Document:

Exhibit 10.3

 

GDC TECHNOLOGY LIMITED
 2013 EQUITY INCENTIVE PLAN

 

1.     Purpose of the Plan

 

The purpose of the Plan is to aid the Company and its Affiliates in recruiting and retaining key employees, directors or consultants of outstanding ability and to motivate such employees, directors or consultants to exert their best efforts on behalf of the Company and its Affiliates by providing incentives through the granting of Awards.  The Company expects that it will benefit from the added interest which such key employees, directors or consultants will have in the welfare of the Company as a result of their proprietary interest in the Company’s success.

 

2.     Definitions

 

The following capitalized terms used in the Plan have the respective meanings set forth in this Section:

 

(a)                                 Applicable Laws: All laws, statutes, regulations, ordinances, rules or governmental requirements that are applicable to this Plan or any Award granted pursuant to this Plan, including but not limited to applicable laws of the People’s Republic of China, the United States and the Cayman Islands, and the rules and requirements of any applicable national securities exchange.

 

(b)                                 Act:  The U.S. Securities Exchange Act of 1934, as amended, or any successor thereto.

 

(c)                                  Affiliate:  With respect to the Company, any entity directly or indirectly controlling, controlled by, or under common control with, the Company or any other entity designated by the Board in which the Company or an Affiliate has an interest.

 

(d)                                 Award:  An Option, Share Appreciation Right or Other Share-Based Award.

 

(e)                                  Beneficial Owner:  A “beneficial owner”, as such term is defined in Rule 13d-3 under the Act (or any successor rule thereto).

 

(f)                                   Board:  The board of directors of the Company.

 

(g)                                  Change in Control:  The occurrence of any of the following events:

 

(i) the sale or disposition, in one or a series of related transactions, of all or substantially all, of the assets of the Company to any “person” or “group” (as such terms are defined in Sections 13(d)(3) or 14(d)(2) of the Act) other than the Permitted Holders;

 

(ii) any person or group, other than the Permitted Holders, is or becomes the Beneficial Owner (except that a person shall be deemed to have “beneficial ownership” of all shares that any such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total voting power of the voting share of the Company (or any entity which controls the Company), including by way of merger, consolidation, tender or exchange offer or otherwise; or

 

 

(iii)  during any period of two consecutive years, individuals who at the beginning of such period constituted the Board (together with any new directors whose election by such Board or whose nomination for election by the shareholders of the Company was approved by a vote of a majority of the directors of the Company, then still in office, who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board, then in office.

 

(h)                                 Code:  The U.S. Internal Revenue Code of 1986, as amended, or any successor thereto.

 

(i)                                     Committee:  The compensation committee of the Board.

 

(j)                                    Company:  GDC TECHNOLOGY LIMITED, a company incorporated under the laws of the Cayman Islands.

 

(k)                                 Disability:  Inability of a Participant to perform in all material respects his duties and responsibilities to the Company, or any Subsidiary of the Company, by reason of a physical or mental disability or infirmity which inability is reasonably expected to be permanent and has continued (i) for a period of not less than 90 consecutive days or (ii) such shorter period as the Committee may reasonably determine in good faith.  The Disability determination shall be in the sole discretion of the Committee and a Participant (or his representative) shall furnish the Committee with medical evidence documenting the Participant’s disability or infirmity which is satisfactory to the Committee.

 

(l)                                     Effective Date:  The date the Board approves the Plan, or such later date as is designated by the Board.

 

(m)                             Employment:  The term “Employment” as used herein shall be deemed to refer to (i) a Participant’s employment if the Participant is an employee of the Company or any of its Affiliates, (ii) a Participant’s services as a consultant, if the Participant is consultant to the Company or its Affiliates and (iii) a Participant’s services as an non-employee director, if the Participant is a non-employee member of the Board.

 

(n)                                 Fair Market Value:  On a given date, (i) if there should be a public market for the Shares on such date, the closing price of the Shares as reported on such date on the Composite Tape of the principal national securities exchange on which such Shares are listed or admitted to trading, or (ii) if there should not be a public market for the Shares on such date, the Fair Market Value shall be the value established by the Committee in good faith.

 

(o)                                 ISO:  An Option that is also an incentive share option granted pursuant to Section 6(d) of the Plan.

 

(p)                                 LSAR:  A limited share appreciation right granted pursuant to Section 7(d) of the Plan.

 

(q)                                 Other Share-Based Awards:  Awards granted pursuant to Section 8 of the Plan.

 

(r)                                    Option:  A share option granted pursuant to Section 6 of the Plan.

 

 

(s)                                   Option Price:  The purchase price per Share of an Option, as determined pursuant to Section 6(a) of the Plan.

 

(t)                                    Participant:  An employee, director or consultant who is selected by the Committee to participate in the Plan.

 

(u)                                 Permitted Holder: means, as of the date of determination, (i) the Company or (ii) any employee benefit plan (or trust forming a part thereof) maintained by (A) the Company or (B) any corporation or other Person of which a majority of its voting power of its voting equity securities or equity interest is owned, directly or indirectly, by the Company,

 

(v)                                 Person:  A “person”, as such term is used for purposes of Section 13(d) or 14(d) of the Act (or any successor section thereto).

 

(w)                               Plan:  This GDC TECHNOLOGY LIMITED 2013 Equity Incentive Plan.

 

(x)                                 Shares:  Ordinary Shares of the Company, par value US$0.0001 per share.

 

(y)                                 Share Appreciation Right:  A share appreciation right granted pursuant to Section 7 of the Plan.

 

(z)                                  Subsidiary:  A corporation or other entity of which a majority of the outstanding voting shares or voting power is beneficially owned directly or indirectly by the Company.

 

3.     Shares Subject to the Plan

 

The total number of Shares which may be issued under the Plan is 50,000,000 (FIFTY MILLION).  The Shares may consist, in whole or in part, of authorized and unissued Shares or Shares purchased on the open market.  The issuance of Shares or the payment of cash upon the exercise of an Award or in consideration of the cancellation or termination of an Award shall reduce the total number of Shares available under the Plan, as applicable.  Shares which are subject to Awards which terminate or lapse without the payment of consideration may be granted again under the Plan.

 

 

4.     Administration

 

The Plan shall be administered by the Committee, which may delegate its duties and powers in whole or in part to any subcommittee thereof consisting solely of at least two individuals who are intended to qualify as “Non-Employee Directors” within the meaning of Rule 16b-3 under the Act (or any successor rule thereto) and an “independent director” as defined in NYSE Rule 303A.02 (or any successor rule thereto).  Awards may, in the discretion of the Committee, be made under the Plan in assumption of, or in substitution for, outstanding awards previously granted by the Company or its subsidiaries or a company acquired by the Company or with which the Company combines.  The number of Shares underlying such substitute awards shall be counted against the aggregate number of Shares available for Awards under the Plan.  The Committee is authorized to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, and to make any other determinations that it deems necessary or desirable for the administration of the Plan.  The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan in the manner and to the extent the Committee deems necessary or desirable.  Any decision of the Committee in the interpretation and administration of the Plan, as described herein, shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned (including, but not limited to, Participants and their beneficiaries or successors).  The Committee shall have the full power and authority to establish the terms and conditions of any Award consistent with the provisions of the Plan and to waive any such terms and conditions at any time (including, without limitation, accelerating or waiving any vesting conditions).  The Committee shall require payment of any amount it may determine to be necessary to withhold for any applicable taxes as a result of the exercise, grant or vesting of an Award.  Unless the Committee specifies otherwise, the Participant may elect to pay a portion or all of such withholding taxes by (a) delivery in Shares or (b) having Shares withheld by the Company from any Shares that would have otherwise been received by the Participant.

 

5.     Limitations

 

No Award may be granted under the Plan after the tenth anniversary of the Effective Date, but Awards theretofore granted may extend beyond that date.

 

6.     Terms and Conditions of Options

 

Options granted under the Plan shall be, as determined by the Committee, non-qualified or incentive share options for U.S. federal income tax purposes, as evidenced by the related Award agreements, and shall be subject to the foregoing and the following terms and conditions and to such other terms and conditions, not inconsistent therewith, as the Committee shall determine:

 

(a)                                 Option Price.  The Option Price per Share shall be determined by the Committee, unless expressly approved by the Committee, shall not be less than 100% of the Fair Market Value of the Shares on the date an Option is granted.

 

(b)                                 Exercisability.  Options granted under the Plan shall be exercisable at such time and upon such terms and conditions as may be determined by the Committee, but in no event shall an Option be exercisable more than ten years after the date it is granted.

 

(c)                                  Exercise of Options.  Except as otherwise provided in the Plan or in an Award agreement, an Option may be exercised for all, or from time to time any part, of the Shares for which it is then exercisable.  For purposes of this Section 6 of the Plan,

 

 

the exercise date of an Option shall be the later of the date a notice of exercise is received by the Company and, if applicable, the date payment is received by the Company pursuant to clauses (i), (ii), (iii) or (iv) in the following sentence.  The purchase price for the Shares as to which an Option is exercised shall be paid to the Company in full at the time of exercise at the election of the Participant (i) in cash or its equivalent (e.g., by check), (ii) to the extent permitted by the Committee, in Shares having a Fair Market Value equal to the aggregate Option Price for the Shares being purchased and satisfying such other requirements as may be imposed by the Committee; provided, that such Shares have been held by the Participant for no less than six months (or such other period as established from time to time by the Committee in order to avoid adverse accounting treatment applying generally accepted accounting principles), (iii) partly in cash and, to the extent permitted by the Committee and subject to the other requirements and conditions set forth above in (ii), partly inShares or (iv) if there is a public market for the Shares at such time, through the delivery of irrevocable instructions to a broker to sell Shares obtained upon the exercise of the Option and to deliver promptly to the Company an amount out of the proceeds of such sale equal to the aggregate Option Price for the Shares being purchased.  No Participant shall have any rights to dividends or other rights of a shareholder with respect to Shares subject to an Option until the Participant has given written notice of exercise of the Option, paid in full for such Shares and, if applicable, has satisfied any other conditions imposed by the Committee pursuant to the Plan.

 

(d)                                 ISOs.  The Committee may grant Options under the Plan that are intended to be ISOs.  Such ISOs shall comply with the requirements of Section 422 of the Code (or any successor section thereto).  No ISO may be granted to any Participant who at the time of such grant, owns more than ten percent of the total combined voting power of all classes of shares of the Company or of any Subsidiary, unless (i) the Option Price for such ISO is at least 110% of the Fair Market Value of a Share on the date the ISO is granted and (ii) the date on which such ISO terminates is a date not later than the day preceding the fifth anniversary of the date on which the ISO is granted.  Any Participant who disposes of Shares acquired upon the exercise of an ISO either (i) within two years after the date of grant of such ISO or (ii) within one year after the transfer of such Shares to the Participant, shall notify the Company of such disposition and of the amount realized upon such disposition.  All Options granted under the Plan are intended to be nonqualified share options, unless the applicable Award agreement expressly states that the Option is intended to be an ISO.  If an Option is intended to be an ISO, and if for any reason such Option (or portion thereof) shall not qualify as an ISO, then, to the extent of such nonqualification, such Option (or portion thereof) shall be regarded as a nonqualified share option granted under the Plan; provided that such Option (or portion thereof) otherwise complies with the Plan’s requirements relating to nonqualified share options.  In no event shall any member of the Committee, the Company or any of its Affiliates (or their respective employees, officers or directors) have any liability to any Participant (or any other Person) due to the failure of an Option to qualify for any reason as an ISO.

 

(e)                                  Attestation.  Wherever in this Plan or any agreement evidencing an Award a Participant is permitted to pay the exercise price of an Option or taxes relating to the exercise of an Option by delivering Shares, the Participant may, subject to procedures satisfactory to the Committee, satisfy such delivery requirement by

 

 

presenting proof of beneficial ownership of such Shares, in which case the Company shall treat the Option as exercised without further payment and shall withhold such number of Shares from the Shares acquired by the exercise of the Option.

 

7.     Terms and Conditions of Share Appreciation Rights

 

(a)                                 Grants.  The Committee also may grant (i) a Share Appreciation Right independent of an Option or (ii) a Share Appreciation Right in connection with an Option, or a portion thereof.  A Share Appreciation Right granted pursuant to clause (ii) of the preceding sentence (A) may be granted at the time the related Option is granted or at any time prior to the exercise or cancellation of the related Option, (B) shall cover the same number of Shares covered by an Option (or such lesser number of Shares as the Committee may determine) and (C) shall be subject to the same terms and conditions as such Option except for such additional limitations as are contemplated by this Section 7 (or such additional limitations as may be included in an Award agreement).

 

(b)                                 Terms.  The exercise price per Share of a Share Appreciation Right shall be an amount determined by the Committee but in no event shall such amount be less than the greater of (i) the Fair Market Value of a Share on the date the Share Appreciation Right is granted or, in the case of a Share Appreciation Right granted in conjunction with an Option, or a portion thereof, the Option Price of the related Option and (ii) the minimum amount permitted by Applicable Laws.  Each Share Appreciation Right granted independent of an Option shall entitle a Participant upon exercise to an amount equal to (i) the excess of (A) the Fair Market Value on the exercise date of one Share over (B) the exercise price per Share, times (ii) the number of Shares covered by the Share Appreciation Right.  Each Share Appreciation Right granted in conjunction with an Option, or a portion thereof, shall entitle a Participant to surrender to the Company the unexercised Option, or any portion thereof, and to receive from the Company in exchange therefore an amount equal to (i) the excess of (A) the Fair Market Value on the exercise date of one Share over (B) the Option Price per Share, times (ii) the number of Shares covered by the Option, or portion thereof, which is surrendered.  The date a notice of exercise is received by the Company shall be the exercise date.  Payment shall be made in Shares or in cash, or partly in Shares and partly in cash (any such Shares valued at such Fair Market Value), all as shall be determined by the Committee.  Share Appreciation Rights may be exercised from time to time upon actual receipt by the Company of written notice of exercise stating the number of Shares with respect to which the Share Appreciation Right is being exercised.  No fractional Shares will be issued in payment for Share Appreciation Rights, but instead cash will be paid for a fraction or, if the Committee should so determine, the number of Shares will be rounded downward to the next whole Share.

 

(c)                                  Limitations.  The Committee may impose, in its discretion, such conditions upon the exercisability or transferability of Share Appreciation Rights as it may deem fit.

 

 

(d)                                 Limited Share Appreciation Rights.  The Committee may grant LSARs that are exercisable upon the occurrence of specified contingent events.  Such LSARs may provide for a different method of determining appreciation, may specify that payment will be made only in cash and may provide that any related Awards are not exercisable while such LSARs are exercisable.  Unless the context otherwise requires, whenever the term “Share Appreciation Right” is used in the Plan, such term shall include LSARs.

 

8.     Other Share-Based Awards

 

The Committee, in its sole discretion, may grant or sell Awards of Shares, Awards of restricted Shares and Awards that are valued in whole or in part by reference to, or are otherwise based on the Fair Market Value of, Shares (“Other Share-Based Awards”).  Such Other Share-Based Awards shall be in such form, and dependent on such conditions, as the Committee shall determine, including, without limitation, the right to receive, or vest with respect to, one or more Shares (or the equivalent cash value of such Shares) upon the completion of a specified period of service, the occurrence of an event and/or the attainment of performance objectives.  Other Share-Based Awards may be granted alone or in addition to any other Awards granted under the Plan.  Subject to the provisions of the Plan, the Committee shall determine to whom and when Other Share-Based Awards will be made, the number of Shares to be awarded under (or otherwise related to) such Other Share-Based Awards; whether such Other Share-Based Awards shall be settled in cash, Shares or a combination of cash and Shares; and all other terms and conditions of such Awards (including, without limitation, the vesting provisions thereof and provisions ensuring that all Shares so awarded and issued shall be fully paid and non-assessable).

 

9.     Adjustments Upon Certain Events

 

Notwithstanding any other provisions in the Plan to the contrary, the following provisions shall apply to all Awards granted under the Plan:

 

(a)                                 Generally.  In the event of any change in the outstanding Shares after the Effective Date by reason of any Share dividend or split, reorganization, recapitalization, merger, consolidation, spin-off, combination, combination or transaction or exchange of Shares or other corporate exchange, or any distribution to shareholders of Shares other than regular cash dividends or any transaction similar to the foregoing, the Committee in its sole discretion and without liability to any person shall make such substitution or adjustment, if any, as it deems to be equitable, as to (i) the number or kind of Shares or other securities issued or reserved for issuance pursuant to the Plan or pursuant to outstanding Awards, (ii) the maximum number of Shares for which Options or Share Appreciation Rights may be granted during a calendar year to any Participant, (iii) the maximum number of Shares for which Other Share-Based Awards may be granted during a calendar year to any Participant, (iv) the maximum amount of an Award that is valued in whole or in part by reference to, or is otherwise based on the Fair Market Value of, Shares that may be granted during a calendar year to any Participant, (v) the Option Price or exercise price of any Share Appreciation Right and/or (vi) any other affected terms of such Awards.

 

(b)                                 Change in Control. In the event of a Change of Control after the Effective Date, (i) if determined by the Committee in the applicable Award agreement or otherwise, any outstanding Awards then held by Participants

 

 

which are unexercisable or otherwise unvested or subject to lapse restrictions shall automatically be deemed exercisable or otherwise vested or no longer subject to lapse restrictions, as the case may be, as of immediately prior to such Change of Control and (ii) the Committee may, but shall not be obligated to, (A) cancel such Awards for fair value (as determined in the sole discretion of the Committee) which, in the case of Options and Share Appreciation Rights, may equal the excess, if any, of value of the consideration to be paid in the Change of Control transaction to holders of the same number of Shares subject to such Options or Share Appreciation Rights (or, if no consideration is paid in any such transaction, the Fair Market Value of the Shares subject to such Options or Share Appreciation Rights) over the aggregate exercise price of such Options or Share Appreciation Rights, (B) provide for the issuance of substitute Awards that will substantially preserve the otherwise applicable terms of any affected Awards previously granted hereunder as determined by the Committee in its sole discretion or (C) provide that for a period of at least 15 days prior to the Change of Control, such Options shall be exercisable as to all Shares subject thereto and that upon the occurrence of the Change of Control, such Options shall terminate and be of no further force and effect.

 

10.  No Right to Employment or Awards

 

The granting of an Award under the Plan shall impose no obligation on the Company or any Subsidiary to continue the Employment of a Participant and shall not lessen or affect the Company’s or Subsidiary’s right to terminate the Employment of such Participant.  No Participant or other Person shall have any claim to be granted any Award, and there is no obligation for uniformity of treatment of Participants, or holders or beneficiaries of Awards.  The terms and conditions of Awards and the Committee’s determinations and interpretations with respect thereto need not be the same with respect to each Participant (whether or not such Participants are similarly situated).

 

11.  Successors and Assigns

 

The Plan shall be binding on all successors and assigns of the Company and a Participant, including without limitation, the estate of such Participant and the executor, administrator or trustee of such estate, or any receiver or trustee in bankruptcy or representative of the Participant’s creditors.

 

12.  Nontransferability of Awards

 

Unless otherwise determined by the Committee, an Award shall not be transferable or assignable by the Participant otherwise than by will or by the laws of descent and distribution.  An Award exercisable after the death of a Participant may be exercised by the legatees, personal representatives or distributees of the Participant.

 

Notwithstanding the foregoing, no provision herein shall prevent or forbid transfers by will, by the laws of descent and distribution, to a trust that was established solely for tax planning purposes and not for purposes of profit or commercial activity or, to one or more “family members” (as such term is defined in SEC Rule 701 promulgated under the Securities Act of 1933, as amended) by gift or pursuant to a qualified domestic relations order.

 

 

13.  Amendments or Termination

 

The Board may amend, alter or discontinue the Plan, but no amendment, alteration or discontinuation shall be made, (a) without the approval of the shareholders of the Company, if such action would (except as is provided in Section 9 of the Plan), increase the total number of Shares reserved for the purposes of the Plan or change the maximum number of Shares for which Awards may be granted to any Participant, in each case only to the extent such approval is required by the principal national securities exchange on which the Shares are listed or admitted to trading, or (b) without the consent of a Participant, if such action would diminish any of the rights of the Participant under any Award theretofore granted to such Participant under the Plan; provided, however, that the Committee may amend the Plan in such manner as it deems necessary to permit the granting of Awards meeting the requirements of any Applicable Laws.

 

Without limiting the generality of the foregoing, to the extent applicable, notwithstanding anything herein to the contrary, this Plan and Awards issued hereunder shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretative guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date.  Notwithstanding any provision of the Plan to the contrary, in the event that the Committee determines that any amounts payable hereunder will be taxable to a Participant under Section 409A of the Code and related Department of Treasury guidance prior to payment to such Participant of such amount, the Company may (a) adopt such amendments to the Plan and Awards and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Committee determines necessary or appropriate to preserve the intended tax treatment of the benefits provided by the Plan and Awards hereunder and/or (b) take such other actions as the Committee determines necessary or appropriate to comply with the requirements of Section 409A of the Code.

 

14.          Multiple Jurisdictions

 

In order to assure the viability of Awards granted to Participants employed in various jurisdictions, the Committee may, in its sole discretion, provide for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy or custom applicable in the jurisdiction in which the Participant resides or is employed.  Moreover, the Committee may approve such supplements to, amendments, restatements, or alternative versions of the Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of the Plan as in effect for any other purpose; provided, however, that no such supplements, amendments, restatements or alternative versions shall increase the Share limitation contained in Section 3 hereof.  Notwithstanding the foregoing, the Committee may not take any actions hereunder, and no Awards shall be granted that would violate any Applicable Laws.

 

15.  Distribution of Shares

 

The obligation of the Company to make payments in Shares pursuant to an Award shall be subject to all Applicable Laws and to any such approvals by government agencies as may be required.  Additionally, in the discretion of the Committee, American depositary shares, or ADSs, may be distributed in lieu of Shares in settlement of any Award, provided that the ADSs shall be of equal value to the Shares that would have otherwise been distributed.  If the number of Shares represented by an ADS is other than on a one-to-one basis, the limitations contained in Section 3 shall be adjusted to reflect the distribution of ADSs in lieu of Shares.

 

16.  Taxes

 

No Shares shall be delivered under the Plan to any Participant until such Participant has made arrangements acceptable to the Committee for the satisfaction of any income and

 

 

employment tax withholding obligations under any Applicable Laws, in particular, the tax laws, rules, regulations and government orders of the People’s Republic of China or the U.S. federal, state or other local tax laws, as applicable.  The Company and each of its Subsidiaries shall have the authority and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, local and foreign taxes (including the Participant’s payroll tax obligations, if any) required to be withheld under any Applicable Laws with respect to any Award issued to the Participant hereunder.  The Committee may in its discretion and in satisfaction of the foregoing requirement allow a Participant to elect to have the Company withhold Shares otherwise issuable under an Award (or allow the return of Shares) having a Fair Market Value equal to the sums required to be withheld.  Notwithstanding any other provision of the Plan, the number of Shares which may be withheld with respect to the issuance, vesting, exercise or payment of any Award (or which may be repurchased from the Participant of such Award after such Shares were acquired by the Participant from the Company) in order to satisfy the Participant’s federal, state, local and other income and payroll tax liabilities with respect to the issuance, vesting, exercise or payment of the Award shall, unless specifically approved by the Committee, be limited to the number of Shares which have a Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for federal, state, local and other income tax any payroll tax purposes that are applicable to such taxable income.

 

17.  Choice of Law

 

The Plan shall be governed by and construed in accordance with the laws of the state of New York.

 

18.  Effectiveness of the Plan

 

The Plan shall be effective as of the Effective Date and shall terminate ten years later, subject to earlier termination by the Board pursuant to Section 13 hereof.Echo Automotive, Inc.: Exhibti 10.2 - Filed by newsfilecorp.com

Form of Warrant Agreement

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE
SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM AND THE ISSUER OF THESE
SECURITIES HAS BEEN PROVIDED WITH AN OPINION OF LEGAL COUNSEL TO THE HOLDER IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES TO THE EFFECT
THAT SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM
REGISTRATION UNDER SUCH LAWS.

	 	 
	 	 
	Date of Issuance: _________, 2013 	Number of Shares _________
	Warrant No. ____	(subject to adjustment) 
	 	 
	 	 
	ECHO AUTOMOTIVE, INC.  
	A NEVADA CORPORATION  
	 

Warrant

     Echo Automotive, Inc., a Nevada
corporation (the “Company”), for value received, hereby certifies that
_______________________(the “Initial Holder”), or its registered assigns
(the Initial Holder or such registered assigns shall be referred to as the
“Registered Holder”), is entitled, subject to the terms set forth below,
to purchase from the Company at any time on or after the Exercise Date and on or
before the Expiration Date, up to ___________shares (the “Warrant
Shares”) of the Company’s common stock, $0.001 par value per share
(“Common Stock”), at a purchase price $______per share (the “Purchase
Price”). The number of shares of Warrant Shares and the Purchase Price may
be adjusted from time to time pursuant to the provisions of this Warrant. As
used herein, “Exercise Date” means any date after the date hereof and
prior to the Expiration Date on which the Registered Holder elects by written
notice to the Company to exercise this Warrant.

     This Warrant is issued pursuant
to that Securities Purchase Agreement, dated as of ___________, 2013, by and
among the Company and the Initial Holder (the “Purchase Agreement”). 

     1.      Exercise.

          (a)      Manner
of Exercise. This Warrant may be exercised by the Registered Holder, in
whole or in part, by surrendering this Warrant, with the purchase/exercise form
appended hereto as Exhibit A duly executed by such Registered Holder or
by such Registered Holder’s duly authorized attorney, at the principal office of
the Company, or at such other office or agency as the Company may designate in
writing, accompanied by payment in full of the Purchase Price payable in respect
of the number of shares of Warrant Shares purchased upon such exercise. The
Purchase Price may be paid by cash, check, or wire transfer.

          (b)     
Effective Time of Exercise. Each exercise of this Warrant shall be deemed
to have been effected immediately prior to the close of business on the day on
which this Warrant shall have been surrendered to the Company as provided in
Section 1(a) above. At such time, the person or persons in whose name or names
any certificates for Warrant Shares shall be issuable upon such exercise as
provided in Section 1(c) below shall be deemed to have become the holder or
holders of record of the Warrant Shares represented by such certificates.

1

          (c)     
Delivery to Holder. As soon as practicable after the exercise of this
Warrant, in whole or in part, and in any event within ten (10) days thereafter,
the Company at its expense will cause to be issued in the name of, and delivered
to, the Registered Holder, or as such Holder (upon payment by such Holder of any
applicable transfer taxes) may direct:

                    (i)     
a certificate or certificates for the number of shares of Warrant Shares to
which such Registered Holder shall be entitled, and

                    (ii)     
in case such exercise is in part only, a new warrant or warrants (dated the date
hereof) of like tenor, calling in the aggregate on the face or faces thereof for
the number of shares of Warrant Shares equal (without giving effect to any
adjustment therein) to the number of such shares called for on the face of this
Warrant minus the number of such shares purchased by the Registered Holder upon
such exercise as provided in Section 1(a) above. 

     2.      Adjustments.

          (a)      Stock
Splits and Dividends. If outstanding shares of the Company’s Common Stock
shall be subdivided into a greater number of shares or a dividend in Common
Stock shall be paid in respect of Common Stock, then the Purchase Price in
effect immediately prior to such subdivision or at the record date of such
dividend shall simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend be proportionately reduced.
If outstanding shares of Common Stock shall be combined into a smaller number of
shares, then the Purchase Price in effect immediately prior to such combination
shall, simultaneously with the effectiveness of such combination, be
proportionately increased. When any adjustment is required to be made in the
Purchase Price, the number of shares of Warrant Shares purchasable upon the
exercise of this Warrant shall be changed to the number determined by dividing
(i) an amount equal to the number of shares issuable upon the exercise of this
Warrant immediately prior to such adjustment, multiplied by the Purchase Price
in effect immediately prior to such adjustment, by (ii) the Purchase Price in
effect immediately after such adjustment.

          (b)     
Reclassification, Etc. In case of any reclassification or change of the
outstanding securities of the Company or of any reorganization of the Company
(or any other corporation the stock or securities of which are at the time
receivable upon the exercise of this Warrant) or any similar corporate
reorganization on or after the date hereof, then and in each such case the
Registered Holder, upon the exercise hereof at any time after the consummation
of such reclassification, change, reorganization, merger or conveyance, shall be
entitled to receive, in lieu of the stock or other securities and property
receivable upon the exercise hereof prior to such consummation, the stock or
other securities or property to which such holder would have been entitled upon
such consummation if such holder had exercised this Warrant immediately prior
thereto, all subject to further adjustment as provided in this Section 2; and in
each such case, the terms of this Section 2 shall be applicable to the shares of
stock or other securities properly receivable upon the exercise of this Warrant
after such consummation.

          (c)     
Adjustment Certificate. When any adjustment is required to be made in the
Warrant Shares or the Purchase Price pursuant to this Section 2, the Company
shall promptly mail to the Registered Holder a certificate setting forth (i) a
brief statement of the facts requiring such adjustment, (ii) the Purchase Price
after such adjustment and (iii) the kind and amount of stock or other securities
or property into which this Warrant shall be exercisable after such
adjustment.

     3.      Transfers.

          (a)     
Unregistered Security. This Warrant and the Warrant Shares have not been
registered under the Securities Act of 1933, as amended (the “Securities
Act”), and may not be sold, pledged, distributed, offered for sale,
transferred or otherwise disposed of in the absence of (i) an effective
registration statement under the Securities Act as to this Warrant or such
Warrant Shares and registration or qualification of this Warrant or such Warrant
Shares under any applicable U.S. federal or state securities law then in effect,
or (ii) an opinion of counsel, reasonably satisfactory to the Company, that such
registration or qualification is not required. Each certificate or other
instrument for Warrant Shares issued upon the exercise of this Warrant shall
bear a legend substantially to the foregoing effect.

2

          (b)     
Transferability. Subject to the provisions of Section 3(a) hereof and
subject to the Company’s approval, this Warrant and all rights hereunder are
transferable, in whole or in part, upon surrender of the Warrant with a properly
executed assignment (in the form of Exhibit B hereto) at the principal
office of the Company.

          (c)     
Warrant Register. The Company will maintain a register containing the
names and addresses of the Registered Holders of this Warrant. Until any
transfer of this Warrant is made in the warrant register, the Company may treat
the Registered Holder as the absolute owner hereof for all purposes;
provided, however, that if this Warrant is properly assigned in
blank, the Company may (but shall not be required to) treat the bearer hereof as
the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary. Any Registered Holder may change such Registered Holder’s address as
shown on the warrant register by written notice to the Company requesting such
change.

     4.     
No Impairment. The Company will not, by amendment of its charter or
through reorganization, consolidation, merger, dissolution, sale of assets or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will (subject to Section 11 below) at
all times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Registered Holder against impairment.

     5.     
Termination. This Warrant (and the right to purchase securities upon
exercise hereof) shall terminate five (5) years from the date of issuance of
this Warrant (the “Expiration Date”).

     6.     
Notices of Certain Transactions. In the event:

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

          (b)     
of any capital reorganization of the Company, any reclassification of the
capital stock of the Company, or any consolidation or merger of the Company with
or into another corporation, or

          (c)     
of the voluntary or involuntary dissolution, liquidation or winding-up of the
Company,

then, and in each such case, the Company will mail or cause to
be mailed to the Registered Holder a notice specifying, as the case may be, (i)
the date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the effective date on which such
reclassification, reorganization, consolidation, merger, dissolution,
liquidation or winding-up is to take place, and the time, if any is to be fixed,
as of which the holders of record of Warrant Shares shall be entitled to
exchange their shares of Warrant Shares (or such other stock or securities) for
securities or other property deliverable upon such reclassification,
reorganization, consolidation, merger, dissolution, liquidation or winding-up.
Such notice shall be mailed at least ten (10) days prior to the record date or
effective date for the event specified in such notice.

     7.      Reservation
of Stock. The Company will at all times reserve and keep available out of
its authorized but unissued stock, solely for the issuance and delivery upon the
exercise of this Warrant and other similar Warrants, such number of its duly
authorized shares of Common Stock as from time to time shall be issuable upon
the exercise of this Warrant and other similar Warrants. All of the shares of
Common Stock issuable upon exercise of this Warrant and other similar Warrants,
when issued and delivered in accordance with the terms hereof and thereof, will
be duly authorized, validly issued, fully paid and non-assessable, subject to no
lien or other encumbrance other than restrictions on transfer arising under
applicable securities laws and restrictions imposed by Section 3 hereof.

3

     8.     
Exchange of Warrants. Upon the surrender by the Registered Holder of any
Warrant or Warrants, properly endorsed, to the Company at the principal office
of the Company, the Company will, subject to the provisions of Section 3 hereof,
issue and deliver to or upon the order of such Holder, at the Company’s expense,
a new Warrant or Warrants of like tenor, in the name of such Registered Holder
or as such Registered Holder (upon payment by such Registered Holder of any
applicable transfer taxes) may direct, calling in the aggregate on the face or
faces thereof for the number of shares of Common Stock called for on the face or
faces of the Warrant or Warrants so surrendered.

     9.      Replacement
of Warrants. Upon receipt of evidence reasonably satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant and (in the case
of loss, theft or destruction) upon delivery of an indemnity agreement (with
surety if reasonably required) in an amount reasonably satisfactory to the
Company, or (in the case of mutilation) upon surrender and cancellation of this
Warrant, the Company will issue, in lieu thereof, a new Warrant of like
tenor.

     10.      Notices.
Any notice required or permitted by this Warrant shall be in writing and shall
be deemed sufficient upon receipt, when delivered personally or by courier,
overnight delivery service or confirmed facsimile, or forty-eight (48) hours
after being deposited in the regular mail as certified or registered mail
(airmail if sent internationally) with postage prepaid, addressed (a) if to the
Registered Holder, to the address of the Registered Holder most recently
furnished in writing to the Company and (b) if to the Company, to the address
set forth below or subsequently modified by written notice to the Registered
Holder.

     11.     
No Rights as Stockholder. Until the exercise of this Warrant, the
Registered Holder shall not have or exercise any rights by virtue hereof as a
stockholder of the Company.

     12.     
Representations of Registered Holder. By acceptance of this Warrant, the
Registered Holder hereby represents and acknowledges to the Company that:

          (a)      this
Warrant and the Warrant Shares are “restricted securities” as such term
is used in the rules and regulations under the Securities Act and that such
securities have not been and will not be registered under the Securities Act or
any state securities law, and that such securities must be held indefinitely
unless registration is effected or transfer can be made pursuant to appropriate
exemptions;

          (b)      the
Registered Holder has read, and fully understands, the terms of this Warrant set
forth on its face and the attachments hereto, including the restrictions on
transfer contained herein;

          (c)     
the Registered Holder is purchasing for investment for its own account and not
with a view to or for sale in connection with any distribution of this Warrant
and the Warrant Shares and it has no intention of selling such securities in a
public distribution in violation of the federal securities laws or any
applicable state securities laws; provided that nothing contained herein will
prevent the Registered Holder from transferring such securities in compliance
with the terms of this Warrant and the applicable federal and state securities
laws; and

          (d)      the
Company may affix one or more legends, including a legend in substantially the
following form (in addition to any other legend(s), if any, required by
applicable state corporate and/or securities laws) to certificates representing
Warrant Shares:

  
    
      
        
          “THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
            UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE
            SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
            TRANSFERABILITY AND RESALE AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR
            HYPOTHECATED UNLESS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS
            PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM AND THE ISSUER OF THESE
            SECURITIES HAS BEEN PROVIDED WITH AN OPINION OF LEGAL COUNSEL TO THE HOLDER IN FORM AND SUBSTANCE SATISFACTORY TO
THE ISSUER OF THESE SECURITIES TO THE EFFECT THAT SUCH OFFER, SALE, TRANSFER,
PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION UNDER SUCH LAWS.”

        

      

    

  

4

     13.     
No Fractional Shares. No fractional shares will be issued in connection
with any exercise hereunder. In lieu of any fractional shares which would
otherwise be issuable, the Company shall pay cash equal to the product of such
fraction multiplied by the fair market value of one such share on the date of
exercise, as determined in good faith by the Company’s Board of Directors.

     14.      Amendment
or Waiver. Any term of this Warrant may be amended or waived upon written
consent of the Company and the Registered Holder.

     15.      Headings.
The headings in this Warrant are for purposes of reference only and shall not
limit or otherwise affect the meaning of any provision of this Warrant.

     16.      Governing
Law. This Warrant shall be governed, construed and interpreted in accordance
with the laws of the State of Nevada, without giving effect to principles of
conflicts of law.

[Remainder of Page Intentionally Left Blank]

5

     IN WITNESS WHEREOF, the Company
has caused this Warrant to be duly executed and delivered by its authorized
officer as of the date first above written.

	 	ECHO AUTOMOTIVE, INC., a Nevada
      corporation 
	 	 
	 	 
	 	Signed: 	 
    
	 	By: 	 
    
	 	Title: 	 
    
	 	Address: 	16000 N. 80th Street, Suite E
Scottsdale, AZ
      85260 
	 	Phone No.: 	(855) 324-6288 

	INITIAL HOLDER: 	 	 
	By: 	 	 
	Print Name: 	 	 
	Title: 	 	 

[SIGNATURE PAGE TO ECHO AUTOMOTIVE, INC. WARRANT]

EXHIBIT A

PURCHASE/EXERCISE FORM

	To:      ECHO AUTOMOTIVE,
      INC. 	Dated:_________________ 

     The undersigned, pursuant to the
provisions set forth in the attached Warrant No. ___ hereby irrevocably elects
to purchase _____shares of the Common Stock covered by such Warrant and herewith
makes payment of $_________, representing the full purchase price for such
shares at the price per share provided for in such Warrant.

     The undersigned acknowledges that
it has reviewed the representations and warranties contained in Section 12 of
the Warrant and by its signature below hereby makes such representations and
warranties to the Company as of the date hereof.

     The undersigned further
acknowledges that it has reviewed that certain Securities Purchase Agreement,
dated as of ________, 2013, among the Company and certain holders of the
Company’s securities (as amended from time to time) and agrees to be bound by
such provisions.

	 	Signature: 	 
	 	Name (print): 	 
	 	Title (if applic.) 	 
	 	Company (if applic.): 	 

EXHIBIT B

ASSIGNMENT FORM

     FOR VALUE RECEIVED,
_________________________________________hereby sells, assigns and transfers all
of the rights of the undersigned under the attached Warrant with respect to the
number of shares of Common Stock covered thereby set forth below, to:

	Name of Assignee 	Address/Fax Number 	No. of Shares

 

 

	Dated: 	 	 	Signature: 	 
	 	 	 	 	 
	  	 	 	Witness: 	 

8

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