[THE LEBRECHT GROUP, APLC LETTERHEAD]
October 15, 2001
E-Rex, Inc.
11645 Biscayne Boulevard, Suite 210
Miami, FL 33181
Attn: Carl E. Dilley, President
RE: FEE PROPOSAL
Dear Mr. Dilley:
This letter will confirm our understanding whereby you have agreed to issue
to Brian A. Lebrecht, principal of The Lebrecht Group, APLC, 470,000 shares of
common stock (the "Shares") of E-Rex, Inc. (the "Company") as partial
consideration for legal services rendered to the Company in the area of general
corporate legal services and preparing the Company's filings as required by the
Securities Exchange Act of 1934 (the "Services"). Upon sale of any or all of
the Shares, an amount equal to 75% of the net proceeds will be applied as a
credit against amounts due from the Company to The Lebrecht Group, APLC for the
Services.
As additional consideration for the Services, you have agreed to issue to
Mr. Lebrecht warrants to acquire up to $20,000 in Company common stock as set
forth in the proposed Warrant Agreement attached hereto as Exhibit A (the
"Warrants"). The Warrants will be exercisable for a period of 24 months at an
exercise price equal to 50% of the market price of the shares to be acquired, as
defined in the Warrant Agreement.
If this letter correctly sets forth our agreement, please indicate by your
signature below. Other than as set forth herein, the terms and conditions of
the Engagement Agreement between the Company and The Lebrecht Group, APLC shall
remain in full force and effect.
Sincerely,
/s/ Brian A. Lebrecht
___________________________
Brian A. Lebrecht, Esq.
The Lebrecht Group, APLC
The undersigned hereby confirms and agrees that this letter, executed and
effective this 15th day of October, 2001, sets forth my understanding and
agreement with The Lebrecht Group, APLC.
E-Rex, Inc.
a Nevada corporation
/s/ Carl E. Dilley
____________________________________
By: Carl E. Dilley
Its: President
EXHIBIT A
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED ("THE ACT"), OR THE SECURITIES LAWS OF
ANY STATE, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE
144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION
OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE
REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM
REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.
WARRANT
E-Rex, Inc.
(Incorporated under the laws of the State of Nevada)
THIS IS TO CERTIFY that, for value received, Brian A. Lebrecht (the "Holder") is
entitled, subject to the terms and conditions set forth herein, to purchase from
E-Rex, Inc. (the "Company") that number of shares of common stock of the Company
equal to the Principal Value divided by the Closing Price (the "Warrant
Securities"). For purposes hereof, the Principal Value shall be equal to Twenty
Thousand Dollars ($20,000.00), minus any amount of the Principal Value
previously exercised. For purposes hereof, the Closing Price shall be fifty
percent (50%) of the closing bid price on the day immediately before the date of
exercise.
1. EXERCISABILITY. This Warrant may be exercised in whole or in part at
any time, or from time to time, between the date of October 15, 2001 and 5:00
p.m. Pacific Time on October 15, 2003, by presentation and surrender hereof to
the Company of a notice of election to purchase duly executed and accompanied by
payment by check or wire transfer of the applicable amount of the Principal
Value then exercised.
2. MANNER OF EXERCISE. In case of the purchase of less than all the
Warrant Securities, the Company shall cancel this Warrant upon the surrender
hereof and shall execute and deliver a new warrant of like tenor for the balance
of the Warrant Securities. Upon the exercise of this Warrant, the issuance of
certificates for securities, properties or rights underlying this Warrant shall
be made forthwith (and in any event within three (3) business days thereafter)
without charge to the Holder including, without limitation, any tax that may be
payable in respect of the issuance thereof: provided, however, that the Company
shall not be required to pay any tax in respect of income or capital gain of the
Holder.
If and to the extent this Warrant is exercised, in whole or in part, the
Holder shall be entitled to receive a certificate or certificates representing
the Warrant Securities so purchased, upon presentation and surrender to the
Company of the form of election to purchase attached hereto duly executed, and
accompanied by payment of the purchase price.
3. NO REQUIREMENT TO EXERCISE. Nothing contained in this Warrant shall
be construed as requiring the Holder to exercise this Warrant prior to or in
connection with the effectiveness of a registration statement.
4. NO STOCKHOLDER RIGHTS. Unless and until this Warrant is exercised,
this Warrant shall not entitle the Holder hereof to any voting rights or other
rights as a stockholder of the Company, or to any other rights whatsoever except
the rights herein expressed, and, no dividends shall be payable or accrue in
respect of this Warrant.
5. EXCHANGE. This Warrant is exchangeable upon the surrender hereof by
the Holder to the Company for new warrants of like tenor representing in the
aggregate the right to purchase the number of Warrant Securities purchasable
hereunder, each of such new warrants to represent the right to purchase such
number of Warrant Securities as shall be designated by the Holder at the time of
such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant, and, in case of
loss, theft or destruction, of indemnity or security reasonably satisfactory to
it and reimbursement to the company of all reasonable expenses incidental
thereto, and upon surrender and cancellation hereof, if mutilated, the Company
will make and deliver a new warrant of like tenor and amount, in lieu hereof.
6. ELIMINATION OF FRACTIONAL INTERESTS. The Company shall not be
required to issue certificates representing fractions of securities upon the
exercise of this Warrant, nor shall it be required to issue scrip or pay cash in
lieu of fractional interests. All fractional interests shall be eliminated by
rounding any fraction up to the nearest whole number of securities, properties
or rights receivable upon exercise of this Warrant.
7. RESERVATION AND LISTING OF SECURITIES. The Company shall at all
times reserve and keep available out of its authorized shares of Common Stock or
other securities, solely for the purpose of issuance upon the exercise of this
Warrant, such number of shares of Common Stock or other securities, properties
or rights as shall be issuable upon the exercise hereof. The Company covenants
and agrees that, upon exercise of this Warrant and payment of the Principal
Value, all shares of Common Stock and other securities issuable upon such
exercise shall be duly and validly issued, fully paid, non-assessable and not
subject to the preemptive rights of any stockholder.
8. NOTICES TO HOLDER. If at any time prior to the expiration of this
Warrant or its exercise, any of the following events shall occur:
(a) the Company shall take a record of the holders of any class of its
securities for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or distribution
payable otherwise than out of current or retained earnings, as indicated by the
accounting treatment of such dividend or distribution on the books of the
Company; or
(b) the Company shall offer to all the holders of a class of its
securities any additional shares of capital stock of the Company or securities
convertible into or exchangeable for shares of capital stock of the Company, or
any option or warrant to subscribe therefor; or
(c) a dissolution, liquidation or winding up of the Company (other than in
connection with a consolidation or merger) or a sale of all or substantially all
of its property, assets and business as an entirety shall be proposed.
then, in any one or more said events, the Company shall give written notice of
such event to the Holder at least fifteen (15) days prior to the date fixed as a
record date or the date of closing the transfer books for the determination of
the stockholder entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale. Such notice shall
specify such record date or the date of closing the transfer books, as the case
may be.
9. TRANSFERABILITY. This Warrant shall not be transferable by the
Holder.
10. INFORMATIONAL REQUIREMENTS. The Company will transmit to the
Holder such information, documents and reports as are generally distributed to
stockholders of the Company concurrently with the distribution thereof to such
stockholders.
11. NOTICE. Notices to be given to the Company or the Holder shall be
deemed to have been sufficiently given if delivered personally or sent by
overnight courier or messenger or sent by registered or certified mail (air mail
if overseas), return receipt requested, or by telex, facsimile transmission,
telegram or similar means of communication. Notices shall be deemed to have
been received on the date of personal delivery, telex, facsimile transmission,
telegram or similar means of communication, or if sent by certified or
registered mail, return receipt requested, shall be deemed to be delivered on
the third business day after the date of mailing. The address of the Company
and of the Holder shall be as set forth in the Subscription Agreement.
12. CONSENT TO JURISDICTION AND SERVICE. The Company consents to the
jurisdiction of any court of the State of California, and of any federal court
located in California, in any action or proceeding arising out of or in
connection with this Warrant. The Company waives personal service of any
summons, complaint or other process in connection with any such action or
proceeding and agrees that service thereof may be made, by certified mail
directed to the Company at the location provided in Section 11 hereof, or, in
the alternative, in any other form or manner permitted by law. Orange County,
California shall be proper venue.
13. SUCCESSORS. All the covenants and provisions of this Warrant shall
be binding upon and inure to the benefit of the Company, the Holder and their
respective legal representatives, successors and assigns.
14. ATTORNEYS FEES. In the event the Investors or any holder hereof
shall refer this Warrant to an attorney to enforce the terms hereof, the Company
agrees to pay all the costs and expenses incurred in attempting or effecting
collection hereunder, including reasonable attorney's fees, whether or not suit
is instituted.
15. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED, CONSTRUED AND
INTERPRETED UNDER THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO
THE RULES GOVERNING CONFLICTS OF LAW.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
the signature of its President and its seal affixed and attested by its
Secretary and to be delivered in Miami, Florida.
Dated: October 15, 2001 E-Rex, Inc.
/s/ Carl E. Dilly
__________________________________
By: Carl E. Dilley
Its: President
[FORM OF ELECTION TO PURCHASE]
The undersigned, the holder of the attached Warrant, hereby irrevocably
elects to exercise the purchase right represented by this Warrant Certificate
for, and to purchase securities of E-Rex, Inc. and herewith makes payment of
$______ therefor, and requests that the certificates for such securities be
issued in the name of, and delivered to _______________________, whose address
is _________________________________________.
Dated: ____________________, 20___ ___________________________________
By: ___________________________
(Signature must conform in all
respects to name of holder as specified
on the face of the Warrant Certificate)
________________________________________
(Insert Social Security or Other
Identifying Number of Holder)