Exhibit 10.1

 

AMENDMENT TO PROMISSORY NOTES

 

This Amendment to Promissory Notes (this “Amendment”) is entered into as of
October 12, 2020, by and between Atlas Sciences, LLC, a Utah limited liability
company (“Lender”), and CBAK Energy Technology, Inc., a Nevada corporation
(“Borrower”). Capitalized terms used in this Amendment without definition shall
have the meanings given to them in the Notes (as defined below).

 

A. Borrower previously issued to Lender a Promissory Note dated July 24, 2019 in
the original principal amount of $1,395,000.00 (the “Note #1”).

 

B. Borrower previously issued to Lender a Promissory Note dated December 30,
2019 in the original principal amount of $1,670,000.00 (“Note #2”, and together
with Note #1, the “Notes”).

 

C. Starting on January 27, 2020, Borrower entered into multiple exchange
agreements with Lender (the “Exchange Agreements”), pursuant to each Exchange
Agreement, it partitioned a new promissory note in various original principal
amounts from the outstanding balance of the Notes and exchanged the partitioned
promissory note for the issuance of shares of the Company common stock to the
Lender.

 

D. Borrower has requested that Lender amend the Notes to make the outstanding
balances convertible into Borrower’s common stock.

 

E. Lender has agreed, subject to the terms, amendments, conditions and
understandings expressed in this Amendment, to make the Notes convertible.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:

 

1. Recitals. Each of the parties hereto acknowledges and agrees that the
recitals set forth above in this Amendment are true and accurate and are hereby
incorporated into and made a part of this Amendment.

 

2. Amendments.

 

(a) The following sentence shall be added to each of the Notes at the end of
Section 4.1:

 

“Borrower’s failure to deliver Conversion Shares (as defined below) to Lender
within three (3) Trading Days (as defined below) of its receipt of a Conversion
Notice (as defined below) shall be considered an Event of Default hereunder.
Notwithstanding the foregoing, on up to three (3) separate occasions, Borrower
shall have an additional five (5) Trading Days after the original delivery date
to deliver such Conversion Shares before the occurrence of an Event of Default
hereunder.”

 

 

 

 

(b) The following provision shall be added to each of the Notes as Section 17
(with respect to Note #1) and Section 18 (with respect to Note #2):

 

“17. Conversion.

 

17.1 Conversions. Lender has the right at any time after the issuance date of
this Note until the outstanding balance has been paid in full, at its election,
to convert (“Conversion”) all or any portion of the outstanding balance of this
Note into shares (“Conversion Shares”) of fully paid and non-assessable common
stock, $0.001 par value per share (“Common Stock”), of Borrower as per the
following conversion formula: the number of Conversion Shares equals the amount
being converted (the “Conversion Amount”) divided by the Conversion Price (as
defined below). Conversion notices (each, a “Conversion Notice”) may be
effectively delivered to Borrower by any method set forth in the “Notices”
Section of the Purchase Agreement, and all Conversions shall be cashless and not
require further payment from Lender.

 

17.2 Conversion Price. Subject to the adjustments set forth herein, the
conversion price for each Conversion shall be calculated pursuant to the
following formula: 80% multiplied by the lowest closing price of the Common
Stock during the ten (10) Trading Days immediately preceding the applicable
Conversion (the “Conversion Price”). As used herein, the term “Trading Day”
shall mean any day on which Nasdaq is open for trading. Notwithstanding the
foregoing, in no event shall the Conversion Price be less than $1.00.”

 

(c) The following provision shall be added to each of the Notes as Section 18
(with respect to Note #1) and Section 19 (with respect to Note #2):

 

“18. Ownership Limitation. Notwithstanding anything to the contrary contained in
this Note, Borrower shall not effect any conversion of this Note to the extent
that after giving effect to such conversion would cause Lender (together with
its affiliates) to beneficially own a number of shares exceeding 4.99% of the
number of shares of Common Stock outstanding on such date (including for such
purpose the shares of Common Stock issuable upon such issuance) (the “Maximum
Percentage”). For purposes of this section, beneficial ownership of Common Stock
will be determined pursuant to Section 13(d) of the 1934 Act. By written notice
to Borrower, Lender may increase, decrease or waive the Maximum Percentage as to
itself but any such waiver will not be effective until the 61st day after
delivery thereof. The foregoing 61-day notice requirement is enforceable,
unconditional and non-waivable and shall apply to all affiliates and assigns of
Lender.”

 

(d) The following provision shall be added to each of the Notes as Section 19
(with respect to Note #1) and Section 20 (with respect to Note #2):

 

“19. Issuance Cap. Notwithstanding anything to the contrary contained in this
Note, Borrower and Lender agree that the total cumulative number of shares of
Common Stock issued to Lender hereunder together with all other Transaction
Documents, including all shares of Common Stock that have been issued pursuant
to Exchange Agreements, may not exceed the requirements of Nasdaq Listing Rule
5635(d) (“Nasdaq 19.99% Cap”). Once the Nasdaq 19.99% Cap is reached, any
remaining Outstanding Balance must be repaid in cash.”

 

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3. Representations and Warranties. In order to induce Lender to enter into this
Amendment, Borrower, for itself, and for its affiliates, successors and assigns,
hereby acknowledges, represents, warrants and agrees as follows:

 

(a) Borrower has full power and authority to enter into this Amendment and to
incur and perform all obligations and covenants contained herein, all of which
have been duly authorized by all proper and necessary action. No consent,
approval, filing or registration with or notice to any governmental authority is
required as a condition to the validity of this Amendment or the performance of
any of the obligations of Borrower hereunder, other than (i) the filings
required under applicable federal state securities law, and (ii) application(s)
to each applicable trading market for the listing of the shares of Common Stock
issued and issuable under the Notes.

 

(b) There is no fact known to Borrower or which should be known to Borrower
which Borrower has not disclosed to Lender on or prior to the date of this
Amendment which would or could materially and adversely affect the understanding
of Lender expressed in this Amendment or any representation, warranty, or
recital contained in this Amendment.

 

(c) Except as expressly set forth in this Amendment, Borrower acknowledges and
agrees that neither the execution and delivery of this Amendment nor any of the
terms, provisions, covenants, or agreements contained in this Amendment shall in
any manner release, impair, lessen, modify, waive, or otherwise affect the
liability and obligations of Borrower under the terms of the Transaction
Documents.

 

(d) Borrower has no defenses, affirmative or otherwise, rights of setoff, rights
of recoupment, claims, counterclaims, actions or causes of action of any kind or
nature whatsoever against Lender, directly or indirectly, arising out of, based
upon, or in any manner connected with, the transactions contemplated hereby,
whether known or unknown, which occurred, existed, was taken, permitted, or
begun prior to the execution of this Amendment and occurred, existed, was taken,
permitted or begun in accordance with, pursuant to, or by virtue of any of the
terms or conditions of the Transaction Documents. To the extent any such
defenses, affirmative or otherwise, rights of setoff, rights of recoupment,
claims, counterclaims, actions or causes of action exist or existed, such
defenses, rights, claims, counterclaims, actions and causes of action are hereby
waived, discharged and released. Borrower hereby acknowledges and agrees that
the execution of this Amendment by Lender shall not constitute an acknowledgment
of or admission by Lender of the existence of any claims or of liability for any
matter or precedent upon which any claim or liability may be asserted.

 

(e) Borrower represents and warrants that as of the date hereof no Events of
Default or other material breaches exist under the Transaction Documents or have
occurred prior to the date hereof.

 

4. Certain Acknowledgments. Each of the parties acknowledges and agrees that no
property or cash consideration of any kind whatsoever has been or shall be given
by Lender to Borrower in connection with any amendment to the Notes granted
herein.

 

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5. Other Terms Unchanged. The Notes, as amended by this Amendment, remain and
continue in full force and effect, constitute legal, valid, and binding
obligations of each of the parties, and are in all respects agreed to, ratified,
and confirmed. Any reference to the Notes after the date of this Amendment is
deemed to be a reference to the Notes as amended by this Amendment. If there is
a conflict between the terms of this Amendment and the Notes, the terms of this
Amendment shall control. No forbearance or waiver may be implied by this
Amendment. Except as expressly set forth herein, the execution, delivery, and
performance of this Amendment shall not operate as a waiver of, or as an
amendment to, any right, power, or remedy of Lender under the Notes, as in
effect prior to the date hereof. For the avoidance of doubt, this Amendment
shall be subject to the governing law, venue, and Arbitration Provisions, as set
forth in the Notes.

 

6. No Reliance. Borrower acknowledges and agrees that neither Lender nor any of
its officers, directors, members, managers, equity holders, representatives or
agents has made any representations or warranties to Borrower or any of its
agents, representatives, officers, directors, or employees except as expressly
set forth in this Amendment and the Transaction Documents and, in making its
decision to enter into the transactions contemplated by this Amendment, Borrower
is not relying on any representation, warranty, covenant or promise of Lender or
its officers, directors, members, managers, equity holders, agents or
representatives other than as set forth in this Amendment.

 

7. Counterparts. This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one instrument. The parties hereto confirm that any electronic copy
of another party’s executed counterpart of this Amendment (or such party’s
signature page thereof) will be deemed to be an executed original thereof.

 

8. Further Assurances. Each party shall do and perform or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Amendment and the consummation of the transactions contemplated
hereby.

 

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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date
set forth above.

 

  LENDER:       Atlas Sciences, LLC       By: /s/ John Finlayson     John
Finlayson, CEO

 

  BORROWER:       CBAK Energy Technology, Inc.       By: /s/ Yunfei Li

  Printed Name: Yunfei Li

  Title:   Chief Executive Officer

 

 

 

[Signature Page to Amendment to Promissory Notes]

 

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