Exhibit 10.2


 


THIS PROMISSORY NOTE (THIS “NOTE”) HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.


 


PROMISSORY NOTE 


 


	Effective Date: July 24, 2019	U.S. $1,395,000.00


 


FOR VALUE RECEIVED,
CBAK Energy Technology, Inc., a Nevada corporation (“Borrower”),
promises to pay to Atlas Sciences, LLC, a Utah limited liability company, or its
successors or assigns (“Lender”), $1,395,000.00 and any interest, fees, charges, and late fees accrued hereunder
on the date that is twelve (12) months after the Purchase Price Date (the “Maturity Date”) in accordance with
the terms set forth herein and to pay interest on the Outstanding Balance at the rate of ten percent (10%) per annum from the Purchase
Price Date until the same is paid in full. All interest calculations hereunder shall be computed on the basis of a 360-day year
comprised of twelve (12) thirty (30) day months, shall compound daily and shall be payable in accordance with the terms
of this Note. This Promissory Note (this “Note”) is issued and made effective as of July 24, 2019 (the “Effective
Date”). This Note is issued pursuant to that certain Securities Purchase Agreement dated July 24, 2019, as the same may
be amended from time to time, by and between Borrower and Lender (the “Purchase Agreement”). Certain capitalized
terms used herein are defined in Attachment 1 attached hereto and incorporated herein by this reference.


 


This Note carries an
OID of $125,000.00. In addition, Borrower agrees to pay $20,000.00 to Lender to cover Lender’s legal fees, accounting costs,
due diligence, monitoring and other transaction costs incurred in connection with the purchase and sale of this Note (the “Transaction
Expense Amount”), all of which amount is fully earned and included in the initial principal balance of this Note. The
purchase price for this Note shall be $1,250,000.00 (the “Purchase Price”), computed as follows: $1,395,000.00
original principal balance, less the OID, less the Transaction Expense Amount. The Purchase Price shall be payable by Lender by
wire transfer of immediately available funds.


 


1. Payment;
Prepayment.


 


1.1. Payment.
All payments owing hereunder shall be in lawful money of the United States of America and delivered to Lender at the address or
bank account furnished to Borrower for that purpose. All payments shall be applied first to (a) costs of collection, if any, then
to (b) fees and charges, if any, then to (c) accrued and unpaid interest, and thereafter, to (d) principal.


 


1.2. Prepayment.
Notwithstanding the foregoing, Borrower shall have the right to prepay all or any portion of the Outstanding Balance. If Borrower
exercises its right to prepay this Note, Borrower shall make payment to Lender of an amount in cash equal to 125% multiplied by
the portion of the Outstanding Balance Borrower elects to repay.


 


2. Security.
This Note is unsecured.


 


3. Redemption.
Beginning on the date that is six (6) months after the Purchase Price Date, Lender shall have the right, exercisable at any time
in its sole and absolute discretion, to redeem any amount of this Note up to $250,000.00 (such amount, the “Redemption
Amount”) per calendar month by providing written notice to Borrower (each, a “Redemption Notice”).
For the avoidance of doubt, Lender may submit to Borrower one (1) or more Redemption Notices in any given calendar month so long
as the aggregate amount being redeemed in such month does not exceed $250,000.00. The Redemption Amount must be at least $50,000.00
unless the Outstanding Balance of the Note is less than $50,000.00. Upon receipt of any Redemption Notice, Borrower shall pay the
applicable Redemption Amount in cash to Lender within three (3) Trading Days of Borrower’s receipt of such Redemption Notice.


 






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4. Defaults
and Remedies.


 


4.1. Defaults.
The following are events of default under this Note (each, an “Event of Default”): (a) Borrower fails to pay
any principal, interest, fees, charges, or any other amount when due and payable hereunder; (b) a receiver, trustee or other similar
official shall be appointed over Borrower or a material part of its assets and such appointment shall remain uncontested for twenty
(20) days or shall not be dismissed or discharged within sixty (60) days; (c) Borrower becomes insolvent or generally fails to
pay, or admits in writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any; (d)
Borrower makes a general assignment for the benefit of creditors; (e) Borrower files a petition for relief under any bankruptcy,
insolvency or similar law (domestic or foreign); (f) an involuntary bankruptcy proceeding is commenced or filed against Borrower;
(g) Borrower or any pledgor, trustor, or guarantor of this Note defaults or otherwise fails to observe or perform any covenant,
obligation, condition or agreement of Borrower or such pledgor, trustor, or guarantor contained herein or in any other Transaction
Document (as defined in the Purchase Agreement), other than those specifically set forth in this Section 4.1 and Section 4 of the
Purchase Agreement; (h) any representation, warranty or other statement made or furnished by or on behalf of Borrower or any pledgor,
trustor, or guarantor of this Note to Lender herein, in any Transaction Document, or otherwise in connection with the issuance
of this Note is false, incorrect, incomplete or misleading in any material respect when made or furnished; (i) the occurrence of
a Fundamental Transaction without Lender’s prior written consent; (j) Borrower effectuates a reverse split of its Common
Stock without twenty (20) Trading Days prior written notice to Lender; (k) any United States money judgment, writ or similar process
is entered or filed against Borrower or any subsidiary of Borrower or any of its property or other assets for more than $1,000,000.00,
and shall remain unvacated, unbonded or unstayed for a period of twenty (20) calendar days unless otherwise consented to by Lender;
(l) Borrower fails to be DWAC Eligible at any time after the six (6) month anniversary of the Purchase Price Date; (m) Borrower
fails to observe or perform any covenant set forth in Section 4 of the Purchase Agreement (other than the covenant with respect
to Unapproved Restricted Issuances); (n) Borrower makes any Unapproved Restricted Issuance; or (o) Borrower, any affiliate of Borrower,
or any pledgor, trustor, or guarantor of this Note breaches any covenant or other term or condition contained in any Other Agreements
(after giving effect to any grace periods therein or any waivers). Notwithstanding the foregoing, the occurrence of any event specified
in Section 4.1(g) – (o) shall not be considered an Event of Default hereunder if such event is cured within ten (10) days
of the occurrence of such event.


 


4.2. Remedies.
At any time and from time to time after Lender becomes aware of the occurrence of any Event of Default, Lender may accelerate this
Note by written notice to Borrower, with the Outstanding Balance becoming immediately due and payable in cash at the Mandatory
Default Amount. Notwithstanding the foregoing, at any time following the occurrence of any Event of Default, Lender may, at its
option, elect to increase the Outstanding Balance by applying the Default Effect (subject to the limitation set forth below) via
written notice to Borrower without accelerating the Outstanding Balance, in which event the Outstanding Balance shall be increased
as of the date of the occurrence of the applicable Event of Default pursuant to the Default Effect, but the Outstanding Balance
shall not be immediately due and payable unless so declared by Lender (for the avoidance of doubt, if Lender elects to apply the
Default Effect pursuant to this sentence, it shall reserve the right to declare the Outstanding Balance immediately due and payable
at any time and no such election by Lender shall be deemed to be a waiver of its right to declare the Outstanding Balance immediately
due and payable as set forth herein unless otherwise agreed to by Lender in writing). Notwithstanding the foregoing, upon the occurrence
of any Event of Default described in clauses (b), (c), (d), (e) or (f) of Section 4.1, the Outstanding Balance as of the date of
acceleration shall become immediately and automatically due and payable in cash at the Mandatory Default Amount, without any written
notice required by Lender. At any time following the occurrence of any Event of Default, upon written notice given by Lender to
Borrower, interest shall accrue on the Outstanding Balance beginning on the date the applicable Event of Default occurred at an
interest rate equal to the lesser of twenty-two percent (22%) per annum or the maximum rate permitted under applicable law (“Default
Interest”). In connection with acceleration described herein, Lender need not provide, and Borrower hereby waives, any
presentment, demand, protest or other notice of any kind, and Lender may immediately and without expiration of any grace period
enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration
may be rescinded and annulled by Lender at any time prior to payment hereunder and Lender shall have all rights as a holder of
the Note until such time, if any, as Lender receives full payment pursuant to this Section 4.2. No such rescission or annulment
shall affect any subsequent Event of Default or impair any right consequent thereon. Nothing herein shall limit Lender’s
right to pursue any other remedies available to it at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief.


 






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5. Unconditional
Obligation; No Offset. Borrower acknowledges that this Note is an unconditional, valid, binding and enforceable obligation
of Borrower not subject to offset, deduction or counterclaim of any kind. Borrower hereby waives any rights of offset it now has
or may have hereafter against Lender, its successors and assigns, and agrees to make the payments called for herein in accordance
with the terms of this Note.


 


6. Waiver.
No waiver of any provision of this Note shall be effective unless it is in the form of a writing signed by the party granting the
waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision or consent
to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or
commit a party to provide a waiver or consent in the future except to the extent specifically set forth in writing.


 


7. Approved
Restricted Issuance. The Outstanding Balance will automatically be increased by three percent (3%) for each Approved Restricted
Issuance made by Borrower (without the need for Lender to provide any notice to Borrower of such increase), which increase will
be effective as of the date of each applicable Approved Restricted Issuance.


 


8. Opinion
of Counsel. In the event that an opinion of counsel is needed for any matter related to this Note, Lender has the right to
have any such opinion provided by its counsel.


 


9. Governing
Law; Venue. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the internal laws of the State of Utah, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of Utah. The provisions set forth in the Purchase Agreement
to determine the proper venue for any disputes are incorporated herein by this reference.


 


10. Arbitration
of Disputes. By its issuance or acceptance of this Note, each party agrees to be bound by the Arbitration Provisions (as defined
in the Purchase Agreement) set forth as an exhibit to the Purchase Agreement.


 






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11. Cancellation.
After repayment of the entire Outstanding Balance, this Note shall be deemed paid in full, shall automatically be deemed canceled,
and shall not be reissued.


 


12. Amendments.
The prior written consent of both parties hereto shall be required for any change or amendment to this Note.


 


13. Assignments.
Borrower may not assign this Note without the prior written consent of Lender. This Note may be offered, sold, assigned or transferred
by Lender without the consent of Borrower, so long as such transfer is in accordance with applicable federal and state securities
laws.


 


14. Notices.
Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance
with the subsection of the Purchase Agreement titled “Notices.”


 


15. Liquidated
Damages. Lender and Borrower agree that in the event Borrower fails to comply with any of the terms or provisions of this Note,
Lender’s damages would be uncertain and difficult (if not impossible) to accurately estimate because of the parties’
inability to predict future interest rates, future share prices, future trading volumes and other relevant factors. Accordingly,
Lender and Borrower agree that any fees, balance adjustments, Default Interest or other charges assessed under this Note are not
penalties but instead are intended by the parties to be, and shall be deemed, liquidated damages.


 


16. Severability.
If any part of this Note is construed to be in violation of any law, such part shall be modified to achieve the objective of Borrower
and Lender to the fullest extent permitted by law and the balance of this Note shall remain in full force and effect.


 


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IN WITNESS WHEREOF,
Borrower has caused this Note to be duly executed as of the Effective Date.


  


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


 


ACKNOWLEDGED, ACCEPTED AND AGREED:


 


LENDER:


 


Atlas
Sciences, LLC


 


	By: 	/s/ John Finlayson	 
	 	John Finlayson, CEO	 


  





[Signature Page
to Promissory Note]







 






     


     


    

 





ATTACHMENT 1


DEFINITIONS


 


For purposes
of this Note, the following terms shall have the following meanings:


 


A1. “Approved
Restricted Issuance” means a Restricted Issuance (as defined in the Purchase Agreement) for which Borrower received Lender’s
written consent prior to the applicable issuance.


 


A2. “Default
Effect” means multiplying the Outstanding Balance as of the date the applicable Event of Default occurred by (a) fifteen
percent (15%) for each occurrence of any Major Default, (b) ten percent (10%) for each occurrence of an Unapproved Restricted Issuance
Default, or (c) five percent (5%) for each occurrence of any Minor Default, and then adding the resulting product to the Outstanding
Balance as of the date the applicable Event of Default occurred, with the sum of the foregoing then becoming the Outstanding Balance
under this Note as of the date the applicable Event of Default occurred; provided that the Default Effect may only be applied three
(3) times hereunder with respect to Major Defaults and three (3) times hereunder with respect to Minor Defaults. There shall be
no limit on the number of times the Default Effect may be applied with respect to Unapproved Restricted Issuance Defaults. Notwithstanding
the forgoing, in no event shall the Default Effect result in the Outstanding Balance to be increased by more than twenty-five percent
(25%) in the aggregate.


 


A3. “DTC”
means the Depository Trust Company or any successor thereto.


 


A4. “DTC/FAST
Program” means the DTC’s Fast Automated Securities Transfer program.


 


A5. “DWAC”
means the DTC’s Deposit/Withdrawal at Custodian system.


 


A6. “DWAC
Eligible” means that (a) Borrower’s Common Stock is eligible at DTC for full services pursuant to DTC’s operational
arrangements, including without limitation transfer through DTC’s DWAC system; (b) Borrower has been approved (without revocation)
by DTC’s underwriting department; (c) Borrower’s transfer agent is approved as an agent in the DTC/FAST Program; and
(d) Borrower’s transfer agent does not have a policy prohibiting or limiting delivery of Common Stock via DWAC.


 


A7. “Fundamental
Transaction” means that (a) (i) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more
related transactions, consolidate or merge with or into (whether or not Borrower or any of its subsidiaries is the surviving corporation)
any other person or entity, or (ii) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related
transactions, sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of its respective
properties or assets to any other person or entity, or (iii) Borrower or any of its subsidiaries shall, directly or indirectly,
in one or more related transactions, allow any other person or entity to make a purchase, tender or exchange offer that is accepted
by the holders of more than 50% of the outstanding shares of voting stock of Borrower (not including any shares of voting stock
of Borrower held by the person or persons making or party to, or associated or affiliated with the persons or entities making or
party to, such purchase, tender or exchange offer), or (iv) Borrower or any of its subsidiaries shall, directly or indirectly,
in one or more related transactions, consummate a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other person or entity whereby such
other person or entity acquires more than 50% of the outstanding shares of voting stock of Borrower (not including any shares of
voting stock of Borrower held by the other persons or entities making or party to, or associated or affiliated with the other persons
or entities making or party to, such stock or share purchase agreement or other business combination), or (v) Borrower or
any of its subsidiaries shall, directly or indirectly, in one or more related transactions, reorganize, recapitalize or reclassify
the Common Stock, other than an increase in the number of authorized shares of Borrower’s Common Stock, or reverse splits
of its outstanding and authorized shares of Common Stock to meet Nasdaq listing requirements or (b) any “person”
or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations
promulgated thereunder) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act),
directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding voting stock of Borrower.


 






     


     


    

 


A8. “Major
Default” means any Event of Default occurring under Sections 4.1(a) or 4.1(m).


 


A9. “Mandatory
Default Amount” means the Outstanding Balance following the application of the Default Effect.


 


A10. “Minor
Default” means any Event of Default that is not a Major Default or an Unapproved Restricted Issuance Default.


 


A11. “OID”
means an original issue discount.


 


A12. “Other
Agreements” means, collectively, (a) all existing and future agreements and instruments between, among or by Borrower
(or an affiliate), on the one hand, and Lender (or an affiliate), on the other hand, and (b) any financing agreement or a material
agreement that affects Borrower’s ongoing business operations.


 


A13. “Outstanding
Balance” means as of any date of determination, the Purchase Price, as reduced or increased, as the case may be, pursuant
to the terms hereof for payment, offset, or otherwise, plus the OID, the Transaction Expense Amount, accrued but unpaid interest,
collection and enforcements costs (including attorneys’ fees) incurred by Lender, transfer, stamp, issuance and similar taxes
and fees incurred under this Note.


 


A14. “Purchase
Price Date” means the date the Purchase Price is delivered by Lender to Borrower.


 


A15. “Trading
Day” means any day on which the New York Stock Exchange (or such other principal market for the Common Stock) is open
for trading. For purposes of determining Borrower’s cash payment deadline under this Note, such “Trading Day”
shall exclude any day on which banking institutions in Dalian, China are authorized or required by law or other governmental action
to close.


 


A16. “Unapproved
Restricted Issuance” means a Restricted Issuance for which Borrower did not receive Lender’s written consent prior
to the applicable issuance.


 


A17. “Unapproved
Restricted Issuance Default” means an Event of Default occurring under Section 4.1(n) of this Note.


 


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