WARRANT ANTIDILUTION AGREEMENT
THIS WARRANT ANTIDILUTION AGREEMENT (the "Agreement") is entered into
as of December 22, 2000, by and among E-REX, INC., a corporation duly organized
and existing under the laws of the State of Nevada (the "Company") and Swartz
Private Equity, LLC (hereinafter referred to as "Swartz").
RECITALS:
WHEREAS, pursuant to the Company's offering ("Equity Line") of up to
Fifteen Million Dollars ($15,000,000), excluding any funds paid upon exercise of
the Warrants, of Common Stock of the Company pursuant to that certain Investment
Agreement (the "Investment Agreement") between the Company and Swartz dated on
or about December 22, 2000, the Company has agreed to sell and Swartz has agreed
to purchase, from time to time as provided in the Investment Agreement, shares
of the Company's Common Stock for a maximum aggregate offering amount of Fifteen
Million Dollars ($15,000,000);
WHEREAS, pursuant to the terms of the Investment Agreement, the Company
has agreed, among other things, to issue to Swartz Commitment Warrants, as
defined in the Investment Agreement, to purchase a number of shares of Common
Stock, exercisable for seven (7) years from their respective dates of issuance;
and
WHEREAS, unless otherwise noted, capitalized terms shall have the
meanings ascribed to them in the Investment Agreement.
TERMS:
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in Agreement and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
1. Issuance of Commitment Warrants. As compensation for entering into the Equity
Line, Swartz received a warrant convertible into 2,700,000 shares of the
Company's Common Stock, in the form attached hereto as Exhibit A
(the "Commitment Warrants").
2. Issuance of Additional Warrants. On each six month anniversary of the date of
issuance of the Commitment Warrant (each, a "Six Month Anniversary Date"), the
Company shall issue to the Investor additional warrants (the "Additional
Warrants"), to purchase a number of shares of Common Stock, if necessary, such
that the sum of the number of Commitment Warrants and the number of Additional
Warrants issued to Investor shall equal at least "Y%" of the number of fully
diluted shares of Common Stock of the Company on such Six Month Anniversary Date
(not including any shares issued or issuable to Swartz), where "Y" shall
initially equal 9.0%, and shall be reduced by 0.5% for each Six Month
Anniversary Date after the first Six Month Anniversary Date. The Additional
Warrants shall initially be exerciseable at the same price as the Commitment
Warrants (as most recently reset), shall have the same reset provisions as the
Commitment Warrants (which resets shall occur on each six month anniversary of
the date of
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issuance of the applicable Additional Warrant throughout the term of
the applicable Additional Warrant), shall have piggyback registration rights and
shall have a 7-year term.
3. Opinion of Counsel. Concurrently with the issuance and delivery of the
Commitment Opinion (as defined in the Investment Agreement) to the Investor, or
on the date that is six (6) months after the date of this Agreement, whichever
is sooner, the Company shall deliver to the Investor an Opinion of Counsel
(signed by the Company's independent counsel) covering the issuance of the
Commitment Warrants and the Additional Warrants, and the issuance and resale of
the Common Stock issuable upon exercise of the Warrants and the Additional
Warrants.
4. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia applicable to agreements made
in and wholly to be performed in that jurisdiction, except for matters arising
under the Act or the Securities Exchange Act of 1934, which matters shall be
construed and interpreted in accordance with such laws.
5. Term. This Agreement shall terminate on the Termination Date of the
Investment Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
this 22nd day of December, 2000.
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E-REX, INC. SUBSCRIBER:
SWARTZ PRIVATE EQUITY, LLC.
By: ________________________________ By: ________________________________
Carl E. Dilley, President & CEO Eric S. Swartz, Manager
E-Rex, Inc. 300 Colonial Center Parkway
8890 Coral Way #220 Suite 300
Miami, FL 33165 Roswell, GA 30076
Telephone: (305) 554-9903 Telephone: (770) 640-8130
Facsimile: (305) 552-5149 Facsimile: (770) 640-7150
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