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.

 

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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      

 

  Ku guohua.       By:        Ku Guohua            

 

 

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