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EXECUTION VERSION

KANDI TECHNOLOGIES GROUP, INC.

WARRANT SUBSCRIPTION AGREEMENT

This Subscription Agreement (this “Agreement”) is entered into as of the date
set forth on the signature page hereof by and between Kandi Technologies Group,
Inc., a Delaware corporation (the “Company”), and the undersigned investor
(together with its successors and permitted assigns, the “Investor”). In
connection with a private placement offering by the Company to accredited
investors (the “Private Placement Offering”), the Investor hereby subscribes for
and agrees to purchase from the Company a warrant, in the form attached hereto
as Exhibit A (the “Warrant”), to purchase shares of common stock, par value
$0.001 per share, of the Company (“Common Stock”), as set forth below:

Investor Name:        [Insert Name of Investor] Subscriber Address:            
    State of Incorporation:           Number of Shares Issuable Upon          
Exercise of the Warrant:                                                        
               (the “Warrant Shares”)       Price Per Warrant Share:   $ 0.01  
    Total Purchase Price:   $_____________(the “Purchase Price”)       Exercise
Price Per Warrant Share:   $ 15.00

1. Subscription; Placement Agent. Subject to the terms and conditions hereof,
the Investor hereby subscribes for and agrees to purchase from the Company, and
the Company hereby agrees to issue and sell to the Purchaser, the Warrant at the
Purchase Price. The Warrant, together with the Warrant Shares, shall be referred
to as the “Securities.”

(a) The Purchase Price is payable by wire transfer of immediately available
funds contemporaneously with the execution and delivery of this Agreement to an
account designated by the Company. The Company hereby agrees to issue to the
Investor the Warrant as soon as reasonably practicable, which shall be no later
than five (5) business days after the execution of this Agreement.

(b) Subject to the terms and conditions of the Warrant, the Investor shall be
entitled to at any time or from time to time after issuance date of the Warrant
(the “Effective Date”), and before 5:00 p.m. Eastern Time on January 30, 2015,
to purchase the Warrant Shares at the Exercise Price Per Warrant Share indicated
above. In connection with a full, or partial, exercise of the Warrant, the Price
Per Warrant Share shall be credited against the Exercise Price Per Warrant Share
(for clarification purposes only, the effective price per Warrant Share shall be
$14.99) .

(c) In connection with the Offering, the Company has retained a placement agent
on a “best-efforts” basis (the “Placement Agent”).

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2. Acknowledgments, Representations and Warranties and Covenants of the
Investor. The Investor acknowledges, represents, warrants and covenants as
follows:

(a) The Investor is an entity duly organized, validly existing and in good
standing under the laws of the state of its incorporation or formation. The
Investor has the authority to enter into the transactions and consummate the
transactions contemplated herein and such transactions shall not contravene any
contractual, regulatory, statutory or other obligation or restriction applicable
to the Investor.

(b) This Agreement constitutes the Investor’s valid and legally binding
obligation, enforceable in accordance with its terms except as may be limited by
bankruptcy, insolvency, reorganization, or other laws of general application
relating to or affecting the enforcement of creditors’ rights generally, and the
effect of rules of law governing the availability of equitable remedies.

(c) The Investor represents that the Investor is an “accredited investor” as
such term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the “Act”), and that the Investor is able to
bear the economic risk and illiquidity of an investment in the Securities.

(d) The Investor recognizes that the purchase of the Securities involves a high
degree of risk in that (i) an investment in the Company is highly speculative
and only investors who can afford the loss of their entire investment should
consider investing in the Company; (ii) the Investor may not be able to
liquidate its investment; (iii) transferability of the Securities is extremely
limited; and (v) in the event of a disposition, the Investor could sustain the
loss of its entire investment.

(e) The Investor is a sophisticated investor by virtue of the Investor’s
education, training, business, and/or numerous prior investments made by the
Investor or on the Investor’s behalf or through entities which the Investor
alone or with others, controls. The Investor is knowledgeable and experienced in
financial and business matters, especially in investments which have risks
similar to those which may be encountered by the Company. The Investor is
capable of evaluating the merits and risks of an investment in the Company and
of making an informed business decision.

(f) The Investor (i) hereby represents that the Investor has had available to it
and has during the course of this transaction had available to it and has
reviewed to its satisfaction the Company's SEC Filings (as hereafter defined),
including without limitation the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2012, the Company's Quarterly Reports for fiscal
quarters ended March 31, 2013, June 30, 2013 and September 30, 2013 and all
other information regarding the Company which the Investor has requested or
desired to know; (ii) has been afforded the opportunity to ask questions of and
receive answers from duly authorized officers or other representatives of the
Company concerning the terms and conditions of this Private Placement Offering;
and (iii) has had an opportunity to request and obtain all additional
information reasonably deemed necessary to verify the accuracy of the answers to
such questions.

(g) The Investor is not relying on the Company or on any legal or other opinion
in the materials reviewed by Investor with respect to the financial or tax
considerations of the Investor relating to the Investor’s subscription of the
Warrant. The Investor has relied solely on the representations and warranties,
covenants and agreements of the Company in this Agreement and on the Investor’s
examination and independent investigation in making the decision to acquire the
Warrant.

(h) The Investor represents that (i) the Investor was contacted regarding the
sale of the Securities by the Placement Agent (or an authorized agent or
representative thereof) with whom the Investor had a prior substantial
pre-existing relationship and (ii) no Securities were offered or sold to it by
means of any form of general solicitation or general advertising.

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(i) The Investor hereby acknowledges that the Offering has not been reviewed by
the United States Securities and Exchange Commission (the “SEC”), because this
Private Placement Offering is intended to be exempt from the registration
requirements of the Act. The Investor agrees that the Investor will not,
directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of
(or solicit any offers to buy, purchase or otherwise acquire or take a pledge
of) any of the Securities, except in compliance with the Act and the rules and
regulations promulgated thereunder.

(j) The Investor understands that none of the Securities have been registered
under the Act by reason of a claimed exemption under the provisions of the Act
which depends, in part, upon the Investor's investment intention. In this
connection, the Investor hereby represents that the Investor is purchasing the
Securities for the Investor's own account for investment and not with a view
toward the resale or distribution thereof to others. The Investor was not formed
for the purpose of purchasing the Securities. The Investor understands that Rule
144 promulgated under the Act requires, amongst other conditions, holding period
requirements prior to the resale of securities acquired in a non-public
offering.

(k) The Investor understands and hereby acknowledges that the Company is under
no obligation to register the Securities under the Act or any state securities
or "blue sky" laws. The transfer of the Securities shall only be permitted if
accompanied by an opinion of counsel reasonably satisfactory to the Company that
neither the sale nor the proposed transfer results in a violation of the Act or
any applicable state "blue sky" laws (collectively, “Securities Laws”).

(l) The Investor consents to the placement of a legend on any certificate or
other document evidencing the Securities indicating that such Securities have
not been registered under the Act or any state securities or "blue sky" laws and
setting forth or referring to the restrictions on transferability and sale
thereof contained in this Agreement.

(m) The Investor understands, acknowledges and agrees that no federal or state
agency or authority has made any finding or determination as to the accuracy or
adequacy of this Agreement or as to the fairness of the terms of the Private
Placement Offering nor any recommendation or endorsement of the Securities. Any
representation to the contrary is a criminal offense. In making an investment
decision, the Investor must rely on its own examination of the Company and the
terms of the Private Placement Offering, including the merits and risks
involved.

3. Representations and Warranties of the Company. The Company represents,
warrants and agrees that:

(a) The Company has all the requisite authority and power to enter into and
consummate the transactions contemplated herein and such transactions shall not
contravene any organizational documents, contractual, regulatory, statutory or
other obligation or restriction applicable to the Company.

(b) This Agreement has been duly and validly authorized, executed and delivered
by the Company, and shall constitute a legal, valid, and binding obligation of
the Company, enforceable against it in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, or similar laws affecting the
enforcement of creditors’ rights generally and general equitable principles
whether in a proceeding in equity or at law.

(c) The execution, delivery and performance of this Agreement and the Securities
by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance of
the Warrant Shares) will not (i) result in a violation of the Certificate of
Incorporation or other organizational documents of the Company or any of its
subsidiaries, any capital stock of the Company or any of its subsidiaries or
bylaws of the Company or any of its subsidiaries, (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company or any of its subsidiaries is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment or decree
(including foreign, federal and state securities laws and regulations and the
rules and regulations of the Nasdaq Global Select Market) applicable to the
Company or any of its subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected except, in the case of
clause (ii) or (iii) above, to the extent such violations that could not
reasonably be expected to have a material adverse effect.

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(d) The Company has a sufficient number of authorized and unissued shares of
voting Common Stock to consummate the issuance of the Warrant Shares upon
exercise of the Warrant.

(e) That the Warrant and any Warrant Shares issued to the Investor pursuant to
the exercise of the Warrant have been duly authorized by the Company’s Board of
Directors and no further filing, consent, or authorization is required by the
Company, its Board of Directors or its stockholder and shall be validly issued,
fully paid and non-assessable and free from all preemptive or similar rights,
taxes, liens, charges and other encumbrances with respect to the issue thereof.

(f) Neither the Company nor any other authorized person acting on its behalf has
provided the Investor or their agents or counsel with any information that
constitutes or could reasonably be expected to constitute material, non-public
information concerning the Company or any of its subsidiaries, other than the
existence of the transactions contemplated by this Agreement. The Company
understands and confirms that the Investor will rely on the foregoing
representations in effecting transactions in securities of the Company. All
disclosure provided to the Investor regarding the Company and its subsidiaries,
their businesses and the transactions contemplated hereby furnished by or on
behalf of the Company or any of its subsidiaries is true and correct and does
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. Each
press release issued by the Company or any of its subsidiaries during the twelve
(12) months preceding the date of this Agreement did not at the time of release
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading.

(g) The Company has all licenses, permits and other governmental authorizations
currently required for the conduct of its business or ownership of properties
and is in all material respects complying therewith, except for any licenses,
permits or other governmental authorizations which would not materially
adversely affect the business, property, financial condition, results of
operations or prospects of the Company.

(h) The Company knows of no pending or threatened legal or governmental
proceedings against the Company which could materially adversely affect the
business, property, financial condition, prospects, results of operations or
prospects of the Company.

(i) All reports required to be filed by the Company under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), since December 31, 2012,
have been duly and timely filed with the SEC. All such reports complied at the
time of their respective filing dates in all material respects with the
requirements of the Exchange Act or the Act, as applicable, and all rules and
regulations thereunder of their respective forms. None of such reports contained
(as of their respective dates) any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements contained therein, in light of the circumstances
under which they were made, not misleading.

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(j) The Company is not an "investment company" within the meaning of such term
under the Investment Company Act of 1940, as amended, and the rules and
regulations of the SEC thereunder.

(k) The Company owns or possesses sufficient rights to use all patents, patent
rights, trademarks, copyrights, licenses, inventions, trade secrets, trade names
and know-how that are necessary for the conduct of its business as now conducted
except where the failure to own or possess would not have a material adverse
effect on the business, assets, financial condition, prospects or results of
operation of the Company (the “Company Intellectual Property”). Except as set
forth in the SEC Filings, (i) the Company has not received any written notice
of, and has no knowledge of, any infringement by the Company of intellectual
property rights of any third party that, individually or in the aggregate, would
have a material adverse effect on the business, assets, financial condition,
prospects or results of operation of the Company and (ii) the Company has not
received any written notice of any infringement by a third party of any Company
Intellectual Property that, individually or in the aggregate, would have a
material adverse effect on the business, assets, financial condition, prospects
or results of operation of the Company.

(l) Since the filing of the Company's most recent SEC Report on Form 10-Q for
fiscal quarter ended September 30, 2013, there has not been any material adverse
change (financial or otherwise) in the assets, properties, financial condition,
prospects, operating results or business of the Company.

(m) Neither the Company nor, to the Company's knowledge, any person duly acting
on the Company's behalf and in accordance with the Company's instructions, has
conducted any general solicitation or general advertising in connection with the
offer or sale of the Securities.

(n) The Company has timely filed all material federal, state, local and foreign
income and franchise and other tax returns required to be filed by any
jurisdiction to which it is subject and has paid all taxes due in accordance
therewith, and no tax deficiency has been determined adversely to the Company
which has had (nor does the Company have any knowledge of any tax deficiency
which, if determined adversely to the Company would reasonably be expected to
have) a material adverse effect on the business, assets, financial condition or
results of operation of the Company.

4. Right of First Refusal. From and after the date hereof, neither the Company
nor any of its subsidiaries shall, directly or indirectly, effect any issuance
of securities off of the Company’s effective shelf registration statement (the
“Registration Statement”) on Form S-3 (File No. 333-188039) (a “Subsequent
Placement”) unless the Company shall have first complied with this Section 4.
The Company acknowledges and agrees that the right set forth in this Section 4
is a right granted by the Company to the Investor.

(a) At least five (5) trading days prior to any proposed or intended Subsequent
Placement, the Company shall deliver to the Investor a written notice of its
proposal or intention to effect a Subsequent Placement (each such notice, a
“Pre-Notice”), which Pre-Notice shall not contain any information (including,
without limitation, material, non-public information) other than: (i) a
statement that the Company proposes or intends to effect a Subsequent Placement,
(ii) a statement that the statement in clause (i) above does not constitute
material, non-public information and (iii) a statement informing the Investor
that it is entitled to receive an Offer Notice (as defined below) with respect
to such Subsequent Placement upon its written request. Upon the written request
of the Investor within three (3) trading days after the Company’s delivery to
the Investor of such Pre-Notice, and only upon a written request by the
Investor, the Company shall promptly, but no later than one (1) trading day
after such request, deliver to the Investor an irrevocable notice (the “Offer
Notice”) of any proposed or intended issuance or sale or exchange (the “Offer”)
of the securities being offered (the “Offered Securities”) in a Subsequent
Placement, which Offer Notice shall (i) identify and describe the Offered
Securities, (ii) describe the price and other terms upon which they are to be
issued, sold or exchanged, and the number or amount of the Offered Securities to
be issued, sold or exchanged, (iii) identify the persons (if known) to which or
with which the Offered Securities are to be offered, issued, sold or exchanged
and (iv) offer to issue and sell to or exchange with the Investor in accordance
with the terms of the Offer all of the Offered Securities, provided that the
number of Offered Securities which the Investors shall have the right to
subscribe for under this Section 4 shall be (a) based on the Investor’s pro rata
portion of the aggregate number of warrants issued to all investors in
connection with this Private Placement Offering (the “Basic Amount”), and (b)
with respect to the Investor that elects to purchase its Basic Amount, any
additional portion of the Offered Securities attributable to the Basic Amounts
of the other investor as the Investor shall indicate it will purchase or acquire
should the other investor subscribe for less than their Basic Amounts (the
“Undersubscription Amount”).

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(b) To accept an Offer, in whole or in part, the Investor must deliver a written
notice to the Company prior to the end of the fifth (5th) business day after the
Investor’s receipt of the Offer Notice (the “Offer Period”), setting forth the
portion of the Investor’s Basic Amount that the Investor elects to purchase and,
if the Investor shall elect to purchase all of its Basic Amount, the
Undersubscription Amount, if any, that the Investor elects to purchase (in
either case, the “Notice of Acceptance”).

(c) The Company shall have five (5) days from the expiration of the Offer Period
above (i) to offer, issue, sell or exchange all or any part of such Offered
Securities as to which a Notice of Acceptance has not been given by an investor
in this Private Placement Offering (the “Refused Securities”) pursuant to a
definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the
offerees described in the Offer Notice (if so described therein) and only upon
terms and conditions (including, without limitation, unit prices and interest
rates) that are not more favorable to the acquiring person or persons or less
favorable to the Company than those set forth in the Offer Notice and (ii) to
publicly announce (A) the execution of such Subsequent Placement Agreement, and
(B) either (1) the consummation of the transactions contemplated by such
Subsequent Placement Agreement or (2) the termination of such Subsequent
Placement Agreement, which shall be filed with the SEC on a Current Report on
Form 8-K with such Subsequent Placement Agreement and any documents contemplated
therein filed as exhibits thereto.

(d) Upon the closing of the issuance, sale or exchange of all or less than all
of the Refused Securities, the Investor shall acquire from the Company, and the
Company shall issue to the Investor, the number or amount of Offered Securities
specified in its Notice of Acceptance. The purchase by the Investor of any
Offered Securities is subject in all cases to the preparation, execution and
delivery by the Company and the Investor of a separate purchase agreement
relating to such Offered Securities reasonably satisfactory in form and
substance to the Investor and its counsel.

(e) The restrictions contained in this Section 4 shall not apply in connection
with the issuance of any Excluded Securities (as such term is defined in the
Warrant). The Company shall not circumvent the provisions of this Section 4 by
providing terms or conditions to the Investor that are not provided to the other
investors in the Private Placement Offering.

5. Restrictive Legends. All certificates representing the Warrant (and the
Warrant Shares) shall have endorsed thereon legends in substantially the
following forms (in addition to any other legend which may be required by other
agreements between the parties hereto):

“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

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        6.

Miscellaneous.

(a) This Agreement may be executed in multiple original counterparts, each of
which shall be an original, but all of which shall constitute one and the same
Agreement. This Agreement and all rights, obligations and liabilities hereunder
shall be governed by, and construed in accordance with, the internal laws of the
State of New York, without giving effect to the principles of conflicts of law
that would require the application of the laws of any other jurisdiction.

(b) On or before 9:30 a.m., New York time, on the first (1st) business day
following the date of this Agreement, the Company shall file a Current Report on
Form 8-K describing all the material terms of the transactions contemplated by
the Agreements in the form required by the Exchange Act and attaching all the
material Agreements (including, without limitation, this Agreement (and all
schedules to this Agreement) and the form of the Warrant) (including all
attachments, the “8-K Filing”). From and after the issuance of the 8-K Filing,
the Company shall have disclosed all material, non-public information (if any)
delivered to the Investor by the Company or any of its subsidiaries, or any of
their respective, authorized officers, directors, employees or agents in
connection with the transactions contemplated by this Agreement.

(c) This Agreement and other documents delivered herewith contain the entire
understanding of the parties in respect of its subject matter and supersede all
prior agreements and understandings between or among the parties with respect to
such subject matter.

(d) Except as otherwise provided in this Agreement or in the Warrant, the
parties shall pay their own fees and expenses, including their own counsel fees,
incurred in connection with this Agreement or any transaction contemplated
hereby.

(e) This Agreement may not be modified, amended, supplemented, canceled or
discharged, except by written instrument executed by both parties. No failure to
exercise, and no delay in exercising, any right, power or privilege under this
Agreement shall operate as a waiver, nor shall any single or partial exercise of
any right, power or privilege hereunder preclude the exercise of any other
right, power or privilege. No waiver of any breach of any provision of this
Agreement shall be deemed to be a waiver of any preceding or succeeding breach
of the same or any other provision, nor shall any waiver be implied from any
course of dealing between the parties.

(f) The rights and obligations of this Agreement shall bind and inure to the
benefit of the parties and their respective successors and legal assigns. The
rights and obligations of this Agreement may not be assigned by any party
without the prior written consent of the other party.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of this 15th day
of January 2014.

[INVESTOR]

By: _____________________________________
Name: ___________________________________
Title: ____________________________________

KANDI TECHNOLOGIES GROUP, INC.

By: _____________________________________
Name:___________________________________
Title: ____________________________________
 

 

 

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