Document:

EX-4.3

 Exhibit 4.3 

Execution Version 

DCP MIDSTREAM OPERATING, LP 

AS ISSUER, 

DCP MIDSTREAM, LP 

AS GUARANTOR 

AND 
 THE BANK OF NEW
YORK MELLON TRUST COMPANY, N.A., 
 AS TRUSTEE 

 
  

Seventh Supplemental Indenture 

Dated as of July 17, 2018 

to 
 Indenture 

Dated as of September 30, 2010 
  

 
 5.375% Senior
Notes due 2025 
  
  

 TABLE OF CONTENTS 

 

							
	 	  	 	  	Page	 
	 ARTICLE 1 ESTABLISHMENT OF SERIES
	  	 	2	 
	 Section 1.01
	  	Establishment	  	 	2	 
		
	 ARTICLE 2 5.375% SENIOR NOTES DUE 2025
	  	 	2	 
	 Section 2.01
	  	Authentication and Delivery	  	 	2	 
	 Section 2.02
	  	Definitions	  	 	2	 
	 Section 2.03
	  	Payment of Principal and Interest	  	 	4	 
	 Section 2.04
	  	Denominations	  	 	5	 
	 Section 2.05
	  	Redemption at the Option of the Company	  	 	5	 
	 Section 2.06
	  	Global Securities	  	 	6	 
	 Section 2.07
	  	Place of Payment and Paying Agent	  	 	7	 
	 Section 2.08
	  	Amount Not Limited	  	 	7	 
	 Section 2.09
	  	Parent Guarantee	  	 	7	 
	 Section 2.10
	  	Global Security Legend	  	 	8	 
		
	 ARTICLE 3 COVENANT SUPPLEMENTS
	  	 	8	 
	 Section 3.01
	  	Limitation on Liens	  	 	8	 
	 Section 3.02
	  	Restriction of Sale-Leaseback Transaction	  	 	10	 
	 Section 3.03
	  	Covenant Defeasance and Waiver	  	 	11	 
	 Section 3.04
	  	Future Subsidiary Guarantors	  	 	11	 
	 Section 3.05
	  	Repurchase Upon a Change of Control Triggering Event	  	 	11	 
		
	 ARTICLE 4 MISCELLANEOUS PROVISIONS
	  	 	14	 
	 Section 4.01
	  	Recitals by Company and the Guarantor	  	 	14	 
	 Section 4.02
	  	Ratification and Incorporation of Original Indenture	  	 	14	 
	 Section 4.03
	  	Executed in Counterparts	  	 	14	 
	 Section 4.04
	  	Governing Law; Waiver of Jury Trial	  	 	15	 
	 Section 4.05
	  	Effect of Headings	  	 	15	 

  
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 THIS SEVENTH SUPPLEMENTAL INDENTURE (this “Seventh Supplemental Indenture”) is
made as of July 17, 2018, by and between DCP MIDSTREAM OPERATING, LP, a Delaware limited partnership, having its principal office at 370 17th Street, Suite 2500, Denver, Colorado 80202 (the “Company”), DCP MIDSTREAM, LP
(formerly DCP Midstream Partners, LP), a Delaware limited partnership, having its principal office at 370 17th Street, Suite 2500, Denver, Colorado 80202 (the “Guarantor”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a
national banking association, as trustee (herein called the “Trustee”). 
 W I T N E S S E T H: 

WHEREAS, the Company has heretofore entered into an Indenture, dated as of September 30, 2010 (the “Original
Indenture”), with The Bank of New York Mellon Trust Company, N.A., as Trustee, to provide for the issuance from time to time of its unsecured senior debt securities (the “Securities”); 

WHEREAS, under the Original Indenture, a new series of Securities may at any time be established in accordance with the provisions of the
Original Indenture and the form and terms of the Securities of such series may be established by a supplemental indenture executed by the Company, the Guarantor and the Trustee; 

WHEREAS, the Company has entered into various supplemental indentures, including the Third Supplemental Indenture dated as of June 14,
2012, pursuant to which the Company amended the Original Indenture provisions regarding the terms on which the Guarantee of the Guarantor or any future Guarantees of the Guarantor or of Subsidiaries or other Affiliates of the Company may be released
or terminated (the “Third Supplemental Indenture”); 
 WHEREAS, the Company proposes to create under the Original Indenture
a new series of Securities to be issued in an initial aggregate principal amount of $500,000,000, designated as the 5.375% Senior Notes due 2025, such series to be guaranteed by the Guarantor; 

WHEREAS, the Original Indenture is incorporated herein by this reference, and the Original Indenture, as amended and supplemented by the Third
Supplemental Indenture and by this Seventh Supplemental Indenture, is herein called the “Indenture”; 
 WHEREAS, additional
Securities of other series hereafter established, except as may be limited in the Indenture as at the time supplemented and modified, may be issued from time to time pursuant to the Indenture as at the time supplemented and modified; and 

WHEREAS, all conditions necessary to authorize the execution and delivery of this Seventh Supplemental Indenture and to make it the valid and
binding obligations of the Company and the Guarantor have been done or performed. 
 NOW, THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: 

  
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 ARTICLE 1 

ESTABLISHMENT OF SERIES 

Section 1.01 Establishment. There is hereby established a new series of Securities to be issued under the Indenture,
designated as the Company’s 5.375% Senior Notes due 2025 (the “Notes”). The Notes shall have the form and terms specified in Article 2 hereof. 

ARTICLE 2 
 5.375%
SENIOR NOTES DUE 2025 
 Section 2.01 Authentication and Delivery. There
are to be authenticated and delivered $500,000,000 principal amount of Notes on the Original Issue Date (as defined below), and additional Notes may be authenticated and delivered from time to time as provided by Sections 301, 303, 304, 305,
306, 906 or 1007 of the Original Indenture or as provided in Section 2.08 of this Seventh Supplemental Indenture. The Notes shall be fully registered and without coupons and shall be initially issued in the form of one or more Global Securities
substantially in the form set out in Annex A hereto, which is hereby incorporated into this Seventh Supplemental Indenture by reference. The Notes shall be senior debt securities. 

Each Note shall be dated the date of authentication thereof and shall bear interest from the Original Issue Date or from the most recent
Interest Payment Date (as defined below) to which interest has been paid or duly provided for. 
 Section 2.02
Definitions. The following defined terms used herein with respect to the Notes shall, unless the context otherwise requires, have the meanings specified below. Capitalized terms used herein for which no definition is provided herein
shall have the meanings set forth in the Original Indenture. 
 “Consolidated Net Tangible Assets” means at any date of
determination, the total amount of consolidated assets of the Guarantor and its Subsidiaries after deducting therefrom (1) all current liabilities (excluding (A) any current liabilities that by their terms are extendable or renewable at
the option of the obligor thereon to a time more than 12 months after the time as of which the amount thereof is being computed, and (B) current maturities of long term debt), and (2) the value (net of any applicable reserves) of all
goodwill, trade names, trademarks, patents and other like intangible assets, all as set forth on the consolidated balance sheet of the Guarantor and its Subsidiaries for the most recently completed fiscal quarter, prepared in accordance with GAAP.

 “Debt” of any Person means, without duplication, (i) all indebtedness of such Person for borrowed money (whether or
not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof), (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of
such Person in respect of letters of credit or other similar instruments (or reimbursement obligations with respect thereto), other than standby letters of credit, performance bonds and other obligations issued by or for the account of such Person
in the ordinary course of business, to the extent not drawn or, to the 

  
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extent drawn, if such drawing is reimbursed not later than the third Business Day following demand for reimbursement, (iv) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services, except trade payables and accrued expenses incurred in the ordinary course of business, (v) all capitalized lease obligations of such Person, (vi) all Debt of others secured by a Lien on any asset of
such Person, whether or not such Debt is assumed by such Person (provided that if the obligations so secured have not been assumed in full by such Person or are not otherwise such Person’s legal liability in full, then such obligations shall be
deemed to be in an amount equal to the greater of (a) the lesser of (1) the full amount of such obligations and (2) the fair market value of such assets, as determined in good faith by the Board of Directors of such Person, which
determination shall be evidenced by a Board Resolution, and (b) the amount of obligations as have been assumed by such Person or which are otherwise such Person’s legal liability), and (vii) all Debt of others (other than endorsements
in the ordinary course of business) guaranteed by such Person to the extent of such guarantee. 
 “Funded Debt” means all
Debt maturing one year or more from the date of the creation thereof, all Debt directly or indirectly renewable or extendible, at the option of the debtor, by its terms or by the terms of any instrument or agreement relating thereto, to a date one
year or more from the date of the creation thereof, and all Debt under a revolving credit or similar agreement obligating the lender or lenders to extend credit over a period of one year or more. 

“Interest Payment Dates” means January 15 and July 15, commencing on January 15, 2019. 

“Lien” means, with respect to any asset, any mortgage, lien, pledge, security interest, charge, adverse claim or other
encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law. 

“Original Issue Date” means July 17, 2018. 

“Person” means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or agency or political subdivision thereof. 
 “Principal
Property” means, whether owned or leased on the date hereof or hereafter acquired, any pipeline, gathering system, terminal, storage facility, processing plant or other plant or facility owned or leased by the Guarantor or its Subsidiaries
and used in the transportation, distribution, terminalling, gathering, treating, processing, marketing or storage of natural gas, natural gas liquids or propane except (1) any property or asset consisting of inventories, furniture, office
fixtures and equipment (including data processing equipment), vehicles and equipment used on, or useful with, vehicles (but excluding vehicles that generate transportation revenues) and (2) any such property or asset, plant or terminal which,
in the good faith opinion of the Board of Directors of the Guarantor as evidenced by resolutions of the Board of Directors of the Guarantor, is not material in relation to the activities of the Guarantor and its Subsidiaries, taken as a whole. 

“Principal Subsidiary” means the Company and any Subsidiary of the Company or the Guarantor that owns or leases, directly or
indirectly, a Principal Property. 

  
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 “Regular Record Date” means, with respect to each Interest Payment Date, the
close of business on January 1 or July 1, respectively, prior to such Interest Payment Date (whether or not a Business Day). 

“Sale-Leaseback Transaction” means the sale or transfer by the Guarantor or any Principal Subsidiary of any Principal
Property to a Person (other than the Guarantor or a Principal Subsidiary) and the taking back by the Guarantor or any Principal Subsidiary, as the case may be, of a lease of such Principal Property. 

“Stated Maturity” means July 15, 2025. 

Section 2.03 Payment of Principal and Interest. The principal of the Notes shall be due at Stated Maturity, unless
earlier redeemed. The principal amount of the Notes shall bear interest at the rate of 5.375% per annum until paid or duly provided for, such interest to accrue from the Original Issue Date or from the most recent Interest Payment Date on which
interest has been paid or duly provided for. Subject to Section 307 of the Original Indenture, interest shall be paid semi-annually in arrears on each Interest Payment Date to the Person or Persons in whose name the Notes are registered on the
Regular Record Date for such Interest Payment Date; provided that interest payable at the Stated Maturity of principal or on a Redemption Date as provided herein shall be paid to the Person to whom principal is payable. The Company shall pay
interest on overdue principal and premium, if any, from time to time on demand at the same rate; and it shall pay interest on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same
rate to the extent lawful. 
 Payments of interest on the Notes shall include interest accrued to but excluding the respective Interest
Payment Dates. Interest payments for the Notes shall be computed and paid on the basis of a 360-day year of twelve 30-day months. If any date on which interest is
payable on the Notes is not a Business Day, then payment of the interest payable on such date shall be made on the next succeeding day that is a Business Day (and without any interest or payment in respect of any such delay) with the same force and
effect as if made on the date the payment was originally payable. 
 Payment of principal of, premium, if any, and interest on the Notes
shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of principal of, premium, if any, and interest on the Notes represented by a Global
Security shall be made by wire transfer of immediately available funds to the Depositary therefor; provided that, in the case of payments of principal and premium, if any, at maturity or upon redemption, such Global Security is first
surrendered to a Paying Agent. If any of the Notes are no longer represented by Global Securities, (i) payments of principal, premium, if any, and interest due at the Stated Maturity or earlier redemption of such Notes shall be made at the
office of any Paying Agent upon surrender of such Notes to such Paying Agent and (ii) payments of interest shall be made, at the option of the Company, subject to such surrender where applicable, by (A) check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register or (B) wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least 16 days
prior to the date for payment by the Person entitled thereto. 

  
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 Section 2.04 Denominations. The Notes shall be issued in denominations of
$2,000 and integral multiples of $1,000 in excess of $2,000. 
 Section 2.05 Redemption at the Option of the Company. At
any time prior to April 15, 2025, the Notes shall be redeemable, in whole or in part, at the option of the Company at a Redemption Price equal to the greater of (i) 100% of the principal amount of the Notes to be redeemed and (ii) the
sum of the present values of the principal amount of the Notes to be redeemed and the remaining scheduled payments of interest thereon (exclusive of interest accrued to the Redemption Date) from the Redemption Date to the respective scheduled
payment dates discounted from their respective scheduled payment dates to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate (as hereinafter defined) plus 50 basis points, plus, in either case, accrued and unpaid interest, if any, on the principal amount being redeemed to, but not including, such Redemption Date. From and after April 15,
2025, the Notes shall be redeemable, in whole or in part, at the option of the Company, at a Redemption Price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, on the principal amount being
redeemed to, but not including, such Redemption Date. 
 For purposes of determining the Redemption Price, the following definitions shall
apply: 
 “Comparable Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having a
maturity comparable to the term between the Redemption Date and the Stated Maturity (the “Remaining Life”) that would be utilized, at the time of selection, and in accordance with customary financial practice, in pricing new issues
of corporate debt securities of comparable maturity with the Remaining Life. 
 “Comparable Treasury Price” means, with
respect to any Redemption Date, (1) the average of four Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest of all of the Reference Treasury Dealer Quotations or (2) if the Quotation Agent
obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations. 
 “Quotation Agent”
means the Reference Treasury Dealer appointed by the Company. 
 “Reference Treasury Dealer” means (i) J.P. Morgan
Securities LLC, Barclays Capital Inc., Citigroup Global Markets Inc., Mizuho Securities USA LLC, SunTrust Robinson Humphrey, Inc., TD Securities (USA) LLC and a U.S. government securities dealer in The City of New York (a “Primary Treasury
Dealer”) selected by MUFG Securities Americas Inc., and their respective successors; provided, however, that if any of the foregoing ceases to be a Primary Treasury Dealer, the Company shall substitute therefor another Primary Treasury
Dealer and (ii) one other Primary Treasury Dealer selected by the Company. 
 “Reference Treasury Dealer Quotation”
means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Quotation Agent by such Reference Treasury Dealer at 5:00 p.m., The City of New York time, on the third Business Day preceding such Redemption Date. 

  
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 “Treasury Rate” means, with respect to any Redemption Date, the rate per year
equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for the
Redemption Date. The Treasury Rate will be calculated on the third Business Day preceding the Redemption Date. 
 The Redemption Price for
any redemption pursuant to the first sentence of this Section 2.05 shall be certified in writing to the Trustee by the Company in an Officer’s Certificate no later than one Business Day after the calculation thereof. The Trustee shall not
be responsible for calculating said Redemption Price. 
 The Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Notes and, other than as described in Section 3.06 of this Seventh Supplemental Indenture, shall have no obligation to repurchase any Notes at the option of the Holders. 

Notices of redemption may be subject to one or more conditions precedent specified in such notices of redemption. If a notice of redemption is
subject to the satisfaction of one or more conditions precedent, the related notice shall describe each such condition, and, if applicable, shall state that, in the Company’s discretion, the Redemption Date may be delayed until such time as any
or all such conditions shall be satisfied or waived (provided, that in no event shall such Redemption Date be delayed to a date later than 60 days after the date on which such notice was sent), or such redemption may not occur and such notice may be
rescinded in the event that any or all such conditions shall not have been satisfied or waived by the Redemption Date, or by the Redemption Date as so delayed. The Company shall provide written notice of the satisfaction or waiver of such
conditions, the delay of such Redemption Date or the rescission of such notice of redemption to the Trustee no later than one Business Day prior to the scheduled Redemption Date, and the Trustee shall provide such notice to each Holder of the Notes
in the same manner in which the notice of redemption was given. Upon receipt of such notice of the delay of such Redemption Date or the rescission of such notice of redemption, such Redemption Date shall be automatically delayed or such notice of
redemption shall be automatically rescinded, as applicable, and the redemption of the Notes shall be automatically delayed or rescinded and cancelled, as applicable, as provided in such notice. 

Section 2.06 Global Securities. The Notes shall initially be issued in the form of permanent Global Securities registered
in the name of the Depositary (which initially shall be The Depository Trust Company) or its nominee. Except under the limited circumstances described below, the Notes represented by such Global Security or Global Securities shall not be
exchangeable for, and shall not otherwise be issuable as, Notes in definitive form. The Global Securities described above may not be transferred, except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the
Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. 

  
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 A Global Security shall be exchangeable for Notes registered in the names of Persons other than
the Depositary or its nominee only if the conditions described in Section 305 of the Indenture relating to any such exchange have been met. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for
Notes registered in such names as the Depositary shall direct. Except to the extent inconsistent with this Section 2.06, Section 305 of the Indenture shall apply to the Global Securities evidencing the Notes. 

Section 2.07 Place of Payment and Paying Agent. The Place of Payment with respect to the Notes shall be the offices of the Paying
Agent with respect to the Notes in the Borough of Manhattan, The City of New York. 
 The Company initially appoints the Trustee to act as
Paying Agent and Security Registrar with respect to the Notes. 
 Section 2.08 Amount Not Limited. The aggregate
principal amount of Notes that may be authenticated and delivered under this Seventh Supplemental Indenture shall not be limited, and additional Notes (the “Additional Notes”) may be issued from time to time without any consent of
Holders or of the Trustee. The Company may, upon the execution and delivery of this Seventh Supplemental Indenture or from time to time thereafter, execute and deliver the Additional Notes to the Trustee for authentication, and the Trustee shall
thereupon authenticate and deliver said Additional Notes upon a Company Order and delivery of such other documentation as are required by the Original Indenture. Upon the issuance of Additional Notes, references herein to the “Notes” shall
include the Additional Notes and all Notes to be issued on the Original Issue Date, and any Additional Notes subsequently issued shall be treated as a single series for all purposes under the Indenture. 

Section 2.09 Parent Guarantee. DCP Midstream, LP shall be a Guarantor of the Notes in accordance with Article Sixteen of the
Original Indenture. Upon a default in payment of principal of, or premium, if any, or interest on the Notes, the Trustee, on behalf of the Holders of the Notes, may institute legal proceedings directly against the Guarantor to enforce the Guarantee
set forth in Article Sixteen of the Original Indenture (as amended and supplemented by this Seventh Supplemental Indenture) without first proceeding against the Company. For the purposes of this Seventh Supplemental Indenture and the Notes
(including without limitation the provisions of the Original Indenture to the extent applicable thereto), the term “Guarantor” (and such derivative terms as are herein or therein used) shall mean DCP Midstream, LP, and accordingly, the
Guarantee of DCP Midstream, LP shall be a Guarantee with respect to the Indenture and the Notes; provided, however, that such Guarantee shall not apply to any obligations under any series of Securities other than the Notes. 

To evidence its Guarantee set forth in Article Sixteen of the Original Indenture (as amended and supplemented by this Seventh
Supplemental Indenture), the Guarantor hereby agrees that a notation of such Guarantee substantially in the form attached as Annex B hereto will be endorsed by an Officer of the Guarantor on each Note authenticated and
delivered by the Trustee and that this Seventh Supplemental Indenture will be executed on behalf of the Guarantor by one of its Officers. 

  
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 The Guarantor hereby agrees that its Guarantee set forth in Article Sixteen of the Original
Indenture (as amended and supplemented by this Seventh Supplemental Indenture) will remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Guarantee. 

If an Officer whose signature is on this Seventh Supplemental Indenture or on the Guarantee no longer holds that office at the time the
Trustee authenticates the Note on which a Guarantee is endorsed, the Guarantee will be valid nevertheless. 
 The delivery of any Note by
the Trustee, after the authentication thereof hereunder, will constitute due delivery of the Guarantee set forth in the Indenture on behalf of the Guarantor. 

Section 2.10 Global Security Legend. Each security certificate evidencing the Global Securities shall bear a legend substantially
in the form set forth in Section 203 of the Original Indenture. 
 ARTICLE 3 

COVENANT SUPPLEMENTS 

The covenants contained in this Article 3 shall apply to the Notes only and not to any other series of Securities issued under the
Original Indenture, and any covenants provided in this Article 3 are expressly being included solely for the benefit of the Notes and not for the benefit of any other series of Securities issued under the Original Indenture. The covenants
contained in this Article 3 shall be effective only for so long as any Notes remain Outstanding. 
 Section 3.01 Limitation on
Liens. While any of the Notes remain Outstanding, the Guarantor will not, nor will it permit any Principal Subsidiary to, create, or permit to be created or to exist, any Lien of any kind upon any Principal Property of the Guarantor or
any Principal Subsidiary, or upon any shares of stock of any Principal Subsidiary, whether such Principal Property is, or shares of stock are, now owned or hereafter acquired, to secure any Debt of the Guarantor or any other Person, unless it shall
make effective provision whereby the Notes then Outstanding shall be secured by such Lien equally and ratably with any and all such Debt thereby secured so long as such Debt shall be so secured; provided, however, that nothing in this
Section shall be construed to prevent the Guarantor or any Principal Subsidiary from creating, or from permitting to be created or to exist, any Liens with respect to: 

(a) purchase money mortgages, or other purchase money Liens of any kind upon property hereafter acquired by the Guarantor or
any Principal Subsidiary, or Liens of any kind existing on any property or any shares of stock at the time of the acquisition thereof (including Liens that exist on any property or any shares of stock of a Person that is consolidated with or merged
with or into the Guarantor or any Principal Subsidiary or that transfers or leases all or substantially all of its properties to the Guarantor or any Principal Subsidiary), or conditional sales agreements or other title retention agreements and
leases in the nature of title retention agreements with respect to any property hereafter acquired; provided, however, that no such Lien shall extend to or cover any other property of the Guarantor or such Principal Subsidiary; 

  
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 (b) Liens upon any property of the Guarantor or any Principal Subsidiary or any
shares of stock of any Principal Subsidiary existing as of the date of the initial issuance of the Securities or upon the property or any shares of stock of any Corporation, which Liens existed at the time such Corporation became a Subsidiary of the
Guarantor; Liens for taxes or assessments or other governmental charges or levies relating to amounts that are not yet delinquent or are being contested in good faith; pledges to secure other governmental charges or levies; pledges or deposits to
secure obligations under worker’s compensation laws, unemployment insurance and other social security legislation; pledges or deposits to secure performance in connection with bids, tenders, contracts (other than contracts for the payment of
money) or leases to which the Guarantor or any Principal Subsidiary is a party; pledges or deposits to secure public or statutory obligations of the Guarantor or any Principal Subsidiary; builders’, materialmen’s, mechanics’,
carriers’, warehousemen’s, workers’, repairmen’s, operators’, landlords’ or other similar Liens, in the ordinary course of business; pledges or deposits to secure surety, stay, appeal, indemnity, customs, performance or
return-of-money bonds or pledges or deposits in lieu thereof; Liens created by or resulting from any litigation or proceeding that at the time is being contested in good
faith by appropriate proceedings, including Liens relating to judgments thereunder as to which the Guarantor or any Principal Subsidiary has not exhausted its appellate rights; Liens on deposits required by any Person with whom the Guarantor or any
Principal Subsidiary enters into forward contracts, futures contracts, swap agreements or other commodities contracts in the ordinary course of business and in accordance with established risk management policies; Liens in connection with leases
(other than capital leases) made, or existing on property acquired, in the ordinary course of business; 
 (c) easements
(including, without limitation, reciprocal easement agreements and utility agreements), zoning restrictions, rights-of-way, covenants, consents, reservations,
encroachments, variations and other restrictions on the use of property or minor irregularities in title thereto, charges or encumbrances (whether or not recorded) affecting the use of real property and which are incidental to, and do not materially
impair the use of such property in the operation of the business of the Guarantor and its Subsidiaries, taken as a whole, or the value of such property for the purpose of such business; 

(d) Liens in favor of the United States of America, any State, any foreign country or any department, agency or instrumentality
or political subdivision of any such jurisdiction, to secure partial, progress, advance or other payments pursuant to any contract or statute or to secure any Debt incurred for the purpose of financing all or any part of the purchase price or the
cost of constructing or improving the property subject to such Liens, including, without limitation, Liens to secure Debt of the pollution control or industrial revenue bond type; 

(e) Liens of any kind upon any property acquired, constructed, developed or improved by the Guarantor or any Principal
Subsidiary (whether alone or in association with others) after the date of this Seventh Supplemental Indenture that are created prior to, at the time of, or within 12 months after such acquisition (or in the case of property constructed, developed
or improved, after the completion of such construction, 

  
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development or improvement and commencement of full commercial operation of such property, whichever is later) to secure or provide for the payment of any part of the purchase price or cost
thereof; provided, that in the case of such construction, development or improvement the Liens shall not apply to any property theretofore owned by the Guarantor or any Principal Subsidiary other than theretofore unimproved real property;

 (f) Liens in favor of the Guarantor, one or more Principal Subsidiaries, one or more wholly-owned Subsidiaries of the
Guarantor or any of the foregoing in combination; 
 (g) the replacement, extension or renewal (or successive replacements,
extensions or renewals), as a whole or in part, of any Lien, or of any agreement, referred to above in clauses (a) through (f) inclusive, or the replacement, extension or renewal of the Debt secured thereby (not exceeding the principal
amount of Debt secured thereby, other than to provide for the payment of any underwriting or other fees related to any such replacement, extension or renewal, as well as any premiums owed on and accrued and unpaid interest payable in connection with
any such replacement, extension or renewal); provided that such replacement, extension or renewal is limited to all or a part of the same property that secured the Lien replaced, extended or renewed (plus improvements thereon or additions or
accessions thereto); or 
 (h) any Lien not excepted by the foregoing clauses (a) through (g); provided, that
immediately after the creation or assumption of such Lien the aggregate principal amount of Debt of the Guarantor or any Principal Subsidiary secured by all Liens created or assumed under the provisions of this clause (h), together with all net
sale proceeds from any Sale-Leaseback Transactions (excluding net sale proceeds applied pursuant to clause (c)(1) of Section 3.02) shall not exceed an amount equal to 10% of the Consolidated Net Tangible Assets for the fiscal quarter that
was most recently completed prior to the creation or assumption of such Lien. Notwithstanding the foregoing, for purposes of making the calculation set forth in this Section 3.01(h), with respect to any such secured indebtedness of a non-wholly-owned Principal Subsidiary of the Company or the Guarantor with no recourse to the Company, the Guarantor or any wholly-owned Principal Subsidiary thereof, only that portion of the aggregate principal
amount of indebtedness for borrowed money reflecting the Company’s or the Guarantor’s pro rata ownership interest in such non-wholly-owned Principal Subsidiary shall be included in calculating
compliance herewith. 
 As used in this Section 3.01, the term “shares of stock” means any and all shares of Capital Stock.

 Section 3.02 Restriction of Sale-Leaseback Transaction. The Guarantor will not, nor will it permit any Principal Subsidiary
to, engage in a Sale-Leaseback Transaction, unless: 
 (a) the Sale-Leaseback Transaction occurs within one year from the
date of acquisition of the Principal Property subject thereto or the date of the completion of construction or commencement of full operations on such Principal Property, whichever 

  
 10 

 
is later, and the Guarantor shall have elected to designate, as a credit against (but not exceeding) the purchase price or cost of construction of such Principal Property, an amount equal to all
or a portion of the net sale proceeds from such Sale-Leaseback Transaction (with any such amount not being so designated to be applied as set forth in clause (c) below); 

(b) the Guarantor or such Principal Subsidiary would be entitled under Section 3.01 to incur Debt secured by a Lien on the
Principal Property subject to the Sale-Leaseback Transaction in a principal amount equal to or exceeding the net sale proceeds from such Sale-Leaseback Transaction without equally and ratably securing the Notes; or 

(c) the Guarantor or such Principal Subsidiary, within a six-month period after such
Sale-Leaseback Transaction, applies or causes to be applied an amount not less than the net sale proceeds from such Sale-Leaseback Transaction to (1) the prepayment, repayment, redemption or retirement of any unsubordinated Debt of the
Guarantor or any Subsidiary of the Guarantor (A) for borrowed money or (B) evidenced by bonds, debentures, notes or other similar instruments, or (2) investment in another Principal Property. 

Section 3.03 Covenant Defeasance and Waiver. Upon the Company’s exercise of the option described in Section 402(3)
of the Indenture with respect to the Notes, in addition to the other obligations permitted to be released by Section 402(3), the Company shall be released from its obligations to comply with any term, provision or condition under
Sections 3.01, 3.02 and 3.05 of this Seventh Supplemental Indenture with respect to the Notes. The provisions of Sections 3.01, 3.02 and 3.05 of this Seventh Supplemental Indenture may be waived in accordance with Section 1005 of the
Indenture. 
 Section 3.04 Future Subsidiary Guarantors. The Company shall cause each Subsidiary of the Company that guarantees
or becomes a co-obligor in respect of any Funded Debt of the Company or the Guarantor to promptly execute and deliver a supplemental indenture, substantially in the form of Annex C
hereto, providing for the guarantee of the payment of the Notes pursuant hereto. 
 Section 3.05 Repurchase Upon a Change of Control
Triggering Event. Upon the occurrence of a Change of Control Triggering Event, unless the Company has exercised its right to redeem all of the Notes as described under Section 2.05 of this Seventh Supplemental Indenture, each Holder
of Notes will have the right to require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Notes pursuant to the offer described below (the “Change of Control
Offer”) at a cash purchase price equal to 101% of the aggregate principal amount of Notes repurchased, plus accrued and unpaid interest, if any, on the Notes repurchased to, but excluding, the date of purchase (the “Change of
Control Payment”), subject to the rights of Holders of Notes on the relevant Regular Record Date to receive interest due on the related Interest Payment Date that has accrued on or prior to the date of purchase. 

  
 11 

 Within 30 days following any Change of Control Triggering Event, the Company shall send a notice
to each Holder describing the transaction or transactions that constitute the Change of Control Triggering Event and offering to repurchase the Notes on the “Change of Control Payment Date” specified in the notice, which date shall
be no earlier than 30 days and no later than 60 days from the date such notice is sent, pursuant to the procedures required by this Seventh Supplemental Indenture and described in such notice. Holders of Notes electing to have the Company repurchase
any or all of such Holders’ Notes pursuant to a Change of Control Offer shall be required to surrender their Notes, with such customary documents of surrender and transfer as the Company may reasonably request be duly completed or transfer
their Notes by book-entry transfer, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day prior to the Change of Control Payment Date. 

The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the Company’s repurchase of any Notes as a result of a Change of Control Triggering Event. To the extent that the provisions
of any securities laws or regulations conflict with the Change of Control Triggering Event provisions included in this Section 3.05, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 3.05 by virtue of such compliance. 
 On the Change of Control Payment Date, the Company
shall, to the extent lawful: 
 (a) accept for payment all Notes or portions of Notes properly tendered pursuant to the
Change of Control Offer; 
 (b) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of
all Notes or portions of Notes properly tendered; and 
 (c) deliver, or cause to be delivered, to the Trustee the Notes
properly accepted together with an Officer’s Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased. 

On the Change of Control Payment Date, the Paying Agent will promptly mail to each Holder of Notes properly tendered the Change of Control
Payment for such Notes (or, if all the Notes are then in global form, the Paying Agent will make such payment through the facilities of The Depository Trust Company), and the Trustee will promptly authenticate and mail (or cause to be transferred by
book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided, that each new Note shall be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof.
The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. 

The provisions of this Section 3.05 that require the Company to make a Change of Control Offer following a Change of Control Triggering
Event shall be applicable whether or not any other provisions of the Indenture are applicable. 

  
 12 

 The Company shall not be required to make a Change of Control Offer if a third party makes such
an offer in the manner, at the times and otherwise in compliance with the requirements for such an offer made by the Company and such third-party purchases all of the Notes properly tendered and not withdrawn under such third party’s offer. In
addition, the Company shall not repurchase any Notes if there has occurred and is continuing on the Change of Control Payment Date an Event of Default under the Indenture, other than a default in the payment of the Change of Control Payment upon a
Change of Control Triggering Event. 
 If Holders of not less than 90% of the aggregate principal amount of the Outstanding Notes are
validly tendered and not withdrawn in a Change of Control Offer and the Company (or the third party making the Change of Control Offer) purchases all of the Notes validly tendered and not withdrawn by such Holders, the Company shall have the right,
upon not less than 30 nor more than 60 days’ prior notice, given not more than 30 days following the purchase pursuant to the Change of Control Offer, to redeem all of the Notes that remain Outstanding following such purchase at a Redemption
Price equal to 101% of the aggregate principal amount of such Notes, plus accrued and unpaid interest on such Notes to, but excluding, the date of redemption (subject to the right of Holders of record on the relevant Regular Record Date to receive
interest due on an Interest Payment Date that has accrued on or prior to the Redemption Date). 
 For purposes of this Section 3.05,
the following definitions shall apply: 
 “Change of Control” means the occurrence of either of the following after the
Original Issue Date of the Notes: (i) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger, consolidation or business combination), in one or a series of related transactions, of all or
substantially all of the properties or assets of the Guarantor and its Subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act); or (ii) the consummation of any transaction
(including, without limitation, any merger, consolidation or business combination), the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act), other than the Guarantor, the
Guarantor’s general partner, DCP Midstream, LLC, and Phillips 66 and Enbridge Inc. and their respective Subsidiaries, becomes the beneficial owner, directly or indirectly, of more than 50% of the voting interests of the Guarantor, the
Guarantor’s general partner, or DCP Midstream, LLC, measured by voting power rather than percentage of interests. 
 “Change of
Control Triggering Event” means the occurrence of a Change of Control that is accompanied or followed by either a downgrade or withdrawal of the rating of the Notes within the Ratings Decline Period by all three Named Rating Agencies, as a
result of which the rating of the Notes by each Named Rating Agency on any day during such Ratings Decline Period is below Investment Grade; provided, however, that no Change of Control Triggering Event will be deemed to have occurred in
connection with any reduction in rating if the Named Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing, at its request, that the
reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control. 

“Fitch” means Fitch Ratings, Ltd. 

  
 13 

 “Investment Grade” means a rating of Baa3 or better by Moody’s (or its
equivalent under any successor rating category of Moody’s); and a rating of BBB- or better by S&P (or its equivalent under any successor rating category of S&P); and a rating of BBB- or better by Fitch (or its equivalent under any successor rating category of Fitch) or the equivalent investment grade credit rating from any replacement agent selected by the Guarantor in accordance with the
definition of Named Rating Agency. 
 “Moody’s” means Moody’s Investors Service, Inc. 

“Named Rating Agency” means (i) each of Moody’s, S&P and Fitch; and (ii) if any of Moody’s, S&P
or Fitch ceases to rate the Notes or fails to make a rating of the Notes, as the case may be, publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating organization” as defined in
Section 3(a)(62) under the Exchange Act selected by the Company as a replacement agency for any or all of Moody’s, S&P or Fitch, as the case may be. 

“Ratings Decline Period” means the period that (i) begins on the occurrence of a Change of Control and (ii) ends 60
days following consummation of such Change of Control. 
 “S&P” means S&P Global Ratings, a division of S&P
Global Inc. 
 ARTICLE 4 

MISCELLANEOUS PROVISIONS 

Section 4.01 Recitals by Company and the Guarantor. The recitals in this Seventh Supplemental Indenture are made by the
Company and the Guarantor only and not by the Trustee, and the Trustee makes no representations as to the validity or sufficiency of this Seventh Supplemental Indenture. All of the provisions contained in the Original Indenture in respect of the
rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of the Notes and this Seventh Supplemental Indenture as fully and with like effect as if set forth herein in full. 

Section 4.02 Ratification and Incorporation of Original Indenture. As amended and supplemented hereby, the Original
Indenture is in all respects ratified and confirmed, and the Original Indenture and this Seventh Supplemental Indenture shall be read, taken and construed as one and the same instrument. If and to the extent that the provisions of the Original
Indenture are duplicative of, or in contradiction with, the provisions of this Seventh Supplemental Indenture, the provisions of this Seventh Supplemental Indenture will govern. 

Section 4.03 Executed in Counterparts. This Seventh Supplemental Indenture may be executed in several counterparts, each of
which shall be deemed to be an original, and such counterparts shall together constitute but one and the same instrument. Portable Document Format (PDF) or facsimile signatures shall be deemed originals. 

  
 14 

 Section 4.04 Governing Law; Waiver of Jury Trial. THIS SEVENTH
SUPPLEMENTAL INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE OR INSTRUMENTS ENTERED INTO AND, IN EACH CASE, PERFORMED IN SAID STATE. EACH OF THE COMPANY,
THE GUARANTOR, THE HOLDERS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS SEVENTH SUPPLEMENTAL INDENTURE,
THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY. 
 Section 4.05 Effect of Headings. The Section headings herein
are for convenience only and shall not affect the construction thereof. 

  
 15 

 IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed in its name and
behalf by its duly authorized signatory, all as of the day and year first above written. 
  

					
	DCP MIDSTREAM OPERATING, LP
		
	By: 	 	 DCP Midstream Operating, LLC,
 its
general partner

  

					
		 	By:	 	/s/ Sean P. O’Brien

 
					
		 	Name:	 	Sean P. O’Brien
		 	Title:	 	Group Vice President and Chief Financial Officer

  

							
	DCP MIDSTREAM, LP
		
	By: 	 	 DCP Midstream GP, LP,
 its general
partner

			
		 	By: 	 	 DCP Midstream GP, LLC,
 its general
partner

  

							
		 		 	  By:	 	/s/ Sean P. O’Brien

 
							
		 		 	  Name:	 	Sean P. O’Brien
		 		 	  Title:	 	Group Vice President and Chief Financial Officer

  

			
	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
		
	By:	 	/s/ Karen Yu

 
			
	Name:	 	Karen Yu
	Title:	 	Vice President

  
 Signature Page to
Seventh Supplemental Indenture 

 ANNEX A 

FORM OF NOTE 

[FORM OF FACE OF NOTE] 

DCP MIDSTREAM OPERATING, LP 

5.375% Senior Note due 2025 
 [If a
Global Security, insert—THIS DEBT SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS DEBT SECURITY MAY NOT BE TRANSFERRED TO, OR
REGISTERED OR EXCHANGED FOR SECURITIES REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN THE DEPOSITARY OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY DEBT SECURITY
AUTHENTICATED AND DELIVERED UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR OR IN LIEU OF, THIS DEBT SECURITY SHALL BE A GLOBAL SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES. 

THE DEPOSITORY TRUST COMPANY SHALL ACT AS THE DEPOSITARY UNTIL A SUCCESSOR SHALL BE APPOINTED BY THE COMPANY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.] 

DCP MIDSTREAM OPERATING, LP 

5.375% Senior Note due 2025 
  

			
	No.                    	  	U.S. $                    
	CUSIP: 23311VAG2	  	
	ISIN: US23311VAG23	  	

 DCP Midstream Operating, LP, a Delaware limited partnership (herein called the “Company,” which term
includes any successor or resulting Person under the Indenture (as defined on the reverse hereof), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of $500,000,000 United States Dollars on
July 15, 2025 and to pay interest thereon from and including July 17, 2018, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on January 15 and July 15
(each, an “Interest Payment Date”) in each year, commencing on January 15, 2019, at the rate of 5.375% per annum, until the principal hereof is paid or made available for payment and at the same rate per annum on any overdue principal
and premium, if any, and on any overdue installment of interest (to the extent that the payment of such interest shall be legally enforceable). Interest on this Security shall be computed on the basis of a
360-day year 

 
comprised of twelve 30-day months. The amount of interest payable for any partial period shall be computed on the basis of a
360-day year comprised of twelve 30-day months and the days elapsed in any partial month. If any date on which interest is payable on this Security is not a Business
Day, then the payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) with the same force and effect as if made on the date
the payment was originally payable. A Business Day shall mean, when used with respect to any Place of Payment, each day that is not a Saturday or Sunday or other day on which banking institutions in that Place of Payment are authorized or required
by law, regulation or executive order to close. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the January 1 or July 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice of which shall be given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed or traded, and upon such notice as may be required by
such exchange, all as more fully provided in such Indenture. 
 [If a Global Security, insert—Payment of the principal of (and premium,
if any) and interest on this Security will be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of principal of, premium, if any, and interest on
this Security will be made by wire transfer of immediately available funds to the Depositary for this Global Security; provided that in the case of payments of principal and premium, if any, at maturity or upon redemption, this Security is
first surrendered to the Paying Agent.] 
 [If a Definitive Security, insert— Payment of the principal of (and premium, if any) and
interest on this Security will be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of (i) principal, premium, if any, and interest due at
the Stated Maturity or earlier redemption of this Security shall be made at the office of any Paying Agent upon surrender of this Security to such Paying Agent and (ii) interest shall be made, at the option of the Company, subject to such
surrender where applicable, by (A) check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (B) wire transfer at such place and to such account at a banking institution in the
United States as may be designated in writing to the Trustee at least 16 days prior to the date for payment by the Person entitled thereto.] 

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place. 
 Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 

  
 2 

 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. 

 

									
	Dated:                ,    	 		 	DCP Midstream Operating, LP
				
		 		 	By: 	 	 DCP Midstream Operating, LLC,
 its
general partner

  

			
	By:	 	 

 
			
	Name:	 	 

 
			
	Title:	 	 

  
 3 

 [Form of Trustee’s Certificate of Authentication] 

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. 

THE BANK OF NEW YORK 

MELLON TRUST COMPANY, N.A., 

as Trustee 
  

			
		
	By:	 	 
		 	Authorized Signatory

 Dated: 

  
 4 

 [REVERSE OF NOTE] 

DCP MIDSTREAM OPERATING, LP 

5.375% Senior Note due 2025 

This Security is one of a duly authorized issue of senior securities of the Company (the “Securities”), issued and to be
issued in one or more series under an Indenture, dated as of September 30, 2010, as amended and supplemented by the Third Supplemental Indenture thereto, dated as of June 14, 2012, and the Seventh Supplemental Indenture thereto, dated as
of July 17, 2018 (such Indenture, as so amended and supplemented being referred to herein as the “Indenture”), by and among the Company, DCP Midstream, LP (the “Guarantor”) and The Bank of New York Mellon Trust
Company, N.A., a national banking association organized and existing under the laws of the United States of America, as Trustee (the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Company, the Guarantor, the Trustee and the Holders of the Securities
and of the terms upon which the Securities are, and are to be, authenticated and delivered. Capitalized terms used but not defined herein have the meanings set forth in the Indenture. This Security is one of the series designated on the face hereof,
initially limited in aggregate principal amount to $500,000,000. To the extent any provision of this Security conflicts with the express provisions of the Indenture, the Indenture will govern and be controlling. The Company may issue an unlimited
aggregate principal amount of additional Securities of this series under the Indenture. Any such additional Securities shall be treated as issued and outstanding Securities of the same series as this Security (with identical terms other than with
respect to the issue date, the date of first payment of interest, if applicable, and the payment of interest accruing prior to the issue date) for all purposes of the Indenture, including waivers, amendments, and redemptions. 

This Security is the general, unsecured, senior obligation of the Company and is guaranteed pursuant to a guarantee (the “Parent
Guarantee”) by the Guarantor. The Parent Guarantee is the general, unsecured, senior obligation of the Guarantor. 
 At any time
prior to April 15, 2025, this Security is redeemable, in whole or in part, at the Company’s option at a Redemption Price equal to the greater of (a) 100% of the principal amount of this Security to be redeemed, and (b) the sum of
the present values of the principal amount of this Security to be redeemed and the remaining scheduled payments of interest hereon (exclusive of interest accrued to the Redemption Date) from the Redemption Date to the respective scheduled payment
dates discounted from their respective scheduled payment dates to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate plus 50 basis points, plus, in either case, accrued and unpaid interest, if any, on the principal amount being redeemed to, but not including, such Redemption Date. From and after April 15, 2025, this Security shall be
redeemable, in whole or in part, at the option of the Company, at a Redemption Price equal to 100% of the principal amount of this Security to be redeemed, plus accrued and unpaid interest, if any, on the principal amount being redeemed to, but not
including, such Redemption Date. 
 For purposes of determining any Redemption Price, the following definitions shall apply: 

“Comparable Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having a maturity
comparable to the term between the Redemption Date and the Stated Maturity (the “Remaining Life”) that would be utilized, at the time of selection, and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity with the Remaining Life. 
 “Comparable Treasury Price” means, with
respect to any Redemption Date, (a) the average of four Reference Treasury Dealer Quotations for the Redemption Date, after excluding the highest and lowest of all of the Reference Treasury Dealer Quotations or (b) if the Quotation Agent
obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations. 
 “Quotation Agent”
means the Reference Treasury Dealer appointed by the Company. 
 “Reference Treasury Dealer” means (i) J.P. Morgan
Securities LLC, Barclays Capital Inc., Citigroup Global Markets Inc., Mizuho Securities USA LLC, SunTrust Robinson Humphrey, Inc., TD Securities (USA) LLC and a U.S. government securities dealer in The City of New York (a “Primary Treasury
Dealer”) selected by 

  
 R-1 

 
MUFG Securities Americas Inc., and their respective successors; provided, however, that if any of the foregoing ceases to be a Primary Treasury Dealer, the Company shall substitute therefor
another Primary Treasury Dealer and (ii) one other Primary Treasury Dealer selected by the Company. 
 “Reference Treasury
Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Quotation Agent by such Reference Treasury Dealer at 5:00 p.m., The City of New York time, on the third Business Day preceding such Redemption Date. 

“Treasury Rate” means, with respect to any Redemption Date, the rate per year equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for the Redemption Date. The Treasury Rate will be
calculated on the third Business Day preceding the Redemption Date. 
 Unless the Company defaults in payment of the Redemption Price, on
and after the Redemption Date, interest will cease to accrue on this Security or the portions hereof called for redemption. 
 In the event
of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. 

The Company is not required to make mandatory redemption or sinking fund payments with respect to this Security. 

Notices of redemption may be subject to one or more conditions precedent specified in such notices of redemption. If a notice of redemption is
subject to the satisfaction of one or more conditions precedent, the related notice shall describe each such condition, and, if applicable, shall state that, in the Company’s discretion, the Redemption Date may be delayed until such time as any
or all such conditions shall be satisfied or waived (provided, that in no event shall such Redemption Date be delayed to a date later than 60 days after the date on which such notice was sent), or such redemption may not occur and such notice may be
rescinded in the event that any or all such conditions shall not have been satisfied or waived by the Redemption Date, or by the Redemption Date as so delayed. The Company shall provide written notice of the satisfaction or waiver of such
conditions, the delay of such Redemption Date or the rescission of such notice of redemption to the Trustee no later than one Business Day prior to the scheduled Redemption Date, and the Trustee shall provide such notice to each Holder of the Notes
in the same manner in which the notice of redemption was given. Upon receipt of such notice of the delay of such Redemption Date or the rescission of such notice of redemption, such Redemption Date shall be automatically delayed or such notice of
redemption shall be automatically rescinded, as applicable, and the redemption of the Notes shall be automatically delayed or rescinded and cancelled, as applicable, as provided in such notice. 

Upon the occurrence of a Change of Control Triggering Event, unless the Company has exercised its right to redeem all of this Security, the
Holder of this Security will have the right to require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of this Security pursuant to the offer described below (the “Change of
Control Offer”) at a cash purchase price equal to 101% of the aggregate principal amount of this Security repurchased, plus accrued and unpaid interest, if any, on the aggregate principal amount of this Security repurchased to, but
excluding, the date of purchase (the “Change of Control Payment”), subject to the rights of the Holder of this Security on the relevant Regular Record Date to receive interest due on the related Interest Payment Date that has
accrued on or prior to the date of purchase. 
 Within 30 days following any Change of Control Triggering Event, the Company shall send a
notice to the Holder of this Security describing the transaction or transactions that constitute the Change of Control Triggering Event and offering to repurchase this Security on the “Change of Control Payment Date” specified in
the notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is sent, pursuant to the procedures required by the Indenture and described in such notice. If the Holder of this Security elects to have the
Company repurchase all or part of this Security pursuant to a Change of Control Offer, the Holder shall be 

  
 R-2 

 
required to surrender this Security, with such customary documents of surrender and transfer as the Company may reasonably request be duly completed or transfer this Security by book-entry
transfer, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day prior to the Change of Control Payment Date. 

The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the Company’s repurchase of this Security as a result of a Change of Control Triggering Event. To the extent that the
provisions of any securities laws or regulations conflict with the Change of Control Triggering Event provisions in the Indenture or this Security, the Company shall comply with the applicable securities laws and regulations and shall not be deemed
to have breached its obligations under the Indenture or this Security by virtue of such compliance. 
 On the Change of Control Payment
Date, the Company shall, to the extent lawful: 
 (a) accept for payment this Security or portions of this Security properly
tendered pursuant to the Change of Control Offer; 
 (b) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of this Security or portions of this Security properly tendered; and 
 (c) deliver, or cause to
be delivered, to the Trustee this Security properly accepted together with an Officer’s Certificate stating the aggregate principal amount of this Security or portions of this Security being purchased. 

On the Change of Control Payment Date, if the Holder has properly tendered all or a portion of this Security, the Paying Agent will promptly
mail to the Holder the Change of Control Payment for this Security (or, if this Security is then in global form, the Paying Agent will make such payment through the facilities of The Depository Trust Company), and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to the Holder a new Security equal in principal amount to any unpurchased portion of this Security surrendered, if any; provided, that each new Security shall be in a principal amount
of $2,000 or an integral multiple of $1,000 in excess thereof. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. 

The provisions of the Indenture that require the Company to make a Change of Control Offer following a Change of Control Triggering Event
shall be applicable whether or not any other provisions of the Indenture are applicable. 
 The Company shall not be required to make a
Change of Control Offer if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for such an offer made by the Company and such third-party purchases all of this Security properly tendered
and not withdrawn under such third party’s offer. In addition, the Company shall not repurchase any of this Security if there has occurred and is continuing on the Change of Control Payment Date an Event of Default under the Indenture, other
than a default in the payment of the Change of Control Payment upon a Change of Control Triggering Event. 
 If Holders of not less than 90%
of the aggregate principal amount of the Securities are validly tendered and not withdrawn in a Change of Control Offer and the Company (or the third party making the Change of Control Offer) purchases all of the Securities validly tendered and not
withdrawn by such Holders, the Company shall have the right, upon not less than 30 nor more than 60 days’ prior notice, given not more than 30 days following the purchase pursuant to the Change of Control Offer, to redeem all of the Securities
that remain Outstanding following such purchase (including this Security if it then remains Outstanding) at a Redemption Price equal to 101% of the aggregate principal amount of such Securities, plus accrued and unpaid interest on such Securities
that remain Outstanding to, but excluding, the date of redemption (subject to the right of Holders of record on the relevant Regular Record Date to receive interest due on an Interest Payment Date that has accrued on or prior to the Redemption
Date). 

  
 R-3 

 For purposes of the Change of Control provisions, the following definitions shall apply: 

“Change of Control” means the occurrence of either of the following after the Original Issue Date of this Security:
(i) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger, consolidation or business combination), in one or a series of related transactions, of all or substantially all of the properties or
assets of the Guarantor and its Subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act); or (ii) the consummation of any transaction (including, without limitation, any merger,
consolidation or business combination), the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act), other than the Guarantor, the Guarantor’s general partner, DCP Midstream, LLC, and
Phillips 66 and Enbridge Inc. and their respective Subsidiaries, becomes the beneficial owner, directly or indirectly, of more than 50% of the voting interests of the Guarantor, the Guarantor’s general partner, or DCP Midstream, LLC, measured
by voting power rather than percentage of interests. 
 “Change of Control Triggering Event” means the occurrence of a
Change of Control that is accompanied or followed by either a downgrade or withdrawal of the rating of this Security within the Ratings Decline Period by all three Named Rating Agencies, as a result of which the rating of this Security by each Named
Rating Agency on any day during such Ratings Decline Period is below Investment Grade; provided, however, that no Change of Control Triggering Event will be deemed to have occurred in connection with any reduction in rating if the Named
Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing, at its request, that the reduction was the result, in whole or in part, of any event
or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control. 
 “Fitch”
means Fitch Ratings, Ltd. 
 “Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under
any successor rating category of Moody’s); and a rating of BBB- or better by S&P (or its equivalent under any successor rating category of S&P); and a rating of
BBB- or better by Fitch (or its equivalent under any successor rating category of Fitch) or the equivalent investment grade credit rating from any replacement agent selected by the Guarantor in accordance with
the definition of Named Rating Agency. 
 “Moody’s” means Moody’s Investors Service, Inc. 

“Named Rating Agency” means (i) each of Moody’s, S&P and Fitch; and (ii) if any of Moody’s, S&P
or Fitch ceases to rate this Security or fails to make a rating of this Security, as the case may be, publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating organization” as
defined in Section 3(a)(62) under the Exchange Act selected by the Company as a replacement agency for any or all of Moody’s, S&P or Fitch, as the case may be. 

“Ratings Decline Period” means the period that (i) begins on the occurrence of a Change of Control and (ii) ends 60
days following consummation of such Change of Control. 
 “S&P” means S&P Global Ratings, a division of S&P
Global Inc. 
 The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of this Security or
(b) certain restrictive covenants and Events of Default with respect to this Security, in each case upon compliance with certain conditions set forth in the Indenture. 

If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in the Indenture. 
 The Indenture permits, with certain
exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company, the Guarantor and any Subsidiary Guarantor, and the rights of the Holders of the Securities of each series to be affected under
the Indenture at any time by the Company, the Guarantor or any Subsidiary Guarantor and the Trustee with the consent of the Holders of a majority in principal 

  
 R-4 

 
amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company, the Guarantor or any Subsidiary Guarantor with certain provisions of the Indenture and certain existing
and past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof, regardless of whether notation of such consent or waiver is made upon this Security. 

No Holder of this Security shall have any right to institute any proceeding, judicial or otherwise, with respect to the Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless (a) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of this series, (b) as set
forth in the Indenture, the Holders of a particular percentage of the principal amount of the Outstanding Securities of this series (either not less than 25%, or not less than a majority, in aggregate principal amount of the Outstanding
Securities, depending on the nature of the relevant Event of Default) shall have made written request to the Trustee to institute proceedings in respect of certain Events of Default set forth in the Indenture in its own name as Trustee hereunder,
(c) such Holder or Holders have offered to the Trustee indemnity satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request, (d) the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to institute any such proceeding and (e) no direction inconsistent with such written request has been given to the Trustee during such 60-day period
by the Holders of not less than a majority in aggregate principal amount of the Outstanding Securities of this series; it being understood and intended that no one or more of such Holders shall have any right in any manner whatsoever by virtue of,
or by availing of, any provision of the Indenture or this Security to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any
right under the Indenture, except in the manner herein provided or provided in the Indenture and for the equal and ratable benefit of all such Holders. 

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place(s) and rate, and in the coin or currency, herein prescribed. 

[If a Global Security, insert—This Global Security or portion hereof may not be exchanged for Definitive Securities of this series except
in the limited circumstances provided in the Indenture. The holders of beneficial interests in this Global Security will not be entitled to receive physical delivery of Definitive Securities except as described in the Indenture and will not be
considered the Holders thereof for any purpose under the Indenture.] 
 [If a Definitive Security, insert— The Holder of this Security
may exchange such Security for a beneficial interest in a Global Security or transfer this Security to a Person who takes delivery hereof in the form of a beneficial interest in a Global Security at any time. Upon receipt of a request for such an
exchange or transfer, the Trustee shall cancel this Security and increase or cause to be increased the aggregate principal amount of the applicable Global Security. 

At the option of the Holder, this Security may be exchanged for other Definitive Securities of the same series, of any authorized
denominations and of like tenor and aggregate principal amount, upon surrender of this Security at an Office or Agency. Whenever this Security is so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver,
the Definitive Securities which the Holder making the exchange is entitled to receive. 
 Upon request by the Holder of this Security and
such Holder’s compliance with the provisions of this paragraph, the Registrar shall register the transfer or exchange of this Security. Prior to such registration of transfer or exchange, the Holder shall present or surrender to the Registrar
this Security duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Company and the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. A Holder of this Security may transfer
this Security to a Person who takes delivery thereof in the form of this Security. Upon receipt of a request to register such a transfer, the Registrar shall register such Security pursuant to the instructions from the Holder thereof.] 

  
 R-5 

 The Securities of this series are issuable only in registered form without coupons in
denominations of U.S. $2,000 and any integral multiple of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge and any other expenses (including fees and expenses of the Trustee) payable in connection therewith, other than exchanges pursuant to Sections 304, 306, 906 and 1107 of the Indenture. 

Except as provided in the Indenture, prior to due presentment of this Security for registration of transfer, the Company, the Guarantor, the
Trustee and any agent of the Company, the Guarantor or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security is overdue, and none of the Company, the Guarantor,
the Trustee nor any such agent shall be affected by notice to the contrary. 
 No recourse under or upon any obligation, covenant or
agreement of or contained in the Indenture or of or contained in this Security, or the Parent Guarantee endorsed thereon, or for any claim based thereon or otherwise in respect thereof, or in any Security or in the Parent Guarantee, or because of
the creation of any indebtedness represented thereby, shall be had against any incorporator, shareholder, partner, member, officer, manager or director, as such, past, present or future, of the Company or the Guarantor or of any successor Person,
either directly or through the Company or the Guarantor or any successor Person, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment, penalty or otherwise; it being expressly understood that all
such liability is hereby expressly waived and released by the acceptance hereof and as a condition of, and as part of the consideration for, the execution of the Indenture and the issuance of the Securities. 

This Security shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made or
instruments entered into and, in each case, performed in said State. 

  
 R-6 

 ANNEX B 

NOTATION OF GUARANTEE 

Each Guarantor (which term includes any successor Person under the Indenture) named below, has fully, unconditionally and absolutely
guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture, the due and punctual payment of the principal of, and premium, if any, and interest on the 5.375% Senior Notes due 2025 (the “Securities”)
and all other amounts due and payable under the Indenture and the Securities by the Company. 
 The obligations of the Guarantor to the
Holders of Securities and to the Trustee pursuant to the Guarantee and the Indenture are expressly set forth in Article Sixteen of the Indenture (as amended and supplemented by the Seventh Supplemental Indenture) and reference is hereby made to
the Indenture for the precise terms of the Guarantee. 

 
							
	DCP MIDSTREAM, LP
		
	By:	 	 DCP Midstream GP, LP,
 its general
partner

			
		 	By: 	 	 DCP Midstream GP, LLC,
 its general
partner

 
							
				
		 		 	    By:	 	 

 
							
		 		 	 Name:	 	Sean P. O’Brien
		 		 	 Title:	 	Group Vice President and Chief Financial Officer

 ANNEX C 

FORM OF SUPPLEMENTAL INDENTURE 

This SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of __________, _______, among DCP MIDSTREAM OPERATING,
LP, a Delaware limited partnership (the “Company”), DCP MIDSTREAM, LP, a Delaware limited partnership (the “Guarantor”), and __________________________ (the “Subsidiary Guarantor”), a direct or
indirect subsidiary of the Company, and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association, as trustee (herein called the “Trustee”) 

W I T N E S S E T H: 

WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the “Original Indenture”), dated as
of September 30, 2010, as supplemented by the Third Supplemental Indenture (the “Third Supplemental Indenture”), dated as of June 14, 2012, as supplemented by the Seventh Supplemental Indenture (the “Seventh
Supplemental Indenture” and, together with the Original Indenture and the Third Supplemental Indenture, the “Indenture”), dated as of July 17, 2018, among the Company, the Guarantor and the Trustee, providing for the
issuance of the Company’s 5.375% Notes due 2025 (the “Notes”); 
 WHEREAS, Section 3.04 of the Seventh
Supplemental Indenture provides that under certain circumstances the Company is required to cause the Subsidiary Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which the Subsidiary Guarantor shall
unconditionally guarantee all of the Company’s obligations under the Notes pursuant to a guarantee on the terms and conditions set forth herein; and 

WHEREAS, pursuant to Section 901 of the Original Indenture, the Company, the Guarantor, the Subsidiary Guarantor and the Trustee are
authorized to execute and deliver this Supplemental Indenture; 
 NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the Company, the Guarantor, the Subsidiary Guarantor and the Trustee mutually covenant and agree for the equal and ratable benefit of the holders of the Notes as follows: 

Section 1. Definitions. 

(a) Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture or the Seventh
Supplemental Indenture, as applicable. 
 (b) For all purposes of this Supplemental Indenture, except as otherwise herein
expressly provided or unless the context otherwise requires: (i) the terms and expressions used herein shall have the same meanings as corresponding terms and expressions used in the Indenture; and (ii) the words “herein,”
“hereof” and “hereby” and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof. 

  
 C-1 

 Section 2. Agreement to Guarantee. 

(a) The Subsidiary Guarantor hereby agrees, jointly and severally with any other Guarantors under the Indenture with respect to
the Notes, to guarantee the Company’s obligations under the Notes and all other amounts due and payable under the Indenture on the terms and subject to the conditions set forth in Article Sixteen of the Original Indenture and
Section 2.09 of the Seventh Supplemental Indenture (as if such Section 2.09 related to the Guarantee hereunder) and to be bound by all other applicable provisions of the Indenture. To further evidence the Guarantee set forth in
Article Sixteen of the Original Indenture (as amended and supplemented by the Seventh Supplemental Indenture and this Supplemental Indenture), the Subsidiary Guarantor is executing a notation relating to such Guarantee, substantially in the
form attached to the Seventh Supplemental Indenture as Annex B. Except as expressly amended hereby, the Indenture and the Seventh Supplemental Indenture are in all respects ratified and confirmed and all the terms, conditions and provisions
thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby. 

Section 3. Governing Law; Waiver of Jury Trial. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE OR INSTRUMENTS ENTERED INTO AND, IN EACH CASE, PERFORMED IN SAID STATE. EACH OF THE COMPANY, THE GUARANTOR , THE SUBSIDIARY GUARANTOR AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS SUPPLEMENTAL INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY. 

Section 4. Recitals by Company, the Subsidiary Guarantor and the Guarantor. The recitals in this Supplemental Indenture are made
by the Company, the Subsidiary Guarantor and the Guarantor only and not by the Trustee, and the Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture. All of the provisions contained in the Indenture in
respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of this Supplemental Indenture as fully and with like effect as if set forth herein in full. 

Section 5. Executed in Counterparts. This Supplemental Indenture may be executed in several counterparts, each of which shall be
deemed to be an original, and such counterparts shall together constitute but one and the same instrument. Portable Document Format (PDF) or facsimile signatures shall be deemed originals. 

Section 6. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction
thereof. 

  
 C-2 

 Section 7. Ratification and Incorporation of Original Indenture. As amended and
supplemented hereby, the Indenture is in all respects ratified and confirmed, and the Indenture and this Supplemental Indenture shall be read, taken and construed as one and the same instrument. If and to the extent that the provisions of the
Indenture are duplicative of, or in contradiction with, the provisions of this Supplemental Indenture, the provisions of this Supplemental Indenture will govern. 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written. 

 

					
	DCP MIDSTREAM OPERATING, LP
		
	By:    	 	DCP Midstream Operating, LLC,
		 	its general partner

 
					
			
		 	By:	 	 

 
					
		 	 Name:	 	 

 
					
		 	Title:	 	

 
			
	
	DCP MIDSTREAM, LP
		
	By:    	 	DCP Midstream GP, LP,
		 	its general partner

 
							
				
		 		 	By:    	 	DCP Midstream GP, LLC,
		 		 		 	its general partner

 
									
					
		 		 		 	By:	 	 

 
									
		 		 		 	 Name: 	 	 

 
									
		 		 		 	Title:	 	 

 
									
	
	[SUBSIDIARY GUARANTOR]

 
									
		
	By:	 	 

 
									
	Name:	 	 

 
									
	Title:	 	 

 
									
	
	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee

 
									
		
	By:	 	 

 
									
	Name:	 	 

 
									
	Title:	 	 

  
 C-3Exhibit 10.1

 

Securities Purchase Agreement

 

This
Securities Purchase Agreement (this “Agreement”), dated as of July 11, 2018, is entered into by and between
China Recycling Energy Corporation, a Nevada corporation (“Company”),
and Iliad Research and Trading, L.P., a Utah limited partnership, its successors
and/or assigns (“Investor”) (Company and Investor, each as “Party” and collectively as “Parties”).

 

A. Company
and Investor are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by
the Securities Act of 1933, as amended (the “1933 Act”), and the rules and regulations promulgated thereunder
by the United States Securities and Exchange Commission (the “SEC”).

 

B. Investor
desires to purchase and Company desires to issue and sell, upon the terms and conditions set forth in this Agreement, a Convertible
Promissory Note, in the form attached hereto as Exhibit A, in the original principal amount of $1,070,000.00 (the “Note”),
convertible into shares of common stock, $0.001 par value per share, of Company (the “Common Stock”), upon the
terms and subject to the limitations and conditions set forth in such Note.

 

C. This
Agreement, the Note, and all other certificates, documents, agreements, resolutions and instruments delivered to any party under
or in connection with this Agreement, as the same may be amended from time to time, are collectively referred to herein as the
“Transaction Documents”.

 

D. For
purposes of this Agreement: “Conversion Shares” means all shares of Common Stock issuable upon conversion of
all or any portion of the Note; and “Securities” means the Note and the Conversion Shares.

 

NOW, THEREFORE,
in consideration of the above recitals and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Company and Investor hereby agree as follows:

 

1. Purchase
and Sale of Securities.

 

1.1. Purchase
of Securities. Company shall issue and sell to Investor and Investor shall purchase from Company the Note. In consideration
thereof, Investor shall pay the Purchase Price (as defined below) to Company.

 

1.2. Form
of Payment. On the Closing Date (as defined below), Investor shall pay the Purchase Price to Company via wire transfer of immediately
available funds against delivery of the Note.

 

1.3. Closing
Date. Subject to the satisfaction (or written waiver) of the conditions set forth in Section 5 and Section 6 below, the date
of the issuance and sale of the Securities pursuant to this Agreement (the “Closing Date”) shall be July 11,
2018, or such other mutually agreed upon date. The closing of the transactions contemplated by this Agreement (the “Closing”)
shall occur on the Closing Date by means of the exchange by email of signed .pdf documents, but shall be deemed for all purposes
to have occurred at the offices of Hansen Black Anderson Ashcraft PLLC.

 

1.4. Original
Issue Discount; Transaction Expense Amount. The Note carries an original issue discount of $50,000.00 (the “OID”).
In addition, Company agrees to pay $20,000.00 to Investor to cover Investor’s legal fees, accounting costs, due diligence,
monitoring and other transaction costs incurred in connection with the purchase and sale of the Securities (the “Transaction
Expense Amount”), all of which amount is included in the initial principal balance of the Note. The Purchase Price, therefore,
shall be $1,000,000.00, computed as follows: $1,070,000.00 initial principal balance, less the OID, less the Transaction Expense
Amount.

 

     

     

    

 

2. Investor’s
Representations and Warranties. Investor represents and warrants to Company that as of the Closing Date: (i) this Agreement
has been duly and validly authorized; (ii) this Agreement constitutes the valid and binding obligations of Investor enforceable
in accordance with its terms; (iii) Investor is an “accredited investor” as that term is defined in Rule 501(a) of
Regulation D of the 1933 Act; and (iv) this Agreement has been duly executed and delivered on behalf of Investor.

 

3. Company’s
Representations and Warranties. Company represents and warrants to Investor that as of the Closing Date: (i) Company is a corporation
duly organized, validly existing and in good standing under the laws of its state of incorporation and has the requisite corporate
power to own its properties and to carry on its business as now being conducted; (ii) Company is duly qualified as a foreign corporation
to do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it
makes such qualification necessary; (iii) Company has registered its Common Stock under Section 12(g) of the Securities Exchange
Act of 1934, as amended (the “1934 Act”), and is obligated to file reports pursuant to Section 13 or Section 15(d)
of the 1934 Act; (iv) each of the Transaction Documents and the transactions contemplated hereby and thereby, have been duly and
validly authorized by Company and all necessary actions have been taken; (v) this Agreement, the Note, and the other Transaction
Documents have been duly executed and delivered by Company and constitute the valid and binding obligations of Company enforceable
in accordance with their terms; (vi) the execution and delivery of the Transaction Documents by Company, the issuance of Securities
in accordance with the terms hereof, and the consummation by Company of the other transactions contemplated by the Transaction
Documents do not and will not conflict with or result in a breach by Company of any of the terms or provisions of, or constitute
a default under (a) Company’s formation documents or bylaws, each as currently in effect, (b) any indenture, mortgage, deed
of trust, or other material agreement or instrument to which Company is a party or by which it or any of its properties or assets
are bound, including, without limitation, any listing agreement for the Common Stock, or (c) any existing applicable law, rule,
or regulation or any applicable decree, judgment, or order of any court, United States federal, state or foreign regulatory body,
administrative agency, or other governmental body having jurisdiction over Company or any of Company’s properties or assets;
(vii) no further authorization, approval or consent of any court, governmental body, regulatory agency, self-regulatory organization,
or stock exchange or market or the stockholders or any lender of Company is required to be obtained by Company for the issuance
of the Securities to Investor or the entering into of the Transaction Documents; (viii) none of Company’s filings with the
SEC contained, at the time they were filed, any untrue statement of a material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made,
not misleading; (ix) Company has filed all reports, schedules, forms, statements and other documents required to be filed by Company
with the SEC under the 1934 Act on a timely basis or has received a valid extension of such time of filing and has filed any such
report, schedule, form, statement or other document prior to the expiration of any such extension; (x) there is no action, suit,
proceeding, inquiry or investigation before or by any court, public board or body pending or, to the knowledge of Company, threatened
against or affecting Company before or by any governmental authority or non-governmental department, commission, board, bureau,
agency or instrumentality or any other person, wherein an unfavorable decision, ruling or finding would have a material adverse
effect on Company or which would adversely affect the validity or enforceability of, or the authority or ability of Company to
perform its obligations under, any of the Transaction Documents; (xi) Company has not consummated any financing transaction that
has not been disclosed in a periodic filing or current report with the SEC under the 1934 Act; (xii) Company is not, nor has it
been at any time in the previous twelve (12) months, a “Shell Company,” as such type of “issuer” is described
in Rule 144(i)(1) under the 1933 Act; (xiii) with respect to any commissions, placement agent or finder’s fees or similar
payments that will or would become due and owing by Company to any person or entity as a result of this Agreement or the transactions
contemplated hereby (“Broker Fees”), any such Broker Fees will be made in full compliance with all applicable
laws and regulations and only to a person or entity that is a registered investment adviser or registered broker-dealer; (xiv)
Investor shall have no obligation with respect to any Broker Fees or with respect to any claims made by or on behalf of other persons
for fees of a type contemplated in this subsection that may be due in connection with the transactions contemplated hereby and
Company shall indemnify and hold harmless each of Investor, Investor’s employees, officers, directors, stockholders, members,
managers, agents, and partners, and their respective affiliates, from and against all claims, losses, damages, costs (including
the costs of preparation and attorneys’ fees) and expenses suffered in respect of any such claimed Broker Fees; (xv) when
issued, the Conversion Shares will be duly authorized, validly issued, fully paid for and non-assessable, free and clear of all
liens, claims, charges and encumbrances; (xvi) neither Investor nor any of its officers, directors, stockholders, members, managers,
employees, agents or representatives has made any representations or warranties to Company or any of its officers, directors, employees,
agents or representatives except as expressly set forth in the Transaction Documents and, in making its decision to enter into
the transactions contemplated by the Transaction Documents, Company is not relying on any representation, warranty, covenant or
promise of Investor or its officers, directors, members, managers, employees, agents or representatives other than as set forth
in the Transaction Documents; (xvii) Company acknowledges that the State of Utah has a reasonable relationship and sufficient contacts
to the transactions contemplated by the Transaction Documents and any dispute that may arise related thereto such that the laws
and venue of the State of Utah, as set forth more specifically in Section 9.3 below, shall be applicable to the Transaction Documents
and the transactions contemplated therein; and (xviii) Company will not use its own lack of due diligence with respect to the background
and history of John M. Fife or Investor as a defense to or justification of its failure to perform any of its obligations under
the Transaction Documents or in any attempt to avoid, modify or reduce such obligations.

 

    	 	2	 

     

    

 

4. Company
Covenants. Until all of Company’s obligations under all of the Transaction Documents are paid and performed in full,
or within the timeframes otherwise specifically set forth below, Company will at all times comply with the following covenants:
(i) so long as Investor beneficially owns any of the Securities and for at least twenty (20) Trading Days (as defined in the Note)
thereafter, Company will timely file on the applicable deadline all reports required to be filed with the SEC pursuant to Sections 13
or 15(d) of the 1934 Act, and will take all reasonable action under its control to ensure that adequate current public information
with respect to Company, as required in accordance with Rule 144 of the 1933 Act, is publicly available, and will not terminate
its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder
would permit such termination; (ii) the Common Stock shall be listed or quoted for trading on any of (a) NYSE, (b) NASDAQ, (c)
OTCQX, or (d) OTCQB; (iii) when issued, the Conversion Shares will be duly authorized, validly issued, fully paid for and non-assessable,
free and clear of all liens, claims, charges and encumbrances; (iv) trading in Company’s Common Stock will not be suspended,
halted, chilled, frozen, reach zero bid or otherwise cease on Company’s principal trading market; (v) Company will not make
any Variable Security Issuance (as defined below) where Company receives net proceeds of less than $1,000,000.00 from such Variable
Security Issuance, without Investor’s prior written consent, which consent may be granted or withheld in Investor’s
sole and absolute discretion; and (vi) at Closing and on the first day of each calendar quarter for so long as the Note remains
outstanding or on any other date during which the Note is outstanding, as may be requested by Investor, Company shall cause its
Chief Executive Officer to provide to Investor a certificate in substantially the form attached hereto as Exhibit B (the
“Officer’s Certificate”) certifying in his personal capacity and in his capacity as Chief Executive Officer
of Company that Company has not made any Variable Security Issuances where Company received less than $1,000,000.00 in net proceeds
subsequent to the Closing Date. For purposes hereof, the term “Variable Security Issuance” means any issuance
of any Company securities that (A) have or may have conversion rights of any kind, contingent, conditional or otherwise, in which
the number of shares that may be issued pursuant to such conversion right varies with the market price of the Common Stock, or
(B) are or may become convertible into Common Stock (including without limitation convertible debt, warrants or convertible preferred
stock), with a conversion price that varies with the market price of the Common Stock, even if such security only becomes convertible
following an event of default, the passage of time, or another trigger event or condition. For avoidance of doubt, the issuance
of shares of Common Stock under, pursuant to, in exchange for or in connection with any contract or instrument, whether convertible
or not, is deemed a Variable Security Issuance for purposes hereof if the number of shares of Common Stock to be issued is based
upon or related in any way to the market price of the Common Stock, including, but not limited to, Common Stock issued in connection
with a Section 3(a)(9) exchange, a Section 3(a)(10) settlement, or any other similar settlement or exchange.

 

    	 	3	 

     

    

 

5. Conditions
Precedent to Company’s Obligation to Sell. The obligation of Company hereunder to issue and sell the Securities to Investor
at the Closing is subject to the satisfaction, on or before the Closing Date, of each of the following conditions:

 

5.1. Investor
shall have executed this Agreement and delivered the same to Company.

 

5.2. Investor
shall have delivered the Purchase Price to Company in accordance with Section 1.2 above.

 

6. Conditions
Precedent to Investor’s Obligation to Purchase. The obligation of Investor hereunder to purchase the Securities at the
Closing is subject to the satisfaction, on or before the Closing Date, of each of the following conditions, provided that these
conditions are for Investor’s sole benefit and may be waived by Investor at any time in its sole discretion:

 

6.1. Company
shall have executed this Agreement and the Note and delivered the same to Investor.

 

6.2. Company’s
Chief Executive Officer shall have executed the Officer’s Certificate and delivered the same to Investor.

 

6.3. Company
shall have delivered to Investor a fully executed Irrevocable Letter of Instructions to Transfer Agent (the “TA Letter”)
substantially in the form attached hereto as Exhibit C acknowledged and agreed to in writing by Company’s transfer
agent (the “Transfer Agent”).

 

6.4. Company
shall have delivered to Investor a fully executed Secretary’s Certificate substantially in the form attached hereto as Exhibit
D evidencing Company’s approval of the Transaction Documents.

 

6.5. Company
shall have delivered to Investor a fully executed Share Issuance Resolution substantially in the form attached hereto as Exhibit
E to be delivered to the Transfer Agent.

 

6.6.
Company shall have delivered to Investor fully executed copies of all other Transaction Documents required to be executed by Company
herein or therein.

 

7. Reservation
of Shares. On the date hereof, Company will reserve 4,020,000 shares of Common Stock from its authorized and unissued Common
Stock to provide for all issuances of Common Stock under the Note (the “Share Reserve”). Company further agrees
to add additional shares of Common Stock to the Share Reserve in increments of 500,000 shares as and when requested by Investor
if as of the date of any such request the number of shares being held in the Share Reserve is less than three (3) times the number
of shares of Common Stock obtained by dividing the Outstanding Balance (as defined in the Note) as of the date of the request by
the Redemption Conversion Price (as defined in the Note). Company shall further require the Transfer Agent to hold the shares of
Common Stock reserved pursuant to the Share Reserve exclusively for the benefit of Investor and to issue such shares to Investor
promptly upon Investor’s delivery of a conversion notice under the Note. Finally, Company shall require the Transfer Agent
to issue shares of Common Stock pursuant to the Note to Investor out of its authorized and unissued shares, and not the Share Reserve,
to the extent shares of Common Stock have been authorized, but not issued, and are not included in the Share Reserve. The Transfer
Agent shall only issue shares out of the Share Reserve to the extent there are no other authorized shares available for issuance
and then only with Investor’s written consent.

 

    	 	4	 

     

    

 

8. OFAC;
Patriot Act.

 

8.1. OFAC
Certification. Company certifies that (i) it is not acting on behalf of any person, group, entity, or nation named by any Executive
Order or the United States Treasury Department, through its Office of Foreign Assets Control (“OFAC”) or otherwise,
as a terrorist, “Specially Designated Nation”, “Blocked Person”, or other banned or blocked person, entity,
nation, or transaction pursuant to any law, order, rule or regulation that is enforced or administered by OFAC or another department
of the United States government, and (ii) Company is not engaged in this transaction on behalf of, or instigating or facilitating
this transaction on behalf of, any such person, group, entity or nation.

 

8.2. Foreign
Corrupt Practices. Neither Company, nor any of its subsidiaries, nor any director, officer, agent, employee or other person
acting on behalf of Company or any subsidiary has, in the course of his actions for, or on behalf of, Company, used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made any direct
or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

 

8.3. Patriot
Act. Company shall not (i) be or become subject at any time to any law, regulation, or list of any government agency (including,
without limitation, the OFAC) that prohibits or limits Investor from making any advance or extension of credit to Company or from
otherwise conducting business with Company, or (ii) fail to provide documentary and other evidence of Company’s identity
as may be requested by Investor at any time to enable Investor to verify Company’s identity or to comply with any applicable
law or regulation, including, without limitation, Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318. Company shall
comply with all requirements of law relating to money laundering, anti-terrorism, trade embargos and economic sanctions, now or
hereafter in effect. Upon Investor’s request from time to time, Company shall certify in writing to Investor that Company’s
representations, warranties and obligations under this Section 8.3 remain true and correct and have not been breached. Company
shall immediately notify Investor in writing if any of such representations, warranties or covenants are no longer true or have
been breached or if Company has a reasonable basis to believe that they may no longer be true or have been breached. In connection
with such an event, Company shall comply with all requirements of law and directives of governmental authorities and, at Investor’s
request, provide to Investor copies of all notices, reports and other communications exchanged with, or received from, governmental
authorities relating to such an event. Company shall also reimburse Investor any expense incurred by Investor in obtaining any
necessary license from governmental authorities as may be necessary for Investor to enforce its rights under the Transaction Documents,
and in complying with all requirements of law applicable to Investor as the result of the existence of such an event and for any
penalties or fines imposed upon Investor as a result thereof.

 

9. Miscellaneous.
The provisions set forth in this Section 9 shall apply to this Agreement, as well as all other Transaction Documents as if these
terms were fully set forth therein; provided, however, that in the event there is a conflict between any provision set forth in
this Section 9 and any provision in any other Transaction Document, the provision in such other Transaction Document shall govern.

 

9.1. Certain
Capitalized Terms. To the extent any capitalized term used in any Transaction Document is defined in any other Transaction
Document (as noted therein), such capitalized term shall remain applicable in the Transaction Document in which it is so used even
if the other Transaction Document (wherein such term is defined) has been released, satisfied, or is otherwise cancelled or terminated.

 

    	 	5	 

     

    

 

9.2. Arbitration
of Claims. The parties shall submit all Claims (as defined in Exhibit F) arising under this Agreement or any other Transaction
Document or any other agreement between the parties and their affiliates or any Claim relating to the relationship of the parties
to binding arbitration pursuant to the arbitration provisions set forth in Exhibit F attached hereto (the “Arbitration
Provisions”). The parties hereby acknowledge and agree that the Arbitration Provisions are unconditionally binding on
the parties hereto and are severable from all other provisions of this Agreement. By executing this Agreement, Each of Company
and Investor represents, warrants and covenants to each other that each of them has reviewed the Arbitration Provisions carefully,
consulted with legal counsel about such provisions (or waived its right to do so), understands that the Arbitration Provisions
are intended to allow for the expeditious and efficient resolution of any dispute hereunder, agrees to the terms and limitations
set forth in the Arbitration Provisions, and that Company will not take a position contrary to the foregoing representations. Company
acknowledges and agrees that Investor may rely upon the foregoing representations and covenants of Company regarding the Arbitration
Provisions.

 

9.3. 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 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. Each party consents to and expressly
agrees that the exclusive venue for arbitration of any dispute arising out of or relating to 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 pursuant to the Arbitration Provisions, for any litigation arising in connection with any of the Transaction
Documents (and notwithstanding the terms (specifically including any governing law and venue terms) of any transfer agent services
agreement or other agreement between the Transfer Agent and Company, such litigation specifically includes, without limitation
any action between or involving Company and the Transfer Agent under the TA Letter or otherwise related to Investor in any way
(specifically including, without limitation, any action where Company seeks to obtain an injunction, temporary restraining order,
or otherwise prohibit the Transfer Agent from issuing shares of Common Stock to Investor for any reason)), each party hereto hereby
(i) consents to and expressly submits to the exclusive personal jurisdiction of any state or federal court sitting in Salt Lake
County, Utah, (ii) expressly submits to the exclusive venue of any such court for the purposes hereof, (iii) agrees to not bring
any such action (specifically including, without limitation, any action where Company seeks to obtain an injunction, temporary
restraining order, or otherwise prohibit the Transfer Agent from issuing shares of Common Stock to Investor for any reason) outside
of any state or federal court sitting in Salt Lake County, Utah, and (iv) waives any claim of improper venue and any claim or objection
that such courts are an inconvenient forum or any other claim, defense or objection to the bringing of any such proceeding in such
jurisdiction or to any claim that such venue of the suit, action or proceeding is improper. Finally, Company covenants and agrees
to name Investor as a party in interest in, and provide written notice to Investor in accordance with Section 9.13 below prior
to bringing or filing, any action (including without limitation any filing or action against any person or entity that is not a
party to this Agreement, including without limitation the Transfer Agent) that is related in any way to the Transaction Documents
or any transaction contemplated herein or therein, including without limitation any action brought by Company to enjoin or prevent
the issuance of any shares of Common Stock to Investor by the Transfer Agent, and further agrees to timely name Investor as a party
to any such action. Company acknowledges that the governing law and venue provisions set forth in this Section 9.3 are material
terms to induce Investor to enter into the Transaction Documents and that but for Company’s agreements set forth in this
Section 9.3 Investor would not have entered into the Transaction Documents.

 

9.4. Specific
Performance. Each Party acknowledges and agrees that irreparable damage may occur to the other Party (the “Non-defaulting
Party”) in the event that either Party (“Defaulting Party”) fails to perform any material provision
of this Agreement or any of the other Transaction Documents in accordance with its specific terms. It is accordingly agreed that
the Non-defaulting Party shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this
Agreement or such other Transaction Document and to enforce specifically the terms and provisions hereof or thereof, this being
in addition to any other remedy to which the Non-defaulting Party may be entitled under the Transaction Documents, at law or in
equity. For the avoidance of doubt, in the event the Non-defaulting Party seeks to obtain an injunction against Company or specific
performance of any provision of any Transaction Document, such action shall not be a waiver of any right of Non-defaulting Party
under any Transaction Document, at law, or in equity, including without limitation its rights to arbitrate any Claim pursuant to
the terms of the Transaction Documents.

 

    	 	6	 

     

    

 

9.5. Calculation
Disputes. Notwithstanding the Arbitration Provisions, in the case of a dispute as to any determination or arithmetic calculation
under the Transaction Documents, including without limitation, calculating the Outstanding Balance, Lender Conversion Price (as
defined in the Note), Lender Conversion Shares (as defined in the Note), Redemption Conversion Price, Redemption Conversion Shares
(as defined in the Note), Conversion Factor (as defined in the Note), Market Price (as defined in the Note), or VWAP (as defined
in the Note) (each, a “Calculation”), Company or Investor (as the case may be) shall submit any disputed Calculation
via email or facsimile with confirmation of receipt (i) within two (2) Trading Days after receipt of the applicable notice giving
rise to such dispute to Company or Investor (as the case may be) or (ii) if no notice gave rise to such dispute, at any time after
Investor learned of the circumstances giving rise to such dispute. If Investor and Company are unable to agree upon such Calculation
within two (2) Trading Days of such disputed Calculation being submitted to Company or Investor (as the case may be), then Investor
will promptly submit via email or facsimile the disputed Calculation to Unkar Systems Inc. (“Unkar Systems”).
Investor shall cause Unkar Systems to perform the Calculation and notify Company and Investor of the results no later than ten
(10) Trading Days from the time it receives such disputed Calculation. Unkar Systems’ determination of the disputed Calculation
shall be binding upon all parties absent demonstrable error. Unkar Systems’ fee for performing such Calculation shall be
paid by the incorrect party, or if both parties are incorrect, by the party whose Calculation is furthest from the correct Calculation
as determined by Unkar Systems. In the event Company is the losing party, no extension of the Delivery Date (as defined in the
Note) shall be granted and Company shall incur all effects for failing to deliver the applicable shares in a timely manner as set
forth in the Transaction Documents.

 

9.6. Counterparts.
Each Transaction Document 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 a Transaction Document (or such party’s signature page thereof) will be deemed to be an executed original
thereof.

 

9.7. Document
Imaging. Either Party shall be entitled, in its sole discretion, to image or make copies of all or any selection of the agreements,
instruments, documents, and items and records governing, arising from or relating to any of Company’s loans, including, without
limitation, this Agreement and the other Transaction Documents, or either Party may destroy or archive the paper originals. The
Parties (i) waive any right to insist or require that the other Party produce paper originals, (ii) agree that such images shall
be accorded the same force and effect as the paper originals, (iii) agree that both Parties are entitled to use such images in
lieu of destroyed or archived originals for any purpose, including as admissible evidence in any demand, presentment or other proceedings,
and (iv) further agree that any executed facsimile (faxed), scanned, emailed, or other imaged copy of this Agreement or any other
Transaction Document shall be deemed to be of the same force and effect as the original manually executed document.

 

9.8. Headings.
The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of,
this Agreement.

 

9.9. Severability.
In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform
to such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the
validity or enforceability of any other provision hereof.

 

    	 	7	 

     

    

 

9.10. Entire
Agreement. This Agreement, together with the other Transaction Documents, contains 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 Company
nor Investor makes any representation, warranty, covenant or undertaking with respect to such matters. For the avoidance of doubt,
all prior term sheets or other documents between Company and Investor, or any affiliate thereof, related to the transactions contemplated
by the Transaction Documents (collectively, “Prior Agreements”), that may have been entered into between Company
and Investor, or any affiliate thereof, are hereby null and void and deemed to be replaced in their entirety by the Transaction
Documents. To the extent there is a conflict between any term set forth in any Prior Agreement and the term(s) of the Transaction
Documents, the Transaction Documents shall govern.

 

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

 

9.12. Amendments.
No provision of this Agreement may be waived or amended other than by an instrument in writing signed by both parties hereto.

 

9.13. Notices.
Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively
given on the earliest of: (i) the date delivered, if delivered by personal delivery as against written receipt therefor or by email
to an executive officer, or by facsimile (with successful transmission confirmation), (ii) the earlier of the date delivered or
the third Trading Day after deposit, postage prepaid, in the United States Postal Service by certified mail, or (iii) the earlier
of the date delivered or the third Trading Day after mailing by express courier, with delivery costs and fees prepaid, in each
case, addressed to each of the other parties thereunto entitled at the following addresses (or at such other addresses as such
party may designate by five (5) calendar days’ advance written notice similarly given to each of the other parties hereto):

 

If to Company:

 

China Recycling Energy Corporation

Attn: Guohua Ku

4/F Block C

Rong Cheng Yun Gu Building

Keji 3rd, Yanta District

Xi An City 710075

China

 

If to Investor:

 

Iliad Research and Trading, L.P.

Attn: John Fife

303 East Wacker Drive, Suite 1040

Chicago, Illinois 60601

 

    	 	8	 

     

    

 

With a copy to (which copy shall not constitute notice):

 

Hansen Black Anderson Ashcraft PLLC

Attn: Jonathan Hansen

3051 West Maple Loop Drive, Suite 325

Lehi, Utah 84043

 

9.14. Successors
and Assigns. This Agreement or any of the severable rights and obligations inuring to the benefit of or to be performed by
either party hereunder may not be assigned to a third party, including its affiliates, in whole or in part, without prior written
consent of the other party. Neither party may assign its rights or obligations under this Agreement or delegate its duties hereunder
without the prior written consent of the other party.

 

9.15. Survival.
The representations and warranties of Company and the agreements and covenants set forth in this Agreement shall survive the Closing
hereunder notwithstanding any due diligence investigation conducted by or on behalf of Investor. Company agrees to indemnify and
hold harmless Investor and all its officers, directors, employees, attorneys, and agents for loss or damage arising as a result
of or related to any breach or alleged breach by Company of any of its representations, warranties and covenants set forth in this
Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

 

9.16. 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.

 

9.17. Rights
and Remedies Cumulative; Liquidated Damages. All rights, remedies, and powers conferred in this Agreement and the Transaction
Documents are cumulative and not exclusive of any other rights or remedies, and shall be in addition to every other right, power,
and remedy that a Party may have, whether specifically granted in this Agreement or any other Transaction Document, or existing
at law, in equity, or by statute, and any and all such rights and remedies may be exercised from time to time and as often and
in such order as the Party may deem expedient. The parties acknowledge and agree that upon Defaulting Party’s failure to
comply with the provisions of the Transaction Documents, the Non-defaulting Party’s damages would be uncertain and difficult
(if not impossible) to accurately estimate because of the parties’ inability to predict future interest rates and future
share prices, the Non-defaulting Party’s increased risk, and the uncertainty of the availability of a suitable substitute
investment opportunity for the Non-defaulting Party, among other reasons. Accordingly, any fees, charges, and default interest
due under the Note and the other Transaction Documents are intended by the parties to be, and shall be deemed, liquidated damages
(under Company’s and Investor’s expectations that any such liquidated damages will tack back to the Closing Date for
purposes of determining the holding period under Rule 144 under the 1933 Act). The parties agree that such liquidated damages are
a reasonable estimate of the Non-defaulting Party’s actual damages and not a penalty, and shall not be deemed in any way
to limit any other right or remedy the Non-defaulting Party may have hereunder, at law or in equity. The parties acknowledge and
agree that under the circumstances existing at the time this Agreement is entered into, such liquidated damages are fair and reasonable
and are not penalties. All fees, charges, and default interest provided for in the Transaction Documents are agreed to by the parties
to be based upon the obligations and the risks assumed by the parties as of the Closing Date and are consistent with investments
of this type. The liquidated damages provisions of the Transaction Documents shall not limit or preclude a party from pursuing
any other remedy available at law or in equity; provided, however, that the liquidated damages provided for in the Transaction
Documents are intended to be in lieu of actual damages.

 

    	 	9	 

     

    

 

9.18. Ownership
Limitation. Notwithstanding anything to the contrary contained in this Agreement or the other Transaction Documents, if at
any time Investor would be issued shares of Common Stock under any of the Transaction Documents, but such issuance would cause
Investor (together with its affiliates) to beneficially own a number of shares exceeding the Maximum Percentage (as defined in
the Note), then Company must not issue to Investor the shares that would cause Investor to exceed the Maximum Percentage. The shares
of Common Stock issuable to Investor that would cause the Maximum Percentage to be exceeded are referred to herein as the “Ownership
Limitation Shares”. Company shall reserve the Ownership Limitation Shares for the exclusive benefit of Investor. From
time to time, Investor may notify Company in writing of the number of the Ownership Limitation Shares that may be issued to Investor
without causing Investor to exceed the Maximum Percentage. Upon receipt of such notice, Company shall be unconditionally obligated
to immediately issue such designated shares to Investor, with a corresponding reduction in the number of the Ownership Limitation
Shares. For purposes of this Section, beneficial ownership of Common Stock will be determined under Section 13(d) of the 1934 Act.

 

9.19. Attorneys’
Fees and Cost of Collection. In the event of any arbitration or action at law or in equity to enforce or interpret the terms
of this Agreement or any of the other Transaction Documents, the parties agree that the party who is awarded the most money (which,
for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges awarded
to any party) shall be deemed the prevailing party for all purposes and shall therefore be entitled to an additional award of the
full amount of the reasonable attorneys’ fees, deposition costs, and expenses paid by such prevailing party in connection
with arbitration or litigation 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. If (i) the Note is placed in the hands of an attorney for collection or enforcement prior
to commencing arbitration or legal proceedings, or is collected or enforced through any arbitration or legal proceeding, or Investor
otherwise takes action to collect amounts due under the Note or to enforce the provisions of the Note, or (ii) there occurs
any bankruptcy, reorganization, receivership of Company or other proceedings affecting Company’s creditors’ rights
and involving a claim under the Note; then Company shall pay the direct costs incurred by Investor for such collection, enforcement
or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation,
reasonable attorneys’ fees, expenses, deposition costs, and disbursements.

 

9.20. Waiver.
No waiver of any provision of this Agreement 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.

 

9.21. Waiver
of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR THE RELATIONSHIPS
OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON
LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND
VOLUNTARILY WAIVING SUCH PARTY’S RIGHT TO DEMAND TRIAL BY JURY.

 

    	 	10	 

     

    

 

9.22. Time
is of the Essence. Time is expressly made of the essence with respect to each and every provision of this Agreement and the
other Transaction Documents.

 

9.23. No
Changes; Signature Pages. Each Party, as well as the person signing each Transaction Document on behalf of such Party, represents
and warrants to the other Party that it has not made any changes to this Agreement or any other Transaction Document except those
that have been conspicuously disclosed to the other Party in a “redline” or similar draft of the applicable Transaction
Document, which clearly marks all changes such Party has made to the applicable Transaction Document. Moreover, the versions of
the Transaction Documents signed by each Party are the same versions the other Party delivered to it as being the “final”
versions of the Transaction Documents and both Investor and Company represent and warrant that they have not made any changes to
such “final” versions of the Transaction Documents and that the versions such Party signed are the same versions the
other Party delivered to it. In the event one Party has made any changes to any Transaction Document that are not conspicuously
disclosed to the other Party in a “redline” or similar draft of the applicable Transaction Document and that have not
been explicitly accepted and agreed upon by the other Party, such Party making the changes acknowledges and agrees that any such
changes shall not be considered part of the final document set. Finally, and in furtherance of the foregoing, Company agrees and
authorizes Investor to compile the “final” versions of the Transaction Documents, which shall consist of Company’s
executed signature pages for all Transaction Documents being applied to the last set of the Transaction Documents that Investor
delivered to Company. Investor represents and warrants that it has not made any changes to the last version of Transaction Documents
agreed and sent to Investor by the Company when compiling the documents. Company agrees that such versions of the Transaction Documents
that have been collated by Investor shall be deemed to be the final versions of the Transaction Documents for all purposes, provided
that the representations and warranties of the Investors in the preceding sentence is true.

 

9.24. Voluntary
Agreement. Each Party has carefully read this Agreement and each of the other Transaction Documents and has asked any questions
needed for it to understand the terms, consequences and binding effect of this Agreement and each of the other Transaction Documents
and fully understand them. Each Party has had the opportunity to seek the advice of an attorney of its choosing, or has waived
the right to do so, and is executing this Agreement and each of the other Transaction Documents voluntarily and without any duress
or undue influence by the other Party or anyone else.

 

[Remainder of page intentionally left
blank; signature page follows]

 

    	 	11	 

     

    

 

IN WITNESS WHEREOF,
the undersigned Investor and Company have caused this Agreement to be duly executed as of the date first above written.

 

SUBSCRIPTION AMOUNT:

 

	Principal Amount of Note:	 	$	1,070,000.00	 
	 	 	 	 	 
	Purchase Price:	 	$	1,000,000.00	 

 

	 	INVESTOR:
	 	 
	 	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

 

	 	COMPANY:
	 	 
	 	China Recycling Energy Corporation
	 	 	 
	 	By:	/s/ Guohua Ku
	 	 	Guohua Ku, Chairman & Chief Executive Officer

 

[Signature Page to Securities Purchase Agreement]

 

     

     

    

 

ATTACHED EXHIBITS:

 

	Exhibit A	Note
	Exhibit B	Officer’s Certificate
	Exhibit C	Irrevocable Transfer Agent Instructions
	Exhibit D	Secretary’s Certificate
	Exhibit E	Share Issuance Resolution
	Exhibit F	Arbitration Provisions

 

     

     

    

 

EXHIBIT A

 

CONVERTIBLE PROMISSORY NOTE

 

	Effective Date: July 11, 2018	U.S. $1,070,000.00

 

FOR VALUE RECEIVED,
China Recycling Energy Corporation, a Nevada corporation (“Borrower”),
promises to pay to Iliad Research and Trading, L.P., a Utah limited partnership,
or its successors or assigns (“Lender”), $1,070,000.00 and any interest, fees, charges, and late fees on the
date that is twenty-four (24) 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 eight percent (8%) per annum from the
Purchase Price Date until the same is paid in full. This Convertible Promissory Note (this “Note”) is issued
and made effective as of July 11, 2018 (the “Effective Date”). This Note is issued pursuant to that certain
Securities Purchase Agreement dated July 11, 2018, 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 $50,000.00. 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 included in the initial principal balance of this Note. The purchase price for
this Note shall be $1,000,000.00 (the “Purchase Price”), computed as follows: $1,070,000.00 original principal
balance, less the OID, less the Transaction Expense Amount. The Purchase Price shall be payable by Lender via wire transfer of
immediately available funds.

 

Payment; Prepayment;
Maturity Date Extension.

 

1.1. Payment.
Provided there is an Outstanding Balance, on each Redemption Date (as defined below), Borrower shall pay to Lender an amount equal
to the Redemption Amount (as defined below) due on such Redemption Date in accordance with Section 8. All payments owing hereunder
shall be in lawful money of the United States of America or Conversion Shares (as defined below), as provided for herein, 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, so long as Borrower has not received a Lender Conversion Notice (as defined below) or a Redemption
Notice (as defined below) from Lender where the applicable Conversion Shares have not yet been delivered and so long as no Event
of Default has occurred since the Effective Date (whether declared by Lender or undeclared and regardless of whether or not cured),
then Borrower shall have the right, exercisable on not less than five (5) Trading Days prior written notice to Lender to prepay
the Outstanding Balance of this Note, in full, in accordance with this Section 1.2. Any notice of prepayment hereunder (an “Optional
Prepayment Notice”) shall be delivered to Lender at its registered address and shall state: (i) that Borrower is exercising
its right to prepay this Note, and (ii) the date of prepayment, which shall be not less than five (5) Trading Days from the date
of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), Borrower
shall make payment of the Optional Prepayment Amount (as defined below) to or upon the order of Lender as may be specified by Lender
in writing to Borrower. If Borrower exercises its right to prepay this Note, Borrower shall make payment to Lender of an amount
in cash equal to 125% (the “Prepayment Premium”) multiplied by the then Outstanding Balance of this Note (the
“Optional Prepayment Amount”). In the event Borrower delivers the Optional Prepayment Amount to Lender prior
to the Optional Prepayment Date or without delivering an Optional Prepayment Notice to Lender as set forth herein without Lender’s
prior written consent, the Optional Prepayment Amount shall not be deemed to have been paid to Lender until the Optional Prepayment
Date. Moreover, in such event the Optional Prepayment Liquidated Damages Amount will automatically be added to the Outstanding
Balance of this Note on the day Borrower delivers the Optional Prepayment Amount to Lender. In the event Borrower delivers the
Optional Prepayment Amount without an Optional Prepayment Notice, then the Optional Prepayment Date will be deemed to be the date
that is five (5) Trading Days from the date that the Optional Prepayment Amount was delivered to Lender and Lender shall be entitled
to exercise its conversion rights set forth herein during such five (5) day period.

 

    	 	1	 

     

    

 

1.3. Maturity Date
Extension. In the event this Note has not been repaid by the Maturity Date and provided that no Event of Default shall have
occurred hereunder at any time after the Effective Date, then the Maturity Date shall automatically be extended for an additional
year (the “Extension Period”). No interest shall accrue on this Note during the Extension Period. Notwithstanding
the foregoing, upon the occurrence of an Event of Default during the Extension Period, the Extension Period shall immediately terminate
and this Note shall immediately be due and payable in full.

 

2. Security.
This Note is not secured.

 

3. Lender Optional
Conversion.

 

3.1. Lender Conversions.
Lender has the right at any time after the Purchase Price Date until the Outstanding Balance has been paid in full, including without
limitation until any Optional Prepayment Date (even if Lender has received an Optional Prepayment Notice) or at any time thereafter
with respect to any amount that is not prepaid (each instance of conversion is referred to herein as a “Lender Conversion”)
all or any part of the Outstanding Balance into shares (“Lender 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 Lender Conversion Shares equals the amount being converted (the “Conversion Amount”) divided by
the Lender Conversion Price (as defined below). Conversion notices in the form attached hereto as Exhibit A (each, a “Lender
Conversion Notice”) may be effectively delivered to Borrower by any method of Lender’s choice (including but not
limited to facsimile, email, mail, overnight courier, or personal delivery), and all Lender Conversions shall be cashless and not
require further payment from Lender. Borrower shall deliver the Lender Conversion Shares from any Lender Conversion to Lender in
accordance with Section 9 below.

 

3.2. Lender Conversion
Price. Subject to adjustment as set forth in this Note, the price at which Lender has the right to convert all or any portion
of the Outstanding Balance into Common Stock is $3.00 per share of Common Stock (the “Lender Conversion Price”).
However, in the event the Market Capitalization falls below the Minimum Market Capitalization at any time, then in such event the
Lender Conversion Price for all Lender Conversions occurring after the first date of such occurrence shall equal the lower of the
Lender Conversion Price and the Market Price as of any applicable date of Conversion.

 

    	 	2	 

     

    

 

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) Borrower fails to deliver any Lender
Conversion Shares in accordance with the terms hereof except such failure to deliver is due to ownership limitation as set forth
in Section 11 or otherwise legally restricted; (c) Borrower fails to deliver any Redemption Conversion Shares (as defined below)
in accordance with the terms hereof except such failure to deliver is due to ownership limitation as set forth in Section 11 or
otherwise legally restricted; (d) 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; (e) Borrower fails to pay, or admits in writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any; (f) Borrower makes a general assignment for the benefit of creditors; (g) Borrower files a petition
for relief under any bankruptcy, insolvency or similar law (domestic or foreign); (h) an involuntary bankruptcy proceeding is commenced
or filed against Borrower; (i) Borrower defaults or otherwise fails to observe or perform any covenant, obligation, condition or
agreement of Borrower contained herein or in any other Transaction Document, other than those specifically set forth in this Section
4.1 and Section 4 of the Purchase Agreement; (j) any representation, warranty or other statement made or furnished by or on behalf
of Borrower 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; (k) the occurrence of a Fundamental Transaction
without Lender’s prior written consent; (l) Borrower fails to maintain the Share Reserve as required under the Purchase Agreement;
(m) Borrower effectuates a reverse split of its Common Stock without twenty (20) Trading Days prior written notice to Lender; (n)
any 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; (o) Borrower fails to be DWAC Eligible; (p) Borrower fails to observe or perform
any covenant set forth in Section 4 of the Purchase Agreement; or (q) Borrower breaches any covenant or other term or condition
contained in any Other Agreements. Notwithstanding the foregoing, the occurrence of the events described in Section 4.1(j) –
(q) above shall not be considered an Event of Default if such event is cured within five (5) Trading 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 (d), (e), (f), (g) or (h) 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. For the avoidance of doubt, Lender may continue making Lender Conversions and Redemption Conversions
(as defined below) at any time following an Event of Default until such time as the Outstanding Balance is paid in full. Borrower
further acknowledges and agrees that Lender may continue making Conversions following the entry of any judgment or arbitration
award in favor of Lender until such time that the entire judgment amount or arbitration award is paid in full. Borrower agrees
that any judgment or arbitration award will, by its terms, be made convertible into Common Stock. Any Conversions made following
a judgment or arbitration award shall be made pursuant to the conversion mechanics for Redemption Conversions set forth in Section
8 of this Note. In such event, Borrower and Lender agree that it is their expectation that any such judgment amount or arbitration
award that is converted will tack back to the Purchase Price Date for purposes of determining the holding period under Rule 144.
Additionally, following the occurrence of any Event of Default, Borrower may, at its option, pay any Lender Conversion in cash
instead of Lender Conversion Shares by paying to Lender on or before the applicable Delivery Date (as defined below) a cash amount
equal to the number of Lender Conversion Shares set forth in the applicable Lender Conversion Notice multiplied by the highest
intra-day trading price of the Common Stock that occurs during the period beginning on the date the applicable Event of Default
occurred and ending on the date of the applicable Lender Conversion Notice. In connection with acceleration described herein, Lender
may 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 with respect to Borrower’s failure to timely deliver Conversion Shares upon Conversion of the Note
as required pursuant to the terms hereof.

 

    	 	3	 

     

    

 

4.3. Certain Additional
Rights. Notwithstanding anything to the contrary herein, in the event Borrower fails to make any payment when due or fails
to deliver any Conversion Shares as and when required under this Note, then the Lender Conversion Price for all Lender Conversions
occurring after the date of such failure to pay shall equal the lower of the Lender Conversion Price and the Market Price as of
any applicable date of Conversion. For the avoidance of doubt, Lender’s exercise of the rights granted to it pursuant to
this Section 4.3 shall not relieve Borrower of its obligation to continue paying the Redemption Amount on all future Redemption
Dates.

 

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 or Conversions 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. Adjustment of
Lender Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision hereof, if Borrower
at any time on or after the Effective Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or
more classes of its outstanding shares of Common Stock into a greater number of shares, the Lender Conversion Price in effect immediately
prior to such subdivision will be proportionately reduced. Without limiting any provision hereof, if Borrower at any time on or
after the Effective Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares
of Common Stock into a smaller number of shares, the Lender Conversion Price in effect immediately prior to such combination will
be proportionately increased. Any adjustment pursuant to this Section 7 shall become effective immediately after the effective
date of such subdivision or combination. If any event requiring an adjustment under this Section 7 occurs during the period that
a Lender Conversion Price is calculated hereunder, then the calculation of such Lender Conversion Price shall be adjusted appropriately
to reflect such event.

 

    	 	4	 

     

    

 

8. Borrower Redemptions.

 

8.1. Redemption Conversion
Price. Subject to the adjustments set forth herein, the conversion price for each Redemption Conversion (as defined below)
(the “Redemption Conversion Price”) shall be the lesser of (a) the Lender Conversion Price, and (b) the Market
Price.

 

8.2. Redemption Conversions.
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 all or any portion of the Note (such amount, the “Redemption Amount”)
by providing Borrower with a notice substantially in the form attached hereto as Exhibit B (each, a “Redemption
Notice”, and each date on which Lender delivers a Redemption Notice, a “Redemption Date”). Notwithstanding
the foregoing, during the nine-month period following the Purchase Price Date, Lender may not, in the aggregate, redeem more than
50% of the then-current Outstanding Balance (the “Maximum Redemption Amount Cap”); provided, however
that the Maximum Redemption Amount Cap shall no longer apply after the earlier of the first occurrence of any Event of Default
hereunder and the date that is nine (9) months from the Purchase Price Date. 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 Redemption Amounts do not exceed the Maximum
Redemption Amount Cap (for so long as the Maximum Redemption Amount Cap remains in effect; thereafter, there shall be no limit
on the Redemption Amounts). Payments of each Redemption Amount may be made (a) in cash, or (b) by converting such Redemption Amount
into shares of Common Stock (“Redemption Conversion Shares”, and together with the Lender Conversion Shares,
the “Conversion Shares”) in accordance with this Section 8 (each, a “Redemption Conversion”)
per the following formula: the number of Redemption Conversion Shares equals the portion of the applicable Redemption Amount being
converted divided by the Redemption Conversion Price, or (c) by any combination of the foregoing, so long as the cash is delivered
to Lender on the third Trading Day immediately following the applicable Redemption Date and the Redemption Conversion Shares are
delivered to Lender on or before the applicable Delivery Date. Notwithstanding the foregoing, Borrower will not be entitled to
elect a Redemption Conversion with respect to any portion of any applicable Redemption Amount and shall be required to pay the
entire amount of such Redemption Amount in cash, if on the applicable Redemption Date there is an Equity Conditions Failure, and
such failure is not waived in writing by Lender. Notwithstanding that failure to repay this Note in full by the Maturity Date is
an Event of Default, the Redemption Dates shall continue after the Maturity Date pursuant to this Section 8 until the Outstanding
Balance is repaid in full.

 

8.3. Allocation of
Redemption Amounts. Following its receipt of a Redemption Notice, Borrower may either ratify Lender’s proposed allocation
in the applicable Redemption Notice or elect to change the allocation by written notice to Lender by email or fax within twenty-four
(24) hours of its receipt of such Redemption Notice, so long as the sum of the cash payments and the amount of Redemption Conversions
equal the applicable Redemption Amount. If Borrower fails to notify Lender of its election to change the allocation prior to the
deadline set forth in the previous sentence, it shall be deemed to have ratified and accepted the allocation set forth in the applicable
Redemption Notice prepared by Lender. Borrower acknowledges and agrees that the amounts and calculations set forth thereon are
subject to correction or adjustment because of error, mistake, or any adjustment resulting from an Event of Default or other adjustment
permitted under the Transaction Documents (an “Adjustment”). Furthermore, no error or mistake in the preparation
of such notices, or failure to apply any Adjustment that could have been applied prior to the preparation of a Redemption Notice
may be deemed a waiver of Lender’s right to enforce the terms of any Note, even if such error, mistake, or failure to include
an Adjustment arises from Lender’s own calculation. Borrower shall deliver the Redemption Conversion Shares from any Redemption
Conversion to Lender in accordance with Section 9 below on or before each applicable Delivery Date. If Borrower elects to pay a
Redemption Amount in cash, such payment must be delivered on the second Trading Day immediately following the Redemption Date.
If Borrowers elects to make a payment in cash and fails to make such payment by the required due date on two (2) separate occasions,
Borrower shall lose the right to make payments of Redemption Amounts in cash in the future without Lender’s written consent.

 

    	 	5	 

     

    

 

9. Method of Conversion
Share Delivery. On or before the close of business on the fifth (5th) Trading Day following each Redemption Date
or the fifth (5th) Trading Day following the date of delivery of a Lender Conversion Notice, as applicable (the “Delivery
Date”), Borrower shall, provided it is DWAC Eligible at such time, deliver or cause its transfer agent to deliver the
applicable Conversion Shares electronically via DWAC to the account designated by Lender in the applicable Lender Conversion Notice
or Redemption Notice. If Borrower is not DWAC Eligible, it shall deliver to Lender or its broker (as designated in the Lender Conversion
Notice or Redemption Notice, as applicable), via reputable overnight courier, a certificate representing the number of shares of
Common Stock equal to the number of Conversion Shares to which Lender shall be entitled, registered in the name of Lender or its
designee. For the avoidance of doubt, Borrower has not met its obligation to deliver Conversion Shares by the Delivery Date unless
Lender or its broker, as applicable, has actually received the certificate representing the applicable Conversion Shares no later
than the close of business on the relevant Delivery Date pursuant to the terms set forth above. Moreover, and notwithstanding anything
to the contrary herein or in any other Transaction Document, in the event Borrower or its transfer agent refuses to deliver any
Conversion Shares to Lender on grounds that such issuance is in violation of Rule 144 under the Securities Act of 1933, as amended
(“Rule 144”), Borrower shall deliver or cause its transfer agent to deliver the applicable Conversion Shares
to Lender with a restricted securities legend, but otherwise in accordance with the provisions of this Section 9. In conjunction
therewith, Borrower will also deliver to Lender a written opinion from its counsel or its transfer agent’s counsel opining
as to why the issuance of the applicable Conversion Shares violates Rule 144.

 

10. Conversion Delays.
If Borrower fails to deliver Conversion Shares in accordance with the timeframes stated in Sections 9, Lender, at any time prior
to selling all of those Conversion Shares may rescind in whole or in part that particular Conversion attributable to the unsold
Conversion Shares, with a corresponding increase to the Outstanding Balance (any returned amount will tack back to the Purchase
Price Date for purposes of determining the holding period under Rule 144). In addition, for each Lender Conversion, in the event
that Lender Conversion Shares are not delivered by the sixth (6th) Trading Day (inclusive of the day of the Lender Conversion),
a late fee equal to the greater of (a) $500.00 and (b) 2% of the applicable Lender Conversion Share Value rounded to the nearest
multiple of $100.00 (but in any event the cumulative amount of such late fees for each Lender Conversion shall not exceed 100%
of the applicable Lender Conversion Share Value) will be assessed for each day after the fifth (5th) Trading Day (inclusive
of the day of the Lender Conversion) until Lender Conversion Share delivery is made; and such late fee will be added to the Outstanding
Balance (such fees, the “Conversion Delay Late Fees”). For illustration purposes only, if Lender delivers a
Lender Conversion Notice to Borrower pursuant to which Borrower is required to deliver 100,000 Lender Conversion Shares to Lender
and on the Delivery Date such Lender Conversion Shares have a Lender Conversion Share Value of $20,000.00 (assuming a Closing Trade
Price on the Delivery Date of $0.20 per share of Common Stock), then in such event a Conversion Delay Late Fee in the amount of
$500.00 per day (the greater of $500.00 per day and $20,000.00 multiplied by 2%, which is $400.00) would be added to the Outstanding
Balance of the Note until such Lender Conversion Shares are delivered to Lender. For purposes of this example, if the Lender Conversion
Shares are delivered to Lender twenty (20) days after the applicable Delivery Date, the total Conversion Delay Late Fees that would
be added to the Outstanding Balance would be $10,000.00 (20 days multiplied by $500.00 per day). If the Lender Conversion Shares
are delivered to Lender one hundred (100) days after the applicable Delivery Date, the total Conversion Delay Late Fees that would
be added to the Outstanding Balance would be $20,000.00 (100 days multiplied by $500.00 per day, but capped at 100% of the Lender
Conversion Share Value).

 

    	 	6	 

     

    

 

11. Ownership Limitation.
Notwithstanding anything to the contrary contained in this Note or the other Transaction Documents, if at any time Lender shall
or would be issued shares of Common Stock under any of the Transaction Documents, but such issuance 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”),
then Borrower must not issue to Lender shares of Common Stock which would exceed 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. The shares of Common Stock issuable
to Lender that would cause the Maximum Percentage to be exceeded are referred to herein as the “Ownership Limitation Shares”.
Borrower will reserve the Ownership Limitation Shares for the exclusive benefit of Lender. From time to time, Lender may notify
Borrower in writing of the number of the Ownership Limitation Shares that may be issued to Lender without causing Lender to exceed
the Maximum Percentage. Upon receipt of such notice, Borrower shall be unconditionally obligated to immediately issue such designated
shares to Lender, with a corresponding reduction in the number of the Ownership Limitation Shares. Notwithstanding the forgoing,
the term “4.99%” above shall be replaced with “9.99%” at such time as the Market Capitalization is less
than $10,000,000.00. Notwithstanding any other provision contained herein, if the term “4.99%” is replaced with “9.99%”
pursuant to the preceding sentence, such increase to “9.99%” shall remain at 9.99% until increased, decreased or waived
by Lender as set forth below. 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.

 

12. Payment of Collection
Costs. If this Note is placed in the hands of an attorney for collection or enforcement prior to commencing arbitration or
legal proceedings, or is collected or enforced through any arbitration or legal proceeding, or Lender otherwise takes action to
collect amounts due under this Note or to enforce the provisions of this Note, then Borrower shall pay the costs incurred by Lender
for such collection, enforcement or action including, without limitation, attorneys’ fees and disbursements. Borrower also
agrees to pay for any costs, fees or charges of its transfer agent that are charged to Lender pursuant to any Conversion or issuance
of shares pursuant to this Note.

 

13. 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.

 

14. 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.

 

15. Resolution of
Disputes.

 

15.1. Arbitration
of Disputes. By its 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.

 

15.2. Calculation
Disputes. Notwithstanding the Arbitration Provisions, in the case of a dispute as to any Calculation (as defined in the Purchase
Agreement), such dispute will be resolved in the manner set forth in the Purchase Agreement.

 

    	 	7	 

     

    

 

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

 

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

 

18. Assignments.
Neither party may assign this Note without the prior written consent of the other party; provided, however, that Lender may assign
this Note to any of its affiliates or any trust where John M. Fife’s descendants are beneficiaries without Borrower’s
consent. Any shares of Common Stock issued upon conversion of this Note may be offered, sold, assigned or transferred by Lender
without the consent of Borrower.

 

19. Time is of the
Essence. Time is expressly made of the essence with respect to each and every provision of this Note and the documents and
instruments entered into in connection herewith.

 

20. 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.”

 

21. 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, 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 (under Lender’s and Borrower’s expectations
that any such liquidated damages will tack back to the Purchase Price Date for purposes of determining the holding period under
Rule 144).

 

22. Waiver of Jury
Trial. EACH OF LENDER AND BORROWER IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS NOTE OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY.
THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE STATUTE, LAW, RULE
OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY’S
RIGHT TO DEMAND TRIAL BY JURY.

 

23. Voluntary Agreement.
Borrower has carefully read this Note and has asked any questions needed for Borrower to understand the terms, consequences and
binding effect of this Note and fully understand them. Borrower has had the opportunity to seek the advice of an attorney of Borrower’s
choosing, or has waived the right to do so, and is executing this Note voluntarily and without any duress or undue influence by
Lender or anyone else.

 

24. 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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    	 	8	 

     

    

 

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

 

	 	BORROWER:
	 	 
	 	China Recycling Energy Corporation
	 	 	 
	 	By: 	 
	 	 	Guohua Ku,
	 	 	Chairman & Chief Executive Officer 

 

ACKNOWLEDGED, ACCEPTED AND AGREED:

 

LENDER:

 

	Iliad Research and Trading, L.P.	 
	 	 
	By: Iliad Management, LLC, its General Partner	 
	 	 	 	 	 
	 	By:	Fife Trading, Inc., its Manager	 
	 	 	 	 	 
	 	 	By: 	 	 
	 	 	 	John M. Fife, President	 

 

[Signature Page to
Convertible Promissory Note]

 

     

     

    

 

ATTACHMENT 1

DEFINITIONS

 

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

 

A1. “Bloomberg”
means Bloomberg L.P. (or if that service is not then reporting the relevant information regarding the Common Stock, a comparable
reporting service of national reputation selected by Lender and reasonably satisfactory to Borrower).

 

A2. “Closing
Bid Price” and “Closing Trade Price” means the last closing bid price and last closing trade price,
respectively, for the Common Stock on its principal market, as reported by Bloomberg, or, if its principal market begins to operate
on an extended hours basis and does not designate the closing bid price or the closing trade price (as the case may be) then the
last bid price or last trade price, respectively, of the Common Stock prior to 4:00:00 p.m., New York time, as reported by
Bloomberg, or, if its principal market is not the principal securities exchange or trading market for the Common Stock, the last
closing bid price or last trade price, respectively, of the Common Stock on the principal securities exchange or trading market
where the Common Stock is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price
or last trade price, respectively, of the Common Stock in the over-the-counter market on the electronic bulletin board for the
Common Stock as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for the Common
Stock by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for the Common Stock as
reported by OTC Markets Group, Inc., and any successor thereto. If the Closing Bid Price or the Closing Trade Price cannot be calculated
for the Common Stock on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Trade Price (as the
case may be) of the Common Stock on such date shall be the fair market value as mutually determined by Lender and Borrower. If
Lender and Borrower are unable to agree upon the fair market value of the Common Stock, then such dispute shall be resolved in
accordance with the procedures in Section 15.2. All such determinations shall be appropriately adjusted for any stock dividend,
stock split, stock combination or other similar transaction during such period.

 

A3. “Conversion”
means a Lender Conversion under Section 3 or a Redemption Conversion under Section 8.

 

A4. “Conversion
Factor” means 75%, subject to the following adjustments. If at any time after the Effective Date, Borrower is not DWAC
Eligible, then the then-current Conversion Factor will automatically be reduced by 5% for all future Conversions. If at any time
after the Effective Date, the Conversion Shares are not DTC Eligible, then the then-current Conversion Factor will automatically
be reduced by an additional 5% for all future Conversions. Finally, in addition to the Default Effect, if any Major Default occurs
after the Effective Date, the Conversion Factor shall automatically be reduced for all future Conversions by an additional 5% for
each of the first three (3) Major Defaults that occur after the Effective Date (for the avoidance of doubt, each occurrence of
any Major Default shall be deemed to be a separate occurrence for purposes of the foregoing reductions in Conversion Factor, even
if the same Major Default occurs three (3) separate times). For example, the first time Borrower is not DWAC Eligible, the Conversion
Factor for future Conversions thereafter will be reduced from 75% to 70% for purposes of this example. Following such event, the
first time the Conversion Shares are no longer DTC Eligible, the Conversion Factor for future Conversions thereafter will be reduced
from 70% to 65% for purposes of this example. If, thereafter, there are three (3) separate occurrences of a Major Default pursuant
to Section 4.1(c), then for purposes of this example the Conversion Factor would be reduced by 5% for the first such occurrence,
and so on for each of the second and third occurrences of such Major Default.

 

A5. “Default
Effect” means multiplying the Outstanding Balance as of the date the applicable Event of Default occurred by (a) 15%
for each occurrence of any Major Default, or (b) 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; and provided further that the Default Effect shall not apply to any Event of Default pursuant to Section 4.1(b) hereof.
Notwithstanding the foregoing, in no event shall the Default Effect result in increases to the Outstanding Balance exceeding, in
the aggregate, 25%.

 

A6. “DTC”
means the Depository Trust Company or any successor thereto.

 

    	 	Attachment 1 to Convertible Promissory Note, Page 1	 

     

    

 

A7. “DTC Eligible”
means, with respect to the Common Stock, that such Common Stock is eligible to be deposited in certificate form at the DTC, cleared
and converted into electronic shares by the DTC and held in the name of the clearing firm servicing Lender’s brokerage firm
for the benefit of Lender.

 

A8. “DTC/FAST
Program” means the DTC’s Fast Automated Securities Transfer program.

 

A9. “DWAC”
means the DTC’s Deposit/Withdrawal at Custodian system.

 

A10. “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; (d)
the Conversion Shares are otherwise eligible for delivery via DWAC; (e) Borrower has previously delivered all Conversion Shares
to Lender via DWAC; and (f) Borrower’s transfer agent does not have a policy prohibiting or limiting delivery of the Conversion
Shares via DWAC.

 

A11. “Equity
Conditions Failure” means that any of the following conditions has not been satisfied during any applicable Equity Conditions
Measuring Period (as defined below): (a) with respect to the applicable date of determination all of the Conversion Shares
would be freely tradable under Rule 144 or without the need for registration under any applicable federal or state securities laws
(in each case, disregarding any limitation on conversion of this Note); (b) on each day during the period beginning one month
prior to the applicable date of determination and ending on and including the applicable date of determination (the “Equity
Conditions Measuring Period”), the Common Stock is listed or designated for quotation (as applicable) on any of NYSE,
NASDAQ, OTCQX, or OTCQB (each, an “Eligible Market”) and shall not have been suspended from trading on any such
Eligible Market (other than suspensions of not more than two (2) Trading Days and occurring prior to the applicable date of
determination due to business announcements by Borrower); (c) on each day during the Equity Conditions Measuring Period, Borrower
shall have delivered all shares of Common Stock issuable upon conversion of this Note on a timely basis as set forth in Section 8.1
hereof and all other shares of capital stock required to be delivered by Borrower on a timely basis as set forth in the other Transaction
Documents; (d) any shares of Common Stock to be issued in connection with the event requiring determination may be issued
in full without violating Section 11 hereof (Lender acknowledges that Borrower shall be entitled to assume that this condition
has been met for all purposes hereunder absent written notice from Lender); (e) any shares of Common Stock to be issued in
connection with the event requiring determination may be issued in full without violating the rules or regulations of the Eligible
Market on which the Common Stock is then listed or designated for quotation (as applicable); (f) on each day during the Equity
Conditions Measuring Period, no public announcement of a pending, proposed or intended Fundamental Transaction shall have occurred
which has not been abandoned, terminated or consummated; (g) Borrower shall have no knowledge of any fact that would reasonably
be expected to cause any of the Conversion Shares to not be freely tradable without the need for registration under any applicable
state securities laws (in each case, disregarding any limitation on conversion of this Note); (h) on each day during the Equity
Conditions Measuring Period, Borrower otherwise shall have been in material compliance with each, and shall not have breached any,
term, provision, covenant, representation or warranty of any Transaction Document; (i) without limiting clause (j) above,
on each day during the Equity Conditions Measuring Period, there shall not have occurred an Event of Default or an event that with
the passage of time or giving of notice would constitute an Event of Default; (k) on each Redemption Date, the average and median
daily dollar volume of the Common Stock on its principal market for the previous twenty (20) and two hundred (200) Trading Days
shall be greater than $200,000.00; (l) the ten (10) day average VWAP of the Common Stock is greater than $1.00, (m) the Market
Capitalization shall be above the Minimum Market Capitalization; and (n) the Common Stock shall be DWAC Eligible as of each applicable
Redemption Date or other date of determination.

 

A12. “Excluded
Securities” means any shares of Common Stock, options, or convertible securities issued or issuable in connection with
any Approved Stock Plan; provided that the option term, exercise price or similar provisions of any issuances pursuant to
such Approved Stock Plan are not amended, modified or changed on or after the Purchase Price Date.

 

A13. “Free
Trading” means that (a) the shares or certificate(s) representing the applicable shares of Common Stock 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.

 

    	 	Attachment 1 to Convertible Promissory Note, Page 2	 

     

    

 

A14. “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 (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.

 

A15. “Lender
Conversion Share Value” means the product of the number of Lender Conversion Shares deliverable pursuant to any Lender
Conversion multiplied by the Closing Trade Price of the Common Stock on the Delivery Date for such Lender Conversion.

 

A16. “Major
Default” means any Event of Default occurring under Sections 4.1(a), 4.1(c), 4.1(l), or 4.1(p) of this Note.

 

A17. “Mandatory
Default Amount” means the greater of (a) the Outstanding Balance divided by the Redemption Conversion Price on the date
the Mandatory Default Amount is demanded, multiplied by the VWAP on the date the Mandatory Default Amount is demanded, or (b) the
Outstanding Balance following the application of the Default Effect.

 

A18. “Market
Capitalization” means a number equal to (a) the average VWAP of the Common Stock for the immediately preceding fifteen
(15) Trading Days, multiplied by (b) the aggregate number of outstanding shares of Common Stock as reported on Borrower’s
most recently filed Form 10-Q or Form 10-K.

 

A19. “Market
Price” means the Conversion Factor multiplied by the lowest Closing Bid Price during the twenty (20) Trading Days immediately
preceding the applicable Conversion.

 

A20. “Minimum
Market Capitalization” means $12,000,000.00.

 

A21. “Minor
Default” means any Event of Default that is not a Major Default.

 

A22. “OID”
means an original issue discount.

 

A23. “Optional
Prepayment Liquidated Damages Amount” means an amount equal to the difference between (a) the product of (i) the number
of shares of Common Stock obtained by dividing (1) the applicable Optional Prepayment Amount by (2) the Lender Conversion Price
as of the date Borrower delivered the applicable Optional Prepayment Amount to Lender, multiplied by (ii) the Closing Trade Price
of the Common Stock on the date Borrower delivered the applicable Optional Prepayment Amount to Lender, and (b) the applicable
Optional Prepayment Amount paid by Borrower to Lender. For illustration purposes only, if the applicable Optional Prepayment Amount
were $50,000.00, the Lender Conversion Price as of the date the Optional Prepayment Amount was paid to Lender was equal to $0.75
per share of Common Stock, and the Closing Trade Price of a share of Common Stock as of such date was equal to $1.00, then the
Optional Prepayment Liquidated Damages Amount would equal $16,666.67 computed as follows: (a) $66,666.67 (calculated as (i) (1)
$50,000.00 divided by (2) $0.75 multiplied by (ii) $1.00) minus (b) $50,000.00.

 

    	 	Attachment 1 to Convertible Promissory Note, Page 3	 

     

    

 

A24. “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.

 

A25. “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, Conversion, 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 related to Conversions, and any other fees or charges (including without limitation Conversion Delay Late
Fees) incurred under this Note.

 

A26. “Purchase
Price Date” means the date the Purchase Price is delivered by Lender to Borrower.

 

A27. “Trading
Day” means any day on which the New York Stock Exchange is open for trading.

 

A28. “VWAP”
means the volume weighted average price of the Common stock on the principal market for a particular Trading Day or set of Trading
Days, as the case may be, as reported by Bloomberg.

 

    	 	Attachment 1 to Convertible Promissory Note, Page 4	 

     

    

 

EXHIBIT A

 

Iliad Research and Trading, L.P.

303 East Wacker Drive, Suite 1040

Chicago, Illinois 60601

 

	China Recycling Energy Corporation	 	Date: __________________

Attn: GuangYu Wu, CEO

Suite 909, Tower B

Chang An International Building

Xi An City, 710068

China

 

LENDER CONVERSION NOTICE

 

The above-captioned Lender hereby gives
notice to China Recycling Energy Corporation, a Nevada corporation (the “Borrower”), pursuant to that certain
Convertible Promissory Note made by Borrower in favor of Lender on July 11, 2018 (the “Note”), that Lender elects
to convert the portion of the Note balance set forth below into fully paid and non-assessable shares of Common Stock of Borrower
as of the date of conversion specified below. Said conversion shall be based on the Lender Conversion Price set forth below. In
the event of a conflict between this Lender Conversion Notice and the Note, the Note shall govern, or, in the alternative, at the
election of Lender in its sole discretion, Lender may provide a new form of Lender Conversion Notice to conform to the Note. Capitalized
terms used in this notice without definition shall have the meanings given to them in the Note.

 

		A.	Date of Conversion: ____________

		B.	Lender Conversion #: ____________

		C.	Conversion Amount: ____________

		D.	Lender Conversion Price: _______________

		E.	Lender Conversion Shares: _______________ (C divided by
D)

		F.	Remaining Outstanding Balance of Note: ____________*

 

* Subject to adjustments for corrections,
defaults, interest and other adjustments permitted by the Transaction Documents (as defined in the Purchase Agreement), the terms
of which shall control in the event of any dispute between the terms of this Lender Conversion Notice and such Transaction Documents.

 

Please transfer the Lender Conversion
Shares electronically (via DWAC) to the following account:

 

	Broker:	 	 	Address:	 	 
	DTC#:	 	 	 	 	 
	Account #:	 	 	 	 	 
	Account Name:	 	 	 	 	 

 

To the extent the
Lender Conversion Shares are not able to be delivered to Lender electronically via the DWAC system, deliver all such certificated
shares to Lender via reputable overnight courier after receipt of this Lender Conversion Notice (by facsimile transmission or otherwise)
to:

 

	 	 	 
	 	 	 
	 	 	 

 

    	 	Exhibit A to Convertible Promissory Note, Page 1	 

     

    

 

Sincerely,

 

Lender:

 

	Iliad Research and Trading, L.P.	 
	 	 
	By: Iliad Management, LLC, its General Partner	 
	 	 	 	 	 
	 	By:	Fife Trading, Inc., its Manager	 
	 	 	 	 	 
	 	 	By:	 	 
	 	 	 	John M. Fife, President	 

 

    	 	Exhibit A to Convertible Promissory Note, Page 2	 

     

    

 

EXHIBIT B

 

Iliad Research and Trading, L.P.

303 East Wacker Drive, Suite 1040

Chicago, Illinois 60601

 

	China Recycling Energy Corporation	Date: __________________

Attn: Guohua Ku, Chairman & CEO

4/F Block C

Rong Cheng Yun Gu Building

Xi An City 710068

China

 

REDEMPTION NOTICE

 

The above-captioned Lender hereby gives
notice to China Recycling Energy Corporation, a Delaware corporation (the “Borrower”), pursuant to that certain
Convertible Promissory Note made by Borrower in favor of Lender on July 11, 2018 (the “Note”), that Lender elects
to redeem a portion of the Note in Redemption Conversion Shares or in cash as set forth below. In the event of a conflict between
this Redemption Notice and the Note, the Note shall govern, or, in the alternative, at the election of Lender in its sole discretion,
Lender may provide a new form of Redemption Notice to conform to the Note. Capitalized terms used in this notice without definition
shall have the meanings given to them in the Note.

 

REDEMPTION INFORMATION 

 

		A.	Redemption Date: ____________, 201_

		B.	Redemption Amount: ____________

		C.	Portion of Redemption Amount to be Paid in Cash: ____________

		D.	Portion of Redemption Amount to be Converted into Common
Stock: ____________ (B minus C)

		E.	Redemption Conversion Price: _______________ (lower of
(i) Lender Conversion Price in effect and (ii) Market Price as of Redemption Date)

		F.	Redemption Conversion Shares: _______________ (D divided
by E)

		G.	Remaining Outstanding Balance of Note: ____________ *

 

* Subject to adjustments for corrections,
defaults, interest and other adjustments permitted by the Transaction Documents (as defined in the Purchase Agreement), the terms
of which shall control in the event of any dispute between the terms of this Redemption Notice and such Transaction Documents.

 

2. EQUITY CONDITIONS CERTIFICATION (Section
to be completed by Borrower)

 

		A.	Market Capitalization:________________

 

(Check One)

 

		B.	_________ Borrower herby certifies that no Equity Conditions
Failure exists as of the applicable Redemption Date.

 

    	 	Exhibit B to Convertible Promissory Note, Page 1	 

     

    

 

		C.	_________ Borrower hereby gives notice that an Equity Conditions
Failure has occurred and requests a waiver from Lender with respect thereto. The Equity Conditions Failure is as follows:

 

	 	 	 
	 	 	 
	 	 	 

 

Please transfer the Redemption Conversion
Shares, if applicable, electronically (via DWAC) to the following account:

 

	Broker:	 	 	Address:	 	 
	DTC#:	 	 	 	 	 
	Account #:	 	 	 	 	 
	Account Name:	 	 	 	 	 

 

To the extent the
Redemption Conversion Shares are not able to be delivered to Lender electronically via the DWAC system, deliver all such certificated
shares to Lender via reputable overnight courier after receipt of this Redemption Notice (by facsimile transmission or otherwise)
to:

 

	 	 	 
	 	 	 
	 	 	 

 

Sincerely,

 

Lender:

 

	Iliad Research and Trading, L.P.	 
	 	 
	By: Iliad Management, LLC, its General Partner	 
	 	 	 	 	 
	 	By:	Fife Trading, Inc., its Manager	 
	 	 	 	 	 
	 	 	By:	 	 
	 	 	 	John M. Fife, President	 

 

    	 	Exhibit B to Convertible Promissory Note, Page 2	 

     

    

  

EXHIBIT B

 

CHINA
RECYCLING ENERGY CORPORATION

OFFICER’S
CERTIFICATE

 

The
undersigned, GuangYu Wu, Chief Executive Officer of China Recycling Energy Corporation, a Nevada corporation (“Company”),
in connection with the issuance of that certain Convertible Promissory Note issued by Company on July 11, 2018 (the “Note”)
in the original principal amount of $1,070,000.00 in favor of Iliad Research and Trading, L.P., a Utah limited partnership (“Investor”),
pursuant to that certain Securities Purchase Agreement dated July 11, 2018 between Investor and Company (the “Purchase
Agreement”), personally and in his capacity as an officer of Company, hereby represents, warrants and certifies that:

 

1.
He is the duly appointed Chief Executive Officer of Company.

 

2.
As of the date hereof, Company has made no Variable Security Issuances (as defined in the Purchase Agreement) where Company
received less than $1,000,000.00 in net proceeds since the Closing Date (as defined in the Purchase Agreement).

 

3.
He agrees to cause Company to comply with the covenants found in Sections 4(v) and (vi) of the Purchase Agreement.

 

4.
He acknowledges that his execution and issuance of this Officer’s Certificate to Investor is a material inducement to
Investor’s agreement to purchase the Note on the terms set forth in the Purchase Agreement and that but for his
execution and issuance of this Officer’s Certificate, Investor would not have purchased the Note from
Company.

 

IN
WITNESS WHEREOF, the undersigned, personally and in his capacity as an officer of Company, has executed this Officer’s Certificate
as of July 11, 2018.

 

	 	
	 	GuangYu
    Wu

 

    	 	1	 

     

    

 

EXHIBIT C

 

IRREVOCABLE
LETTER OF INSTRUCTIONS TO TRANSFER AGENT

 

Date:
July 11, 2018

 

To
the transfer agent of China Recycling Energy Corp.

 

Re:
Instructions to Reserve and Issue Shares

 

Ladies
and Gentlemen:

 

Reference
is made to that certain Convertible Promissory Note dated as of July 11, 2018 (as the same may be amended or exchanged from time
to time, the “Note”), made by China Recycling Energy Corp., a Nevada corporation (“Company”),
pursuant to which Company agreed to pay to Iliad Research and Trading, L.P., a Utah limited partnership, its successors and/or
assigns (“Investor”), the aggregate sum of $1,070,000.00, plus interest, fees, and collection costs. The Note
was issued pursuant to that certain Securities Purchase Agreement dated July 11, 2018, by and between Company and Investor (the
“Purchase Agreement”, and together with the Note and all other documents entered into in conjunction therewith,
including any amendments thereto, the “Transaction Documents”). Pursuant to the terms of the Note, the Outstanding
Balance (as defined in the Note) of the Note may be converted into shares of the common stock, par value $0.001 per share, of
Company (the “Common Stock”, and the shares of Common Stock issuable upon any conversion or otherwise under
the Note, the “Shares”).

 

Pursuant
to the terms of the Purchase Agreement, Company has agreed to establish a reserve of shares of authorized but unissued Common
Stock for Investor’s sole and exclusive benefit in an amount not less than 4,020,000 shares (the “Share Reserve”).
Company further agreed to add additional shares of Common Stock to the Share Reserve in increments of 500,000 shares, as and when
requested by Investor, if the number of shares being held in the Share Reserve is less than the amount calculated as follows:
three (3) times the number of shares of Common Stock obtained by dividing the Outstanding Balance by the Redemption Conversion
Price (as defined in the Note). For the avoidance of doubt, this Share Reserve shall be in addition to any previous share reserves
put in place for the benefit of Investor.

 

This
irrevocable letter of instructions (this “Letter”) shall serve as the authorization and direction of Company
to Securities Transfer Corporation, or its successors, as Company’s transfer agent (hereinafter, “you”
or “your”), to reserve shares of Common Stock and to issue (or where relevant, to reissue in the name of Investor)
shares of Common Stock to Investor or its broker, upon conversion of the Note, as follows:

 

1.
From and after the date hereof and until all of Company’s obligations under the Purchase Agreement and the Note are paid
and performed in full, (a) you shall establish a reserve of shares of authorized but unissued Common Stock in an amount not less
than the Share Reserve, (b) you shall maintain and hold the Share Reserve for the exclusive benefit of Investor, (c) you shall
issue the shares of Common Stock held in the Share Reserve to Investor or its broker only (subject to the immediately following
clause (d)), (d) when you issue shares of Common Stock to Investor or its broker under the Note pursuant to the other instructions
in this Letter, you shall issue such shares from Company’s authorized and unissued shares of Common Stock to the extent
the same are available and not from the Share Reserve unless and until there are no authorized shares of Common Stock available
for issuance other than those held in the Share Reserve, at which point, and upon your receipt of written authorization from Investor,
you shall then issue any shares of Common Stock deliverable to Investor under the Note from the Share Reserve, (e) you shall not
otherwise reduce the Share Reserve under any circumstances, unless Investor delivers to you written pre-approval of such reduction,
and (f) you shall immediately add shares of Common Stock to the Share Reserve in increments of 500,000 shares as and when requested
by Company or Investor in writing from time to time.

 

    	 	1	 

     

    

 

2.
You shall issue the Shares to Investor or its broker in accordance with Paragraph 3 upon a conversion of all or any portion of
the Note, upon delivery to you of a duly executed Lender Conversion Notice substantially in the form attached hereto as Exhibit
A (a “Conversion Notice”), or a duly executed Redemption Notice substantially in the form attached hereto
as Exhibit B (a “Redemption Notice”, and together with a Lender Conversion Notice, a “Conversion
Notice”). By your signature below, you acknowledge and agree that a conversion of the Note may include any conversion
by Investor of any judgment amount or arbitration award granted in favor of Investor, as set forth in the Note, and that you will
issue Shares to Investor in accordance with Paragraph 3 below upon Investor’s delivery to you of a duly executed Conversion
Notice wherein Investor seeks to convert any portion of any judgment amount or arbitration award granted in favor of Investor.
You further acknowledge that Company and Investor have agreed that it is their expectation that any such judgment amount or arbitration
award that is converted will tack back to the Purchase Price Date (as defined in the Note) for purposes of determining the holding
period under Rule 144 (as defined below) and that Company agreed that it will not take a contrary position in any filing, document,
letter, agreement or setting.

 

3.
In connection with a Conversion Notice delivered to you pursuant to Paragraph 2 above, you will receive a legal opinion as to
the free transferability of the Shares, dated within ninety (90) days from the date of the Conversion Notice, from either Investor’s
or Company’s legal counsel, indicating that the Shares to be issued are registered pursuant to an effective registration
statement under the Securities Act of 1933, as amended (the “1933 Act”), or pursuant to Rule 144 promulgated
under the 1933 Act (“Rule 144”), or any other available exemption under the 1933 Act, the issuance of the applicable
Shares to Investor is exempt from registration under the 1933 Act, and thus the Shares may be issued or delivered without restrictive
legend (the “Opinion Letter”). Upon your receipt of a Conversion Notice and an Opinion Letter, you shall, within
five (5) Trading Days (as defined below) thereafter, (i) if you are eligible to participate in the Depository Trust Company (“DTC”)
Fast Automated Securities Transfer program, and the Common Stock is eligible to be transferred electronically with DTC through
the Deposit/Withdrawal at Custodian system (“DWAC Eligible”), credit such aggregate number of DWAC Eligible
shares of Common Stock to Investor’s or its designee’s balance account with DTC, provided Investor identifies its
bank or broker (by providing its name and DTC participant number) and causes its bank or broker to initiate such DWAC Eligible
transaction, or (ii) if the Common Stock is not then DWAC Eligible, issue and deliver to Investor or its broker (as specified
in the applicable Conversion Notice), via reputable overnight courier, to the address specified in the Conversion Notice, a certificate,
registered in the name of Investor or its designee, representing such aggregate number of shares of Common Stock as have been
requested by Investor to be transferred in the Conversion Notice. Such Shares (A) shall not bear any legend restricting transfer,
(B) shall not be subject to any stop-transfer restrictions, and (C) shall otherwise be freely transferable on the books and records
of Company. For purposes hereof, “Trading Day” shall mean any day on which the New York Stock Exchange is open
for trading.

 

If
you receive a Conversion Notice, but you do not also receive an Opinion Letter, and you are required to issue the Shares in certificated
form, then any certificates for the applicable Shares shall bear a restrictive legend substantially as follows:

 

THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL
IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS OR OTHER EVIDENCE ACCEPTABLE TO COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED, OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

 

    	 	2	 

     

    

 

4.
Please note that a share issuance resolution is not required for each conversion since this Letter and the Transaction Documents
have been approved by resolution of Company’s board of directors (the “Share Issuance Resolution”). Pursuant
to the Share Issuance Resolution, all of the Shares are authorized to be issued to Investor. For the avoidance of doubt, this
Letter is your authorization and instruction by Company to issue the Shares pursuant to this Letter without any further authorization
or direction from Company. You shall rely exclusively on the instructions in this Letter and shall have no liability for relying
on any Conversion Notice provided by Investor. Any Conversion Notice delivered hereunder shall constitute an irrevocable instruction
to you to process such notice or notices in accordance with the terms thereof, without any further direction or inquiry. Such
notice or notices may be transmitted to you by fax, email, or any commercially reasonable method.

 

5.
Notwithstanding any other provision hereof, Company and Investor understand that you shall not be required to perform any issuance
or transfer of Shares if (a) such an issuance or transfer of Shares is in violation of any state or federal securities laws or
regulations; provided, however, that if you refuse to issue Shares to Investor based on an assertion (whether by you, Company,
or any other third party) that such issuance would be in violation of Rule 144, you are hereby instructed and agree to issue the
applicable Shares to Investor with a restricted legend and to further provide a written opinion to Investor from an attorney explaining
why such issuance is considered to be in violation of Rule 144, or (b) the issuance or transfer of Shares is prohibited or stopped
as required or directed by a court order from the court or arbitrator authorized by the Purchase Agreement to resolve disputes
between Company and Investor. Additionally, Company and Investor understand that you shall not be required to perform any issuance
or transfer of Shares if Company is in default of its payment obligations under its agreement with you; provided, however,
that in such case Investor shall have the right to pay the applicable issuance or transfer fee on behalf of Company and upon payment
of the issuance or transfer fee by Investor, you shall be obligated to make the requested issuance or transfer.

 

6.
You understand that a delay in the delivery of Shares hereunder could result in economic loss to Investor and that time is of
the essence in your processing of each Conversion Notice.

 

7.
You are hereby authorized and directed to promptly disclose to Investor, after Investor’s request from time to time, the
total number of shares of Common Stock issued and outstanding and the total number of shares that are authorized but unissued
and unreserved.

 

8.
Company hereby confirms to you and to Investor that no instruction other than as contemplated herein (including instructions to
increase the Share Reserve as necessary pursuant to Paragraph 1(f) above) will be given to you by Company with respect to the
matters referenced herein. Company hereby authorizes you, and you shall be obligated, to disregard any contrary instruction received
by or on behalf of Company or any other person purporting to represent Company.

 

9.
Notwithstanding anything to the contrary herein or in any previous Irrevocable Letter of Instructions to Transfer Agent with Investor
and Company, Company hereby agrees that the Share Reserve set forth in this Letter may, at Investor’s election, be used
to satisfy any prior obligations owed by Company to Investor or any obligations owed by Company to Investor that may arise in
the future under the Note or Purchase Agreement. Company further agrees that any prior or future share reserves established for
the benefit of Investor or any of its affiliates may also be used to satisfy Company’s obligations under the Note.

 

    	 	3	 

     

    

 

10.
Company hereby agrees not to change you as its transfer agent without first (a) providing Investor with at least 30-days’
written notice of such proposed change, and (b) obtaining Investor’s written consent to such proposed change. Any such consent
is conditioned upon the new transfer agent executing an irrevocable letter of instructions substantially similar to this Letter
so that such transfer agent is bound by the same terms set forth herein. You agree not to help facilitate any change to Company’s
transfer agent without first receiving such written consent to such change from Investor.

 

11.
Company acknowledges that Investor is relying on the representations and covenants made by Company in this Letter and that the
representations and covenants contained in this Letter constitute a material inducement to Investor to make the loan evidenced
by the Note. Company further acknowledges that without such representations and covenants of Company, Investor would not have
made the loan to Company evidenced by the Note.

 

12.
Company shall indemnify you and your officers, directors, members, managers, principals, partners, agents and representatives,
and hold each of them harmless from and against any and all loss, liability, damage, claim or expense (including the reasonable
fees and disbursements of its attorneys) incurred by or asserted against you or any of them arising out of or in connection with
the instructions set forth herein, the performance of your duties hereunder and otherwise in respect hereof, including the costs
and expenses of defending yourself or themselves against any claim or liability hereunder, except that Company shall not be liable
hereunder as to matters in respect of which it is determined that you have acted with gross negligence or in bad faith.

 

13.
Investor is an intended third-party beneficiary of this Letter. The parties hereto specifically acknowledge and agree that in
the event of a breach or threatened breach by a party hereto of any provision hereof, Investor will be irreparably damaged, and
that damages at law would be an inadequate remedy if this Letter were not specifically enforced. Therefore, in the event of a
breach or threatened breach of this Letter, Investor shall be entitled, in addition to all other rights or remedies, to an injunction
restraining such breach, without being required to show any actual damage or to post any bond or other security, and/or to a decree
for a specific performance of the provisions of this Letter. By your signature below, you agree to honor any injunction issued
by any arbitrator or court of competent jurisdiction that requires Company (i) to issue shares of Common Stock to Investor, or
(ii) to refrain from issuing shares of Common Stock to any person or entity other than Investor. You further agree to honor such
injunction even if it does not name you as a party or has not been domesticated in the state in which your principal office is
located.

 

14.
This Letter shall be fully binding and enforceable against Company even if it is not signed by you. If Company takes (or fails
to take) any action contrary to this Letter, then such action or inaction will constitute a default under the Transaction Documents.
Although no additional direction is required by Company, any refusal by Company to immediately confirm this Letter and the instructions
contemplated herein to you will constitute a default hereunder and under the Transaction Documents.

 

15.
Whenever possible, each provision of this Letter shall be interpreted in such a manner as to be effective and valid under applicable
law, but if any provision of this Letter shall be invalid or unenforceable in any jurisdiction, such provision shall be modified
to achieve the objective of the parties to the fullest extent permitted and such invalidity or unenforceability shall not affect
the validity or enforceability of the remainder of this Letter or the validity or enforceability of this Letter in any other jurisdiction.

 

16.
By signing below, (a) each individual executing this Letter on behalf of an entity represents and warrants that he or she has
authority to so execute this Letter on behalf of such entity and thereby bind such entity to the terms and conditions hereof,
and (b) each party to this Letter represents and warrants that such party has received good and valuable consideration in exchange
for executing this Letter.

 

    	 	4	 

     

    

 

17.
This Letter is governed by Utah law.

 

18.
This Letter is subject to the Arbitration Provisions (as defined in the Purchase Agreement) set forth as an exhibit to the Purchase
Agreement, which you acknowledge having received and reviewed by your signature below. Each party consents to and expressly agrees
that exclusive venue for arbitration of any dispute arising out of or relating to this Letter or the relationship of the parties
or their affiliates shall be in Salt Lake County, Utah and, notwithstanding the terms (specifically including any governing law
and venue terms) of any transfer agent services agreement or other agreement between you and Company (which agreement, if any,
is hereby amended to the extent necessary in order to be consistent with the terms of this Letter and, for the avoidance of doubt,
you and Company hereby agree that in the event of any conflict between the terms of this Letter and any agreement between you
and Company, the terms of this Letter shall govern), each party further agrees to not participate in any action, suit, proceeding
or arbitration (including without limitation any action or proceeding seeking an injunction or temporary restraining order against
your issuance of Shares to Investor) of any dispute arising out of or relating to this Letter or the relationship of the parties
or their affiliates that takes place outside of Salt Lake County, Utah.

 

19.
Company hereby authorizes and directs you to provide to Investor a copy of any process, stop order, notice or other instructions
delivered to you in furtherance of any attempt to prohibit or prevent you from issuing Shares to Investor. By your signature below,
you covenant and agree to promptly and as soon as reasonably practicable provide to Investor, upon a request from Investor, a
copy of any such process, stop order, notice or other instructions.

 

[Remainder
of page intentionally left blank; signature page follows]

 

    	 	5	 

     

    

 

	 	Very
    truly yours,
	 	 	 
	 	China
                                         Recycling Energy Corp.

 
	 	 	 
	 	By:	                 
	 	Name:	 
	 	Title:	 

 

	ACKNOWLEDGED
    AND AGREED:	 
	 	 
	INVESTOR:	 
	 	 
	Iliad
    Research and Trading, L.P.	 
	 	 	 	 	 
	By:	Iliad
    Management, LLC, its General Partner	 
	 	 	 	 	 
	 	By:	Fife
    Trading, Inc., its Manager	 
	 	 	 	 	 
	 	 	By:	 	 
	 	 	      	John
    M. Fife, President	 

 

	TRANSFER
    AGENT:
	 
	Securities
    Transfer Corporation
	 	 	 
	By:	                  	 
	Name:	 	 
	Title:	 	 

 

Attachments:

 

	Exhibit
    A	Form
    of Lender Conversion Notice
	Exhibit
    B	Form
    of Redemption Notice

 

 

[Signature
Page to Irrevocable Letter of Instructions to Transfer Agent]

  

     

     

    

 

EXHIBIT D

 

CHINA RECYCLING ENERGY CORPORATION

SECRETARY’S CERTIFICATE

 

I, ____________________,
hereby certify that I am the duly elected, qualified and acting Secretary of China Recycling Energy Corporation, a Nevada corporation
(“Company”), and I am authorized to execute this Secretary’s Certificate (this “Certificate”)
on behalf of Company. This Certificate is delivered in connection with that certain Securities Purchase Agreement dated July 11,
2018 (the “Purchase Agreement”), by and between Company and Iliad Research and Trading, L.P., a Utah limited
partnership.

 

Solely in my capacity
as Secretary, I certify that Schedule 1 attached hereto is a true, accurate and complete copy of all of the resolutions
adopted by the Board of Directors of Company (the “Resolutions”) approving and authorizing the execution, delivery
and performance of the Purchase Agreement and related documents to which Company is a party on the date hereof, and the transactions
contemplated thereby. Such Resolutions have not been amended, rescinded or modified since their adoption and remain in effect as
of the date hereof.

 

IN WITNESS WHEREOF,
I have made this Secretary’s Certificate effective as of July 11, 2018.

 

	 	China Recycling Energy Corporation

	 	 	 
	 	 	 
	 	Printed Name:	 
	 	Title: Secretary	 

 

    	 	1	 

     

    

 

Schedule 1

 

BOARD RESOLUTIONS

 

[attached]

 

    	 	2	 

     

    

 

CHINA RECYCLING ENERGY CORPORATION

RESOLUTIONS ADOPTED BY THE BOARD OF
DIRECTORS

 

 

 

Effective July 11, 2018

 

 

 

APPROVAL OF FINANCING

 

WHEREAS, the Board
of Directors (the “Board”) of China Recycling Energy Corporation, a Nevada corporation (“Company”),
has determined that it is in the best interests of Company to seek financing in the amount of up to $1,000,000.00 through the issuance
and sale to Iliad Research and Trading, L.P., a Utah limited partnership (“Investor”), of a Convertible Promissory
Note (the “Financing”);

 

WHEREAS, the terms
of the Financing are reflected in a Securities Purchase Agreement substantially in the form attached hereto as Exhibit A
(the “Purchase Agreement”), a Convertible Promissory Note issued by Company to Investor in the original principal
amount of $1,070,000.00 substantially in the form attached hereto as Exhibit B (the “Note”), an Irrevocable
Letter of Instructions to Transfer Agent substantially in the form attached hereto as Exhibit C, a Share Issuance Resolution
substantially in the form attached hereto as Exhibit D (“Share Issuance Resolution”), and all other agreements,
certificates, instruments and documents being or to be executed and delivered under or in connection with the Financing (collectively,
the “Financing Documents”); and

 

WHEREAS, the Board,
having received and reviewed the Financing Documents, believes that it is in the best interests of Company and its stockholders
to approve the Financing and the Financing Documents and authorize the officers of Company to execute such documents.

 

NOW, THEREFORE, BE
IT:

 

RESOLVED, that the
Financing is hereby approved and determined to be in the best interests of Company and its stockholders;

 

RESOLVED FURTHER, that
the form, terms and provisions of the Financing Documents (including all exhibits, schedules and other attachments thereto) are
hereby ratified, confirmed and approved;

 

RESOLVED FURTHER, that
the Note shall be duly and validly issued upon the issuance and delivery thereof in accordance with the Purchase Agreement;

 

RESOLVED FURTHER, that
the Conversion Shares (as defined in the Note) shall be duly authorized, validly issued, fully paid for and non-assessable upon
the issuance and delivery thereof in accordance with the Purchase Agreement and the Note;

 

RESOLVED FURTHER, that
Company shall take all action necessary to at all times have authorized and reserved for the purpose of issuance under the Note
such number of shares of Company’s common stock required under the Purchase Agreement (the “Share Reserve”);

 

RESOLVED FURTHER, that
the fixed number of shares of common stock set forth in the Share Issuance Resolution to be reserved by the transfer agent is not
meant to limit or restrict in any way the resolutions contained herein, including without limitation the calculation of the Share
Reserve under the Purchase Agreement, as required from time to time;

 

RESOLVED FURTHER, that
each of the officers of Company be, and each of them hereby is, authorized to instruct the transfer agent to increase the Share
Reserve, from time to time, in the incremental amount set forth in the Share Issuance Resolution; provided, however, that
any decrease in the Share Reserve held by the transfer agent will require the prior written consent of Investor;

 

    Page 1 of Board Resolutions

     

    

 

RESOLVED FURTHER, that
in the event of any conflict between these resolutions and the Share Issuance Resolution, these resolutions shall control;

 

RESOLVED FURTHER, that
with respect to each Conversion (as defined in the Note) under the Note, the reduction in the Outstanding Balance (as defined in
the Note and as the same may increase or decrease pursuant to the terms of the Note) in an amount equal to the applicable Conversion
Amount (as defined in the Note) or Redemption Amount (as defined in the Note) being converted into Conversion Shares shall constitute
fair and adequate consideration to Company for the issuance of the applicable Conversion Shares, regardless of the conversion price
used to determine the number of Conversion Shares deliverable with respect to any Conversion;

 

RESOLVED FURTHER, that
each of the officers of Company be, and each of them hereby is, authorized to execute and deliver in the name of and on behalf
of Company, each of the Financing Documents and any other related agreements (with such additions to, modifications to, or deletions
from such documents as the officer approves, such approval to be conclusively evidenced by such execution and delivery), to conform
Company’s minute books and other records to the matters set forth in these resolutions, and to take all other actions on
behalf of Company as any of them deem necessary, required, or advisable with respect to the matters set forth in these resolutions;

 

RESOLVED FURTHER, that
the Board hereby determines that all acts and deeds previously performed by the Board and other officers of Company relating to
the foregoing matters prior to the date of these resolutions are ratified, confirmed and approved in all respects as the authorized
acts and deeds of Company; and

 

RESOLVED FURTHER, that
all prior actions or resolutions of Company’s directors that are inconsistent with the foregoing are hereby amended, corrected
and restated to the extent required to be consistent herewith.

 

******************

 

EXHIBITS ATTACHED TO BOARD RESOLUTIONS:

 

	Exhibit A	PURCHASE AGREEMENT
	Exhibit B	NOTE
	Exhibit C	TRANSFER AGENT LETTER
	Exhibit D	SHARE ISSUANCE RESOLUTION

 

 

[Remainder of page intentionally left
blank]

  

    Page 2 of Board Resolutions

     

    

 

EXHIBIT E

 

Share
Issuance Resolution

Authorizing
The Issuance Of New Shares Of Common Stock In

 

China
Recycling Energy Corporation

 

 

 

Effective
July 11, 2018

 

 

 

The
undersigned, as a qualified officer of China Recycling Energy Corporation, a Nevada corporation (“Company”),
hereby certifies that this Share Issuance Resolution is authorized by and consistent with the resolutions of Company’s board
of directors (“Board Resolutions”) regarding that certain Convertible Promissory Note in the face amount of
$1,070,000.00 with an original issuance date of July 11, 2018 (the “Note”), made by Company in favor of Iliad
Research and Trading, L.P., a Utah limited partnership, its successors and/or assigns (“Investor”), pursuant
to that certain Securities Purchase Agreement dated July 11, 2018, by and between Company and Investor (the “Purchase
Agreement”).

 

RESOLVED,
that Securities Transfer Corporation, as transfer agent (including any successor transfer agent, the “Transfer Agent”)
of shares of Company’s common stock, $0.001 par value per share (“Common Stock”), is authorized to rely
upon:

 

		(i)	a
                                         Lender Conversion Notice substantially in the form of Exhibit A attached hereto,
                                         whether an original or a copy (the “Lender Conversion Notice”), and

 

		(ii)	a
                                         Redemption Notice substantially in the form of Exhibit B attached hereto, whether
                                         an original or a copy (the “Redemption Notice”),

 

in
each case without any further inquiry, to be delivered to the Transfer Agent from time to time either by Company or Investor.

 

RESOLVED
FURTHER, that the Transfer Agent is authorized to issue the number of:

 

		(i)	“Lender
                                         Conversion Shares” (representing shares of Common Stock) set forth in each Lender
                                         Conversion Notice delivered to the Transfer Agent,

 

		(ii)	“Redemption
                                         Conversion Shares” (representing shares of Common Stock) set forth in each Redemption
                                         Notice delivered to the Transfer Agent, and

 

		(iii)	all
                                         additional shares of Common Stock Company may subsequently instruct the Transfer Agent
                                         to issue in connection with any of the foregoing or otherwise under the Note,

 

with
such shares to be issued in the name of Investor, or its successors, transferees, or designees, free of any restricted security
legend, as permitted by the Note.

 

RESOLVED
FURTHER, that consistent with the terms of the Purchase Agreement, the Transfer Agent is authorized and directed to immediately
create a share reserve equal to 4,020,000 shares of Company’s Common Stock for the benefit of Investor (the “Share
Reserve”); provided that the Share Reserve may increase in increments of 500,000 shares from time to time by
written instructions provided to the Transfer Agent by Company or Investor as required by the Purchase Agreement and as contemplated
by the Board Resolutions.

 

     1

     

    

 

RESOLVED
FURTHER, that Investor and the Transfer Agent may rely upon the more general approvals and authorizations set forth in the Board
Resolutions, and the Transfer Agent is hereby authorized and directed to take those further actions approved under the Board Resolutions.

 

RESOLVED
FURTHER, that Investor must consent in writing to any reduction of the Share Reserve held by the transfer agent; provided,
however, that upon full conversion and/or full repayment of the Note, the Share Reserve will terminate thirty (30) days thereafter.

 

RESOLVED
FURTHER, that Company shall indemnify the Transfer Agent and its employees against any and all loss, liability, damage, claim
or expenses incurred by or asserted against the Transfer Agent arising from any action taken by the Transfer Agent in reliance
upon this Share Issuance Resolution.

 

Nothing
in this Share Issuance Resolution shall limit or restrict those resolutions and authorizations set forth in the Board Resolutions,
including without limitation increasing the Share Reserve from time to time required by the Purchase Agreement.

 

The
undersigned officer of Company hereby certifies that this is a true copy of Company’s Share Issuance Resolution, effective
as of the date set forth below, and that said resolution has not been in any way rescinded, annulled, or revoked, but the same
is still in full force and effect.

 

	 	 	 	 	 
	 	Officer’s
    Signature	 	Date	 
	 	 	 	 	 
	 	 	 	 	 
	 	Printed
    Name and Title	 	 	 

 

EXHIBITS
ATTACHED TO SHARE ISSUANCE RESOLUTION:

 

	Exhibit
    A	Lender
    Conversion Notice
	Exhibit
    B	Redemption
    Notice

 

     2

     

    

 

Exhibit
F

 

ARBITRATION PROVISIONS

 

1. Dispute
Resolution. For purposes of this Exhibit F, the term “Claims” means any disputes, claims, demands,
causes of action, requests for injunctive relief, requests for specific performance, liabilities, damages, losses, or controversies
whatsoever arising from, related to, or connected with the transactions contemplated in the Transaction Documents and any communications
between the parties related thereto, including without limitation any claims of mutual mistake, mistake, fraud, misrepresentation,
failure of formation, failure of consideration, promissory estoppel, unconscionability, failure of condition precedent, rescission,
and any statutory claims, tort claims, contract claims, or claims to void, invalidate or terminate the Agreement (or these Arbitration
Provisions (defined below)) or any of the other Transaction Documents. The term “Claims” specifically excludes a dispute
over Calculations. The parties to the Agreement (the “parties”) hereby agree that the arbitration provisions
set forth in this Exhibit F (“Arbitration Provisions”) are binding on each of them. As a result, any
attempt to rescind the Agreement (or these Arbitration Provisions) or declare the Agreement (or these Arbitration Provisions) or
any other Transaction Document invalid or unenforceable for any reason is subject to these Arbitration Provisions. These Arbitration
Provisions shall also survive any termination or expiration of the Agreement. Any capitalized term not defined in these Arbitration
Provisions shall have the meaning set forth in the Agreement.

 

2. Arbitration.
Except as otherwise provided herein, all Claims must be submitted to arbitration (“Arbitration”) to be conducted
exclusively in Salt Lake County, Utah and pursuant to the terms set forth in these Arbitration Provisions. Subject to the arbitration
appeal right provided for in Paragraph 5 below (the “Appeal Right”), the parties agree that the award of the
arbitrator rendered pursuant to Paragraph 4 below (the “Arbitration Award”) shall be (a) final and binding upon
the parties, (b) the sole and exclusive remedy between them regarding any Claims, counterclaims, issues, or accountings presented
or pleaded to the arbitrator, and (c) promptly payable in United States dollars free of any tax, deduction or offset (with respect
to monetary awards). Subject to the Appeal Right, any costs or fees, including without limitation attorneys’ fees, incurred
in connection with or incident to enforcing the Arbitration Award shall, to the maximum extent permitted by law, be charged against
the party resisting such enforcement. The Arbitration Award shall include default interest (as defined or otherwise provided for
in the Note, “Default Interest”) (with respect to monetary awards) at the rate specified in the Note for Default
Interest both before and after the Arbitration Award. Judgment upon the Arbitration Award will be entered and enforced by any state
or federal court sitting in Salt Lake County, Utah.

 

3. The
Arbitration Act. The parties hereby incorporate herein the provisions and procedures set forth in the Utah Uniform Arbitration
Act, U.C.A. § 78B-11-101 et seq. (as amended or superseded from time to time, the “Arbitration Act”);
provided, however, to the extent any provisions or procedures regarding the Arbitration are not adequately described in
these Arbitration Provisions or the Arbitration Act then the rules of the American Arbitration Association shall apply with respect
to such provisions or procedures. Notwithstanding the foregoing, pursuant to, and to the maximum extent permitted by, Section 105
of the Arbitration Act, in the event of conflict or variation between the terms of these Arbitration Provisions and the provisions
of the Arbitration Act, the terms of these Arbitration Provisions shall control and the parties hereby waive or otherwise agree
to vary the effect of all requirements of the Arbitration Act that may conflict with or vary from these Arbitration Provisions.

 

4. Arbitration
Proceedings. Arbitration between the parties will be subject to the following:

 

4.1 Initiation
of Arbitration. Pursuant to Section 110 of the Arbitration Act, the parties agree that a party may initiate Arbitration by
giving written notice to the other party (“Arbitration Notice”) in the same manner that notice is permitted
under Section 9.13 of the Agreement; provided, however, that the Arbitration Notice may not be given by email or fax. Arbitration
will be deemed initiated as of the date that the Arbitration Notice is deemed delivered to such other party under Section 9.13
of the Agreement (the “Service Date”). After the Service Date, information may be delivered, and notices may
be given, by email or fax pursuant to Section 9.13 of the Agreement or any other method permitted thereunder. The Arbitration Notice
must describe the nature of the controversy, the remedies sought, and the election to commence Arbitration proceedings. All Claims
in the Arbitration Notice must be pleaded consistent with the Utah Rules of Civil Procedure.

 

    Arbitration Provisions, Page 1

     

    

 

4.2 Selection
and Payment of Arbitrator.

 

 (a) Within ten
(10) calendar days after the Service Date, Investor shall select and submit to Company the names of three (3) arbitrators that
are designated as “neutrals” or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com) (such three
(3) designated persons hereunder are referred to herein as the “Proposed Arbitrators”). For the avoidance of
doubt, each Proposed Arbitrator must be qualified as a “neutral” with Utah ADR Services. Within five (5) calendar days
after Investor has submitted to Company the names of the Proposed Arbitrators, Company must select, by written notice to Investor,
one (1) of the Proposed Arbitrators to act as the arbitrator for the parties under these Arbitration Provisions. If Company fails
to select one of the Proposed Arbitrators in writing within such 5-day period, then Investor may select the arbitrator from the
Proposed Arbitrators by providing written notice of such selection to Company.

 

 (b) If Investor
fails to submit to Company the Proposed Arbitrators within ten (10) calendar days after the Service Date pursuant to subparagraph
(a) above, then Company may at any time prior to Investor so designating the Proposed Arbitrators, identify the names of three
(3) arbitrators that are designated as “neutrals” or qualified arbitrators by Utah ADR Service by written notice to
Investor. Investor may then, within five (5) calendar days after Company has submitted notice of its Proposed Arbitrators to Investor,
select, by written notice to Company, one (1) of the Proposed Arbitrators to act as the arbitrator for the parties under these
Arbitration Provisions. If Investor fails to select in writing and within such 5-day period one (1) of the three (3) Proposed Arbitrators
selected by Company, then Company may select the arbitrator from its three (3) previously selected Proposed Arbitrators by providing
written notice of such selection to Investor.

 

 (c) If a Proposed
Arbitrator chosen to serve as arbitrator declines or is otherwise unable to serve as arbitrator, then the party that selected such
Proposed Arbitrator may select one (1) of the other three (3) Proposed Arbitrators within three (3) calendar days of the date the
chosen Proposed Arbitrator declines or notifies the parties he or she is unable to serve as arbitrator. If all three (3) Proposed
Arbitrators decline or are otherwise unable to serve as arbitrator, then the arbitrator selection process shall begin again in
accordance with this Paragraph 4.2.

 

 (d) The date that
the Proposed Arbitrator selected pursuant to this Paragraph 4.2 agrees in writing (including via email) delivered to both parties
to serve as the arbitrator hereunder is referred to herein as the “Arbitration Commencement Date”. If an arbitrator
resigns or is unable to act during the Arbitration, a replacement arbitrator shall be chosen in accordance with this Paragraph
4.2 to continue the Arbitration. If Utah ADR Services ceases to exist or to provide a list of neutrals and there is no successor
thereto, then the arbitrator shall be selected under the then prevailing rules of the American Arbitration Association.

 

 (e) Subject to
Paragraph 4.10 below, the cost of the arbitrator must be paid equally by both parties. Subject to Paragraph 4.10 below, if one
party refuses or fails to pay its portion of the arbitrator fee, then the other party can advance such unpaid amount (subject to
the accrual of Default Interest thereupon), with such amount being added to or subtracted from, as applicable, the Arbitration
Award.

 

4.3 Applicability
of Certain Utah Rules. The parties agree that the Arbitration shall be conducted generally in accordance with the Utah Rules
of Civil Procedure and the Utah Rules of Evidence. More specifically, the Utah Rules of Civil Procedure shall apply, without limitation,
to the filing of any pleadings, motions or memoranda, the conducting of discovery, and the taking of any depositions. The Utah
Rules of Evidence shall apply to any hearings, whether telephonic or in person, held by the arbitrator. Notwithstanding the foregoing,
it is the parties’ intent that the incorporation of such rules will in no event supersede these Arbitration Provisions. In
the event of any conflict between the Utah Rules of Civil Procedure or the Utah Rules of Evidence and these Arbitration Provisions,
these Arbitration Provisions shall control.

 

4.4 Answer
and Default. An answer and any counterclaims to the Arbitration Notice shall be required to be delivered to the party initiating
the Arbitration within twenty (20) calendar days after the Arbitration Commencement Date. If an answer is not delivered by the
required deadline, the arbitrator must provide written notice to the defaulting party stating that the arbitrator will enter a
default award against such party if such party does not file an answer within five (5) calendar days of receipt of such notice.
If an answer is not filed within the five (5) day extension period, the arbitrator must render a default award, consistent with
the relief requested in the Arbitration Notice, against a party that fails to submit an answer within such time period.

 

    Arbitration Provisions, Page 2

     

    

 

4.5 Related
Litigation. The party that delivers the Arbitration Notice to the other party shall have the option to also commence concurrent
legal proceedings with any state or federal court sitting in Salt Lake County, Utah (“Litigation Proceedings”),
subject to the following: (a) the complaint in the Litigation Proceedings is to be substantially similar to the claims set forth
in the Arbitration Notice, provided that an additional cause of action to compel arbitration will also be included therein, (b)
so long as the other party files an answer to the complaint in the Litigation Proceedings and an answer to the Arbitration Notice,
the Litigation Proceedings will be stayed pending an Arbitration Award (or Appeal Panel Award (defined below), as applicable) hereunder,
(c) if the other party fails to file an answer in the Litigation Proceedings or an answer in the Arbitration proceedings, then
the party initiating Arbitration shall be entitled to a default judgment consistent with the relief requested, to be entered in
the Litigation Proceedings, and (d) any legal or procedural issue arising under the Arbitration Act that requires a decision of
a court of competent jurisdiction may be determined in the Litigation Proceedings. Any award of the arbitrator (or of the Appeal
Panel (defined below)) may be entered in such Litigation Proceedings pursuant to the Arbitration Act.

 

4.6 Discovery.
Pursuant to Section 118(8) of the Arbitration Act, the parties agree that discovery shall be conducted as follows:

 

(a) Written discovery
will only be allowed if the likely benefits of the proposed written discovery outweigh the burden or expense thereof, and the written
discovery sought is likely to reveal information that will satisfy a specific element of a claim or defense already pleaded in
the Arbitration. The party seeking written discovery shall always have the burden of showing that all of the standards and limitations
set forth in these Arbitration Provisions are satisfied. The scope of discovery in the Arbitration proceedings shall also be limited
as follows:

 

(i) To
facts directly connected with the transactions contemplated by the Agreement.

 

(ii) To
facts and information that cannot be obtained from another source or in another manner that is more convenient, less burdensome
or less expensive than in the manner requested.

 

 (b) No party shall
be allowed (i) more than fifteen (15) interrogatories (including discrete subparts), (ii) more than fifteen (15) requests for admission
(including discrete subparts), (iii) more than ten (10) document requests (including discrete subparts), or (iv) more than three
(3) depositions (excluding expert depositions) for a maximum of seven (7) hours per deposition. The costs associated with depositions
will be borne by the party taking the deposition. The party defending the deposition will submit a notice to the party taking the
deposition of the estimated attorneys’ fees that such party expects to incur in connection with defending the deposition.
If the party defending the deposition fails to submit an estimate of attorneys’ fees within five (5) calendar days of its
receipt of a deposition notice, then such party shall be deemed to have waived its right to the estimated attorneys’ fees.
The party taking the deposition must pay the party defending the deposition the estimated attorneys’ fees prior to taking
the deposition, unless such obligation is deemed to be waived as set forth in the immediately preceding sentence. If the party
taking the deposition believes that the estimated attorneys’ fees are unreasonable, such party may submit the issue to the
arbitrator for a decision. All depositions will be taken in Utah.

 

 (c) All discovery
requests (including document production requests included in deposition notices) must be submitted in writing to the arbitrator
and the other party. The party submitting the written discovery requests must include with such discovery requests a detailed explanation
of how the proposed discovery requests satisfy the requirements of these Arbitration Provisions and the Utah Rules of Civil Procedure.
The receiving party will then be allowed, within five (5) calendar days of receiving the proposed discovery requests, to submit
to the arbitrator an estimate of the attorneys’ fees and costs associated with responding to such written discovery requests
and a written challenge to each applicable discovery request. After receipt of an estimate of attorneys’ fees and costs and/or
challenge(s) to one or more discovery requests, consistent with subparagraph (c) above, the arbitrator will within three (3) calendar
days make a finding as to the likely attorneys’ fees and costs associated with responding to the discovery requests and issue
an order that (i) requires the requesting party to prepay the attorneys’ fees and costs associated with responding to the
discovery requests, and (ii) requires the responding party to respond to the discovery requests as limited by the arbitrator within
twenty-five (25) calendar days of the arbitrator’s finding with respect to such discovery requests. If a party entitled to
submit an estimate of attorneys’ fees and costs and/or a challenge to discovery requests fails to do so within such 5-day
period, the arbitrator will make a finding that (A) there are no attorneys’ fees or costs associated with responding to such
discovery requests, and (B) the responding party must respond to such discovery requests (as may be limited by the arbitrator)
within twenty-five (25) calendar days of the arbitrator’s finding with respect to such discovery requests. Any party submitting
any written discovery requests, including without limitation interrogatories, requests for production subpoenas to a party or a
third party, or requests for admissions, must prepay the estimated attorneys’ fees and costs, before the responding party
has any obligation to produce or respond to the same, unless such obligation is deemed waived as set forth above.

 

    Arbitration Provisions, Page 3

     

    

 

 (d) In order to
allow a written discovery request, the arbitrator must find that the discovery request satisfies the standards set forth in these
Arbitration Provisions and the Utah Rules of Civil Procedure. The arbitrator must strictly enforce these standards. If a discovery
request does not satisfy any of the standards set forth in these Arbitration Provisions or the Utah Rules of Civil Procedure, the
arbitrator may modify such discovery request to satisfy the applicable standards, or strike such discovery request in whole or
in part.

 

 (e) Each party
may submit expert reports (and rebuttals thereto), provided that such reports must be submitted within sixty (60) days of the Arbitration
Commencement Date. Each party will be allowed a maximum of two (2) experts. Expert reports must contain the following: (i) a complete
statement of all opinions the expert will offer at trial and the basis and reasons for them; (ii) the expert’s name and qualifications,
including a list of all the expert’s publications within the preceding ten (10) years, and a list of any other cases in which
the expert has testified at trial or in a deposition or prepared a report within the preceding ten (10) years; and (iii) the compensation
to be paid for the expert’s report and testimony. The parties are entitled to depose any other party’s expert witness
one (1) time for no more than four (4) hours. An expert may not testify in a party’s case-in-chief concerning any matter
not fairly disclosed in the expert report.

 

4.6 Dispositive
Motions. Each party shall have the right to submit dispositive motions pursuant Rule 12 or Rule 56 of the Utah Rules of Civil
Procedure (a “Dispositive Motion”). The party submitting the Dispositive Motion may, but is not required to,
deliver to the arbitrator and to the other party a memorandum in support (the “Memorandum in Support”) of the
Dispositive Motion. Within seven (7) calendar days of delivery of the Memorandum in Support, the other party shall deliver to the
arbitrator and to the other party a memorandum in opposition to the Memorandum in Support (the “Memorandum in Opposition”).
Within seven (7) calendar days of delivery of the Memorandum in Opposition, as applicable, the party that submitted the Memorandum
in Support shall deliver to the arbitrator and to the other party a reply memorandum to the Memorandum in Opposition (“Reply
Memorandum”). If the applicable party shall fail to deliver the Memorandum in Opposition as required above, or if the
other party fails to deliver the Reply Memorandum as required above, then the applicable party shall lose its right to so deliver
the same, and the Dispositive Motion shall proceed regardless.

 

4.7 Confidentiality.
All information disclosed by either party (or such party’s agents) during the Arbitration process (including without limitation
information disclosed during the discovery process or any Appeal (defined below)) shall be considered confidential in nature. Each
party agrees not to disclose any confidential information received from the other party (or its agents) during the Arbitration
process (including without limitation during the discovery process or any Appeal) unless (a) prior to or after the time of disclosure
such information becomes public knowledge or part of the public domain, not as a result of any inaction or action of the receiving
party or its agents, (b) such information is required by a court order, subpoena or similar legal duress to be disclosed if such
receiving party has notified the other party thereof in writing and given it a reasonable opportunity to obtain a protective order
from a court of competent jurisdiction prior to disclosure, or (c) such information is disclosed to the receiving party’s
agents, representatives and legal counsel on a need to know basis who each agree in writing not to disclose such information to
any third party. Pursuant to Section 118(5) of the Arbitration Act, the arbitrator is hereby authorized and directed to issue a
protective order to prevent the disclosure of privileged information and confidential information upon the written request of either
party.

 

4.8 Authorization;
Timing; Scheduling Order. Subject to all other portions of these Arbitration Provisions, the parties hereby authorize and direct
the arbitrator to take such actions and make such rulings as may be necessary to carry out the parties’ intent for the Arbitration
proceedings to be efficient and expeditious. Pursuant to Section 120 of the Arbitration Act, the parties hereby agree that an Arbitration
Award must be made within one hundred twenty (120) calendar days after the Arbitration Commencement Date. The arbitrator is hereby
authorized and directed to hold a scheduling conference within ten (10) calendar days after the Arbitration Commencement Date in
order to establish a scheduling order with various binding deadlines for discovery, expert testimony, and the submission of documents
by the parties to enable the arbitrator to render a decision prior to the end of such 120-day period.

 

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4.9 Relief.
The arbitrator shall have the right to award or include in the Arbitration Award (or in a preliminary ruling) any relief which
the arbitrator deems proper under the circumstances, including, without limitation, specific performance and injunctive relief,
provided that the arbitrator may not award exemplary or punitive damages.

 

4.10 Fees
and Costs. As part of the Arbitration Award, the arbitrator is hereby directed to require the losing party (the party being
awarded the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any
statutory fines, penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees
of the Arbitration, and (b) reimburse the prevailing party for all reasonable attorneys’ fees, arbitrator costs and fees,
deposition costs, other discovery costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party in
connection with the Arbitration.

 

5. Arbitration
Appeal.

 

5.1 Initiation
of Appeal. Following the entry of the Arbitration Award, either party (the “Appellant”) shall have a period
of thirty (30) calendar days in which to notify the other party (the “Appellee”), in writing, that the Appellant
elects to appeal (the “Appeal”) the Arbitration Award (such notice, an “Appeal Notice”) to
a panel of arbitrators as provided in Paragraph 5.2 below. The date the Appellant delivers an Appeal Notice to the Appellee is
referred to herein as the “Appeal Date”. The Appeal Notice must be delivered to the Appellee in accordance with
the provisions of Paragraph 4.1 above with respect to delivery of an Arbitration Notice. In addition, together with delivery of
the Appeal Notice to the Appellee, the Appellant must also pay for (and provide proof of such payment to the Appellee together
with delivery of the Appeal Notice) a bond in the amount of 110% of the sum the Appellant owes to the Appellee as a result of the
Arbitration Award the Appellant is appealing. In the event an Appellant delivers an Appeal Notice to the Appellee (together with
proof of payment of the applicable bond) in compliance with the provisions of this Paragraph 5.1, the Appeal will occur as a matter
of right and, except as specifically set forth herein, will not be further conditioned. In the event a party does not deliver an
Appeal Notice (along with proof of payment of the applicable bond) to the other party within the deadline prescribed in this Paragraph
5.1, such party shall lose its right to appeal the Arbitration Award. If no party delivers an Appeal Notice (along with proof of
payment of the applicable bond) to the other party within the deadline described in this Paragraph 5.1, the Arbitration Award shall
be final. The parties acknowledge and agree that any Appeal shall be deemed part of the parties’ agreement to arbitrate for
purposes of these Arbitration Provisions and the Arbitration Act.

 

5.2 Selection
and Payment of Appeal Panel. In the event an Appellant delivers an Appeal Notice to the Appellee (together with proof of payment
of the applicable bond) in compliance with the provisions of Paragraph 5.1 above, the Appeal will be heard by a three (3) person
arbitration panel (the “Appeal Panel”).

 

 (a)  Within
ten (10) calendar days after the Appeal Date, the Appellee shall select and submit to the Appellant the names of five (5) arbitrators
that are designated as “neutrals” or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com) (such
five (5) designated persons hereunder are referred to herein as the “Proposed Appeal Arbitrators”). For the
avoidance of doubt, each Proposed Appeal Arbitrator must be qualified as a “neutral” with Utah ADR Services, and shall
not be the arbitrator who rendered the Arbitration Award being appealed (the “Original Arbitrator”). Within
five (5) calendar days after the Appellee has submitted to the Appellant the names of the Proposed Appeal Arbitrators, the Appellant
must select, by written notice to the Appellee, three (3) of the Proposed Appeal Arbitrators to act as the members of the Appeal
Panel. If the Appellant fails to select three (3) of the Proposed Appeal Arbitrators in writing within such 5-day period, then
the Appellee may select such three (3) arbitrators from the Proposed Appeal Arbitrators by providing written notice of such selection
to the Appellant.

 

 (b)  If the
Appellee fails to submit to the Appellant the names of the Proposed Appeal Arbitrators within ten (10) calendar days after the
Appeal Date pursuant to subparagraph (a) above, then the Appellant may at any time prior to the Appellee so designating the Proposed
Appeal Arbitrators, identify the names of five (5) arbitrators that are designated as “neutrals” or qualified arbitrators
by Utah ADR Service (none of whom may be the Original Arbitrator) by written notice to the Appellee. The Appellee may then, within
five (5) calendar days after the Appellant has submitted notice of its selected arbitrators to the Appellee, select, by written
notice to the Appellant, three (3) of such selected arbitrators to serve on the Appeal Panel. If the Appellee fails to select in
writing within such 5-day period three (3) of the arbitrators selected by the Appellant to serve as the members of the Appeal Panel,
then the Appellant may select the three (3) members of the Appeal Panel from the Appellant’s list of five (5) arbitrators
by providing written notice of such selection to the Appellee.

 

    Arbitration Provisions, Page 5

     

    

 

 (c)  If a selected
Proposed Appeal Arbitrator declines or is otherwise unable to serve, then the party that selected such Proposed Appeal Arbitrator
may select one (1) of the other five (5) designated Proposed Appeal Arbitrators within three (3) calendar days of the date a chosen
Proposed Appeal Arbitrator declines or notifies the parties he or she is unable to serve as an arbitrator. If at least three (3)
of the five (5) designated Proposed Appeal Arbitrators decline or are otherwise unable to serve, then the Proposed Appeal Arbitrator
selection process shall begin again in accordance with this Paragraph 5.2; provided, however, that any Proposed Appeal Arbitrators
who have already agreed to serve shall remain on the Appeal Panel.

 

 (d) The date
that all three (3) Proposed Appeal Arbitrators selected pursuant to this Paragraph 5.2 agree in writing (including via email) delivered
to both the Appellant and the Appellee to serve as members of the Appeal Panel hereunder is referred to herein as the “Appeal
Commencement Date”. No later than five (5) calendar days after the Appeal Commencement Date, the Appellee shall designate
in writing (including via email) to the Appellant and the Appeal Panel the name of one (1) of the three (3) members of the Appeal
Panel to serve as the lead arbitrator in the Appeal proceedings. Each member of the Appeal Panel shall be deemed an arbitrator
for purposes of these Arbitration Provisions and the Arbitration Act, provided that, in conducting the Appeal, the Appeal Panel
may only act or make determinations upon the approval or vote of no less than the majority vote of its members, as announced or
communicated by the lead arbitrator on the Appeal Panel. If an arbitrator on the Appeal Panel
ceases or is unable to act during the Appeal proceedings, a replacement arbitrator shall be chosen in accordance with Paragraph
5.2 above to continue the Appeal as a member of the Appeal Panel. If Utah ADR Services ceases to exist or to provide a list
of neutrals, then the arbitrators for the Appeal Panel shall be selected under the then prevailing rules of the American Arbitration
Association.

 

 (d)  Subject
to Paragraph 5.7 below, the cost of the Appeal Panel must be paid entirely by the Appellant.

 

5.3 Appeal
Procedure. The Appeal will be deemed an appeal of the entire Arbitration Award. In conducting the Appeal, the Appeal Panel
shall conduct a de novo review of all Claims described or otherwise set forth in the Arbitration Notice. Subject to the foregoing
and all other provisions of this Paragraph 5, the Appeal Panel shall conduct the Appeal in a manner the Appeal Panel considers
appropriate for a fair and expeditious disposition of the Appeal, may hold one or more hearings and permit oral argument, and may
review all previous evidence and discovery, together with all briefs, pleadings and other documents filed with the Original Arbitrator
(as well as any documents filed with the Appeal Panel pursuant to Paragraph 5.4(a) below). Notwithstanding the foregoing, in connection
with the Appeal, the Appeal Panel shall not permit the parties to conduct any additional discovery or raise any new Claims to be
arbitrated, shall not permit new witnesses or affidavits, and shall not base any of its findings or determinations on the Original
Arbitrator’s findings or the Arbitration Award.

 

5.4 Timing.

 

(a) Within
seven (7) calendar days of the Appeal Commencement Date, the Appellant (i) shall deliver or cause to be delivered to the Appeal
Panel copies of the Appeal Notice, all discovery conducted in connection with the Arbitration, and all briefs, pleadings and other
documents filed with the Original Arbitrator (which material Appellee shall have the right to review and supplement if necessary),
and (ii) may, but is not required to, deliver to the Appeal Panel and to the Appellee a Memorandum in Support of the Appellant’s
arguments concerning or position with respect to all Claims, counterclaims, issues, or accountings presented or pleaded in the
Arbitration. Within seven (7) calendar days of the Appellant’s delivery of the Memorandum in Support, as applicable, the
Appellee shall deliver to the Appeal Panel and to the Appellant a Memorandum in Opposition to the Memorandum in Support. Within
seven (7) calendar days of the Appellee’s delivery of the Memorandum in Opposition, as applicable, the Appellant shall deliver
to the Appeal Panel and to the Appellee a Reply Memorandum to the Memorandum in Opposition. If the Appellant shall fail to substantially
comply with the requirements of clause (i) of this subparagraph (a), the Appellant shall lose its right to appeal the Arbitration
Award, and the Arbitration Award shall be final. If the Appellee shall fail to deliver the Memorandum in Opposition as required
above, or if the Appellant shall fail to deliver the Reply Memorandum as required above, then the Appellee or the Appellant, as
the case may be, shall lose its right to so deliver the same, and the Appeal shall proceed regardless.

 

    Arbitration Provisions, Page 6

     

    

 

(b)  Subject
to subparagraph (a) above, the parties hereby agree that the Appeal must be heard by the Appeal Panel within thirty (30) calendar
days of the Appeal Commencement Date, and that the Appeal Panel must render its decision within thirty (30) calendar days after
the Appeal is heard (and in no event later than sixty (60) calendar days after the Appeal Commencement Date).

 

5.5 Appeal
Panel Award. The Appeal Panel shall issue its decision (the “Appeal Panel Award”) through the lead arbitrator
on the Appeal Panel. Notwithstanding any other provision contained herein, the Appeal Panel Award shall (a) supersede in its entirety
and make of no further force or effect the Arbitration Award (provided that any protective orders issued by the Original Arbitrator
shall remain in full force and effect), (b) be final and binding upon the parties, with no further rights of appeal, (c) be the
sole and exclusive remedy between the parties regarding any Claims, counterclaims, issues, or accountings presented or pleaded
in the Arbitration, and (d) be promptly payable in United States dollars free of any tax, deduction or offset (with respect to
monetary awards). Any costs or fees, including without limitation attorneys’ fees, incurred in connection with or incident
to enforcing the Appeal Panel Award shall, to the maximum extent permitted by law, be charged against the party resisting such
enforcement. The Appeal Panel Award shall include Default Interest (with respect to monetary awards) at the rate specified in the
Note for Default Interest both before and after the Arbitration Award. Judgment upon the Appeal Panel Award will be entered and
enforced by a state or federal court sitting in Salt Lake County, Utah.

 

5.6 Relief.
The Appeal Panel shall have the right to award or include in the Appeal Panel Award any relief which the Appeal Panel deems
proper under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the Appeal
Panel may not award exemplary or punitive damages.

 

5.7 Fees
and Costs. As part of the Appeal Panel Award, the Appeal Panel is hereby directed to require the losing party (the party being
awarded the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any
statutory fines, penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees
of the Arbitration and the Appeal Panel, and (b) reimburse the prevailing party (the party being awarded the most amount of money
by the Appeal Panel, which, for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees,
or other charges awarded to any part) the reasonable attorneys’ fees, arbitrator and Appeal Panel costs and fees, deposition
costs, other discovery costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party in connection
with the Arbitration (including without limitation in connection with the Appeal).

 

6.  Miscellaneous.

 

6.1 Severability.
If any part of these Arbitration Provisions is found to violate or be illegal under applicable law, then such provision shall
be modified to the minimum extent necessary to make such provision enforceable under applicable law, and the remainder of the Arbitration
Provisions shall remain unaffected and in full force and effect.

 

6.2 Governing
Law. These Arbitration Provisions shall be governed by the laws of the State of Utah without regard to the conflict of laws
principles therein.

 

6.3 Interpretation.
The headings of these Arbitration Provisions are for convenience of reference only and shall not form part of, or affect the interpretation
of, these Arbitration Provisions.

 

6.4 Waiver.
No waiver of any provision of these Arbitration Provisions shall be effective unless it is in the form of a writing signed by the
party granting the waiver.

 

6.5 Time
is of the Essence. Time is expressly made of the essence with respect to each and every provision of these Arbitration Provisions.

 

 

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