Document:

Exhibit 10.39

 

THE EXCHANGE CONTEMPLATED HEREIN IS INTENDED TO COMPORT WITH
THE REQUIREMENTS OF SECTION 3(a)(9) OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

EXCHANGE AGREEMENT

 

This Exchange
Agreement (this “Agreement”) is entered into as of May 15, 2020 by and between Iliad Research and Trading, L.P.,
a Utah limited partnership (“Lender”), and China Recycling Energy Corporation, a Nevada corporation (“Borrower”).
Capitalized terms used in this Agreement without definition shall have the meanings given to them in the Exchange Note (defined
below).

 

A. Borrower
previously sold and issued to Lender that certain Convertible Promissory Note dated January 31, 2019 in the original principal
amount of $1,050,000.00 (the “Original Note”) pursuant to that certain Securities Purchase Agreement dated January
31, 2019 by and between Lender and Borrower (the “Purchase Agreement”).

 

B. Pursuant
to an Exchange Agreement dated April 14, 2019 (the “Exchange Agreement”), Borrower and Lender exchanged the
Original Note for a new Promissory Note in the original principal amount of $1,173,480.00 (the “Exchange Note,”
and together with the Exchange Agreement and all other documents entered into in conjunction therewith, the “Exchange
Documents”).

 

C. Subject
to the terms of this Agreement, Borrower and Lender desire to partition a new Promissory Note in the original principal amount
of $319,586.00 (the “Partitioned Note”) from the Exchange Note and then cause the outstanding balance of the
Exchange Note to be reduced by an amount equal to the initial outstanding balance of the Partitioned Note.

 

D. Borrower
and Lender further desire to exchange (such exchange is referred to as the “Note Exchange”) the Partitioned
Note for the delivery of 106,528 shares of the Company’s Common Stock, par value $0.001 (the “Common Stock,”
and such 106,528 shares of Common Stock, the “Exchange Shares”), according to the terms and conditions of this
Agreement.

 

E. The
Note Exchange will consist of Lender surrendering the Partitioned Note in exchange for the Exchange Shares, which will be issued
free of any restrictive securities legend pursuant to Rule 144. Other than the surrender of the Partitioned Note, no consideration
of any kind whatsoever shall be given by Lender to Borrower in connection with this Agreement.

 

F. Lender
and Borrower now desire to exchange the Partitioned Note for the Exchange Shares on the terms and conditions set forth herein.

 

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

 

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

 

     

     

    

 

2. Partition.
Effective as of the date hereof, Borrower and Lender agree that the Partitioned Note is hereby partitioned from the Exchange Note.
Following such partition of the Exchange Note, Borrower and Lender agree that the Exchange Note shall remain in full force and
effect, provided that the outstanding balance of the Exchange Note shall be reduced by an amount equal to the initial outstanding
balance of the Partitioned Note.

 

3. Issuance
of Shares. Pursuant to the terms and conditions of this Agreement, the Exchange Shares shall be delivered to Lender on or before
May 15, 2020 and the Note Exchange shall occur with Lender surrendering the Partitioned Note to Borrower on the Free Trading Date
(as defined below). On the Free Trading Date, the Partitioned Note shall be cancelled and all obligations of Borrower under the
Partitioned Note shall be deemed fulfilled. All Exchange Shares delivered hereunder shall be delivered via DWAC to Lender’s
designated brokerage account. Subject to the securities laws and regulations, Borrower agrees to provide all necessary cooperation
or assistance that may be required to cause all Exchange Shares delivered hereunder to become Free Trading (the first date such
occurs, the “Free Trading Date”). For purposes hereof, the term “Free Trading” means that
(a) the Exchange Shares have been cleared and approved for public resale by the compliance departments of Lender’s brokerage
firm and the clearing firm servicing such brokerage, and (b) such shares are held in the name of the clearing firm servicing Lender’s
brokerage firm and have been deposited into such clearing firm’s account for the benefit of Lender.

 

4. Closing.
The closing of the transaction contemplated hereby (the “Closing”) along with the delivery of the Exchange Shares
to Lender shall occur on the date that is mutually agreed to by Borrower and Lender by means of the exchange by email of .pdf documents,
but shall be deemed to have occurred at the offices of Hansen Black Anderson Ashcraft PLLC in Lehi, Utah.

 

5. Holding
Period, Tacking and Legal Opinion. Lender and Borrower agree that for the purposes of Rule 144 (“Rule 144”)
of the Securities Act of 1933, as amended (the “Securities Act”), the holding period of the Partitioned Note
and the Exchange Shares will include Lender’s holding period of the Exchange Note from January 31, 2019, which date is the
date that the Original Note was originally issued. Borrower agrees not to take a position contrary to this Section 5 in any document,
statement, setting, or situation. Borrower agrees to take all action necessary to issue the Exchange Shares without restriction,
and not containing any restrictive legend without the need for any action by Lender; provided that the applicable holding period
has been met. In furtherance thereof, prior to the Closing, counsel to Lender may, in its sole discretion, provide an opinion that:
(a) the Exchange Shares may be resold pursuant to Rule 144 without volume or manner-of-sale restrictions or current public information
requirements; and (b) the transactions contemplated hereby and all other documents associated with this transaction comport with
the requirements of Section 3(a)(9) of the Securities Act. Borrower represents that it is in full compliance with the tests and
standards set forth in Rule 144(i)(2) as of the date of this Agreement. The Exchange Shares are being issued in substitution of
and exchange for and not in satisfaction of the Partitioned Note. The Exchange Shares shall not constitute a novation or satisfaction
and accord of the Partitioned Note. Borrower acknowledges and understands that the representations and agreements of Borrower in
this Section 5 are a material inducement to Lender’s decision to consummate the transactions contemplated herein.

 

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6. Representations,
Warranties and Agreements of Borrower. In order to induce Lender to enter into this Agreement, 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 Agreement and to incur and perform all obligations and covenants contained
herein, all of which have been duly authorized by all proper and necessary action, (b) no consent, approval, filing or
registration with or notice to any governmental authority is required as a condition to the validity of this Agreement or the
performance of any of the obligations of Borrower hereunder, (c) except as specifically set forth herein, nothing herein
shall in any manner release, lessen, modify or otherwise affect Borrower’s obligations under the Exchange Note, (d) the
issuance of the Exchange Shares is duly authorized by all necessary corporate action and the Exchange Shares are validly
issued, fully paid and non-assessable, free and clear of all taxes, liens, claims, pledges, mortgages, restrictions,
obligations, security interests and encumbrances of any kind, nature and description, (e) Borrower has not received any
consideration in any form whatsoever for entering into this Agreement, other than the surrender of the Partitioned Note, and
(f) Borrower has taken no action which would give rise to any claim by any person for a brokerage commission, placement agent
or finder’s fee or other similar payment by Borrower related to this Agreement.

 

7. Representations,
Warranties and Agreements of Lender. In order to induce Borrower to enter into this Agreement, Lender, for itself, and for
its affiliates, successors and assigns, hereby acknowledges, represents, warrants and agrees as follows: (a) Lender has full power
and authority to enter into this Agreement and to incur and perform all obligations and covenants contained herein, all of which
have been duly authorized by all proper and necessary action, and (b) no consent, approval, filing or registration with or notice
to any governmental authority is required as a condition to the validity of this Agreement or the performance of any of the obligations
of Lender hereunder.

 

8. Arbitration.
By its execution of this Agreement, 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 and the parties agree to submit all Claims (as defined in the Purchase Agreement)
arising under this Agreement or any Transaction Document or other agreement between the parties and their affiliates to binding
arbitration pursuant to the Arbitration Provisions.

 

9. Governing
Law; Venue. This Agreement shall be construed and enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Agreement 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 jurisdictions)
that would cause the application of the laws of any jurisdictions 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. BORROWER
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

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10. Counterparts.
This Agreement may be executed in any number of counterparts with the same effect as if all signing parties had signed the
same document. All counterparts shall be construed together and constitute the same instrument. The exchange of copies of
this Agreement and of signature pages by facsimile transmission or other electronic transmission (including email) shall
constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original
Agreement for all purposes. Signatures of the parties transmitted by facsimile transmission or other electronic transmission
(including email) shall be deemed to be their original signatures for all purposes.

 

11. 
Attorneys’ Fees. In the event of any arbitration or action at law or in equity to enforce or interpret the terms of
this Agreement, the prevailing party shall therefore be entitled to an additional award of the full amount of the attorneys’
fees and expenses paid by such prevailing party in connection with the arbitration, litigation and/or dispute without reduction
or apportionment based upon the individual claims or defenses giving rise to the fees and expenses. Nothing herein shall restrict
or impair an arbitrator’s or a court’s power to award fees and expenses for frivolous or bad faith pleading.

 

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

 

13. Severability.
If any part of this Agreement is construed to be in violation of any law, such part shall be modified to achieve the objective
of the parties to the fullest extent permitted and the balance of this Agreement shall remain in full force and effect.

 

14. Entire
Agreement. This Agreement, together with the Exchange Documents, and all other documents referred to herein, supersedes all
other prior oral or written agreements between Borrower, Lender, its affiliates and persons acting on its behalf with respect to
the matters discussed herein, and this Agreement and the instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither
Lender nor Borrower makes any representation, warranty, covenant or undertaking with respect to such matters.

 

15. Amendments.
This Agreement may be amended, modified, or supplemented only by written agreement of the parties. No provision of this Agreement
may be waived except in writing signed by the party against whom such waiver is sought to be enforced.

 

16. Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and
assigns. This Agreement or any of the severable rights and obligations inuring to the benefit of or to be performed by Lender hereunder
may be assigned by Lender to a third party, including its financing sources, in whole or in part. Neither party shall assign this
Agreement or any of its obligations herein without the prior written consent of the other party.

 

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17. Continuing
Enforceability; Conflict Between Documents. Except as otherwise modified by this Agreement, the Exchange Note and each of the
other Exchange Documents shall remain in full force and effect, enforceable in accordance with all of its original terms and provisions.
This Agreement shall not be effective or binding unless and until it is fully executed and delivered by Lender and Borrower. If
there is any conflict between the terms of this Agreement, on the one hand, and the Exchange Note or any other Transaction Document,
on the other hand, the terms of this Agreement shall prevail.

 

18. Time
of Essence. Time is of the essence with respect to each and every provision of this Agreement.

 

19. Notices.
Unless otherwise specifically provided for herein, all notices, demands or requests required or permitted under this Agreement
to be given to Borrower or Lender shall be given as set forth in the “Notices” section of the Purchase Agreement.

 

20. 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 Agreement and the consummation of the transactions contemplated
hereby.

 

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

  

	 	COMPANY:
	 	 
	 	CHINA RECYCLING ENERGY CORPORATION
	 	 
	 	By:	 /s/ Guohua Ku
	 	Name:	 Guohua Ku
	 	Title:	Chairman and Chief Executive Officer

 

	 	LENDER:
	 	 
	 	ILIAD RESEARCH AND TRADING, L.P.
	 	 
	 	By:	 Iliad Management, LLC, its General Partner
	 	 
	 	 	By:	 Fife Trading, Inc., its Manager

 

	 	 	By:	/s/ John M. Fife
	 	 	 	John M. Fife, President

  

[Signature Page
to Exchange Agreement]

 

 

6Exhibit 10.40

 

FORBEARANCE AGREEMENT

 

This Forbearance Agreement
(this “Agreement”) is entered into as of May 15, 2020 by and between Iliad Research and Trading, L.P., a Utah
limited partnership (“Lender”), and China Recycling Energy Corporation, a Nevada corporation (“Borrower”).
Capitalized terms used in this Agreement without definition shall have the meanings given to them in the Note (defined below).

 

A. Borrower previously
sold and issued to Lender that certain Promissory Note with an original issuance date of February 27, 2019 in the original principal
amount of $1,165,379.18 (the “Note”) pursuant to that certain Exchange Agreement dated April 14, 2019 by and
between Lender and Borrower (the “Exchange Agreement,” and together with the Note and all other documents entered
into in conjunction therewith and in conjunction with the promissory note exchanged thereunder, the “Transaction Documents”).

 

B. Pursuant to Section
4 of the Note, upon receipt of a Redemption Notice, Borrower was obligated to repay the Redemption Amount set forth in the Redemption
Notice within three (3) Trading Days of its receipt of such Redemption Notice (each such instance, a “Redemption”).

 

C. On November 4, 2019,
Lender delivered a Redemption Notice to Borrower (the “November 4 Redemption Notice”, and such Redemption, the
“November 4 Redemption”).

 

D. As of the date hereof,
Borrower has not yet paid the Redemption Amount set forth in the November 4 Redemption Notice, which failure to pay constitutes
an Event of Default under the Note (the “Default”).

 

E. As a result of the
Default, Lender has the right to, among other things, accelerate the Maturity Date of the Note and cause the Outstanding Balance
of the Note to be increased by 25% (the “Balance Increase”).

 

F. No new or additional
consideration is being provided in connection with this Agreement other than the modification of terms as provided herein.

 

G. Lender has agreed,
subject to the terms, conditions and understandings expressed in this Agreement, to refrain and forbear from exercising and enforcing
remedies against Borrower for the Default as provided in this Agreement.

 

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

 

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

 

     

     

    

  

2. Forbearance.
Subject to the terms, conditions and understandings contained in this Agreement, Lender hereby agrees to withdraw the November
4 Redemption Notice as if it had never been made or issued by Lender and agrees that there has been no Event of Default, acceleration
of the Outstanding Balance and Balance Increase due to the November 4 Redemption as of the day of this Agreement (the “Forbearance”).
For the avoidance of doubt, the Forbearance shall only apply to the withdrawal of the November 4 Redemption Notice and not to any
Events of Default that may occur subsequent to the date hereof or any other Event of Default that occurred prior to the date hereof.

 

3. Redemption Adjustment.
Notwithstanding anything to the contrary in the Note, in the event Lender delivers a Redemption Notice to Borrower and the Redemption
Amount set forth therein is not paid in cash to Lender within three (3) Trading Days, then the applicable Redemption Amount shall
be increased by 25% (the “Adjusted Redemption Amount”). Upon payment in cash of the Adjusted Redemption Amount,
the Outstanding Balance will be reduced by the original amount set forth in the Redemption Notice.

 

4. Ratification
of the Note. The Note shall be and remains in full force and effect in accordance with its terms, and is hereby ratified and
confirmed in all respects. Borrower acknowledges and agrees that the Outstanding Balance as of the date hereof is $1,271,719.78.
Borrower acknowledges that it is unconditionally obligated to pay the Outstanding Balance and represents that such obligation is
not subject to any defenses, rights of offset or counterclaims. No forbearance or waiver other than as expressly set forth herein
may be implied by this Agreement. Except as expressly set forth herein, the execution, delivery, and performance of this Agreement
shall not operate as a waiver of, or as an amendment to, any right, power or remedy of Lender under the Note or the Transaction
Documents, as in effect prior to the date hereof.

 

5. Failure to Comply.
Borrower understands that the Forbearance shall terminate immediately upon the earliest occurrence of any Event of Default after
the date hereof (or Lender becoming aware of any Event of Default other than the Default that occurred prior to the date hereof),
and that in such case, Lender may seek all recourse available to it under the terms of the Note, this Agreement, any other Transaction
Document, or applicable law (including without limitation applying the Balance Increase with respect to the Default). For the avoidance
of any doubt, the termination of the Forbearance pursuant to this Section shall not terminate, limit or modify any other provision
of this Agreement (including without limitation Section 3 hereof).

 

6. Representations,
Warranties and Agreements. In order to induce Lender to enter into this Agreement, 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 Agreement 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 Agreement or the performance of any of the obligations
of Borrower hereunder.

 

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(b) Any Event of Default
which may have occurred under the Note has not been, is not hereby, and shall not be deemed to be waived by Lender, expressly,
impliedly, through course of conduct or otherwise except upon full satisfaction of Borrower’s obligations under this Agreement.
The agreement of Lender to refrain and forbear from exercising any rights and remedies by reason of any existing default or any
future default shall not constitute a waiver of, consent to, or condoning of, any other future default. For the avoidance of any
doubt, the Forbearance described herein only applies to the to the withdrawal of the November 4 Redemption Notice so that there
is no Event of Default due to the November 4 Redemption as of the date of this Agreement, and shall not constitute a waiver or
forbearance of any other rights or remedies available to Lender with respect to any other Events of Default under the Note or other
breach of the Transaction Documents by Borrower.

 

(c) All understandings,
representations, warranties and recitals contained or expressed in this Agreement are true, accurate, complete, and correct in
all respects; and no such understanding, representation, warranty, or recital fails or omits to state or otherwise disclose any
material fact or information necessary to prevent such understanding, representation, warranty, or recital from being misleading.
Borrower acknowledges and agrees that Lender has been induced in part to enter into this Agreement based upon Lender’s justifiable
reliance on the truth, accuracy, and completeness of all understandings, representations, warranties, and recitals contained in
this Agreement. 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 hereof which would or could materially and adversely affect the understandings of Lender expressed in this
Agreement or any representation, warranty, or recital contained in this Agreement.

 

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

 

(e) 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 Agreement 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 Agreement 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.

 

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(f) Borrower hereby acknowledges
that it has freely and voluntarily entered into this Agreement after an adequate opportunity and sufficient period of time to review,
analyze, and discuss (i) all terms and conditions of this Agreement, (ii) any and all other documents executed and delivered in
connection with the transactions contemplated by this Agreement, and (iii) all factual and legal matters relevant to this Agreement
and/or any and all such other documents, with counsel freely and independently selected by Borrower (or had the opportunity to
be represented by counsel). Borrower further acknowledges and agrees that it has actively and with full understanding participated
in the negotiation of this Agreement and all other documents executed and delivered in connection with this Agreement after consultation
and review with its counsel (or had the opportunity to be represented by counsel), that all of the terms and conditions of this
Agreement and the other documents executed and delivered in connection with this Agreement have been negotiated at arm’s
length, and that this Agreement and all such other documents have been negotiated, prepared, and executed without fraud, duress,
undue influence, or coercion of any kind or nature whatsoever having been exerted by or imposed upon any party by any other party.
No provision of this Agreement or such other documents shall be construed against or interpreted to the disadvantage of any party
by any court or other governmental or judicial authority by reason of such party having or being deemed to have structured, dictated,
or drafted such provision.

 

(g) There are no proceedings
or investigations pending or threatened before any court or arbitrator or before or by, any governmental, administrative, or judicial
authority or agency, or arbitrator, against Borrower.

 

(h) There is no statute,
regulation, rule, order or judgment and no provision of any mortgage, indenture, contract or other agreement binding on Borrower,
which would prohibit or cause a default under or in any way prevent the execution, delivery, performance, compliance or observance
of any of the terms and conditions of this Agreement and/or any of the other documents executed and delivered in connection with
this Agreement.

 

(i) Borrower is solvent
as of the date of this Agreement, and none of the terms or provisions of this Agreement shall have the effect of rendering Borrower
insolvent. The terms and provisions of this Agreement and all other instruments and agreements entered into in connection herewith
are being given for full and fair consideration and exchange of value.

 

7. Headings. The headings contained
in this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement.

 

8. Arbitration.
By its execution of this Agreement, each party agrees to be bound by the Arbitration Provisions (as defined in the Exchange Agreement)
and the parties agree to submit all Claims (as defined in the Exchange Agreement) arising under this Agreement or any Transaction
Document or other agreement between the parties and their affiliates to binding arbitration pursuant to the Arbitration Provisions.

 

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9. Governing Law;
Venue. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Utah without regard
to the principles of conflict of laws. Each party consents to and expressly agrees that the exclusive venue for arbitration of
any dispute arising out of or relating to this Agreement or any Transaction Document or the relationship of the parties or their
affiliates shall be in Salt Lake County, Utah. Without modifying the parties obligations to resolve disputes hereunder or under
any Transaction Document pursuant to the Arbitration Provisions, each party hereto submits to the exclusive jurisdiction of any
state or federal court sitting in Salt Lake County, Utah in any proceeding arising out of or relating to this Agreement and agrees
that all Claims in respect of the proceeding may only be heard and determined in any such court and hereby expressly submits to
the exclusive personal jurisdiction and venue of such court for the purposes hereof and expressly waives any claim of improper
venue and any claim that such courts are an inconvenient forum. BORROWER HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

10. Counterparts.
This Agreement may be executed in any number of counterparts with the same effect as if all signing parties had signed the same
document. All counterparts shall be construed together and constitute the same instrument. The exchange of copies of this Agreement
and of signature pages by facsimile transmission or other electronic transmission (including email) shall constitute effective
execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes.
Signatures of the parties transmitted by facsimile transmission or other electronic transmission (including email) shall be deemed
to be their original signatures for all purposes.

 

11. Attorneys’
Fees. In the event of any arbitration or action at law or in equity to enforce or interpret the terms of this Agreement, the
parties agree that the party who is awarded the most money shall be deemed the prevailing party for all purposes and shall therefore
be entitled to an additional award of the full amount of the attorneys’ fees and expenses  paid by such prevailing party
in connection with the arbitration, litigation and/or dispute without reduction or apportionment based upon the individual claims
or defenses  giving rise to the fees and expenses.  Nothing herein shall restrict or impair an arbitrator’s or
a court’s power to award fees and expenses for frivolous or bad faith pleading.

 

12. 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 Agreement and the Transaction Documents and, in making its decision to enter into
the transactions contemplated by this Agreement, 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
Agreement.

 

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13. Severability.
If any part of this Agreement is construed to be in violation of any law, such part shall be modified to achieve the objective
of the parties to the fullest extent permitted and the balance of this Agreement shall remain in full force and effect.

 

14. Entire Agreement.
This Agreement, together with the Transaction Documents, and all other documents referred to herein, supersedes all other prior
oral or written agreements between Borrower, Lender, its affiliates and persons acting on its behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein contain the entire understanding of the parties with
respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither Lender nor Borrower
makes any representation, warranty, covenant or undertaking with respect to such matters.

 

15. Amendments.
This Agreement may be amended, modified, or supplemented only by written agreement of the parties. No provision of this Agreement
may be waived except in writing signed by the party against whom such waiver is sought to be enforced.

 

16. Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.
This Agreement or any of the severable rights and obligations inuring to the benefit of or to be performed by Lender hereunder
may be assigned by Lender to a third party, including its financing sources, in whole or in part. Borrower may not assign this
Agreement or any of its obligations herein without the prior written consent of Lender.

 

17. Continuing Enforceability;
Conflict Between Documents. Except as otherwise modified by this Agreement, the Note and each of the other Transaction Documents
shall remain in full force and effect, enforceable in accordance with all of its original terms and provisions. This Agreement
shall not be effective or binding unless and until it is fully executed and delivered by Lender and Borrower. If there is any conflict
between the terms of this Agreement, on the one hand, and the Note or any other Transaction Document, on the other hand, the terms
of this Agreement shall prevail.

 

18. Time of Essence.
Time is of the essence with respect to each and every provision of this Agreement.

 

19. Notices.
Unless otherwise specifically provided for herein, all notices, demands or requests required or permitted under this Agreement
to be given to Borrower or Lender shall be given as set forth in the “Notices” section of the Exchange Agreement.

 

20. 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 Agreement and the consummation of the transactions contemplated hereby.

 

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

 

	 	BORROWER:
	 	 
	 	CHINA RECYCLING ENERGY CORPORATION
	 	 
	 	By:	/s/ Guohua Ku
	 	Name: 	Guohua Ku
	 	Title:  	Chairman and Chief Executive Officer

 

	 	LENDER:
	 	 
	 	ILIAD RESEARCH AND TRADING, L.P.
	 	 
	 	By:	 Iliad Management, LLC, its General Partner
	 	 
	 	 	By:	 Fife Trading, Inc., its Manager

 

	 	 	By:	/s/ John M. Fife
	 	 	 	John M. Fife, President

  

[Signature Page to Forbearance Agreement]

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