Exhibit 10.2

 

EXCHANGE AGREEMENT

 

This Exchange Agreement (the “Agreement”) is entered into as of the 22nd day of
November, 2019, by and between China Recycling Energy Corporation, a Nevada
corporation (the “Company”) and the investor signatory hereto (the “Holder”),
with reference to the following facts:

 

A. Prior to the date hereof, pursuant to that certain Securities Purchase
Agreement, dated April 15, 2019, by and among the Company and certain investors
(including the Holder) (the “Securities Purchase Agreement”), the Company issued
to the Holder, among other things, a warrant to purchase such aggregate number
of Common Stock, par value $0.001 per share (“Common Stock”), as set forth on
the signature page of the Holder attached hereto (the “Existing Warrant”, as
exercised, the “Existing Warrant Stock”).

 

B. The Company and the Holder further desire to exchange (collectively, the
“Exchange”) the Existing Warrant, in full, into such aggregate number of Common
Stock as set forth on the signature page of the Holder attached hereto (the
“Exchange Stock”), which represents an Exchange ratio of 1 Existing Warrant
Stock :0.6 Common Stock.

 

C. The Exchange is being made in reliance upon the exemption from registration
provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the
“Securities Act”).

 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants hereinafter contained, the parties hereto agree as follows:

 

1. Exchange. Pursuant to Section 3(a)(9) of the Securities Act, the Holder
hereby agrees to convey, assign, transfer and surrender the Existing Warrant to
the Company, in exchange for which the Company agrees to issue the Exchange
Stock to the Holder. On the date hereof, in connection with the Exchange, the
Company shall cause its transfer agent to deliver to the Holder the Exchange
Stock by electronic delivery at the applicable balance account at the Depositary
Trust Company (“DTC”) in accordance with the instructions set forth on Schedule
A within two business days of this Agreement subject to rule 144. Effective upon
the Holder’s receipt of such Exchange Stock, the Existing Warrant held by the
Holder will be deemed cancelled and all rights of the Holder thereunder will
terminate. As soon as commercially practicable following the date hereof, the
Holder shall return the original certificates with respect to the Existing
Warrant to the Company (or a lost warrant affidavit in form and substance
reasonably acceptable to the Company).

  

 

 

 

2. Representations and Warranties. As of the date hereof:

 

2.1 Organization and Qualification. Each of the Company and each of its
subsidiaries are entities duly organized and validly existing and in good
standing under the laws of the jurisdiction in which they are formed, and have
the requisite power and authority to own their properties and to carry on their
business as now being conducted and as presently proposed to be conducted. Each
of the Company and each of its subsidiaries is duly qualified as a foreign
entity to do business and is in good standing in every jurisdiction in which its
ownership of property or the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not reasonably be expected to have a
Material Adverse Effect (as defined below). As used in this Agreement, “Material
Adverse Effect” means any material adverse effect on (i) the business,
properties, assets, liabilities, operations (including results thereof),
condition (financial or otherwise) or prospects of the Company or any
subsidiary, individually or taken as a whole, (ii) the transactions contemplated
hereby or (iii) the authority or ability of the Company or any of its
subsidiaries to perform any of their respective obligations under this
Agreement.

   

2.2 Authorization and Binding Obligation. The Company has the requisite power
and authority to enter into and perform its obligations under this Agreement and
to consummate the Exchange (including, without limitation, the issuance of the
Exchange Stock) in accordance with the terms hereof. The execution and delivery
of this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby, including, without limitation, the issuance of
the Exchange Stock has been duly authorized by the Company’s Board of Directors
and no further filing, consent, or authorization is required by the Company, its
Board of Directors or its shareholders. This Agreement has been duly executed
and delivered by the Company, and constitutes the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
its respective terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the
enforcement of applicable creditors’ rights and remedies and except as rights to
indemnification and to contribution may be limited by federal or state
securities laws.

 

2.3 No Conflict. The execution, delivery and performance of this Agreement by
the Company and the consummation by the Company of the transactions contemplated
hereby and thereby (including, without limitation, the issuance of the Exchange
Stock) will not (i) result in a violation of the articles or certificate of
incorporation or any other organizational documents of the Company or any of its
subsidiaries, (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Company or any of its
subsidiaries is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including foreign, federal and state
securities laws and regulations and the rules and regulations of the Nasdaq
Capital Market (the “Principal Market”) and including all applicable federal
laws, rules and regulations) applicable to the Company or any of its
subsidiaries or by which any property or asset of the Company or any of its
subsidiaries is bound or affected except, in the case of clause (ii) or (iii)
above, to the extent such violations that would not reasonably be expected to
have a Material Adverse Effect.

 

2.4 Not a Shell Company. 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 Securities Act.

  

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2.5 No Modifications. No written document, agreement, instrument, contract,
amendment or modification to the Existing Warrants exists that supplements,
modifies or amends the Existing Warrants.

   

2.6 No Consents. Neither the Company nor any subsidiary is required to obtain
any consent from, authorization or order of, or make any filing or registration
with (other than the filing with the Securities and Exchange Commission (the
“SEC”) of a Form D with the SEC, any other filings as may be required by any
state securities agencies, and notification to the Principal Market by means of
a listing of additional stock notification in respect of the Exchange Stock as
required by Section 6 hereof), any court, governmental agency or any regulatory
or self-regulatory agency or any other person, in order for the Company to
execute, deliver or perform any of its respective obligations under or
contemplated by this Agreement, in each case, in accordance with the terms
hereof or thereof. All consents, authorizations, orders, filings and
registrations which the Company or any subsidiary is required to obtain pursuant
to the preceding sentence have been obtained or effected on or prior to the date
hereof, and neither the Company nor any of its subsidiaries are aware of any
facts or circumstances which might prevent the Company or any of its
subsidiaries from obtaining or effecting any of the registration, application or
filings contemplated by this Agreement.

 

2.7 Securities Law Exemptions. Assuming the accuracy of the representations and
warranties of the Holder contained herein, the offer and issuance by the Company
of the Exchange Stock is exempt from registration under the Securities Act
pursuant to the exemption provided by Section 3(a)(9) thereof.

 

2.8 Status of Warrants; Issuance of Exchange Stock. The Existing Warrants were
authorized by all necessary company action and validly issued and executed, and
the Company’s signatory had full corporate or other requisite authority to
execute such agreements to bind the Company. Upon issuance in accordance
herewith, the Exchange Stock, when issued, will be validly issued, fully paid
and nonassessable and free from all preemptive or similar rights, mortgages,
defects, claims, liens, pledges, charges, taxes, rights of first refusal,
encumbrances, security interests and other encumbrances (collectively “Liens”)
with respect to the issue thereof, with the holders being entitled to all rights
accorded to a holder of Common Stock. By virtue of Section 3(a)(9) and Rule
144(d)(iii)(2) under the Securities Act, each of the Exchange Stock will have a
Rule 144 holding period that will be deemed to have commenced as of April 17,
2019, which was the date of the payment for the Existing Warrant by the Holder.

 

2.9 Transfer Taxes. On the date hereof, all share transfer or other taxes (other
than income or similar taxes) which are required to be paid in connection with
the issuance of the Exchange Stock will be, or will have been, fully paid or
provided for by the Company, and all laws imposing such taxes will be or will
have been complied with.

  

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2.10 SEC Documents; Financial Statements. During the two (2) years prior to the
date hereof, the Company has filed all reports, schedules, forms, proxy
statements, statements and other documents required to be filed by it with the
SEC pursuant to the reporting requirements of the 1934 Act, and all exhibits and
appendices included therein (other than Exhibits 99.1 to Form 8-K) and financial
statements, notes and schedules thereto and documents incorporated by reference
therein being hereinafter referred to as the “SEC Documents”). The Company has
delivered or has made available to the Holder or its representatives true,
correct and complete copies of each of the SEC Documents not available on the
EDGAR system. As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto as in effect as of the time of filing, except that
they have been restated/amended and filed with SEC. Such financial statements
have been prepared in accordance with generally accepted accounting principles
(“GAAP”), consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments which will not be material, either individually or in the
aggregate). No other information provided by or on behalf of the Company to the
Holder which is not included in the SEC Documents (including, without
limitation, information in the disclosure schedules to this Agreement) contains
any untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstance under which they are or were made, not misleading. The Company is
not currently contemplating to amend or restate any of the financial statements
(including, without limitation, any notes or any letter of the independent
accountants of the Company with respect thereto) included in the SEC Documents
(the “Financial Statements”), nor is the Company currently aware of facts or
circumstances which would require the Company to amend or restate any of the
Financial Statements, in each case, in order for any of the Financials
Statements to be in compliance with GAAP and the rules and regulations of the
SEC. The Company has not been informed by its independent accountants that they
recommend that the Company amend or restate any of the Financial Statements or
that there is any need for the Company to amend or restate any of the Financial
Statements.

 

2.11 Litigation. There is no action, suit, arbitration, proceeding, inquiry or
investigation before or by the Principal Market, any court, public board, other
Governmental Entity, self-regulatory organization or body pending or, to the
knowledge of the Company, threatened against or affecting the Company or any of
its subsidiaries, the Common Stock or any of the Company’s officers or directors
that would reasonably be expected to have a Material Adverse Effect on the
Company or its Subsidiaries, whether of a civil or criminal nature or otherwise,
in their capacities as such. No director, officer or employee of the Company or
any of its subsidiaries has willfully violated 18 U.S.C. §1519 or engaged in
spoliation in reasonable anticipation of litigation. Without limitation of the
foregoing, there has not been, and to the knowledge of the Company, there is not
pending or contemplated, any investigation by the SEC involving the Company, any
of its subsidiaries or any current or former director or officer of the Company
or any of its subsidiaries. The SEC has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by the Company
under the Securities Act or the 1934 Act. Neither the Company nor any of its
subsidiaries is subject to any order, writ, judgment, injunction, decree,
determination or award of any governmental agency.

  

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3. Holder’s Representations and Warranties. As a material inducement to the
Company to enter into this Agreement and consummate the Exchange, the Holder
represents, warrants and covenants with and to the Company as follows:

 

3.1 Reliance on Exemptions. The Holder understands that the Exchange Stock are
being offered and exchanged in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and the
Holder’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Holder set forth herein and in this
Agreement in order to determine the availability of such exemptions and the
eligibility of the Holder to acquire the Exchange Stock.

 

3.2 No Governmental Review. The Holder understands that no United States federal
or state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Exchange Stock or the fairness or
suitability of the investment in the Exchange Stock nor have such authorities
passed upon or endorsed the merits of the offering of the Exchange Stock.

 

3.3 Validity; Enforcement. This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Holder and shall constitute the legal,
valid and binding obligations of the Holder enforceable against the Holder in
accordance with their respective terms, except as such enforceability may be
limited by general principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies.

 

3.4 No Conflicts. The execution, delivery and performance by the Holder of this
Agreement, and the consummation by the Holder of the transactions contemplated
hereby will not (i) result in a violation of the organizational documents of the
Holder or (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Holder is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws) applicable to the Holder, except
in the case of clauses (ii) and (iii) above, for such conflicts, defaults,
rights or violations which would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the ability of the
Holder to perform its obligations hereunder.

  

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3.5 Investment Risk; Sophistication. The Holder is acquiring the Exchange Stock
hereunder, and the Holder acquired Existing Warrant in the ordinary course of
its business. The Holder has, and at the time of the grant of the Existing
Warrant had, such knowledge, sophistication, and experience in business and
financial matters so as to be capable of evaluation of the merits and risks of
the prospective investment in the Existing Warrant and Exchange Stock,
respectively, and has so evaluated the merits and risk of such investment. The
Holder is and was at the time that it acquired the Existing Warrant an
“accredited investor” as defined in Regulation D under the Securities Act.

 

3.6 Ownership of Existing Warrants. The Holder owns the Existing Warrants free
and clear of any Liens (other than the obligations pursuant to this Agreements
and applicable securities laws).

 

3.7 Additional Rule 144 Representations. The Holder represents that Holder is
not now and has not been during the preceding three months an affiliate of the
Company. Holder acknowledges that the transfer agent of the Company may rely on
the representation included in this Section 3.7 of this Agreement.

   

4. Disclosure of Transaction. The Company shall, on or before 8:30 a.m., New
York City Time, on the first business day after the date of this Agreement, file
a Current Report on Form 8-K describing the terms of the transactions
contemplated hereby in the form required by the 1934 Act and attaching this
Agreement as an exhibit to such filing (including all attachments, the “8-K
Filing”). From and after the filing of the 8-K Filing, the Company shall have
disclosed all material, non-public information (if any) provided up to such time
to the Holder by the Company or any of its subsidiaries or any of their
respective officers, directors, employees or agents. In addition, effective upon
the filing of the 8-K Filing, the Company acknowledges and agrees that any and
all confidentiality or similar obligations under any agreement with respect to
the transactions contemplated by this Agreement or as otherwise disclosed in the
8-K Filing, whether written or oral, between the Company, any of its
subsidiaries or any of their respective officers, directors, affiliates,
employees or agents, on the one hand, and any of the Holder or any of their
affiliates, on the other hand, shall terminate. Without the prior written
consent of the Holder (which may be granted or withheld in the Holder’s sole
discretion), except as required by applicable law, the Company shall not (and
shall cause each of its Subsidiaries and affiliates to not) disclose the name of
the Holder in any filing, announcement, release or otherwise.

 

5. No Integration. None of the Company, its subsidiaries, any of their
affiliates, or any person acting on their behalf shall, directly or indirectly,
make any offers or sales of any security (as defined in the Securities Act) or
solicit any offers to buy any security or take any other actions, under
circumstances that would require registration of any of the Exchange Stock under
the Securities Act or cause this offering of the Exchange Stock to be integrated
with such offering or any prior offerings by the Company for purposes of
Regulation D under the Securities Act.

 

6. Listing. The Company shall use reasonable best efforts to secure the listing
or designation for quotation (as applicable) of all of the Exchange Stock upon
the Principal Market (subject to official notice of issuance) and shall maintain
such listing of all the Exchange Stock from time to time issuable under the
terms of this Agreement. The Company shall maintain the Common Stock’
authorization for quotation on the Principal Market. Neither the Company nor any
of its subsidiaries shall take any action which would be reasonably expected to
result in the delisting or suspension of the Common Stock on the Principal
Market other than that disclosed in Form 8-K by the Company. The Company shall
pay all fees and expenses in connection with satisfying its obligations under
this Section 6.

  

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7. Holding Period, Tacking and Legal Opinion. For the purposes of Rule 144, the
Company acknowledges that the holding period of the Exchange Stock by virtue of
Section 3(a)(9) and Rule 144(d)(iii)(2) under the Securities Act will be deemed
to have commenced as of April 17, 2019, the date of the payment of the Existing
Warrant by the Holder and may be tacked onto the holding period of the Existing
Warrants, and the Company agrees not to take a position contrary to this Section
7. The Company acknowledges and agrees that, in reliance on the Holder’s
representations contained in Section 3 of this Agreement: (i) upon issuance in
accordance with the terms hereof, the Exchange Stock are, as of the date hereof,
eligible to be resold pursuant to Rule 144 and (ii) the Company is not aware of
any event reasonably likely to occur that would reasonably be expected to result
in the Exchange Stock becoming ineligible to be resold by the Holder pursuant to
Rule 144. The Company and the Holder agree that, in connection with any resale
of any Exchange Stock pursuant to Rule 144, the Holder shall be required to
provide reasonable assurances that such Exchange Stock are eligible for resale,
assignment or transfer under Rule 144, but the Holder shall not be required to
obtain an opinion of Holder’s counsel. The Company shall be responsible for any
transfer agent fees or DTC fees or legal fees of the Company’s counsel with
respect to the removal of legends, if any, or issuance of Exchange Stock in
accordance herewith. The Company understands that the representations and
agreements of the Company in this Section 7 are a material inducement to
Holder’s decision to consummate the transactions contemplated herein.

   

8. Blue Sky. The Company shall make all filings and reports relating to the
Exchange required under applicable securities or “Blue Sky” laws of the states
of the United States following the date hereof, if any.

 

9. Most Favored Nation. The Company hereby represents and warrants as of the
date hereof and covenants and agrees from and after the date hereof that none of
the terms offered to any person with respect to any warrants issued pursuant to
the Securities Purchase Agreement and/or any consent, release, amendment,
settlement or waiver relating to the terms, conditions and transactions
contemplated hereby (each a “Settlement Document”), is or will be more favorable
to such person than those of the Holder and this Agreement. For the avoidance of
doubt, this includes rights of participation, rights of first refusal or similar
rights to subscribe to additional securities in the Company

 

10. Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be
construed under the laws of the state of New York, without regard to principles
of conflicts of law or choice of law that would permit or require the
application of the laws of another jurisdiction. The Company and the Holder each
hereby agrees that all actions or proceedings arising directly or indirectly
from or in connection with this Agreement shall be litigated only in the Supreme
Court of the State of New York or the United States District Court for the
Southern District of New York located in New York County, New York. The Company
and the Holder each consents to the exclusive jurisdiction and venue of the
foregoing courts and consents that any process or notice of motion or other
application to either of said courts or a judge thereof may be served inside or
outside the State of New York or the Southern District of New York by generally
recognized overnight courier or certified or registered mail, return receipt
requested, directed to such party at its or his address set forth below (and
service so made shall be deemed “personal service”) or by personal service or in
such other manner as may be permissible under the rules of said courts. THE
COMPANY AND THE HOLDER EACH HEREBY WAIVES ANY RIGHT TO A JURY TRIAL IN
CONNECTION WITH ANY LITIGATION PURSUANT TO THIS AGREEMENT.

  

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11. Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party; provided that a facsimile signature shall be
considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile
signature.

   

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

 

13. Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

 

14. Entire Agreement; Amendments. This Agreement supersedes all other prior oral
or written agreements between the Holder, the Company, their affiliates and
persons acting on their behalf with respect to the matters discussed herein, and
this Agreement and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor the Holder makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Agreement may be
amended other than by an instrument in writing signed by the Company and the
Holder. No provision hereof may be waived other than by an instrument in writing
signed by the party against whom enforcement is sought.

 

15. Notices. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement shall be given in
accordance with the Securities Purchase Agreement or to such other address
and/or facsimile number and/or to the attention of such other person as the
recipient party has specified by written notice given to each other party five
(5) days prior to the effectiveness of such change.

 

16. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns. N party
may assign some or all of its rights hereunder without the consent of the other
party.

 

17. No Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
person.

  

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18. Survival of Representations. The representations and warranties of the
Company and the Holder contained in Sections 2 and 3, respectively, will survive
the closing of the transactions contemplated by this Agreement.

 

19. 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 any 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.

  

20. Independent Nature of Investor’s Obligations and Rights. The obligations of
the Holder under this Agreement are several and not joint with the obligations
of any other Holder, and the Holder shall not be responsible in any way for the
performance of the obligations of any other Holder under any other Agreement.
Nothing contained herein or in any other Agreement, and no action taken by the
Holder pursuant hereto, shall be deemed to constitute the Holder and other
Holders as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Holder and other Holders are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated by this Agreement or any other Agreement and the
Company acknowledges that, to the best of its knowledge, the Holder and the
other Holders are not acting in concert or as a group with respect to such
obligations or the transactions contemplated by this Agreement or any other
Agreement. The Company and the Holder confirm that the Holder has independently
participated in the negotiation of the transactions contemplated hereby with the
advice of its own counsel and advisors. The Holder shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement, and it shall not be necessary for any
other Holder to be joined as an additional party in any proceeding for such
purpose. The parties hereto hereby further acknowledge and agree that each other
Agreement shall be negotiated separately with each other Holder and shall not in
any way be construed as the Holder or any other Holder acting in concert or as a
group with respect to the purchase, disposition or voting of securities of the
Company or otherwise.

 

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IN WITNESS WHEREOF, Holders and the Company have executed this Agreement as of
the date set forth on the first page of this Agreement.

  

  COMPANY:       CHINA RECYCLING ENERGY CORPORATION       By:       Name: 
Guohua Ku     Title: Chairman & CEO

  

 

 

 

IN WITNESS WHEREOF, Holders and the Company have executed this Agreement as of
the date set forth on the first page of this Agreement.

  

  HOLDER:       By:       Name:     Title:       Number of Existing Warrant
Stock issuable upon exercise of Existing Warrants*:       Number of shares of
Exchange Stock       *Without regard to any limitations on exercise set forth in
the Existing Warrants