SHARE PURCHASE AGREEMENT
This SHARE PURCHASE
AGREEMENT is dated as of August 27th, 2014 (the “Agreement”) and is entered into by and among China Recycling
Energy Corporation, a Nevada corporation (the “Company”) and Mr. Ku Guohua, a Chinese citizen, major shareholder,
Chairman and Chief Executive Officer of the Company (“Mr. Ku”).
RECITALS
WHEREAS, Mr. Ku, a major shareholder,
Chairman and Chief Executive Officer (“CEO”) of this Company wishes to purchase
13,829,074 shares of common stock of the Company at the market price; and
WHEREAS, the Company
is willing to sell Mr. Ku 13,829,074 shares of common stock of the Company at the market price.
WITNESSETH
NOW THEREFORE,
in consideration of the above recitals and promises made in this Agreement, the parties hereby agree as follows:
SECTION 1. Share Purchase.
Subject to the terms and conditions of this Agreement, the Company shall issue and sell to Mr. Ku,
and Mr. Ku shall purchase from the Company 13,829,074 shares of common stock of the Company
(the "Shares"). The purchase price per share for the Shares shall be the average closing price quoted
on the NASDAQ Global Market for the common stock of the Company 15 trading days prior to the effective date of the Agreement.
SECTION 2. Payments. The
total purchase price of the Shares shall be paid in two installments: 1) $12,000,000 or its equivalent Chinese RMB shall be paid
by Mr. Ku within ten days of the effective date of the Agreement; and 2) the remaining purchase price shall be paid by Mr. Ku within
20 days of the effective date of the Agreement. The exchange rate between $US and Chinese RMB in the Agreement shall be the rate
equal to the middle rate published by the People’s Bank of China on the effective date of the Agreement. The Shares shall
be issued and delivered upon the receipt of the final payment by the Company.
SECTION 3. Representations and Warranties
of the Company. The Company represents and warrants to Mr. Ku that it is duly organized,
validly existing and in good standing under the Laws of the jurisdiction of its incorporation and the Company has all requisite
legal and corporate power, and has taken all corporate action on the part of its officers, directors and shareholders as may be
necessary for the authorization, execution and delivery of this Agreement.
SECTION 4.
Representations and Warranties of Mr. Ku. Mr. Ku represents and warrants to the Company he does not possess
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.
SECTION 5. Registration
Rights. Within 180 days from the effective date of this Agreement, the Company shall file a registration statement on Form
S-1 or Form S-3 or on such other form promulgated by the SEC for which the Company then qualifies for the registration of the Shares
for their resale by Mr. Ku .
SECTION 6. Restricted Securities. Mr.
Ku understands that the Shares are characterized as "restricted securities" under U.S. federal securities laws
inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under
such laws and applicable regulations such securities may be resold without registration under the Securities Act only in
certain limited circumstances. Mr. Ku understands that the Shares have not been qualified or registered under the laws of any
other jurisdiction and therefore may be viewed as restricted securities under any or all of such other applicable securities
Laws.
SECTION
7. Legends. Mr. Ku understands that the certificates evidencing the Shares
issued pursuant to this Agreement may bear the following legend:
"THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE (A) ABSENCE
OF (1) A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER THE SECURITIES ACT OR (II) AN OPINION OF COUNSEL
TO THE HOLDER THAT SUCH REGISTRATION IS NOT REQUIRED OR (B) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144 OF THE SECURITIES ACT.
THIS SECURITY MAY NOT BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT BUT MAY BE PLEDGED IN CONNECTION WITH ANY LOAN SECURED
BY SUCH SECURITIES FOR THE BENEFIT OF THE COMPANY."
SECTION 8. Miscellaneous.
8.1 Further Assurances. Each
party agrees to cooperate fully with the other parties and to execute such further instruments, documents and agreements and to
give such further written assurances, as may be reasonably requested by any other party to evidence and reflect the transactions
described herein and contemplated hereby, and to carry into effect the intents and purposes of this Agreement.
8.2 Number and Gender. All
words and any variations thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity
of the person, persons, entity or entities may require or as otherwise appropriate in view of their context.
8.3. Captions. Captions are
provided herein for convenience only and they are not to serve as a basis for interpretation or construction of this Agreement,
nor as evidence of the intention of the parties hereto.
8.4 Severability. The provisions
of this Agreement are severable. The invalidity, in whole or in part, of any provision of this Agreement shall not affect the validity
or enforceability of any other of its provisions. If one or more provisions hereof shall be declared invalid or unenforceable,
the remaining provisions shall remain in full force and effect and shall be construed in the broadest possible manner to effectuate
the purposes hereof. The parties further agree to replace such void or unenforceable provisions of this Agreement with valid and
enforceable provisions that will achieve, to the extent possible, the economic, business and other purposes of the void or unenforceable
provisions.
8.5 Counterparts. This Agreement
may be executed in separate counterparts, each of which shall be deemed as an original; when executed, separately or together,
all of such counterparts shall constitute a single original instrument, effective in the same manner as if all parties hereto had
executed one and the same instrument.
8.6 Entire Agreement. This
Agreement is intended by the parties hereto to be the final expression of their agreement and constitutes and embodies the entire
agreement and understanding between the parties hereto with regard to the subject matter hereof and is a complete and exclusive
statement of the terms and conditions thereof, and shall supersede any and all prior oral and written correspondence, conversations,
negotiations, agreements and understandings relating to the same subject matter.
8.7 Amendment. Any term of
this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written consent of the Company and the Investors. Any amendment
or waiver effected in accordance with this paragraph shall be binding upon each of the parties hereto.
8.9 Governing Law. This amendment
shall be governed by and construed in and accordance with the law of the State of Nevada, without giving effect to the conflict
of law principles thereof.
8.10 Successors and Assigns.
Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors of the parties hereto whose rights or obligations hereunder are affected by such terms and conditions.
This Agreement, and the rights and obligations hereunder, shall not be assigned Nothing in this Agreement, express or implied,
is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
8.11 Effectiveness of this Agreement.
This Agreement shall become effective when it is executed by all parties and the date stated in the first sentence of this Agreement
shall be the effective date.
[The remainder of this page has been
left intentionally blank]
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement with the intent and agreement that the same shall be effective as of the day and year first above
written.
| |
CHINA RECYCLING ENERGY CORPORATION |
| |
|
| |
By: |
|
| |
|
Name: David Chong |
| |
|
Title: Chief Financial Officer |
| |
|
|
