Document:

EXHIBIT
      4.23

    
 

    MEMORANDUM
      AGREEMENT

     

    This
      Memorandum Agreement made effective as of the 12th
      day of
      October, 2006 between Ener1, Inc. (“Ener1”) and Ener1 Group, Inc.
      (“Group”).

    

    WHEREAS,
      the Board of Directors of Group has elected Ajit Habbu as its Chief Financial
      Officer; and 

    

    WHEREAS,
      the Board of Directors of Ener1 has elected Ajit Habbu as its Chief Financial
      Officer; and

     

    WHEREAS,
      the Ener1 Board’s decision to elect Mr. Habbu and set his annual salary at
      $325,000 was made with the understanding that Group would defray, in cash,
      $100,000 of such salary cost, along with any employment tax payments and tax
      or
      other payments required relative to the $400,000 portion and any additional
      amounts required to purchase health insurance and other employee benefits for
      Mr. Habbu, reflecting that Mr. Habbu will be performing services to Group as
      its
      Chief Financial Officer; and

    

    WHEREAS,
      in return for such payments, Ener1 would allow Mr. Habbu to perform services
      for
      Group, subject to the terms hereof; and 

    

    WHEREAS,
      Group and Ener1 wish to memorialize and define the above understandings in
      this
      Agreement.

    

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

    

    1. Group
      will wire to Ener1’s account, in time to be included in the ADP draft for
      payroll funding for Ener1 (generally, not less than two business days prior
      to
      each payroll date): (a) an amount sufficient to cover 31% ($100,000/$325,000)
      of
      the payroll, payroll taxes and other payments required for Mr. Habbu; (b)
      amounts sufficient to cover 31% of the payments required from Ener1 to cover
      Mr.
      Habbu’s health insurance and other employee benefits; and (c) an amount
      sufficient to cover all expenses incurred by Mr. Habbu on behalf of Group to
      the
      extent that such expenses are requested to be paid by Ener1; provided, with
      respect to (b) and (c), that Ener1 identifies to Group the exact amount of
      each
      such payment with itemized details in writing the day prior to the day such
      payment is required. The dollar amounts in (a) and (b) will be adjusted as
      necessary to reflect any increments in Mr. Habbu’s salary or benefits. In
      return, Ener1 will allow Mr. Habbu to perform services for Group, provided
      that
      the amount, type and timing of such services does not adversely affect Ener1.
      Group will use any such services at its own risk. Ener1 shall not be responsible
      for any failure by Mr. Habbu to perform any such services or for his failure
      to
      perform any such services timely or properly, nor for any results of such
      failure; and Group hereby releases Ener1 from any costs, expenses, claims,
      damages, suits or investigations (including, without limitation, attorneys
      fees,
      court costs and costs of investigation, or fines or penalties of any nature)
      (“Losses”), resulting from such failure or the services provided to Group or the
      results thereof. Likewise, Ener1 hereby releases Group from any Ener1 Losses
      resulting from Mr. Habbu providing services to Group, except to the extent
      such
      Losses result from Mr. Habbu’s negligence, willful misconduct, violation of law
      or breach of fiduciary duty. 

    

    
      
        
        

      

      
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    2. In
      the
      event that Group fails to make any of the above-required payments on time,
      in
      addition to any other remedies available to Ener1 hereunder or at law or in
      equity, Group will indemnify and hold Ener1 and its subsidiaries, and the
      officers and directors of each of them, harmless, on a dollar-for-dollar basis,
      for any costs, expenses, claims, damages, suits or investigations (including,
      without limitation, attorneys fees, court costs and costs of investigation,
      or
      fines or penalties of any nature), resulting from such failure. In addition
      to
      such indemnification in the event of such payment failure, after notice and
      the
      opportunity to cure (such cure period to be five days), Ener1 may require Mr.
      Habbu to cease his services to Group. In addition, all such amounts that Group
      fails to pay to Ener1 shall be offset against any amount owed to Group by Ener1,
      first against intercompany advances that have not been documented into
      promissory notes, and any excess remaining after exhausting all such
      intercompany advances will be offset against such outstanding promissory notes
      outstanding from Ener1 to Group as Ener1 shall choose; and all such promissory
      notes outstanding shall be deemed modified hereby to so provide. If the amounts
      that Group fails to pay shall exceed the total of intercompany advances and
      promissory notes outstanding, Group shall execute a demand note payable to
      Ener1
      for such amounts and increase the principal of such note in the amount of any
      subsequent payment failures hereunder.

    

    3. Nothing
      in this Agreement shall eliminate or reduce the fiduciary and other
      responsibilities that Group and/or Mr. Habbu may have to Ener1. 

    

    4. General
      Terms. 

     

    (a) Notices.
      All
      notices, demands or other communications given under this Agreement shall be
      in
      writing and shall be mailed by first-class, registered or certified mail, return
      receipt requested, postage prepaid, or transmitted by hand delivery (including
      delivery by courier), telegram, telex, or facsimile transmission, addressed
      as
      follows:

     

    
       

      
        	 	 If to ENER1:	 Ajit Habbu
	 	 	 Ener1, Inc.
	 	 	 500 W. Cypress Creek Rd.,
                Suite 100
	 	 	 Ft. Lauderdale, FL
                33309
	 	 	 Facsimile:
                954-556-4031

      

       

      
         

        
          	 	 With a copy to:	 Ronald Stewart
	 	 	 Ener1, Inc.
	 	 	 500 W. Cypress Creek
                  Rd.,
                  Suite 100
	 	 	 Ft. Lauderdale, FL
                  33309
	 	 	 Facsimile:
                  954-776-3359

        

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      
         

           

          
            	 	 If to ENER1:	 Mike Zoi
	 	 	 Ener1, Inc.
	 	 	 500 W. Cypress Creek
                    Rd.,
                    Suite 100
	 	 	 Ft. Lauderdale, FL
                    33309
	 	 	 Facsimile:
                    954-556-4031

          

        

      

       

      
         

        
          	 	 With a copy to:	 Curtis Wolfe
	 	 	 Ener1, Inc.
	 	 	 500 W. Cypress Creek
                  Rd.,
                  Suite 100
	 	 	 Ft. Lauderdale, FL
                  33309
	 	 	 Facsimile:
                  954-229-7595

        

      

    

     

    
    

    or
      to
      such other address which each Party may designate by notice in writing. Each
      such notice, demand or other communication which shall be mailed, delivered
      or
      transmitted in the manner described above shall be deemed given for all purposes
      at such time as it is delivered to the addressee (with the return receipt,
      the
      delivery receipt, the affidavit of messenger or (with respect to a telex) the
      answer back being deemed conclusive (but not exclusive) evidence of such
      delivery) or at such time as delivery is refused by the addressee upon
      presentation.

     

    (b) Governing
      Law.
      The
      construction and interpretation of this Agreement and the rights of the Parties
      shall be governed by the laws of the State of Florida, without regard to its
      conflicts of laws provisions. The state and federal courts located in Florida
      shall have exclusive jurisdiction over any dispute arising from or in connection
      with this Agreement not otherwise submitted to arbitration. Each Party hereby
      consents to the personal jurisdiction of the state and federal courts in Florida
      in any such dispute arising from or relating to this Agreement. Each Party
      further agrees that services of process may be made, in addition to any other
      method permitted by law, by certified mail, return receipt requested, sent
      to
      the applicable address set forth herein. Any award or injunctive relief granted
      in any dispute may be enforced by either Party in either the courts of the
      State
      of Florida or in the United States District Courts located in Broward County,
      Florida. The Parties hereby expressly waive their rights to trial by
      jury.

     

    (c) Assignment.
      This
      Agreement shall be binding upon and shall inure to the benefit of the Parties
      hereto and their respective successors and assigns as permitted hereunder.
      No
      person or entity other than the Parties hereto is or shall be entitled to bring
      any action to enforce any provision of this Agreement against any of the Parties
      hereto, and the covenants and agreements set forth in this Agreement shall
      be
      solely for the benefit of, and shall be enforceable only by, the Parties hereto
      or their respective successors and assigns as permitted hereunder. 

    

    (d) Entire
      Agreement; Amendment.
      This
      Agreement constitutes the entire agreement between the Parties with respect
      to
      the subject matter hereof and supersedes all other prior agreements and
      understandings, both written and oral, between the Parties with respect to
      such
      matters. No amendment to this Agreement shall be made except by an instrument
      in
      writing signed on behalf each Party.

     

    (e) Severability.
      If any
      court or arbiter of applicable jurisdiction determines that any of the
      agreements, covenants and undertakings set forth herein, or any part thereof,
      is
      invalid or unenforceable, the provision shall, to the extent possible, be
      restated to reflect the original intention of the Parties, and the remainder
      of
      this Agreement shall be given full effect, without regard to the invalid or
      restated portions.

     

    
      
        
        

      

      
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    (f) Waiver.
      The
      failure of either Party to assert a right hereunder or to insist upon compliance
      with any term or condition of this Agreement shall not constitute a waiver
      of
      that right or excuse a similar subsequent failure to perform any such term
      or
      condition by the other Party.

    

    (g) Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed to be an original, but all of which together shall constitute one and
      the
      same agreement.

     

      
(h) Compliance
      with Laws.
      In
      performing under this Agreement, both Parties agree to comply with all
      applicable laws, rules, and regulations of any governmental entity.

     

    (i) Term.
      This
      Agreement shall remain in force until Mr. Habbu is no longer employed by Ener1
      and all Group obligations to Ener1 hereunder have been paid in
      full.

     

    WHEREFORE,
      the parties hereto have caused their duly authorized officers to execute this
      Agreement on their behalf, effective as of the date first written
      above.

     

    

     

    ENER1,
      INC.       ENER1
      GROUP, INC.

     

    By: _/s/
      Ronald Stewart_______       By: _/s/
      Curtis Wolfe______

     

    Name: Ronald
      Stewart               Name: Curtis
      Wolfe

     

    Title: General
      Counsel, Secretary         Title: General
      Counsel

     

     

    
      
        
        

      

      4EXHIBIT
      4.24

    
 

    EMPLOYMENT
      AGREEMENT

    

    THIS
      EMPLOYMENT AGREEMENT (this “Agreement”) is made effective as of the 12th
      day of October, 2006, by and between ENER1, INC., a Florida corporation with
      its
      offices at 500 West Cypress Creek Road, Suite 100, Ft. Lauderdale, Florida
      33309
      (the “Corporation”), and AJIT HABBU (the “Executive”).

    

    WHEREAS,
      the Corporation desires to retain the Executive in the position described
      herein, and the Executive desires to assume such position, on the terms and
      conditions set forth herein.

    

    NOW,
      THEREFORE, in consideration of the premises and the mutual agreements made
      herein, and intending to be legally bound hereby, the Corporation and the
      Executive agree as follows:

    

    1. Employment;
      Duties.

    

    (a) Employment
      and Employment Period.
      The
      Corporation will commence the employment of the Executive beginning October
      16,
      2006 (the “Commencement Date”) and shall continue to employ the Executive until
      October 16, 2011 (the “Initial Term”). Executive’s employment shall then
      automatically renew for subsequent one year periods following the termination
      of
      the Initial Term or any subsequent term, unless either party gives written
      notice to the other at least 30 days prior to the termination of such period
      of
      its intent not to extend or renew this Agreement. The Initial Term and all
      subsequent terms are referred to herein as the “Employment Period.”

    

    (b) Offices,
      Duties and Responsibilities.
      During
      the Employment Period, the Executive shall hold the title of Chief Financial
      Officer of the Corporation, and shall perform the duties commensurate with
      such
      position. The Executive’s office shall be at the Corporation’s office in Broward
      County or Miami-Dade County, Florida. 

    

    (c) Devotion
      to Interests of the Corporation.
      Except
      as expressly authorized by the Corporation, until the earlier to occur of (i)
      the effective date of termination of this Agreement by either the Executive
      or
      the Corporation or (ii) the end of the Employment Period, the Executive shall
      devote substantially all of his business services to the performance of his
      duties hereunder; provided, however, the Executive shall not be restricted
      from
      non-executive service to any charitable organization. 

    

    2. Base
      Compensation and Fringe Benefits.

    

    (a) Base
      Compensation.
      The
      Corporation shall pay the Executive a base salary at the rate of $325,000 per
      year (“Base Salary”) paid semi-monthly at the Corporation’s normal payroll
      intervals, with deduction of such amounts as may be required to be withheld
      under applicable law and regulations. The Base Salary shall not be reduced
      during the Employment Period. The Corporation shall consider, in its discretion,
      increasing the Executive’s Base Salary on at least an annual basis, with the
      first increase being effective January 1, 2008.

    

    
      
        
        

      

      
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    (b) Fringe
      Benefits.
      The
      Executive shall be entitled to eligibility for enrollment in the Corporation’s
medical,
      dental, disability and life insurance plans, pension plan, 401(k) and SERP
      plans, deferred compensation and incentive compensation plans, and all other
      benefits as the Corporation extends to any of its regular employees, pursuant
      to
      the applicable personnel policies of the Corporation.
      Executive shall be entitled to four (4) weeks paid vacation per year. The
      Executive shall have a corporate credit/debit card for authorized business
      use.
      During the Employment Period the Corporation shall provide the Executive a
      car
      allowance paid monthly. During the Employment Period, upon submission of
      reasonable supporting documentation and in specific accordance with such
      guidelines as may be established from time to time by the Board, the Executive
      shall be reimbursed by the Corporation for all reasonable business expenses
      actually and necessarily incurred by the Executive on behalf of the Corporation
      in connection with the performance of services under this Agreement, including
      without limitation, expenses related to commuting to South Florida for four
      (4)
      months following the Commencement Date and preceding the Executive’s relocation
      to South Florida. At no time during the Employment Term shall Executive’s fringe
      benefits as described in this paragraph be reduced without the Executive’s
      written consent. The Executive shall be solely responsible for transportation
      expenses between his home in South Florida after the earlier of four months
      following the Commencement Date or his relocation to South Florida.

    

    (c) Bonus
      Compensation.
      Executive shall be considered annually by the Board of Directors for the award
      of a cash bonus (the “Annual Bonus”), with a target amount equal to one (1)
      times the Executive’s then-current Base Salary for reference (such amount, the
“Target Bonus”). The actual amount of the Annual Bonus each year may be greater
      than, less than or equal to the Target Bonus in the reasonable discretion of
      the
      Board, and shall be based upon whether Executive fails to meet, meets or exceeds
      the goals the Board and the Executive mutually agree for each fiscal year.
      For
      any year (other than 2006) that does not fall entirely within the Employment
      Period, the Annual Bonus for that year shall be prorated according to the
      following formula: (i) the bonus for that entire year, multiplied by (ii) a
      fraction, (x) the numerator of which shall be the number of days in that year
      that fell within the Employment Period and (y) the denominator of which shall
      be
      365. The Annual Bonus, if any, shall be paid no later than ninety (90) days
      after the end of the Corporation’s fiscal year. 

    

    (d) Equity
      Interest.
      

     

    (1) On
      the
      Commencement Date, the Executive will receive (i) an option (the “Option”) to
      purchase 2,500,000 shares of common stock of the Corporation (the “Common
      Stock”) at an exercise price equal to fair market value on the date of the
      option grant. On each of the first and second anniversary of the Commencement
      Date, the Option will vest as to 750,000 shares of Common Stock. On the third
      anniversary of the Commencement Date, the Option will vest as to 1,000,000
      shares of Common Stock. Executive shall have the right to exercise the Option
      as
      to some or all of the shares of Common Stock in which he is vested at any date
      following vesting.

     

    
      
        
        

      

      
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    (2) During
      the Employment Period and for a period of sixty (60) days following the last
      day
      of the Employment Period, at the time of the Executive’s exercise of any options
      in the Corporation, the Corporation shall pay to the Executive a bonus equal
      to
      the amount of the exercise price for such options being exercised to give effect
      to the parties’ intention that the Executive have a right of “cashless exercise”
of the vested Options. All
      Options granted hereunder shall be granted pursuant to a stock option agreement
      mutually agreeable to the Executive and the Board and delivered to the Executive
      within thirty (30) days following the Commencement Date (the “Stock Option
      Agreement”). All Options issued under this Agreement and under the Stock Option
      Agreement shall be adjusted for mergers, stock splits, stock spin-offs, reverse
      stock splits, and similar events. Notwithstanding
      anything contained herein to the contrary, the Option shall be fully vested,
      and
      automatically exercised immediately upon the occurrence of a Liquidity Event
      (as
      hereinafter defined). “Liquidity Event” means (i) a merger, (ii) initial public
      offering, or (iii) a Change In Control (as hereinafter defined). “Change in
      Control” shall mean (i) a reorganization, merger, consolidation or other form of
      corporate transaction or series of transactions, in each case, with respect
      to
      which persons who were the shareholders (or beneficial owners of the
      shareholders) of the Corporation immediately prior to such reorganization,
      merger or consolidation or other transaction do not, immediately thereafter,
      own
      more than fifty percent (50%) of the combined voting power entitled to vote
      generally in the election of directors of the reorganized, merged or
      consolidated company, (ii) a liquidation or dissolution of the Corporation,
      (iii) the sale, lease, exchange or other disposition of all or substantially
      all
      of the assets of the Corporation (other than any disposition of assets as a
      result of the exercise of conversion rights in the Corporation’s financing
      documents or that result from actions pursuant to pledge agreements securing
      the
      Corporation’s debt), or (iv) the acquisition by any person, or any two or more
      persons acting as a group, and all affiliates of such person or persons, who
      prior to such time owned less than fifty percent (50%) of the combined voting
      power entitled to vote generally in the election of directors, of additional
      voting power in one or more transactions, or series of transactions, such that
      following such transaction or transactions, such person or group and affiliates
      beneficially owns fifty percent (50%) or more of the combined voting power
      entitled to vote generally in the election of directors. 

     

    (3) Except
      as
      specifically provided herein, to the extent permissible under Section 422 of
      United States Internal Revenue Code (the “Code”) the options shall be incentive
      stock options, and the Corporation shall take all actions reasonably necessary
      to establish and maintain a qualified option plan pursuant to which the Options
      shall be qualified as incentive stock options under the Code. 

     

    (e) Payments
      for Relocation.
      The
      Corporation will reimburse the Executive for actual, documented, reasonable
      costs associated with relocating to Florida, including without limitation
      transportation of household goods, vehicles and persons, import duties, closing
      costs, broker fees, and fees for tax preparation and negotiation of this
      Agreement, not to exceed an aggregate of $85,000. The Executive must relocate
      to
      South Florida within ten (10) months of the Commencement Date.

     

    
      
        
        

      

      
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    4. Trade
      Secrets.
      The
      Executive shall not use (except for the benefit of the Corporation while
      employed hereunder) or disclose to anyone any of the Corporation’s trade secrets
      or other confidential information. The term “trade secrets or other confidential
      information” includes, by way of example, matters of a technical nature, such as
      scientific, trade and engineering secrets, “know-how,” formulae, secret
      processes, recipes or machines, inventions, computer programs (including
      documentation of such programs) and research projects, and matters of a business
      nature, such as proprietary information about costs, profits, markets, sales,
      lists of customers, and other information of a similar nature to the extent
      not
      available to the public, and plans for future development. After termination
      of
      this Agreement, the Executive shall not use or disclose trade secrets or other
      confidential information unless such information (a) is or becomes a part of
      the
      public domain other than through a breach of this Agreement or (b) is disclosed
      to the Executive by a third party who is entitled to receive and disclose such
      information. 

    

    5. Return
      of Documents and Property.
      Upon
      the end of the Employment Period or upon the effective date of notice of the
      Executive’s or the Corporation’s election to terminate this Agreement, the
      Executive or his personal representatives shall deliver to the Corporation
      (a) all documents and materials containing trade secrets or other
      confidential information relating to the business and affairs of the
      Corporation, and (b) all documents, materials and other property belonging
      to the Corporation, which in either case are in the possession or under the
      control of the Executive (or his heirs or personal
      representatives).

    

    6. Discoveries
      and Works.
      All
      discoveries and works made or conceived by the Executive during his employment
      by the Corporation, jointly or with others, that relate to the Corporation’s
      activities shall be owned by the Corporation. The term “discoveries and works”
includes, by way of example, inventions, computer programs (including
      documentation of such programs), technical improvements, processes, drawings
      and
      works of authorship. The Executive shall (i) promptly notify, make full
      disclosure to, and execute and deliver any documents requested by, the
      Corporation to evidence or better assure title to such discoveries and works
      in
      the Corporation, (ii) assist the Corporation in obtaining or maintaining for
      itself at its own expense United States and foreign patents, copyrights, trade
      secret protection or other protection of any and all such discoveries and works,
      and (iii) promptly execute, whether during his employment by the Corporation
      or
      thereafter, all applications or other reasonably requested endorsements
      necessary or appropriate to maintain patents and other rights for the
      Corporation and to protect its title thereto. Executive
      claims no inventions,
      patented or unpatented, conceived or made by him prior to his employment by
      the
      Corporation and which should excluded from this Agreement.

    

    7. Termination;
      Resignation.

    

    (a) Parties’
      Rights to Terminate.
      The
      Executive may terminate this Agreement by resignation at any time, upon sixty
      (60) days’ prior written notice (the “Executive’s Notice Period”) or for “Good
      Reason,” as described in Section 7(c) below, and the Corporation may terminate
      this Agreement with “Cause,” as defined in Section 7(e) below, or without Cause
      upon ninety (90) days’ prior written notice (the “Corporation’s Notice Period”).

    

    
      
        
        

      

      
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    (b) Termination
      for Cause; Resignation without Good Reason.
      In the
      event the Corporation terminates this Agreement for “Cause” (as defined in
      Section 7(e) below) or the Executive resigns without “Good Reason,” (as defined
      in Section 7(d) below), the Executive shall be entitled to payment of all
      amounts of Base Salary (if the Corporation gives notice within the first six
      months following the Commencement Date, then the Base Salary obligation is
      through the end of the six month period from the Commencement Date), accrued
      but
      unused vacation, reimbursements for appropriate expenses incurred prior to
      the
      termination date, and any other amounts payable under Corporation policy or
      applicable law that are due or accrued as of the termination date. On the
      effective date of any termination by the Corporation for “Cause” or the
      resignation by the Executive without “Good Reason”, all unvested options shall
      immediately expire; provided, however, all vested Options shall remain vested
      and subject to exercise; provided, further, that in this case the Executive
      shall exercise any vested Options within 60 days from the effective date of
      termination. After the first anniversary of the Commencement Date, on the
      effective date of any termination by the Corporation without “Cause” or the
      resignation by the Executive with “Good Reason,” an additional amount of Options
      will vest in an amount calculated according
      to the following formula: (i) the amount of Options scheduled at the end of
      the
      then current anniversary year, multiplied by (ii) a fraction, (x) the numerator
      of which shall be the number of days in that year that fell within the
      Employment Period and (y) the denominator of which shall be 365. 

    

    (c) Termination
      Without Cause or Resignation with Good Reason.
      If the
      Corporation terminates the Executive’s employment without Cause or the Executive
      terminates his employment for Good Reason all vested Options together with
      all
      Options which would have vested within ninety (90) days of the effective date
      of
      such termination shall become or remain fully vested, as the case may be, and
      subject to exercise; provided, however, that in this case the Executive shall
      exercise any vested Options within 60 days from the effective date of
      termination. In addition, if the Corporation terminates the Executive’s
      employment without Cause or the Executive terminates his employment for Good
      Reason, the Corporation shall pay to the Executive the Base Salary (but no
      bonus) for a period of six (6) months beginning on the effective termination
      date. Other than as set forth in this paragraph, in no event shall the
      Corporation pay any severance.

    

    (d) Good
      Reason.
“Good
      Reason” shall mean (i) a material reduction of the Executive's duties, title,
      position, reporting status, or responsibilities; (ii) a reduction of the
      Executive's Base Salary as in effect immediately prior to such reduction; (iii)
      a material, uncured breach by the Corporation of this Agreement (after receiving
      notice of such breach and a period of thirty (30) day to cure such breach (the
      “Executive’s Notice Period”); (iv) material failure by the Corporation to
      promptly pay Executive’s salary and/or deliver benefits; (v) relocation of
      Executive’s office to a location outside of Broward County or Miami-Dade County,
      Florida without the Executive’s prior agreement; or (vi) the Corporation’s
      failure to maintain D&O insurance having commercially reasonable policy
      limits and coverage, while the Corporation is publicly traded. During the
      Executive’s Notice Period, the Corporation shall have the right to cure any
      action or condition that constitutes Good Reason.

    

    (e) Cause.
“Cause”
      shall mean (i) the continued, willful and deliberate failure of the Executive
      to
      accept and cooperate with the lawful actions and initiatives assigned to the
      Executive by the Board from time to time, provided such duties are consistent
      with his position, in a manner substantially consistent with the manner
      prescribed by the Board (other than any such failure resulting from incapacity
      due to physical or mental illness), (ii) the willful and deliberate engaging
      by
      the Executive in misconduct materially and demonstrably injurious to the
      Corporation, (iii) the conviction of the Executive for commission of a felony,
      whether or not such felony was committed in connection with the Corporation’s
      business, or (iv) the circumstances described in Section 8 hereof, in which
      case
      the provisions of Section 8 shall govern the rights and obligations of the
      parties.

    

    
      
        
        

      

      
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    8. Disability;
      Death.
      (a)
      If,
      prior to the expiration or termination of the Employment Period, the Executive
      shall be unable to substantially perform his duties by reason of disability
      or
      impairment of health as determined (by a physician having staff privileges
      at a
      private hospital located in Dade County or Broward County, Florida) for at
      least
      three consecutive calendar months, the Corporation shall have the right to
      terminate this Agreement by giving written notice to the Executive to that
      effect, but only if at the time such notice is given such disability or
      impairment is still continuing. After giving such notice, (i) the Employment
      Period shall terminate with the payment of the Executive’s Base Salary for the
      month in which notice is given and the payment of a pro rata
      portion
      of any Annual Bonus that would have been payable to Executive under Section
      2(c)
      had he not become disabled, (ii) all unvested Options (and any other option
      or
      restricted stock granted to him) shall, immediately upon such effective date,
      become fully vested and subject to exercise, and (iii) all of the Executive’s
      benefits under this Agreement shall terminate, except that the Executive shall
      receive such accidental disability benefits to which the Executive may be
      entitled under the plans of the Corporation then in effect. In the event of
      a
      dispute as to whether the Executive is disabled within the meaning of this
      Section 8(a), either party may from time to time request a medical examination
      of the Executive by a doctor appointed by the Chief of Staff of a hospital
      selected by mutual agreement of the parties, or as the parties may otherwise
      agree, and the written medical opinion of such doctor shall establish a
      presumption as to whether the Executive has become disabled and the date when
      such disability arose. Such presumption shall become binding and conclusive
      upon
      the parties unless, within 20 days of the date of receipt of such written
      medical opinion, the party disputing such opinion provides a contrary written
      medical opinion from two doctors appointed by the same Chief of Staff which
      appointed the first doctor, in which event the opinions of the latter two
      doctors shall become binding and conclusive upon the parties. The cost of any
      such medical examinations shall be borne by the Corporation, except that the
      Executive shall bear the cost of any medical examinations sought in order to
      rebut a presumption of disability.

    

    (b) If,
      prior
      to the expiration or termination of the Employment Period, the Executive shall
      die, the Corporation shall pay to the Executive’s estate (or to the revocable
      living trust previously specified by the Executive) his base compensation
      through the end of the month in which the Executive’s death occurred and a
pro rata
      portion
      of any bonus (if any) that would have been payable to the Executive under
      Section 2(c) had his death not occurred, at which time the Employment Period
      shall terminate without further notice. In addition, all of the Executive’s
      benefits under this Agreement shall terminate, except that the Executive’s
      estate shall receive such accidental death benefits to which the Executive
      may
      be entitled under the plans of the Corporation then in effect.

    

    9. Intentionally
      Omitted. 

    

    10. Enforcement.
      The
      Executive agrees that the Corporation’s remedies at law for any breach or threat
      of breach by him of the provisions of Sections 4, 5 and 6 hereof will be
      inadequate, and that the Corporation shall be entitled to pursue an injunction
      or injunctions (and temporary restraining orders and preliminary injunctions,
      as
      the case may be) to prevent breaches of the said provisions and to enforce
      specifically the terms and provisions thereof, in addition to any other remedy
      to which the Corporation may be entitled at law or equity.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    11. Severability.
      Should
      any provision of this Agreement be determined to be unenforceable or prohibited
      by any applicable law, such provision shall be ineffective to the extent, and
      only to the extent, of such unenforceability or prohibition without invalidating
      the balance of such provision or any other provision of this Agreement, and
      any
      such unenforceability or prohibition in any jurisdiction shall not invalidate
      or
      render unenforceable such provision in any other jurisdiction.

    

    12. Assignment.
      The
      Executive’s rights and obligations under this Agreement shall not be assignable
      by the Executive. The Corporation’s rights and obligations under this Agreement
      shall be assignable by the Corporation, including as incident to the transfer,
      by merger or otherwise, of all or substantially all of the business of the
      Corporation. In the event of any such assignment by the Corporation, all rights
      of the Corporation hereunder shall inure to the benefit of the
      assignee.

    

    13. Notices.
      Any
      notice required or permitted under this Agreement shall be deemed to have been
      effectively made or given if in writing and personally delivered or mailed
      properly addressed in a sealed envelope, postage prepaid by certified or
      registered mail. Unless otherwise changed by notice, notice shall be properly
      addressed to Executive if addressed to:

    

    Ajit
      Habbu

    3461
      Fox
      Hollow Drive NE

    Marietta,
      GA 30068

     

    and
      properly addressed to the Corporation if addressed to:

    

    Chairman

    Ener1,
      Inc.

    500
      West
      Cypress Creek Road, Suite 100

    Ft.
      Lauderdale, Florida 33309

    Email:
      victor.mendes@ener1group.com

    

    with
      a
      copy to:

    Ronald
      Stewart

    General
      Counsel

    Ener1,
      Inc.

    500
      West
      Cypress Creek Road, Suite 100

    Ft.
      Lauderdale, Florida 33309

    Email:
      rstewart@ener1.com

    

    14. Award
      to Prevailing Party in Dispute.
      In the
      event either of the parties to this Agreement commences any action or proceeding
      arising out of, or relating in any way to, this Agreement, the prevailing party
      shall be entitled to recover, in addition to any other relief awarded to such
      party, his or its costs, expenses and reasonable attorneys’ fees.

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    15. Additional
      Documents to be Executed by the Executive.
      The
      obligations of the Corporation under this Agreement shall be subject to the
      execution and delivery, by the Executive, of the Corporation’s Business Code of
      Conduct, and other standard in-processing documentation normally required of
      all
      incoming employees. The obligations of the Executive thereunder shall be
      additive and complementary to the Executive’s obligations
      hereunder.

    

    16.  Indemnification.
      

    

    (a)
       If
      the
      Executive is made a party or threatened to be made a party to any action, suit
      or proceeding, whether civil, criminal, administrative or investigative (a
      “Proceeding”), by reason of the fact that the Executive is or was a director or
      officer of the Corporation or any subsidiary thereof or is or was serving at
      the
      request of the Corporation or any subsidiary thereof as a director, officer,
      member, employee or agent of another person, the Executive shall be indemnified
      and held harmless by the Corporation to the fullest extent authorized by the
      appropriate governing law, as the same exists or may hereafter be amended,
      against all damages, losses, judgments, liabilities, fines, settlements, and
      costs, attorneys' fees and any expenses of establishing a right to
      indemnification under this Agreement (“Expenses”) incurred by the Executive in
      connection therewith, and such indemnification shall continue after Executive
      has ceased to be an officer, director, or agent, or is no longer employed by
      the
      Corporation and shall inure to the benefit of his heirs, executors and
      administrators; provided, however, that the Executive shall not be so
      indemnified for any Proceeding which is adjudicated to have arisen out of his
      willful misconduct, bad faith, gross negligence or reckless disregard of duty
      or
      his failure to act in good faith in the reasonable belief that his action was
      in
      the best interests of the Corporation. Expenses incurred by the Executive in
      connection with any Proceeding shall be paid by the Corporation in advance
      upon
      the Executive's request and Executive's delivery of an undertaking to reimburse
      the Corporation for Expenses with respect to which the Executive is not entitled
      to indemnification. The right to indemnification and the payment of Expenses
      incurred in defending a Proceeding in advance of its final disposition hereunder
      shall not be exclusive of any other right which the Executive may have or
      hereafter may acquire.

    

       (b) The
      Executive shall give the Corporation notice of any claim made against him for
      which indemnification could be sought under this Agreement, but the failure
      of
      the Executive to give such notice shall not relieve the Corporation of any
      liability the Corporation may have to the Executive except to the extent that
      the Corporation is prejudiced thereby. In addition, the Executive shall give
      the
      Corporation such information and cooperation as it may reasonably require and
      as
      shall be within the Executive's power and at such time and places as are
      convenient for the Executive.

    

       (c) The
      Corporation will be entitled to participate in any Proceeding at its own expense
      and, except as otherwise provided below, the Corporation will be entitled to
      assume the defense thereof, with counsel reasonably satisfactory to the
      Executive. The Executive also shall have the right to employ his own counsel
      in
      such Proceeding if he reasonably concludes that failure to do so would involve
      a
      conflict of interest between the Corporation and the Executive, and under such
      circumstances the fees and expenses of such counsel shall be at the expense
      of
      the Corporation.

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

       (d) The
      Corporation shall not be liable to indemnify the Executive for any amounts
      paid
      in settlement of any claim effected without its written consent. The Corporation
      shall not settle any claim in any manner which would not include a full and
      unconditional release of the Executive without the Executive's prior written
      consent. Neither the Corporation nor the Executive will unreasonably withhold
      or
      delay their consent to any proposed settlement.

    

    17.  Miscellaneous.
      This
      Agreement constitutes the entire agreement, and supersedes all prior agreements,
      of the parties hereto relating to the subject matter hereof, and there are
      no
      written or oral terms or representations made by either party other than those
      contained herein. The validity, interpretation, performance and enforcement
      of
      this Agreement shall be governed by the laws of the State of Florida. The
      headings contained herein are for reference purposes only and shall not in
      any
      way affect the meaning or interpretation of this Agreement.

     

    18.  Press
      Releases.
      During
      the Term of this Agreement, the Executive shall have a right of approval of
      all
      press releases of the Corporation that mention the Executive and shall have
      a
      right of approval of all photographs of the Executive that are used in such
      press releases, which approvals shall not be unreasonably withheld.

     

    [This
      space intentionally blank.]

     

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

     IN
      WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
      effective as of the day and year first above written.

     

    ENER1,
      INC.           EXECUTIVE

    

    

    

    By:
      _/s/
      Ronald N. Stewart________   _/s/
      Ajit
      Habbu_______________ 

    Name: Ronald
      N.
      Stewart              Ajit
      Habbu

    Title:
      General Counsel and Secretary 

     

    

    
      
        
        

      

      10

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