# Articles of Amendmentto the Articles of IncorporationofEner1, Inc.

# Certificate of
Designationsof Series B Preferred
Stock of Ener1, Inc.

(Pursuant to Section
607.0602 of the Florida Business
Corporation Act)

Series B Convertible
Preferred Stock.

1.       
          Designation. The designation of this class of Preferred Stock is
          Series B Convertible Preferred Stock (hereinafter, the Series
          B Preferred). The number of shares constituting the Series B Preferred
          shall be 180,000shares, with a liquidation value of $100.00 per share
          (the Liquidation Value).

2.       
          Rank. The Series B Preferred shall rank: (i) junior to any other class or
          series of capital stock of the Corporation hereafter created specifically
          ranking by its terms senior to the Series B Preferred; (ii) senior to the
          Corporations common stock, $.01 par value per share (the Common
          Stock); (iii) senior to any class or series of capital stock of the
          Corporation hereafter created not specifically ranking by its terms senior to
          the Series B Preferred (collectively, with the Common Stock, the Junior
          Securities); and (iv) pari passu with any class or series of
          capital stock of the Corporation hereafter created specifically ranking by its
          terms on parity with the Series B Preferred, in each case as to distribution of
          assets of the Corporation upon liquidation, dissolution or winding up of the
          Corporation, whether voluntary or involuntary (Parity Securities).

3.       
          Dividends.

| | (a)                        Dividends
shall be payable, to the extent allowed by applicable law and           available, on the
shares of outstanding Series B Preferred as follows:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (i)                        Semi-annually,
in arrears, on November 1 of each year during which the Series B           Preferred
shall be outstanding beginning November 1, 2005;
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)                        For
the first two years after issuance of the Series B Preferred,           payment-in-kind,
in the form of additional shares of Series B Preferred, at the           rate of Seven
Percent (7%) of the Liquidation Value.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii)                        Thereafter,
in the form of cash at the rate of Seven Percent (7%) of the Liquidation Value.
| | ------------------------------------------------------------------------------------------------------------------------

| | (iv)                        In
the event that any dividends are not paid because not legally allowable or           not
available, said dividends shall cumulate.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)                        Dividends
payable under this Section 3 shall be paid to the holders of record of           the
outstanding Series B Preferred as their names shall appear on the stock
          register of the Corporation on the record date fixed by the Board of Directors
          in advance of declaration and payment of each dividend.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4.       
          Voting. The Series B Preferred shall have no voting rights, except as
          required by law.

5.       
          Liquidation Preference. Upon any voluntary or involuntary liquidation,
          dissolution or winding up of the Corporation, holders of the Series B Preferred
          Stock shall be entitled to be paid, before any distribution or payment is made
          upon any Junior Securities, an amount in cash equal to the aggregate Liquidation
          Value of all such Series B Preferred Stock outstanding on the date of such
          liquidation, dissolution or winding up, and the holders of Series B Preferred
          Stock shall not be entitled to any further payment. If upon any such
          liquidation, dissolution or winding up of the Corporation, the
          Corporations assets (or proceeds thereof) to be distributed among the
          holders of the Series B Preferred Stock and any Parity Securities are
          insufficient to permit payment in full to such holders of the aggregate amount
          which they are entitled to be paid, then the entire assets to be distributed
          shall be distributed ratably among such holders based upon, in the case of
          holders of the Series B Preferred Stock, the aggregate Liquidation Value of the
          Series B Preferred Stock held by each such holder on the date of such
          liquidation, dissolution or winding up and, in the case of holders of any Parity
          Securities, the liquidation preference and accumulated and unpaid dividends
          which they are entitled to pursuant to such Parity Securities. The Corporation
          shall mail written notice of such liquidation, dissolution or winding up, not
          less than 10 days prior to the payment date statement therein, to each record
          holder of Series B Preferred Stock. Neither the consolidation or merger of the
          Corporation into or with any other Person or Persons, nor the reduction of the
          capital stock of the Corporation, shall be deemed to be a liquidation,
          dissolution or winding up of the Corporation within the meaning of this Section
          5.

6.       
          Conversion and Registration Rights. In the event that the Corporation
          shall file a registration statement with the U.S. Securities and Exchange
          Commission subsequent to the issuance of the Series B Preferred hereunder, the
          holder shall have the right to convert that number of Series B Preferred Stock
          equal to up to 50% of the then unredeemed aggregate Liquidation Value of said
          Series B Preferred Stock into Common Stock of the Corporation, solely for the
          purpose of including said Common Stock in said registration and selling said
          Common Stock in the offering for which said registration is filed. The
          conversion ratio shall be established by dividing the Liquidation Value per
          share of Series B Preferred by the Common Stock price established for the
          Corporations Common Stock in the offering. Said rights of conversion and
          registration shall be subject to the discretion of the underwriters as to the
          inclusion of said Common Stock in said offering and to the effectiveness of said
          registration statement.

7.       
          Redemption. The Series B Preferred shall be redeemable by the Corporation
          at any time in part or whole at 100% of the Liquidation Value, plus accrued and
          unpaid dividends. The Series B Preferred shall also redeemable at the option of
          the holder thereof once 100% of the Corporations 5% senior secured
          debentures due January 20, 2009 are liquidated through conversion, mandatory
          conversion, repurchase or payment by the Corporation. If such liquidation occurs
          in full before January 20, 2009, redemption shall be in twenty-four (24) equal
          monthly installments beginning thirty (30) days from the date of the
          Coporations receipt of notice from the holder, and continuing monthly
          thereafter. If such liquidation occurs on January 20,.2009, the redemption shall
          be in twelve (12) equal monthly installments, the first payment beginning thirty
          (30) days from January 20, 2009 and continuing monthly thereafter. In each case,
          said liquidation payments shall include all accrued and unpaid dividends. The
          Corporation shall notify the holder of the Series B Preferred Stock of the
          occurance of the liquidation.

8.       
          Protective Provisions. For so long as any of the Series B Preferred
          remains outstanding, the consent of the holder of the Series B Preferred will be
          required for any amendment or change of the rights, preferences, privileges or
          powers of Series B Preferred or the issuance of any other series of preferred
          stock of the Corporation which is senior to Series B Preferred.

9.       
          Identical Rights. Each share of Series B Preferred shall have the
          same relative rights and preferences as, and shall be identical in all respects
          with, all other shares of the Series B Preferred.

10.       
          Certificates. So long as any shares of the Series B Preferred are
          outstanding, there shall be set forth on the face or back of each stock
          certificate issued by the Corporation a statement that the Corporation shall
          furnish without charge to each shareholder who so requests, a full statement of
          the designation and relative rights, preferences and limitations of each class
          of stock or series thereof that the Corporation is authorized to issue and of
          the authority of the Board of Directors to designate and fix the relative
          rights, preferences and limitations of each series.  The foregoing Amendment was
adopted by the Board of Directors of the Corporation acting by written consent dated October 13, 2004, pursuant to
Sections 607.0821 and 607.0602 of the Florida Business Corporation Act.  Therefore, the number of votes cast for
the Amendment to the Corporation's Articles of Incorporation was Sufficient for approval.

IN
WITNESS WHEREOF, this Certificate of Designations is executed on behalf of the
Corporation this 15thday of October, 2004.

| |  | ENER1, INC.BY: /S/ Ronald N. Stewart
Ronald N. StewartExecutive Vice President,General Counsel and Secretary
| |  | --------------------------------------------------------------------------------------------------------------------------