Exhibit 4.2





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. SUBJECT TO COMPLIANCE
WITH THE REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE PLEDGED OR
HYPOTHECATED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY THIS
WARRANT OR ANY OF THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT. 




WARRANT TO PURCHASE
COMMON STOCK 




OF 




ENER1, INC. 


Issue Date: January ____, 2004             
                          
                   
                    
                      
               Warrant No. ____




        THIS
CERTIFIES that ______________________ or any subsequent holder hereof (the
“Holder”), has the right to purchase from ENER1, INC., a Florida
corporation (the “Company”), up to __________ 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 beginning on the date on
which this Warrant is issued (the “Issue Date”) and ending at 7:00 p.m.,
eastern time, on the date that is the tenth (10th) anniversary of the Issue
Date (the “Expiration Date”). This Warrant is issued pursuant to a
Securities Purchase Agreement, dated as of January 16, 2004 (the “Securities
Purchase Agreement”). Capitalized terms used herein and not otherwise defined
shall have the respective meanings set forth in the Securities 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
          $2.51, subject to adjustment for the events specified in Section 6 below. 



1





         (b)       
          Exercise Notice. In order to exercise this Warrant, the Holder shall send
          by facsimile transmission, at any time prior to 5:00 p.m., eastern time, on the
          Business Day on which the Holder wishes to effect such exercise (the
          “Exercise Date”), to the Company an executed copy of the notice
          of exercise in the form attached hereto as Exhibit A (the “Exercise
          Notice”), the original Warrant and, in the case of a Cash Exercise (as
          defined below), the Exercise Price. The Exercise Notice shall also state the
          name or names (with address) in which the shares of Common Stock that are
          issuable on such exercise shall be issued. If shares are to be issued in the
          name of a person other than the Holder, the Holder will pay all transfer taxes
          payable with respect thereto. In the case of a dispute as to the calculation of
          the Exercise Price or the number of Warrant Shares issuable hereunder
          (including, without limitation, the calculation of any adjustment pursuant to
          Section 6 below), the Company shall promptly issue to the Holder the number of
          Warrant Shares that are not disputed and shall submit the disputed calculations
          to a certified public accounting firm of national recognition (other than the
          Company’s independent accountants) within two (2) Business Days following
          the date on which the Exercise Notice is delivered to the Company. The Company
          shall cause such accountant to calculate the Exercise Price and/or the number of
          Warrant Shares issuable hereunder and to notify the Company and the Holder of
          the results in writing no later than three (3) Business Days following the day
          on which such accountant received the disputed calculations (the
          “Dispute Procedure”). Such accountant’s calculation shall
          be deemed conclusive absent manifest error. The fees of any such accountant
          shall be borne by the party whose calculations were most at variance with those
          of such accountant. 



         (c)       
          Holder of Record. The Holder shall, for all purposes, be deemed to have
          become the holder of record of the Warrant Shares specified in an Exercise
          Notice on the Exercise Date specified therein, irrespective of the date of
          delivery of such Warrant Shares. Except as specifically provided herein, nothing
          in this Warrant shall be construed as conferring upon the Holder hereof any
          rights as a stockholder of the Company prior to the Exercise Date. 



         (d)       
          Cancellation of Warrant. This Warrant shall be canceled upon its exercise
          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); provided, however, that the Holder shall be entitled
          to exercise all or any portion of such new warrant at any time following the
          time at which this Warrant is exercised, regardless of whether the Company has
          actually issued such new warrant or delivered to the Holder a certificate
          therefor. 




2





         2.       
          Delivery of Warrant Shares Upon Exercise. Upon receipt of an Exercise
          Notice pursuant to paragraph 1 above, the Company shall, (A) in the case of a
          Cash Exercise (as defined below) no later than the close of business on the
          later to occur of (i) the third (3rd) Business Day following the Exercise Date
          set forth in such Exercise Notice and (ii) such later date on which the Company
          shall have received payment of the Exercise Price and the taxes specified in
          paragraph 1(b) above, if any, are paid in full, (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 set forth in such Exercise
          Notice, and (C) with respect to Warrant Shares that are the subject of a Dispute
          Procedure, the close of business on the third (3rd) Business Day
          following the determination made pursuant to paragraph 1(b) (each of the dates
          specified in (A), (B) or (C) 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 by, as long as the
          Transfer Agent participates in the Depository Trust Company
          (“DTC”) Fast Automated Securities Transfer program
          (“FAST”), 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 Warrant Shares are not otherwise eligible for delivery through
          FAST, or if the Holder so specifies in an 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.       
          Failure to Deliver Warrant Shares. 



        In
the event that the Holder has not received certificates (without any restrictive legend
except as expressly required by the Securities Purchase Agreement) representing the number
of Warrant Shares specified in the applicable Exercise Notice on or before the second (2d)
Business Day following the Delivery Date therefor (an “Exercise
Default”), the Holder shall have the right to receive from the Company an amount
equal to (A) the aggregate amount paid by the Holder for shares of Common Stock purchased
by the Holder in order to make delivery on a sale effected in anticipation of receiving
Warrant Shares upon such exercise minus (B) the aggregate Exercise Price for such
Warrant Shares (which payment shall not relieve the Company from its obligation to deliver
such Warrant Shares to the Holder); provided, that if, in lieu of or in addition to
purchasing shares of Common Stock for the purpose of making delivery on such sale, the
Holder borrows shares of Common Stock in order to make such delivery, the Holder shall
have the additional right to be reimbursed by the Company for all costs associated with
effecting such borrowing transaction. 



        The
Holder’s rights and remedies hereunder are cumulative, and no right or remedy is
exclusive of any other. In addition to the amounts specified herein, the Holder shall have
the right to pursue all other remedies available to it at law or in equity (including,
without limitation, a decree of specific performance and/or injunctive relief). The
amounts specified herein shall be paid to the Holder in immediately available funds on or
before the fifth (5th) Business Day following written notice thereof from the Holder. 



3 





         4.       
          Exercise Limitations. In no event shall the Holder be permitted to
          exercise this Warrant, or part thereof, if, upon such exercise, the number of
          shares of Common Stock beneficially owned by the Holder (other than shares which
          would otherwise be deemed beneficially owned except for being subject to a
          limitation on conversion or exercise analogous to the limitation contained in
          this paragraph 4), would exceed 4.99% of the number of shares of Common
          Stock then issued and outstanding. As used herein, beneficial ownership shall be
          determined in accordance with Section 13(d) of the Securities Exchange Act of
          1934, as amended, and the rules thereunder. To the extent that the limitation
          contained in this paragraph 4 applies, the submission of an Exercise Notice by
          the Holder shall be deemed to be the Holder’s representation that this
          Warrant is exercisable pursuant to the terms hereof and the Company shall be
          entitled to rely on such representation without making any further inquiry as to
          whether this Section 4 applies. The Company shall have no liability to any
          person if the Holder’s determination of whether this Warrant is convertible
          pursuant to the terms hereof is incorrect. Nothing contained herein shall be
          deemed to restrict the right of a Holder to exercise this Warrant, or part
          thereof, at such time as such exercise will not violate the provisions of this
          Section 4. This Section 4 may not be amended unless such amendment is approved
          by the holders of a majority of the Common Stock then outstanding;
          provided, however, that the Holder shall have the right, upon
          sixty (60) days’ prior written notice to the Company, to waive the
          provisions of this Section 4 in the event that a Major Transaction (as defined
          below) is announced or occurs. 



         5.       
          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)       
          if, following the one-year anniversary of the Issue Date, an effective
          Registration Statement is not available for the resale of all of the Warrant
          Shares issuable hereunder at the time an Exercise Notice is delivered to the
          Company, through a cashless exercise (a “Cashless Exercise”).
          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. 



4





         6.       
          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 6. In the event that
          any adjustment of the Exercise Price or the number of Warrant Shares as required
          herein results in a fraction of a cent or fraction of a share, as applicable,
          such Exercise Price or number of Warrant Shares shall be rounded up or down to
          the nearest cent or share, as applicable. 



         (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) its shares of
          Common Stock into a greater number of shares, then after the date of record 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 initial issuance of this Warrant, combines (by reverse stock split,
          recapitalization, reorganization, reclassification or otherwise) its shares of
          Common Stock into a smaller number of shares, then, after the date of record for
          effecting such combination, the Exercise Price in effect immediately prior to
          such combination will be proportionally increased. 



         (b)       
          Distributions. If the Company shall declare or make any distribution of
          its assets (or rights to acquire its assets) to holders of Common Stock as a
          partial liquidating dividend or otherwise (including any dividend or
          distribution to the Company’s stockholders in cash or shares (or rights to
          acquire shares) of capital stock of a subsidiary) (a
          “Distribution”), the Company shall deliver written notice of
          such Distribution (a “Distribution Notice”) to the Holder at
          least fifteen (15) Business Days prior to the earlier to occur of (i) the record
          date for determining stockholders entitled to such Distribution (the
          “Record Date”) and (ii) the date on which such Distribution is
          made (the “Distribution Date”). The Holder shall be entitled,
          at its option (to be exercised by written notice delivered to the Company on or
          before the fifteenth (15th) Business Day following the date on which
          a Distribution Notice is delivered to the Holder), either (A) upon any exercise
          of this Warrant on or after the Record Date, to be entitled to receive, on the
          Distribution Date (for any exercise effected prior to the Distribution Date) or
          the applicable Delivery Date (for any exercise effected after the Distribution
          Date), the amount of such assets which would have been payable to the holder
          with respect to the shares of Common Stock issuable upon such exercise (without
          giving effect to any limitations on such exercise contained in this Warrant or
          the Securities Purchase Agreement) had the Holder been the holder of such shares
          of Common Stock on the Record Date or (B) upon any exercise of this Warrant on
          or after the Distribution Date, to reduce the Exercise Price applicable to such
          exercise by reducing the Exercise Price in effect on the Business Day
          immediately preceding the Record Date by an amount equal to the fair market
          value of the assets to be distributed divided by the number of shares of
          Common Stock as to which such Distribution is to be made, such fair market value
          to be reasonably determined in good faith by the independent members of the
          Company’s Board of Directors. Notwithstanding anything herein to the
          contrary, if the Holder does not notify the Company of whether the Holder has
          elected clause (A) or (B) in the preceding sentence by the date that is fifteen
          (15) Business Days after the date on which the Company delivers a Distribution
          Notice to the Holder, the Company shall have the right, exercisable upon written
          notice to the Holder, to determine whether clause (A) or (B) shall be applicable
          to exercises of this Warrant effected on or after the Distribution Date. 



5





         (c)       
          Dilutive Issuances. 



         (i)       
          Adjustment Upon Dilutive Issuance. If, at any time after the Issue Date,
          the Company issues or sells, or in accordance with subparagraph (ii) of this
          paragraph (c), is deemed to have issued or sold, any shares of Common Stock for
          no consideration or for a consideration per share less than the Exercise Price
          on the date of such issuance or sale (or deemed issuance or sale) (a
          “Dilutive Issuance”), then the Exercise Price shall be adjusted
          as follows: 



          		    (A)       
               If such Dilutive Issuance occurs prior to the Effective Date (as defined in the
               Registration Rights Agreement), then effective immediately upon the Dilutive
               Issuance, the Exercise Price shall be adjusted so as to equal the consideration
               received or receivable by the Company (on a per share basis) for the additional
               shares of Common Stock so issued, sold or deemed issued or sold in such Dilutive
               Issuance (which, in the case of a deemed issuance or sale, shall be calculated
               in accordance with subparagraph (ii) below). Notwithstanding the foregoing,
               prior to the Effective Date, the Company shall not engage in any transaction
               that would result in the issuance or deemed issuance of shares of Common Stock
               (other than Excluded Securities (as defined below) for no consideration. 



               



          		    (B)       
               If such Dilutive Issuance occurs on or after the Effective Date, then effective
               immediately upon the Dilutive Issuance, the Exercise Price shall be adjusted so
               as to equal an amount determined by multiplying such Exercise Price by the
               following fraction: 



               




        N0 + N1
        N0 + N2




      where:



	 	N0	
= the number of shares of Common Stock outstanding immediately prior to the issuance, sale
or deemed issuance or sale of such additional shares of Common Stock in such Dilutive
Issuance (without taking into account any shares of Common Stock issuable upon conversion,
exchange or exercise of any securities or other instruments which are convertible into or
exercisable or exchangeable for Common Stock (“Convertible Securities”)
or options, warrants or other rights to purchase or subscribe for Common Stock or
Convertible Securities (“Purchase Rights”), including the Debentures and
Warrants); 





6 





	 	N1	
= the number of shares of Common Stock which the aggregate consideration, if any, received
or receivable by the Company for the total number of such additional shares of Common
Stock so issued, sold or deemed issued or sold in such Dilutive Issuance (which, in the
case of a deemed issuance or sale, shall be calculated in accordance with subparagraph
(ii) below) would purchase at the Exercise Price in effect immediately prior to such
Dilutive Issuance; and 






	 	N2	
= the number of such additional shares of Common Stock so issued, sold or deemed issued or
sold in such Dilutive Issuance. 






	 	        Notwithstanding
the foregoing, no adjustment shall be made pursuant hereto if such adjustment would result
in an increase in the Exercise Price. 







         (ii)       
          Effect On Exercise Price Of Certain Events. For purposes of determining
          the adjusted Exercise Price under subparagraph (i) of this paragraph (c), the
          following will be applicable: 



          		    (A)       
               Issuance Of Purchase Rights. If the Company issues or sells any Purchase
               Rights, whether or not immediately exercisable, and the price per share for
               which Common Stock is issuable upon the exercise of such Purchase Rights (and
               the price of any conversion of Convertible Securities, if applicable) is less
               than the Exercise Price in effect on the date of issuance or sale of such
               Purchase Rights, then the maximum total number of shares of Common Stock
               issuable upon the exercise of all such Purchase Rights (assuming full
               conversion, exercise or exchange of Convertible Securities, if applicable)
               shall, as of the date of the issuance or sale of such Purchase Rights, be deemed
               to be outstanding and to have been issued and sold by the Company for such price
               per share. For purposes of the preceding sentence, the “price per share for
               which Common Stock is issuable upon the exercise of such Purchase Rights”
               shall be determined by dividing (x) the total amount, if any, received or
               receivable by the Company as consideration for the issuance or sale of all such
               Purchase Rights, plus the minimum aggregate amount of additional consideration,
               if any, payable to the Company upon the exercise of all such Purchase Rights,
               plus, in the case of Convertible Securities issuable upon the exercise of
               such Purchase Rights, the minimum aggregate amount of additional consideration
               payable upon the conversion, exercise or exchange thereof (determined in
               accordance with the calculation method set forth in subparagraph (ii)(B) below)
               at the time such Convertible Securities first become convertible, exercisable or
               exchangeable, by (y) the maximum total number of shares of Common Stock issuable
               upon the exercise of all such Purchase Rights (assuming full conversion,
               exercise or exchange of Convertible Securities, if applicable). No further
               adjustment to the Exercise Price shall be made upon the actual issuance of such
               Common Stock upon the exercise of such Purchase Rights or upon the conversion,
               exercise or exchange of Convertible Securities issuable upon exercise of such
               Purchase Rights. To the extent that shares of Common Stock or Convertible
               Securities are not delivered pursuant to such Purchase Rights, upon the
               expiration or termination of such Purchase Rights, the Exercise Price shall be
               readjusted to the Exercise Price that would then be in effect had the
               adjustments made upon the issuance of such Purchase Rights been made on the
               basis of delivery of only the number of shares of Common Stock actually
               delivered. 



               


7 





          		    (B)       
               Issuance Of Convertible Securities. If the Company issues or sells any
               Convertible Securities, whether or not immediately convertible, exercisable or
               exchangeable, and the price per share for which Common Stock is issuable upon
               such conversion, exercise or exchange is less than the Exercise Price in effect
               on the date of issuance or sale of such Convertible Securities, then the maximum
               total number of shares of Common Stock issuable upon the conversion, exercise or
               exchange of all such Convertible Securities shall, as of the date of the
               issuance or sale of such Convertible Securities, be deemed to be outstanding and
               to have been issued and sold by the Company for such price per share. If the
               Convertible Securities so issued or sold do not have a fluctuating conversion or
               exercise price or exchange ratio, then for the purposes of the immediately
               preceding sentence, the “price per share for which Common Stock is issuable
               upon such conversion, exercise or exchange” shall be determined by dividing
               (A) the total amount, if any, received or receivable by the Company as
               consideration for the issuance or sale of all such Convertible Securities, plus
               the minimum aggregate amount of additional consideration, if any, payable to the
               Company upon the conversion, exercise or exchange thereof (determined in
               accordance with the calculation method set forth in this subparagraph (ii)(B))
               at the time such Convertible Securities first become convertible, exercisable or
               exchangeable, by (B) the maximum total number of shares of Common Stock issuable
               upon the exercise, conversion or exchange of all such Convertible Securities. If
               the Convertible Securities so issued or sold have a fluctuating conversion or
               exercise price or exchange ratio (a “Variable Rate  Convertible
               Security”) provided, however, that if the conversion or exercise
               price or exchange ratio of a Convertible Security may fluctuate solely as a
               result of provisions designed to protect against dilution, such Convertible
               Security shall not be deemed to be a Variable Rate Convertible Security, then
               for purposes of the first sentence of this subparagraph (B), the “price per
               share for which Common Stock is issuable upon such conversion, exercise or
               exchange” shall be deemed to be the lowest price per share which would be
               applicable (assuming all holding period and other conditions to any discounts
               contained in such Variable Rate Convertible Security have been satisfied) if the
               conversion price of such Variable Rate Convertible Security on the date of
               issuance or sale thereof were seventy-five percent (75%) of the actual
               conversion price on such date (the “Assumed Variable Market
               Price”), and, further, if the conversion price of such Variable Rate
               Convertible Security at any time or times thereafter is less than or equal to
               the Assumed Variable Market Price last used for making any adjustment under this
               paragraph (c) with respect to any Variable Rate Convertible Security, the
               Exercise Price in effect at such time shall be readjusted to equal the Exercise
               Price which would have resulted if the Assumed Variable Market Price at the time
               of issuance of the Variable Rate Convertible Security had been seventy-five
               percent (75%) of the actual conversion price of such Variable Rate Convertible
               Security existing at the time of the adjustment required by this sentence. No
               further adjustment to the Exercise Price shall be made upon the actual issuance
               of such Common Stock upon conversion, exercise or exchange of such Convertible
               Securities. To the extent that shares of Common Stock are not delivered pursuant
               to conversion of such Convertible Securities, upon the expiration or termination
               of the right to convert such Convertible Securities into Common Stock, the
               Exercise Price shall be readjusted to the Exercise Price that would then be in
               effect had the adjustments made upon the issuance of such Convertible Securities
               been made on the basis of delivery of only the number of shares of Common Stock
               actually delivered. 



               


8





          		    (C)       
               Change In Option Price Or Conversion Rate. If there is a change at any
               time in (x) the amount of additional consideration payable to the Company upon
               the exercise of any Purchase Rights; (y) the amount of additional consideration,
               if any, payable to the Company upon the conversion, exercise or exchange of any
               Convertible Securities; or (z) the rate at which any Convertible Securities are
               convertible into or exercisable or exchangeable for Common Stock (in each such
               case, other than under or by reason of provisions designed to protect against
               dilution), then in any such case, the Exercise Price in effect at the time of
               such change shall be readjusted to the Exercise Price which would have been in
               effect at such time had such Purchase Rights or Convertible Securities still
               outstanding provided for such changed additional consideration or changed
               conversion, exercise or exchange rate, as the case may be, at the time initially
               issued or sold. 



               



          		    (D)       
               Calculation Of Consideration Received. If any Common Stock, Purchase
               Rights or Convertible Securities are issued or sold for cash, the consideration
               received therefor will be the amount received by the Company therefor. In case
               any Common Stock, Purchase Rights or Convertible Securities are issued or sold
               for a consideration part or all of which shall be other than cash, including in
               the case of a strategic or similar arrangement in which the other entity will
               provide services to the Company, purchase services from the Company or otherwise
               provide intangible consideration to the Company, the amount of the consideration
               other than cash received by the Company (including the net present value of the
               consideration expected by the Company for the provided or purchased services)
               shall be the fair market value of such consideration, except where such
               consideration consists of securities, in which case the amount of consideration
               received by the Company will be the average of the last sale prices thereof on
               the principal market for such securities during the period of ten Trading Days
               immediately preceding the date of receipt. In case any Common Stock, Purchase
               Rights or Convertible Securities are issued in connection with any merger or
               consolidation in which the Company is the surviving corporation, the amount of
               consideration therefor will be deemed to be the fair market value of such
               portion of the net assets and business of the non-surviving corporation as is
               attributable to such Common Stock, Purchase Rights or Convertible Securities, as
               the case may be. Notwithstanding anything else herein to the contrary, if Common
               Stock, Purchase Rights or Convertible Securities are issued or sold in
               conjunction with each other as part of a single transaction or in a series of
               related transactions, the Holder may elect to determine the amount of
               consideration deemed to be received by the Company therefor by deducting the
               fair value of any type of securities (the “Disregarded
               Securities”) issued or sold in such transaction or series of
               transactions. If the holder makes an election pursuant to the immediately
               preceding sentence, no adjustment to the Exercise Price shall be made pursuant
               to this paragraph (c) for the issuance of the Disregarded Securities or upon any
               conversion, exercise or exchange thereof. The independent members of the
               Corporation’s Board of Directors shall calculate reasonably and in good
               faith, using standard commercial valuation methods appropriate for valuing such
               assets, the fair market value of any consideration other than cash or
               securities. 



               


9 





          		    (E)       
               Issuances Pursuant To Existing Securities. If the Company issues (or
               becomes obligated to issue) shares of Common Stock pursuant to any antidilution
               or similar adjustments (other than as a result of stock splits, stock dividends
               and the like) contained in any Convertible Securities or Purchase Rights
               outstanding as of the date hereof but not included in the Disclosure Schedule to
               the Securities Purchase Agreement, then all shares of Common Stock so issued
               shall be deemed to have been issued for no consideration. If the Company issues
               (or becomes obligated to issue) shares of Common Stock pursuant to any
               antidilution or similar adjustments contained in any Convertible Securities or
               Purchase Rights disclosed in a schedule to the Securities Purchase Agreement as
               a result of the issuance of the Debentures or Warrants and the number of shares
               that the Company issues (or is obligated to issue) as a result of such initial
               issuance exceeds the amount specified in such schedule, such excess shares shall
               be deemed to have been issued for no consideration. 



               



         (iii)       
          Exceptions To Adjustment Of Exercise Price. Notwithstanding the
          foregoing, no adjustment to the Exercise Price shall be made pursuant to this
          paragraph (c) upon the issuance of any Excluded Securities. For purposes hereof,
          “Excluded Securities” means (I) securities purchased under the
          Securities Purchase Agreement; (II) securities issued upon conversion or
          exercise of the Debentures or 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 adopted after the
          Issue Date by the independent members of the Board of Directors with
          substantially the same terms as such plans in effect as of the Issue Date, and
          (y) vendors pursuant to warrants to purchase Common Stock that are outstanding
          on the date hereof or issued hereafter, provided such issuances are approved by
          the Board of Directors; (IV) any borrowings, direct or indirect, from financial
          institutions by the Company that are approved by the Board of Directors,
          including any type of loan or payment evidenced by any type of Debt instrument,
          provided the equity portion of any such borrowings, including warrants, options
          or other rights to purchase capital stock and other interests convertible into
          capital stock of the Company, does not exceed ten percent (10%) of such
          borrowing; (V) shares of Common Stock issued in connection with any stock split,
          stock dividend or recapitalization of the Company; (VI) shares of Common Stock
          issued in connection with the acquisition by the Company of any corporation or
          other entity occurring after the Effective Date and as long as a fairness
          opinion with respect to such acquisition is rendered by an investment bank of
          national recognition; (VII) shares of Common Stock issued in connection with any
          Convertible Securities or Purchase Rights outstanding on the date hereof and
          (VIII) shares issued to Persons with whom the Corporation is entering into a
          joint venture, strategic alliance or other commercial relationship in connection
          with the operation of the Company ‘s business and not in connection with a
          transaction the primary purpose of which is to raise equity capital. 



         (iv)       
          Notice Of Adjustments. Upon the occurrence of each adjustment or
          readjustment of the Exercise Price pursuant to this paragraph (c) resulting in a
          change in the Exercise Price by more than one percent (1%), 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
          certificate setting forth such adjustment or readjustment or change and showing
          in detail the facts upon which such adjustment or readjustment or change is
          based. The Company shall, upon the written request at any time of the Holder,
          furnish to the Holder a like certificate setting forth (i) such adjustment or
          readjustment or change, (ii) the Exercise Price at the time in effect and (iii)
          the number of shares of Common Stock and the amount, if any, of other securities
          or property which at the time would be received upon exercise of this Warrant. 



10





         (d)       
          Major Transactions. In the event of a merger, consolidation, business
          combination, tender offer, exchange of shares, recapitalization, reorganization,
          redemption or other similar event, as a result of which shares of Common Stock
          of the Company shall be changed into the same or a different number of shares of
          the same or another class or classes of stock or securities or other assets of
          the Company or another entity or the Company shall sell all or substantially all
          of its assets (each of the foregoing being a “Major
          Transaction”), the Company will give the Holder at least thirty (30)
          days written notice prior to the closing of such Major Transaction (which period
          shall be increased to sixty one (61) days if, at such time, without giving
          effect to the limitation on exercise contained in paragraph 4 hereof, the Holder
          would beneficially own more than 4.9% of the Common Stock then outstanding, and
          the Holder has notified the Corporation in writing of such circumstance);
          provided, however, that the Company shall publicly disclose the
          terms of any such Major Transaction on or before the date on which it delivers
          notice of a Major Transaction to the Holder. Upon the occurrence of a Major
          Transaction, (i) the Holder shall be permitted to exercise this Warrant in whole
          or in part at any time prior to the record date for the receipt of such
          consideration and shall be entitled to receive, for each share of Common Stock
          issued to Holder for such exercise, the same per share consideration paid to the
          other holders of Common Stock in connection with such Major Transaction, and
          (ii) if and to the extent that the Holder retains any portion of this Warrant
          following such record date, the Company will cause the surviving or, in the
          event of a sale of assets, purchasing entity, as a condition precedent to such
          Major Transaction, to assume the obligations of the Company under this Warrant,
          with such adjustments to the Exercise Price and the securities covered hereby as
          are deemed appropriate by the Company’s Board of Directors in order to
          preserve the economic benefits of this Warrant to the Holder. 



         (e)       
          Adjustments; Additional Shares, Securities or Assets. In the event that
          at any time, as a result of an adjustment made pursuant to this paragraph 6, the
          Holder of this Warrant shall, upon exercise of this Warrant, become entitled to
          receive securities or assets (other than Common Stock) then, wherever
          appropriate, all references herein to shares of Common Stock shall be deemed to
          refer to and include such shares and/or other securities or assets; and
          thereafter the number of such shares and/or other securities or assets shall be
          subject to adjustment from time to time in a manner and upon terms as nearly
          equivalent as practicable to the provisions of this paragraph 6. Any adjustment
          made herein other than pursuant to Section 6(c) hereof that results in a
          decrease in the Exercise Price shall also effect a proportional increase in the
          number of shares of Common Stock into which this Warrant is exercisable. 



11 






    7.       
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, pay to the Holder an amount in cash equal to the product resulting from
multiplying such fraction by the Market Price as of the Exercise Date. 



         8.       
          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, and applicable state securities laws, and is otherwise made in accordance
with the applicable provisions of the Securities Purchase Agreement. Upon such transfer or
other disposition, 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. 



         9.       
          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. 



         10.       
          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. 



12 





         11.       
          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 Corporation:



Ener1, Inc.

550 Cypress Creek Road

Suite 120

Fort Lauderdale, Florida 33309

Attn:    Kevin P. Fitzgerald

Tel:     954-202-4442

Fax:     954-202-2884



with a copy to:



Gibson, Dunn & Crutcher LLP

1050 Connecticut Avenue N.W.

Washington, DC 20036

Attn:    Stephen I. Glover

Tel:     202 955-8500

Fax:     202 467-0539








and if to the Holder, to such address
as shall be designated by the Holder in writing to the Company. 



     12.    
          Taxes. 



         (a)       
          The issue of stock certificates on exercises of this Warrant shall be made
          without charge to the exercising Holder for any tax in respect of the issue
          thereof. The Company shall not, however, be required to pay any tax which may be
          payable in respect of any transfer involved in the issue and delivery of stock
          in any name other than that of the Holder of any Warrant exercised, and the
          Company shall not be required to issue or deliver any such stock certificate
          unless and until the person or persons requesting the issue thereof shall have
          paid to the Company the amount of such tax or shall have established to the
          reasonable satisfaction of the Company that such tax has been paid. 



13 





         (b)       
          Notwithstanding any other provision of this Warrant or any other Transaction
          Document, for income tax purposes, any assignee or transferee shall agree that
          the Company and the Transfer Agent shall be permitted to withhold from any
          amounts payable to such assignee or transferee any taxes required by law to be
          withheld from such amounts. Unless exempt from the obligation to do so, each
          assignee or transferee shall execute and deliver to the Company or the Transfer
          Agent, as applicable, a properly completed Form W-8 or W-9, indicating that such
          assignee or transferee is not subject to back-up withholding for United States
          Federal income tax purposes. Each assignee or transferee that does not deliver
          such a form pursuant to the preceding sentence shall have the burden of proving
          to the Company’s reasonable satisfaction that it is exempt from such
          requirement. 




    13.       
Applicable Law.



        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. 




    14.       
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 sixty-six percent (66%) 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. 




[Signature Page to
Follow] 









14 








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







	 	ENER1, Inc. 



By: __________________________

      Name:

      Title:





15 















EXHIBIT A to WARRANT 




EXERCISE NOTICE 



        The
undersigned Holder hereby irrevocably exercises the right to purchase of the 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 5(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:






16 







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: