THIS COMMON STOCK PURCHASE WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING
THIS COMMON STOCK PURCHASE WARRANT, AGREES FOR THE BENEFIT OF THE COMPANY THAT
SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE
COMPANY, (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT, OR (C) IF REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS. IN ADDITION, A SECURITIES PURCHASE AGREEMENT, DATED THE DATE
HEREOF, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS PRINCIPAL
EXECUTIVE OFFICE, CONTAINS CERTAIN ADDITIONAL AGREEMENTS AMONG THE PARTIES,
INCLUDING, WITHOUT LIMITATION, PROVISIONS WHICH LIMIT THE EXERCISE RIGHTS OF THE
HOLDER.
E-REX, INC.
COMMON STOCK PURCHASE WARRANT
No. 1 Warrant to Purchase 5,000,000 Shares
E-REX, INC., a Nevada corporation (the "Company"), hereby certifies that,
for value received, Auxiliarius Fortunare,LLC, or assigns, is entitled, subject
to the terms set forth below, to purchase from the Company at any time or from
time to time during the period commencing October 14, 2002 and ending October
14, 2004 (the "Exercise Period"), at the Purchase Price (as hereinafter
defined), five million (5,000,000) shares of the fully paid and nonassessable
shares of Common Stock of the Company. The number and character of such shares
of Common Stock and the Purchase Price are subject to adjustment as provided
herein.
This Warrant (this "Warrant"; such term to include any warrants issued in
substitution therefor) is one of a series of one (1) warrants issued in
connection with that certain Securities Purchase Agreement (the "Agreement")
dated of even date herewith among the initial Holder hereof, the Company and
certain other parties thereto.
Capitalized terms used herein not otherwise defined shall have the meanings
ascribed thereto in the Agreement. As used herein the following terms, unless
the context otherwise requires, have the following respective meanings:
(a) The term "Agreement" refers to that certain Securities
Purchase Agreement dated the date herewith among the initial Holder hereof, the
Company and certain other parties hereto.
(b) The term "Company" shall include E-Rex, Inc. and any corpora-
tion that shall succeed or assume the obligations of such corporation hereunder.
(c) The term "Common Stock" includes (a) the Company's common
stock, par value $0.001 per share, (b) any other capital stock of any class or
classes (however designated) of the Company, authorized on or after such date,
the Holders of which shall have the right, without limitation as to amount,
either to all or to a share of the balance of current dividends and liquidating
dividends after the payment of dividends and distributions on any shares
entitled to preference, and the Holders of which shall ordinarily, in the
absence of contingencies, be entitled to vote for the election of a majority of
directors of the Company (even though the right so to vote has been suspended by
the happening of such a contingency) and (c) any other securities into which or
for which any of the securities described in (a) or (b) may be converted or
exchanged pursuant to a plan of recapitalization, reorganization, merger, sale
of assets or otherwise.
(d) The term "Other Securities" refers to any stock (other than
Common Stock) and other securities of the Company or any other person (corporate
or otherwise) that the Holder of this Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of this Warrant, in lieu of or
in addition to Common Stock, or that at any time shall be issuable or shall have
been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 3 or otherwise.
(e) The term "Purchase Price" means $0.008 per share.
(f) The term "Registration Rights Agreement" refers to that
certain Registration Rights Agreement dated the date herewith among the initial
Holder hereof, the Company and certain other parties hereto.
1. Exercise of Warrant.
1.1. Method of Exercise.
(a) This Warrant may be exercised in whole or in part (but not as to a
fractional share of Common Stock), at any time and from time to time during the
Exercise Period by the Holder hereof by delivery of a notice of exercise (a
"Notice of Exercise") in the form attached hereto as Exhibit I via facsimile to
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the Company. Promptly thereafter the Holder shall surrender this Warrant to the
Company at its principal office, accompanied by payment of the Purchase Price
multiplied by the number of shares of Common Stock for which this Warrant is
being exercised (the "Exercise Price"). Payment of the Exercise Price shall be
made by wire transfer to the account of the Company. Upon exercise, the Holder
shall be entitled to receive, one or more certificates, issued in the Holder's
name or in such name or names as the Holder may direct, subject to the
limitations on transfer contained herein, for the number of shares of Common
Stock so purchased. The shares of Common Stock so purchased shall be deemed to
be issued as of the close of business on the date on which the Company shall
have received from the Holder payment of the Exercise Price (the "Exercise
Date").
(b) Notwithstanding anything to the contrary set forth herein, upon
exercise of all or a portion of this Warrant in accordance with the terms
hereof, the Holder shall not be required to physically surrender this Warrant to
the Company. Rather, records showing the amount so exercised and the date of
exercise shall be maintained on a ledger in the form of Annex B attached hereto
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(a copy of which shall be delivered to the Company or transfer agent with each
Notice of Exercise). It is specifically contemplated that the Company hereof
shall act as the calculation agent for all exercises of this Warrant. In the
event of any dispute or discrepancies, such records maintained by the Company
shall be controlling and determinative in the absence of manifest error. The
Holder and any assignee, by acceptance of this Warrant, acknowledge and agree
that, by reason of the provisions of this paragraph, following an exercise of a
portion of this Warrant, the number of shares of Common Stock represented by
this Warrant will be the amount indicated on Annex B attached hereto (which may
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be less than the amount stated on the face hereof).
1.2. Regulation D Restrictions. The Holder hereof represents and
warrants to the Company that it has acquired this Warrant and anticipates
acquiring the shares of Common Stock issuable upon exercise of the Warrant
solely for its own account for investment purposes and not with a view to or for
resale of such securities unless such resale has been registered with the
Commission or an applicable exemption is available therefor. At the time this
Warrant is exercised, the Company may require the Holder to state in the Notice
of Exercise such representations concerning the Holder as are necessary or
appropriate to assure compliance by the Holder with the Securities Act.
1.3. Limitation on Exercise. Notwithstanding the rights of the Holder
to exercise all or a portion of this Warrant as described herein, such exercise
rights shall be limited, solely to the extent set forth in the Agreement as if
such provisions were specifically set forth herein. Specifically, the rights of
the Holder to exercise all or a portion of this Warrant are subject to the
limitation on exercise provisions specified in Section 10.1 of the Agreement.
2. Delivery of Stock Certificates on Exercise. Within five (5)
business days after the exercise of this Warrant, the Company at its expense
(including the payment by it of any applicable issue, stamp or transfer taxes)
will cause to be issued in the name of and delivered to the Holder thereof, or,
to the extent permissible hereunder, to such other person as such Holder may
direct, a certificate or certificates for the number of fully paid and
nonassessable shares of Common Stock (or Other Securities) to which such Holder
shall be entitled on such exercise, plus, in lieu of any fractional share to
which such Holder would otherwise be entitled, cash equal to such fraction
multiplied by the then applicable Purchase Price, together with any other stock
or other securities and property (including cash, where applicable) to which
such Holder is entitled upon such exercise pursuant to Section 1 or otherwise
which certificate or certificates shall be without restrictive legend of any
nature provided that a registration statement has been declared effective in
accordance with the Registration Rights Agreement, and if a registration
statement has not been declared effective, then in accordance with Rule 144.
3. Adjustment of Purchase Price In Certain Events. The Purchase Price
to be paid by the Holder upon exercise of this Warrant, and the consideration to
be received upon exercise of this Warrant, shall be adjusted in case at any time
or from time to time for Capital Reorganizations as provided in the Agreement as
if such provisions were specifically set forth herein.
4. No Impairment. The Company will not, by amendment of its Articles
of Incorporation or through any reorganization, transfer of assets,consoli-
dation, merger, dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder of this Warrant against
impairment. Without limiting the generality of the foregoing, the Company (a)
will not increase the par value of any shares of stock receivable on the
exercise of this Warrant above the amount payable therefor on such exercise, (b)
will take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
stock on the exercise of this Warrant, and (c) will not transfer all or
substantially all of its properties and assets to any other person (corporate or
otherwise), or consolidate with or merge into any other person or permit any
such person to consolidate with or merge into the Company (if the Company is not
the surviving person), unless such other person shall expressly assume in
writing and will be bound by all the terms of this Warrant.
5. Intentionally Left Blank.
6. Notices of Record Date. In the event of
(a) any taking by the Company of a record of the Holders of any class
or securities for the purpose of determining the Holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all or
substantially all the assets of the Company to or consolidation or merger of the
Company with or into any other person, or
(c) any voluntary or involuntary dissolution, liquidation or winding-up
of the Company,
then and in each such event the Company will mail or cause to be mailed to the
Holder of this Warrant a notice specifying (i) the date on which any such record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, and
(ii) the date on which any such reorganization, reclassification, recapitali-
zation, transfer, consolidation, merger, dissolution, liquidation or winding-up
is to take place, and the time, if any, as of which the Holders of record of
Common Stock (or Other Securities) shall be entitled to exchange their shares
of Common Stock (or Other Securities) for securities or other property
deliverable on such reorganization, reclassification, recapitalization, transfer
consolidation, merger, dissolution, liquidation or winding-up. Such notice shall
be mailed at least twenty (20) days prior to the date specified in such notice
on which any action is to be taken.
7. Reservation of Stock Issuable on Exercise of Warrant. The Company
will at all times reserve and keep available, solely for issuance and delivery
on the exercise of this Warrant, all shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of this Warrant.
8. Exchange of Warrant. On surrender for exchange of this Warrant,
properly endorsed and in compliance with the restrictions on transfer set forth
in the legend on the face of this Warrant, to the Company, the Company at its
expense will issue and deliver to or on the order of the Holder thereof a new
Warrant of like tenor, in the name of such Holder or as such Holder (on payment
by such Holder of any applicable transfer taxes) may direct, calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
called for on the face of the Warrant so surrendered.
9. Replacement of Warrant. On receipt of evidence reasonably satisfac-
tory to the Company of the loss, theft, destruction or mutilation of this
Warrant and, in the case of any such loss, theft or destruction of this Warrant,
on delivery of an indemnity agreement or security reasonably satisfactory in
form and amount to the Company or, in the case of any such mutilation, on
surrender and cancellation of this Warrant, the Company at its expense will
execute and deliver, in lieu thereof, a new Warrant of like tenor.
10. Remedies. The Company stipulates that the remedies at law of the
Holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
11. Negotiability, etc. This Warrant is issued upon the following terms,
to all of which each Holder or owner hereof by the taking hereof consents and
agrees:
(a) title to this Warrant may be transferred by endorsement and
delivery in the same manner as in the case of a negotiable instrument
transferable by endorsement and delivery.
(b) any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is empowered to
transfer absolute title hereto by endorsement and delivery hereof to a bona fide
purchaser hereof for value; each prior taker or owner waives and renounces all
of his equities or rights in this Warrant in favor of each such bona fide
purchaser, and each such bona fide purchaser shall acquire absolute title hereto
and to all rights represented hereby;
(c) until this Warrant is transferred on the books of the Company,
the Company may treat the registered Holder hereof as the absolute owner hereof
for all purposes, notwithstanding any notice to the contrary; and
(d) notwithstanding the foregoing, this Warrant may not be sold,
transferred or assigned except pursuant to an effective registration statement
under the Securities Act or pursuant to an applicable exemption therefrom.
12. Registration Rights. The Company is obligated to register the
shares of Common Stock issuable upon exercise of this Warrant in accordance with
the terms of the Registration Rights Agreement.
13. Notices. All notices and other communications from the Company to
the Holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by such Holder or, until any such Holder furnishes to the
Company an address, then to, and at the address of, the last Holder of this
Warrant who has so furnished an address to the Company.
14. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the internal laws of the State of Florida. The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
DATED as of October 14, 2002.
E-REX, INC.
By: /s/ Carl Dilley
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Name: Carl Dilley
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Title: President
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[Corporate Seal]
Attest:
By: Carl Dilley
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Secretary
EXHIBIT I
FORM OF NOTICE OF EXERCISE - WARRANT
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(To be executed only upon exercise
of the Warrant in whole or in part)
To: E-REX, INC.
The undersigned registered Holder of the accompanying Warrant hereby
exercises such Warrant or portion thereof for, and purchases thereunder,
______________ shares of Common Stock (as defined in such Warrant) and herewith
makes payment therefor in the amount and manner set forth below, as of the date
written below. The undersigned requests that the certificates for such shares
of Common Stock be issued in the name of, and delivered to, __________
whose address is _________________________________________________________.
The Exercise Price is paid by check or wire transfer to the account of the
Company in the amount of $________.
Upon exercise pursuant to this Notice of Exercise, the Holder will be in
compliance with the Limitation on Exercise (as defined in the Securities
Purchase Agreement pursuant to which this Warrant was issued).
Dated: ____________________ _____________________________________________
(Name must conform to name of Holder as
specified on the face of the Warrant)
By:_________________________________
Name:_______________________________
Title:______________________________
Address of Holder:________________
____________________________________
____________________________________
Date of exercise:______________________
Insert the number of shares of Common Stock as to which the accompanying
Warrant is being exercised. In the case of a partial exercise, a new Warrant or
Warrants will be issued and delivered, representing the unexercised portion of
the accompanying Warrant, to the holder surrendering the same.