EXHIBIT
      4.20


**WARRANT**




THE
      WARRANT EVIDENCED OR CONSTITUTED HEREBY, AND ALL SHARES OF COMMON STOCK ISSUABLE
      HEREUNDER, HAVE


BEEN
      AND
      WILL BE ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE “ACT”) AND MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED OR
      HYPOTHECATED WITHOUT REGISTRATION UNDER THE ACT UNLESS EITHER (i) THE
      COMPANY HAS RECEIVED AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE REASONABLY
      SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED
      IN
      CONNECTION WITH SUCH DISPOSITION OR (ii) THE SALE OF SUCH SECURITIES IS
      MADE PURSUANT TO SECURITIES AND EXCHANGE COMMISSION RULE 144.




**WARRANT
      TO PURCHASE COMMON STOCK OF ENER1, INC.**




(Subject
      to Adjustment)




**WARRANT
      NO. 093006A**




**THIS
      CERTIFIES THAT,** for
      value received, Ener1 Group, Inc., or its permitted registered assigns
      (“ **Holder** ”),
      is
      entitled, subject to the terms and conditions of this Warrant, at any time
      or
      from time to time after September 30, 2006 (the “ **Effective
      Date** ”),
      and
      before 5:00 p.m. Central Time on September 30, 2011 (the “ **Expiration
      Date** ”),
      to
      purchase from Ener1, Inc., a Florida corporation (the “ **Company** ”),
      NINE
      MILLION (9,000,000) shares of Common Stock of the Company at a price per share
      of $.40 (the “ **Purchase
      Price** ”).
      Both
      the number of shares of Common Stock purchasable upon exercise of this Warrant
      and the Purchase Price are subject to adjustment and change as provided herein.




**1.**  **CERTAIN
      DEFINITIONS.** As
      used
      in this Warrant the following terms shall have the following respective
      meanings:




“ **Actively
      Traded** ”
shall
      mean attainment of an average of 20,000 or more shares per business day arm's
      length trading volume of Common Stock over a period of twenty (20) trading
      days
      as reported by the over-the-counter or other established quotation
      agencies.




“ **Fair
      Market Value** ”
of
      a
      share of Common Stock as of a particular date shall mean:




(a)  If
      traded
      on a securities exchange or the NASDAQ National Market, the Fair Market Value
      shall be deemed to be the average of the closing prices of the Common Stock
      of
      the Company on such exchange or market over the 5 business days ending
      immediately prior to the applicable date of valuation;




(b)  If
      Actively Traded over-the-counter, the Fair Market Value shall be deemed to
      be
      the average of the closing bid prices over the 30-day period ending immediately
      prior to the applicable date of valuation; and







(c)  If
      not
      Actively Traded over-the-counter or traded on a securities exchange or the
      NASDAQ National Market, the Fair Market Value shall be the value thereof, as
      agreed upon by the Company and the Holder; provided, however, that if the
      Company and the Holder cannot agree on such value, such value shall be
      determined by an independent valuation firm experienced in valuing businesses
      such as the Company and jointly selected in good faith by the Company and the
      Holder. Fees and expenses of the valuation firm shall be paid for by the
      Company.




“ **HSR
      Act** ”
shall
      mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
      amended.




“ **Registered
      Holder** ”
shall
      mean any Holder in whose name this Warrant is registered upon the books and
      records maintained by the Company.




“ **SEC** ”
shall
      mean the United States Securities and Exchange Commission.




“ **Warrant** ”
as
      used
      herein, shall include this Warrant and any warrant delivered in substitution
      or
      exchange therefor as provided herein.




“ **Warrant
      Shares** ”
shall
      mean the shares of Common Stock to be issuable upon exercise of this Warrant
      (or
      any shares of stock or other securities at the time issuable upon exercise
      of
      this Warrant).




“ **Common
      Stock** ”
shall
      mean the Common Stock of the Company and any other securities at any time
      receivable or issuable upon exercise of this Warrant.




**2.**  **EXERCISE
      OF WARRANT**




2.1.  Payment .
      Subject
      to compliance with the terms and conditions of this Warrant and applicable
      securities laws, this Warrant may be exercised, in whole or in part at any
      time
      or from time to time, on or before the Expiration Date by the delivery
      (including, without limitation, delivery by facsimile) of the form of Notice
      of
      Exercise attached hereto as ** Exhibit 1
      (the “ **Notice
      of Exercise** ”),
      duly
      executed by the Holder, at the principal office of the Company, and as soon
      as
      practicable after such date, surrendering




(a)
      this
      Warrant at the principal office of the Company, and




(b)
      payment in cash (by check) or by wire transfer, of an amount equal to the
      product obtained by multiplying the number of shares of Common Stock being
      purchased upon such exercise by the then effective Purchase Price (the
“ **Exercise
      Amount** ”),
      except that if Holder is subject to HSR Act Restrictions (as defined in Section
      2.4 below), the Exercise Amount shall be paid to the Company within five (5)
      business days of the termination of all HSR Act Restrictions.




2.2.  “ Easy
      Sale” Exercise .
      In lieu
      of the payment methods set forth in Section 2.1(b) above, when permitted by
      law and applicable regulations (including NYSE, NASDAQ and NASD rules, as
      applicable), the Holder may pay the Purchase Price through a “same day sale”
commitment from the Holder (and if applicable a broker-dealer that is a member
      of the National Association of Securities Dealers (a “ **NASD**  **Dealer** ”)),
      whereby the Holder irrevocably elects to exercise this Warrant and to sell
      a
      portion of the Shares so purchased to pay for the Purchase Price and the Holder
      (or, if applicable, the NASD Dealer) commits upon sale (or, in the case of
      the
      NASD Dealer, upon receipt) of such Shares to forward the Purchase Price directly
      to the Company.




-2-


2.3.  Stock
      Certificates; Fractional Shares .
      As soon
      as practicable on or after such date, the Company shall issue and deliver to
      the
      person or persons entitled to receive the same a certificate or certificates
      for
      the number of whole shares of Common Stock issuable upon such exercise, together
      with cash in lieu of any fraction of a share equal to such fraction of the
      current Fair Market Value of one whole share of Common Stock as of the date
      of
      exercise of this Warrant. No fractional shares or scrip representing fractional
      shares shall be issued upon an exercise of this Warrant.




2.4.  HSR
      Act .
      The
      Company hereby acknowledges that exercise of this Warrant by Holder may subject
      the Company and/or the Holder to the filing requirements of the HSR Act and
      that
      Holder may be prevented from exercising this Warrant until the expiration or
      early termination of all waiting periods imposed by the HSR Act (“ **HSR
      Act Restrictions** ”).
      If on
      or before the Expiration Date, Holder has sent the Notice of Exercise to Company
      and Holder has not been able to complete the exercise of this Warrant prior
      to
      the Expiration Date because of HSR Act Restrictions, the Holder shall be
      entitled to complete the process of exercising this Warrant in accordance with
      the procedures contained herein notwithstanding the fact that completion of
      the
      exercise of this Warrant would take place after the Expiration
      Date.




2.5.  Partial
      Exercise; Effective Date of Exercise .
      In case
      of any partial exercise of this Warrant, the Company shall cancel this Warrant
      upon surrender hereof and shall execute and deliver a new Warrant of like tenor
      and date for the balance of the shares of Common Stock purchasable hereunder.
      This Warrant shall be deemed to have been exercised immediately prior to the
      close of business on the date of its surrender for exercise as provided above.
      However, if Holder is subject to HSR Act filing requirements this Warrant shall
      be deemed to have been exercised on the date immediately following the date
      of
      the expiration of all HSR Act Restrictions. The person entitled to receive
      the
      shares of Common Stock issuable upon exercise of this Warrant shall be treated
      for all purposes as the holder of record of such shares as of the close of
      business on the date the Holder is deemed to have exercised this
      Warrant.




**3.**  **VALID
      ISSUANCE: TAXES.** All
      shares of Common Stock issued upon the exercise of this Warrant shall be validly
      issued, fully paid and non-assessable, and the Company shall pay all taxes
      and
      other governmental charges that may be imposed in respect of the issue or
      delivery thereof. The Company shall not be required to pay any tax or other
      charge imposed in connection with any transfer involved in the issuance of
      any
      certificate for shares of Common Stock in any name other than that of the
      Registered Holder of this Warrant, and in such case the Company shall not be
      required to issue or deliver any stock certificate or security until such tax
      or
      other charge has been paid, or it has been established to the Company’s
      reasonable satisfaction that no tax or other charge is due.




**4.**  **ADJUSTMENT
      OF PURCHASE PRICE AND NUMBER OF SHARES.** The
      number of shares of Common Stock issuable upon exercise of this Warrant (or
      any
      shares of stock or other securities or property receivable or issuable upon
      exercise of this Warrant) and the Purchase Price are subject to adjustment
      upon
      occurrence of the following events:




-3-


4.1.  Adjustment
      for Stock Splits, Stock Subdivisions or Combinations of Shares .
      The
      Purchase Price of this Warrant shall be proportionally decreased and the number
      of Warrant Shares shall be proportionally increased to reflect any stock split
      or subdivision of the Company’s Common Stock. The Purchase Price of this Warrant
      shall be proportionally increased and the number of Warrant Shares shall be
      proportionally decreased to reflect any combination of the Company’s Common
      Stock.




4.2.  Reclassification .
      If the
      Company, by reclassification of securities or otherwise, shall change any of
      the
      securities as to which purchase rights under this Warrant exist into the same
      or
      a different number of securities of any other class or classes, this Warrant
      shall thereafter represent the right to acquire such number and kind of
      securities as would have been issuable as the result of such change with respect
      to the securities that were subject to the purchase rights under this Warrant
      immediately prior to such reclassification or other change and the Purchase
      Price therefore shall be appropriately adjusted, all subject to further
      adjustment as provided in this Section 4. No adjustment shall be made pursuant
      to this Section 4.2 upon any conversion or redemption of the Common Stock which
      is the subject of Section 4.4.




4.3.  Adjustment
      for Capital Reorganization, Merger or Consolidation .
      In case
      of any capital reorganization of the capital stock of the Company (other than
      a
      combination, reclassification, exchange or subdivision of shares otherwise
      provided for herein), or any merger or consolidation of the Company with or
      into
      another corporation, or the sale of all or substantially all the assets of
      the
      Company then, and in each such case, as a part of such reorganization, merger,
      consolidation, sale or transfer, lawful provision shall be made so that the
      Holder of this Warrant shall thereafter be entitled to receive upon exercise
      of
      this Warrant, during the period specified herein and upon payment of the
      Purchase Price then in effect, the number of shares of stock or other securities
      or property of the successor corporation resulting from such reorganization,
      merger, consolidation, sale or transfer that a holder of the shares deliverable
      upon exercise of this Warrant would have been entitled to receive in such
      reorganization, consolidation, merger, sale or transfer if this Warrant had
      been
      exercised immediately before such reorganization, merger, consolidation, sale
      or
      transfer, all subject to further adjustment as provided in this Section 4.
      The
      foregoing provisions of this Section 4.3 shall similarly apply to successive
      reorganizations, consolidations, mergers, sales and transfers and to the stock
      or securities of any other corporation that are at the time receivable upon
      the
      exercise of this Warrant. If the per-share consideration payable to the Holder
      hereof for shares in connection with any such transaction is in a form other
      than cash or marketable securities, then the value of such consideration shall
      be determined in good faith by the Company’s Board of Directors. In all events,
      appropriate adjustment (as determined in good faith by the Company’s Board of
      Directors) shall be made in the application of the provisions of this Warrant
      with respect to the rights and interests of the Holder after the transaction,
      to
      the end that the provisions of this Warrant shall be applicable after that
      event, as near as reasonably may be, in relation to any shares or other property
      deliverable after that event upon exercise of this Warrant.




4.4.  Conversion
      of Common Stock .
      In case
      all of the authorized and outstanding shares of Common Stock of the Company
      are
      redeemed or converted or reclassified into other securities or property pursuant
      to the Company’s Articles of Incorporation or otherwise, or the Common Stock
      otherwise ceases to exist, then, in such case, the Holder of this Warrant,
      upon
      exercise hereof at any time after the date on which the Common Stock is so
      redeemed or converted, reclassified or ceases to exist (the “ **Termination
      Date** ”),
      shall
      receive, in lieu of the number of shares of Common Stock that would have been
      issuable upon such exercise immediately prior to the Termination Date, the
      securities or property that would have been received if this Warrant had been
      exercised in full and the Common Stock received thereupon had been
      simultaneously converted immediately prior to the Termination Date, all subject
      to further adjustment as provided in this Warrant. Additionally, the Purchase
      Price shall be immediately adjusted to equal the quotient obtained by dividing
      (x) the aggregate Purchase Price of the maximum number of shares of Common
      Stock for which this Warrant was exercisable immediately prior to the
      Termination Date by (y) the number of shares of Common Stock of the Company
      for which this Warrant is exercisable immediately after the Termination Date,
      all subject to further adjustment as provided herein.




-4-




**5.**  **CERTIFICATE
      AS TO ADJUSTMENTS.** In
      each
      case of any adjustment in the Purchase Price, or number or type of shares
      issuable upon exercise of this Warrant, the Chief Financial Officer or
      Controller of the Company shall compute such adjustment in accordance with
      the
      terms of this Warrant and prepare a certificate setting forth such adjustment
      and showing in detail the facts upon which such adjustment is based, including
      a
      statement of the adjusted Purchase Price. The Company shall promptly send (by
      facsimile and by either first class mail, postage prepaid or overnight delivery)
      a copy of each such certificate to the Holder.




**6.**  **LOSS
      OR MUTILATION.** Upon
      receipt of evidence reasonably satisfactory to the Company of the ownership
      of
      and the loss, theft, destruction or mutilation of this Warrant, and of indemnity
      reasonably satisfactory to it, and (in the case of mutilation) upon surrender
      and cancellation of this Warrant, the Company will execute and deliver in lieu
      thereof a new Warrant of like tenor as the lost, stolen, destroyed or mutilated
      Warrant.




**7.**  **RESERVATION
      OF COMMON STOCK.** The
      Company hereby covenants that at all times there shall be reserved for issuance
      and delivery upon exercise of this Warrant such number of shares of Common
      Stock
      or other shares of capital stock of the Company as are from time to time
      issuable upon exercise of this Warrant and, from time to time, will take all
      steps necessary to amend its Articles of Incorporation to provide sufficient
      reserves of shares of Common Stock issuable upon exercise of this Warrant (and
      shares of its Common Stock for issuance on conversion of such Common Stock).
      All
      such shares shall be duly authorized, and when issued upon such exercise, shall
      be validly issued, fully paid and non-assessable, free and clear of all liens,
      security interests, charges and other encumbrances or restrictions on sale
      and
      free and clear of all preemptive rights, except encumbrances or restrictions
      arising under federal or state securities laws or restrictions provided for
      in
      Section 9 below. Issuance of this Warrant shall constitute full authority to
      the
      Company’s officers who are charged with the duty of executing stock certificates
      to execute and issue the necessary certificates for shares of Common Stock
      upon
      the exercise of this Warrant.




-5-


**8.**  **TRANSFER
      AND EXCHANGE.** Subject
      to the terms and conditions of this Warrant and compliance with all applicable
      securities laws, this Warrant and all rights hereunder may be transferred in
      whole or in part, on the books of the Company maintained for such purpose at
      the
      principal office of the Company referred to above, to any Registered Holder
      parent, subsidiary or affiliate, by the Registered Holder hereof in person,
      or
      by duly authorized attorney, upon surrender of this Warrant properly endorsed
      and upon payment of any necessary transfer tax or other governmental charge
      imposed upon such transfer. Upon any permitted partial transfer, the Company
      will issue and deliver to the Registered Holder a new Warrant or Warrants with
      respect to the shares of Common Stock not so transferred. Each taker and holder
      of this Warrant, by taking or holding the same, consents and agrees that when
      this Warrant shall have been so endorsed, the person in possession of this
      Warrant may be treated by the Company, and all other persons dealing with this
      Warrant, as the absolute owner hereof for any purpose and as the person entitled
      to exercise the rights represented hereby, any notice to the contrary
      notwithstanding; provided, however that until a transfer of this Warrant is
      duly
      registered on the books of the Company, the Company may treat the Registered
      Holder hereof as the owner for all purposes.




**9.**  **RESTRICTIONS
      ON TRANSFER.** The
      Holder, by acceptance hereof, agrees that:




(a)  it
      will
      not sell, transfer, pledge or hypothecate any or all of this Warrant without
      the
      prior written consent of the Company, which consent may be withheld in the
      Company’s sole and absolute discretion; and




(b)  notwithstanding
      any consent given by the Company under Section 9(a) hereof, absent an effective
      registration statement filed with the SEC under the Securities Act of 1933,
      as
      amended (the “ **1933
      Act** ”),
      covering the disposition or sale of this Warrant or the Common Stock issued
      or
      issuable upon exercise hereof or the Common Stock issuable upon conversion
      thereof, as the case may be, and registration or qualification under applicable
      state securities laws, such Holder will not sell, transfer, pledge, or
      hypothecate any or all such Warrants or Common Stock, as the case may be, unless
      either (i) the Company has received an opinion of counsel, in form and
      substance reasonably satisfactory to the Company, to the effect that such
      registration is not required in connection with such disposition or
      (ii) the sale of such securities is made pursuant to SEC Rule
      144.




**10.**  **COMPLIANCE
      WITH SECURITIES LAWS.** By
      acceptance of this Warrant, the holder hereby represents, warrants and covenants
      that any shares of stock purchased upon exercise of this Warrant or acquired
      upon conversion thereof shall be acquired for investment only and not with
      a
      view to, or for sale in connection with, any distribution thereof; that the
      Holder has had such opportunity as such Holder has deemed adequate to obtain
      from representatives of the Company such information as is necessary to permit
      the Holder to evaluate the merits and risks of its investment in the company;
      that the Holder is able to bear the economic risk of holding such shares as
      may
      be acquired pursuant to the exercise of this Warrant for an indefinite period;
      that the Holder understands that the shares of stock acquired pursuant to the
      exercise of this Warrant or acquired upon conversion thereof will not be
      registered under the 1933 Act (unless otherwise required pursuant to exercise
      by
      the Holder of registration rights, if any, previously granted to the registered
      Holder) and will be “restricted securities” within the meaning of Rule 144 under
      the 1933 Act and that the exemption from registration under Rule 144 will not
      be
      available for at least one year from the date of exercise of this Warrant,
      subject to any special treatment by the SEC for exercise of this Warrant
      pursuant to Section 2.2, and even then will not be available unless a public
      market then exists for the stock, adequate information concerning the Company
      is
      then available to the public, and other terms and conditions of Rule 144 are
      complied with; and that all stock certificates representing shares of stock
      issued to the Holder upon exercise of this Warrant or upon conversion of such
      shares may have affixed thereto a legend substantially in the following
      form:




-6-


THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT
      OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE.
      THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE
      AND
      MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE
      APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
      THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
      FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER
      OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
      SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE
      IS
      IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES
      LAWS.




**11.**  **NO
      RIGHTS OR LIABILITIES AS STOCKHOLDERS.** This
      Warrant shall not entitle the Holder to any voting rights or other rights as
      a
      stockholder of the Company. In the absence of affirmative action by such Holder
      to purchase Common Stock by exercise of this Warrant, no provisions of this
      Warrant, and no enumeration herein of the rights or privileges of the Holder
      hereof shall cause such Holder hereof to be a stockholder of the Company for
      any
      purpose.




**12.**  **NOTICES.** All
      notices and other communications from the Company to the Holder shall be given
      in accordance with the Exchange Agreement.




**13.**  **HEADINGS.** The
      headings in this Warrant are for purposes of convenience in reference only,
      and
      shall not be deemed to constitute a part hereof.




**14.**  **LAW
      GOVERNING.** This
      Warrant shall be construed and enforced in accordance with, and governed by,
      the
      laws of the State of Florida **** without
      regard to its conflict of laws provisions and venue shall rest solely in the
      Federal or state courts located in **** Broward
      County, Florida.




**15.**  **NO
      IMPAIRMENT.** The
      Company will not, by amendment of its Articles of Incorporation or bylaws,
      or
      through reorganization, consolidation, merger, dissolution, issue or sale of
      securities, sale of assets or any other voluntary action, avoid or seek to
      avoid
      the observance or performance of any of the terms of this Warrant, but will
      at
      all times in good faith assist in the carrying out of all such terms and in
      the
      taking of all such action as may be necessary or appropriate in order to protect
      the rights of the Registered Holder of this Warrant against impairment. Without
      limiting the generality of the foregoing, the Company (a) will not increase
      the
      par value of any shares of stock issuable upon the exercise of this Warrant
      above the amount payable therefor upon such exercise, and (b) will take all
      such
      action as may be necessary or appropriate in order that the Company may validly
      and legally issue fully paid and non-assessable shares of Common Stock upon
      exercise of this Warrant.




-7-


**16.**  **NOTICES
      OF RECORD DATE.** In
      case:




16.1.  the
      Company shall take a record of the holders of its Common Stock (or other stock
      or securities at the time receivable upon the exercise of this Warrant), for
      the
      purpose of entitling them to receive any dividend or other distribution, or
      any
      right to subscribe for or purchase any shares of stock of any class or any
      other
      securities or to receive any other right; or




16.2.  of
      any
      consolidation or merger of the Company with or into another corporation, any
      capital reorganization of the Company, any reclassification of the Capital
      Stock
      of the Company, or any conveyance of all or substantially all of the assets
      of
      the Company to another corporation in which holders of the Company’s stock are
      to receive stock, securities or property of another corporation; or




16.3.  of
      any
      voluntary dissolution, liquidation or winding-up of the Company; or




16.4.  of
      any
      redemption or conversion of all outstanding Common Stock;




then,
      and
      in each such case, the Company will mail or cause to be mailed to the Registered
      Holder of this Warrant a notice specifying, as the case may be, (i) the
      date on which a record is to be taken for the purpose of such dividend,
      distribution or right, or (ii) the date on which such reorganization,
      reclassification, consolidation, merger, conveyance, dissolution, liquidation,
      winding-up, redemption or conversion is to take place, and the time, if any
      is
      to be fixed, as of which the holders of record of Common Stock or (such stock
      or
      securities as at the time are receivable upon the exercise of this Warrant),
      shall be entitled to exchange their shares of Common Stock (or such other stock
      or securities), for securities or other property deliverable upon such
      reorganization, reclassification, consolidation, merger, conveyance,
      dissolution, liquidation or winding-up. Such notice shall be delivered at least
      thirty (30) days prior to the date therein specified.




**17.**  **SEVERABILITY.** If
      any
      term, provision, covenant or restriction of this Warrant is held by a court
      of
      competent jurisdiction to be invalid, void or unenforceable, the remainder
      of
      the terms, provisions, covenants and restrictions of this Agreement shall remain
      in full force and effect and shall in no way be affected, impaired or
      invalidated.




**18.**  **COUNTERPARTS.** For
      the
      convenience of the parties, any number of counterparts of this Warrant may
      be
      executed by the parties hereto and each such executed counterpart shall be,
      and
      shall be deemed to be, an original instrument.




**19.**  **SATURDAYS,
      SUNDAYS AND HOLIDAYS.** If
      the
      Expiration Date falls on a Saturday, Sunday or legal holiday, the Expiration
      Date shall automatically be extended until 5:00 p.m. the next business
      day.




**20.**  **DERIVATIVES.** If for
      any reason, this Warrant or any provision thereof be interpreted or deemed
      to
      result in Issuer derivative liability under generally accepted accounting
      principles, as interpreted and enforced by the U.S. Securities and Exchange
      Comission, then the parties will amend this Warrant, *ab
      initio* ,
      to the
      full extent necessary to eliminate such derivative liability.




-8-




**IN
      WITNESS WHEREOF,** the
      parties hereto have executed this Warrant as of the Effective Date.







**[HOLDER]**





**Ener1
      Group, Inc.**




By:__/s/
      Curtis Wolfe_________________________


Name:
      Curtis Wolfe


Title:
      General Counsel











**[ISSUER** ]





**Ener1,
      Inc.,**


a
      Florida
      corporation




By:___/s/
      Ronald Stewart______________________


Name:
      Ronald Stewart


Title:
      Interim Chief Executive Officer









-9-







**EXHIBIT
      1**




**NOTICE
      OF EXERCISE**




(To
      be
      executed upon exercise of Warrant)




**ENER1,
                INC.**
            WARRANT
                NO. 093006A




The
      undersigned hereby irrevocably elects to exercise the right of purchase
      represented by the within Warrant Certificate for, and to purchase thereunder,
      the securities of Ener1, Inc., as provided for therein, and (check the
      applicable box):




o
            Tenders
                herewith payment of the exercise price in full in the form of cash
                or a
                certified or official bank check in same-day funds in the amount
                of
                $____________ for _________ such
                securities.




o
            Elects
                the Easy Sale Exercise option pursuant to Section 2.2 of the Warrant,
                and accordingly requests delivery of a net of ______________ of such
                securities.




Please
      issue a certificate or certificates for such securities in the name of, and
      pay
      any cash for any fractional share to (please print name, address and social
      security number):




Name:__________________________________________




Address:________________________________________




Signature:_______________________________________




Note:
      The
      above signature should correspond exactly with the name on the first page of
      this Warrant Certificate or with the name of the assignee appearing in the
      assignment form below.




If
      said
      number of shares shall not be all the shares purchasable under the within
      Warrant Certificate, a new Warrant Certificate is to be issued in the name
      of
      said undersigned for the balance remaining of the shares purchasable thereunder
      rounded up to the next higher whole number of shares.






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