Item 1.01 Entry into a Material Definitive Agreement.
Exchange Agreement
On May 15, 2020, China Recycling Energy Corporation, a Nevada corporation (the
"Company"), entered into an Exchange Agreement (the "Exchange Agreement") with
Iliad Research and Trading, L.P., a Utah limited partnership (the "Lender").
Pursuant to the Exchange Agreement, the Company and the Lender agreed to
partition a new Promissory Note in the original principal amount of $319,586
(the "Partitioned Note") from a Convertible Promissory Note dated January 31,
2019 which was exchanged for a new Promissory Note in the original principal
amount of $1,173,480 on April 14, 2019 (the "Note"). The Company and the Lender
agreed to exchange the Partitioned Note for 106,528 shares of common stock of
the Company, and then the amount of the outstanding balance of the Note will be
reduced by an amount equal to the Partitioned Note. The shares of common stock
were issued without any restrictions.
The foregoing description of the Exchange Agreement is not complete and is
qualified in its entirety by reference to the full text of the Exchange
Agreement, a copy of which is attached hereto as Exhibit 10.39.
Forbearance Agreement
On May 15, 2020, the Company entered into a Forbearance Agreement (the
"Forbearance Agreement") with the Lender. The Lender had delivered a redemption
notice to the Company on November 4, 2019 pursuant to the terms of the Exchange
Agreement dated April 14, 2019 and the Company failed to pay the amount provided
therein. Accordingly, the Lender has the right to accelerate the maturity date
of the Note and cause the outstanding balance to be increased by 25%.
The Lender agreed with the Company to withdraw the November 4, 2019 redemption
notice as if it was never made and agreed that as of May 15, 2020 there is no
default under the Note. The Company did not pay any consideration to the Lender
for this forbearance.
The outstanding balance of the Note as of May 15, 2020 is $1,271,719.78 and if
the Lender delivers a redemption notice and the amount set forth in such notice
is not paid in cash to Lender within three trading days, the applicable
redemption amount shall be increased to 25%.
The foregoing description of the Exchange Agreement is not complete and is
qualified in its entirety by reference to the full text of the Exchange
Agreement, a copy of which is attached hereto as Exhibit 10.40.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.39 Exchange Agreement dated as of May 15, 2020 by and between Iliad
Research and Trading, L.P. and China Recycling Energy Corporation
10.40 Forbearance Agreement dated as of May 15, 2020 by and between Iliad
Research and Trading, L.P. and China Recycling Energy Corporation
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