Internal Revenue Code or
state taxation statutes or by a court of competent jurisdiction, administrative or other
governmental order, no press release or other information relating to the transactions
contemplated by this Agreement may be made or given to the public except upon the written
agreement of Provider and Customer.

6.9
Unless specifically empowered by Customer, the Provider Manager(s) will not, during the
term of this Agreement, serve as the agent(s) or legal representative(s) of and will not
have any express or implied right or authority to assume or to create any obligation or
responsibility on behalf of or in the name of or to bind Provider in any manner. This
Agreement does not constitute either Party the agent or legal representative of the other,
and neither Party is granted any express or implied right or authority to assume or to
create any obligation or responsibility on behalf of or in the name of the other, or to
bind the other in any manner. No employee of either Party may in any sense be an employee
of the other.

6.10
The Parties to this Agreement will work together in good faith to remedy any dispute which
may arise in connection with this Agreement. In the event such a dispute cannot be
amicably resolved, such dispute will be submitted to binding arbitration in Oakland
County, Michigan, in accordance with the rules and regulations of the American Arbitration
Association then in effect. The party against whom a decision is made will pay the fees of
the American Arbitration Association.

-4-

The
Parties have executed this Agreement by their duly authorized representatives as of the
day and year indicated below.

| |  | Provider:Ener1, Inc.BY: /s/ Ronald N. Stewart
Ronald N. StewartExecutive Vice PresidentDate:_________________________Customer:EnerDel, Inc.BY: /s/ Kevin P. Fitzgerald
Kevin P. Fitzgerald Chief Executive OfficerDate:_________________________
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-5-

---

# SCHEDULE 2.1

# MANAGEMENT AND
ADMINISTRATIVE SERVICES

# MANAGEMENT SERVICES

|Management Service            | % of Provider Manager's Time | Monthly Charge
|----------------------------- | ---------------------------- | --------------
|Chief Executive Services      | 50%                          | $16,000       
|Information Technology        | 50%                          | $  4,000      
|Public Relations              | 25%                          | $  2,000      
|Human Resources               | 50%                          | $  3.000      
|Legal Advisory Services       | 25%                          | $  5,000      
|Financial/Accounting Services | 50%                          | $  8,000      
|TOTAL                         |                              | $38,000       
|                              |                              |               

# ADMINISTRATIVE SERVICES

|Administrative Service       | Monthly Charge
|---------------------------- | --------------
|Business Insurance Coverages | $30,000       
|Administrative Office Usage  | $  2,000      
|TOTAL                        | $32,000       
|                             |