EX-4.1






EXHIBIT 4.1




THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW,
AND MAY NOT BE OFFERED FOR SALE, SOLD OR TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER SUCH ACT
AND APPLICABLE STATE SECURITIES LAWS SHALL BE EFFECTIVE WITH RESPECT THERETO, OR AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN
CONNECTION WITH SUCH OFFER, SALE OR TRANSFER.



WARRANT




TO PURCHASE COMMON STOCK 




OF




ENER1 , INC.




Issue Date: October 24, 2008



THIS CERTIFIES that ALPHA CLASS INVESTMENTS LIMITED or any subsequent holder hereof (the
“Holder”), has the right to purchase from ENER1,  INC., a Florida corporation (the
“Company”), up to 2,560,000 fully paid and nonassessable shares of the Company’s common stock, par
value $0.01 per share (the “Common Stock”), subject to adjustment as provided herein, at a price
per share equal to the Exercise Price (as defined below), at any time and from time to time
beginning on the date on which this Warrant is originally issued (the “Issue Date”) and ending at
5:00 p.m., eastern time, on the date that is the second (2nd) anniversary of the Issue
Date (or, if such date is not a Business Day, on the Business Day immediately following such date)
(the “Expiration Date”). This Warrant is issued pursuant to a Purchase Agreement, dated as of
October 15, 2008 (the “Purchase Agreement”). Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in the Purchase Agreement.



1. Exercise.



(a) Right to Exercise; Exercise Price. The Holder shall have the right to exercise
this Warrant at any time and from time to time during the period beginning on the Issue Date and
ending on the Expiration Date as to all or any part of the shares of Common Stock covered hereby
(the “Warrant Shares”). The “Exercise Price” for each Warrant Share purchased by the Holder upon
the exercise of this Warrant shall be equal to US$7.50, subject to adjustment for the events
specified in Section 5 below.



(b) Exercise Notice. In order to exercise this Warrant, the Holder shall send to the
Company by facsimile transmission, at any time prior to 5:00 p.m., eastern U.S. time, on the
Business Day on which the Holder wishes to effect such exercise (the “Exercise Date”), (i) a notice
of exercise in substantially the form attached hereto as Exhibit A (an “Exercise Notice”), and (ii)
a copy of the original Warrant, and, in the case of a Cash Exercise (as defined below), the Holder
shall pay the Exercise Price to the Company by wire transfer of immediately available funds. The
Exercise Notice shall state the name or names in which the shares of Common Stock that are issuable
on such exercise shall be issued.



(c) Cancellation of Warrant. This Warrant shall be canceled upon its exercise in full
and, if this Warrant is exercised in part, the Company shall, at the time that it delivers Warrant
Shares to the Holder pursuant to such exercise as provided herein, issue a new warrant, and deliver
to the Holder a certificate representing such new warrant, with terms identical in all respects to
this Warrant (except that such new warrant shall be exercisable into the number of shares of Common
Stock with respect to which this Warrant shall remain unexercised).



2. Delivery of Warrant Shares Upon Exercise. Upon receipt of a fax or email copy of
an Exercise Notice pursuant to Section 1 above, the Company shall, (A) in the case of a Cash
Exercise, no later than the close of business on the later to occur of (i) the third (3rd) Business
Day following the Exercise Date specified in such Exercise Notice and (ii) such later date on which
the Company shall have received payment of the Exercise Price, and (B) in the case of a Cashless
Exercise (as defined below), no later than the close of business on the third (3rd) Business Day
following the Exercise Date specified in such Exercise Notice (each of the dates specified in (A)
and (B) being referred to as a “Delivery Date”), issue and deliver or caused to be delivered to the
Holder the number of Warrant Shares as shall be determined as provided herein. The Company shall
effect delivery of Warrant Shares to the Holder, as long as the Company’s designated transfer agent
(the “Transfer Agent”) participates in the Depository Trust Company (“DTC”) Fast Automated
Securities Transfer program (“FAST”) and no restrictive legend is required pursuant to the terms of
this Warrant or the Purchase Agreement, by crediting the account of the Holder or its nominee at
DTC (as specified in the applicable Exercise Notice) with the number of Warrant Shares required to
be delivered, no later than the close of business on such Delivery Date. In the event that the
Transfer Agent is not a participant in FAST or if the Holder so specifies in a Exercise Notice or
otherwise in writing on or before the Exercise Date, the Company shall effect delivery of Warrant
Shares by delivering to the Holder or its nominee physical certificates representing such Warrant
Shares, no later than the close of business on such Delivery Date.



3. [Intentionally Omitted] 



4. Payment of the Exercise Price; Cashless Exercise. The Holder may pay the Exercise
Price in either of the following forms or, at the election of Holder, a combination thereof:



(a) through a cash exercise (a “Cash Exercise”) by delivering immediately available funds, or



(b) through a cashless exercise (a “Cashless Exercise”), as hereinafter provided. The Holder
may effect a Cashless Exercise by surrendering this Warrant to the Company and noting on the
Exercise Notice that the Holder wishes to effect a Cashless Exercise, upon which the Company shall
issue to the Holder the number of Warrant Shares determined as follows:



X = Y x (A-B)/A



	 	 	 
	where:

	 	X = the number of Warrant Shares to be issued to the Holder;
	
 
	 	Y = the number of Warrant Shares with respect to which this Warrant is

being exercised;
	
 
	 	A = the Market Price as of the Exercise Date; and
	
 
	 	B = the Exercise Price.






For purposes of Rule 144, it is intended and acknowledged that the Warrant Shares issued in a
Cashless Exercise transaction shall be deemed to have been acquired by the Holder, and the holding
period for the Warrant Shares required by Rule 144 shall be deemed to have been commenced, on the
Issue Date. “Market Price” means, as of a particular date, the average of the daily VWAP on each of
the five (5) consecutive Trading Days occurring immediately prior to (but not including) such date.
“VWAP” on a Trading Day means the volume weighted average price of the Common Stock for such
Trading Day on the Principal Market as reported by Bloomberg Financial Markets or, if Bloomberg
Financial Markets is not then reporting such prices, by a comparable reporting service of national
reputation selected by the Company and reasonably satisfactory to the Holder. If VWAP cannot be
calculated for the Common Stock on such Trading Day on any of the foregoing bases, then the Company
shall submit such calculation to an independent financial institution of international reputation
reasonably acceptable to the Holder, and shall cause such financial institution to perform such
determination and notify the Company and the Holder of the results of determination no later than
two (2) Business Days from the time such calculation was submitted to it by the Company. All such
determinations shall be appropriately adjusted for any stock dividend, stock split or other similar
transaction during such period. “Trading Day” means any day on which the Common Stock is purchased
and sold on the Principal Market. “Principal Market” means, at any time, the principal exchange,
market or quotation system on which the Common Stock is listed, traded or quoted at such time.



5. Anti-Dilution Adjustments; Distributions; Other Events. The Exercise Price and the
number of Warrant Shares issuable hereunder shall be subject to adjustment from time to time as
provided in this Section 5. In the event that any adjustment of the Exercise Price required herein
results in a fraction of a cent, the Exercise Price shall be rounded up or down to the nearest one
hundredth of a cent.



(a) Subdivision or Combination of Common Stock. If the Company, at any time after the
Issue Date, subdivides (by any stock split, stock dividend, recapitalization, reorganization,
reclassification or otherwise) the outstanding shares of Common Stock into a greater number of
shares, then effective upon the close of business on the record date for effecting such
subdivision, the Exercise Price in effect immediately prior to such subdivision will be
proportionately reduced. If the Company, at any time after the Issue Date, combines (by reverse
stock split, recapitalization, reorganization, reclassification or otherwise) the outstanding
shares of Common Stock into a smaller number of shares, then, effective upon the close of business
on the record date for effecting such combination, the Exercise Price in effect immediately prior
to such combination will be proportionally increased. Any adjustment made pursuant to this
subparagraph (a) that results in a change in the Exercise Price shall also effect a proportional
increase or decrease, as the case may be, in the number of shares of Common Stock into which this
Warrant is exercisable.



(b) Dilutive Issuances. If, at any time during the period beginning on the Issue Date
and ending on the three-month anniversary of the Issue Date, the Company issues or sells Common
Stock, or is deemed to have issued or sold Common Stock pursuant to the issuance of securities
convertible or exercisable into, or exchangeable for, shares of Common Stock, for a price per share
less than the Exercise Price on the date of such issuance or sale (a “Dilutive Issuance”), then the
Exercise Price shall be adjusted to equal such lower price.



(c) Exceptions To Adjustment Of Exercise Price. Notwithstanding the foregoing, no
adjustment to the Exercise Price shall be made pursuant to paragraph (b) above upon the issuance of
any Excluded Securities. For purposes hereof, “Excluded Securities” means (I) securities purchased
under the Purchase Agreement; (II) securities issued upon exercise of the Warrants; (III) shares of
Common Stock issuable or issued to (x) employees, consultants or directors from time to time upon
the exercise of options, in such case granted or to be granted in the discretion of the Board of
Directors pursuant to one or more stock option plans or restricted stock plans in effect as of the
Issue Date, or (y) vendors pursuant to warrants to purchase Common Stock that are outstanding on
the date hereof; and (IV) shares of Common Stock issued in connection with any convertible
securities, options or warrants outstanding on the date hereof and disclosed in the Buyer Reports
(as defined in the Purchase Agreement).



(d) Notice Of Adjustments. Upon the occurrence of one or more adjustments or
readjustments of the Exercise Price or any change in the number or type of stock, securities and/or
other property issuable upon exercise of this Warrant, the Company, at its expense, shall promptly
compute such adjustment or readjustment or change and prepare and furnish to the Holder a notice
(an “Adjustment Notice”) setting forth such adjustment or readjustment or change and showing in
detail the facts upon which such adjustment or readjustment or change is based, and, on or before
the time that it delivers an Adjustment Notice, publicly disclose the contents thereof. The
failure of the Company to deliver an Adjustment Notice shall not affect the validity of any such
adjustment.



6. Fractional Interests.



No fractional shares or scrip representing fractional shares shall be issuable upon the
exercise of this Warrant, but on exercise of this Warrant, the Holder hereof may purchase only a
whole number of shares of Common Stock. If, on exercise of this Warrant, the Holder hereof would
be entitled to a fractional share of Common Stock or a right to acquire a fractional share of
Common Stock, the Company shall, in lieu of issuing any such fractional share, round the number of
shares issuable upon such exercise to the nearest whole integer.



7. Transfer of this Warrant.



The Holder may sell, transfer, assign, pledge or otherwise dispose of this Warrant, in whole
or in part, as long as such sale or other disposition is made pursuant to an effective registration
statement or an exemption from the registration requirements of the Securities Act. Upon such
transfer or other disposition (other than a pledge), the Holder shall deliver this Warrant to the
Company together with a written notice to the Company, substantially in the form of the Transfer
Notice attached hereto as Exhibit B (the “Transfer Notice”), indicating the person or persons to
whom this Warrant shall be transferred and, if less than all of this Warrant is transferred, the
number of Warrant Shares to be covered by the part of this Warrant to be transferred to each such
person. Within three (3) Business Days of receiving a Transfer Notice and the original of this
Warrant, the Company shall deliver to the each transferee designated by the Holder a Warrant or
Warrants of like tenor and terms for the appropriate number of Warrant Shares and, if less than all
this Warrant is transferred, shall deliver to the Holder a Warrant for the remaining number of
Warrant Shares.



8. Benefits of this Warrant.



This Warrant shall be for the sole and exclusive benefit of the Holder of this Warrant and
nothing in this Warrant shall be construed to confer upon any person other than the Holder of this
Warrant any legal or equitable right, remedy or claim hereunder.



9. Loss, theft, destruction or mutilation of Warrant.



Upon receipt by the Company of evidence of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) of indemnity reasonably satisfactory to
the Company, and upon surrender of this Warrant, if mutilated, the Company shall execute and
deliver a new Warrant of like tenor and date.



10. Notice or Demands.



Any notice, demand or request required or permitted to be given by the Company or the Holder
pursuant to the terms of this Warrant shall be in writing and shall be deemed delivered (i) when
delivered personally or by verifiable facsimile transmission, unless such delivery is made on a day
that is not a Business Day, in which case such delivery will be deemed to be made on the next
succeeding Business Day, (ii) on the next Business Day after timely delivery to an overnight
courier and (iii) on the Business Day actually received if deposited in the U.S. mail (certified or
registered mail, return receipt requested, postage prepaid), addressed as follows:



If to the Company:



Ener1, Inc.




c/o Ener1 Group, Inc.


1540 Broadway, Suite 25C


New York, NY 10036




Attn: Chief Executive Officer




Tel: (212) 920-3500


Fax: (212) 920-3510




	 	 	 	With a copy (which shall not






constitute notice) to:



Mazzeo Song & Bradham LLP



708 Third Avenue




New York, NY 10017




Tel: (212) 599-0700



Fax: (212) 599-8400



and if to the Holder, to such address as the Holder shall have furnished to the Company in writing.



11. Applicable Law; Dispute Resolution.



This Warrant is issued under and shall for all purposes be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made and to be performed
entirely within the State of New York. Any dispute, controversy or difference arising between the
parties out of or in relation to this Agreement or for the breach thereof shall be resolved
exclusively by arbitration in London, England. Such arbitration shall be conducted in the English
language in accordance with the Rules of Arbitration of the International Chamber of Commerce
(“ICC”) by three (3) arbitrators, of whom one shall be appointed by the Company, another shall be
appointed by the Holder, and the third shall be appointed by the first two (2) arbitrators. If the
third arbitrator is not so appointed within one month after the appointment of the first two
arbitrators, the third arbitrator shall be selected in accordance with the rules of the ICC. The
decision of the arbitrators shall be made on the principles of majority rule. The award made by
the arbitrators shall be final and binding upon the parties and may be enforced in any court of
competent jurisdiction. The prevailing Party in any such arbitration is entitled to recover its
reasonable attorneys’ fees and costs, including without limitation the cost of filing the
arbitration claim.



12. Amendments.



No amendment, modification or other change to, or waiver of any provision of, this Warrant may
be made unless such amendment, modification or change is (A) set forth in writing and is signed by
the Company and the Holder and (B) agreed to in writing by the holders of at least two-thirds (2/3)
of the number of shares into which the Warrants are exercisable (without regard to any limitation
contained herein on such exercise), it being understood that upon the satisfaction of the
conditions described in (A) and (B) above, each Warrant (including any Warrant held by the Holder
who did not execute the agreement specified in (B) above) shall be deemed to incorporate any
amendment, modification, change or waiver effected thereby as of the effective date thereof.



13. Entire Agreement.



This Warrant and the Purchase Agreement constitute the entire agreement among the parties
hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and therein. This
Warrant and the Purchase Agreement supersede all prior agreements and understandings among the
parties hereto with respect to the subject matter hereof and thereof.



14. Headings.



The headings in this Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.



[Signature Page to Follow]




1




IN WITNESS WHEREOF, the Company has duly executed and delivered this Warrant as of the
Issue Date.



ENER1, INC.



	 	 	 	 	 
	By:
	 	 	—	 
	   Name:

	   Title:







2




EXHIBIT A to WARRANT




EXERCISE NOTICE




The undersigned Holder hereby irrevocably exercises the right to purchase 
            shares of Common Stock (“Warrant Shares”) of ENER1, INC. evidenced by the attached Warrant
(the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective
meanings set forth in the Warrant.



1. Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be
made as:



     a Cash Exercise with respect to      Warrant Shares; and/or



     a Cashless Exercise with respect to      Warrant Shares, as
permitted by Section 4(b) of the attached Warrant.



2. Payment of Exercise Price. In the event that the Holder has elected a Cash Exercise with
respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder shall pay the
sum of $     to the Company in accordance with the terms of the Warrant.



Date:      



     



Name of Registered Holder



By:      

Name:

Title:




EXHIBIT B to WARRANT




TRANSFER NOTICE




FOR VALUE RECEIVED, the undersigned Holder of the attached Warrant hereby sells, assigns and
transfers unto the person or persons named below the right to purchase  shares of
the Common Stock of ENER1, INC. evidenced by the attached Warrant.



Date:      



     



Name of Registered Holder



By:      

Name:

Title:




Transferee Name and Address:




3