EX 10.1 Common Stock Purchase Warrant


     

    
      

      

    

    THIS
      WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE WARRANT MAY NOT
      BE SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS
      IT HAS BEEN REGISTERED UNDER THOSE LAWS OR UNLESS THE COMPANY HAS RECEIVED
      AN
      OPINION OF COUNSEL SATISFACTORY TO IT THAT SUCH DISPOSITION IS IN COMPLIANCE
      WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

     

    Right
      to
      Purchase 1,900,000 Shares of the
Common
      Stock of Ethos Environmental, Inc.

     

    ETHOS
      ENVIRONMENTAL, INC.

     

    Common
      Stock Purchase Warrant

     

    For
      good
      and valuable consideration, the receipt of which is hereby acknowledged, Ethos
      Environmental, Inc, a Nevada corporation (the “Company”), hereby grants to
      National Advisors, Inc. (the “Holder”), the right, but not the obligation, to
      purchase from the Company at any time or from time to time on or before 5:00
      p.m., Pacific Standard Time on the Expiration Date, as defined below, ONE
      MILLION NINE HUNDRED THOUSAND (1,900,000) fully paid and nonassessable shares
      of
      common stock of the Company (the “Common Stock”) at a purchase price per share
      equal to the Purchase Price, as defined below. The number of such shares of
      Common Stock and the Purchase Price are subject to adjustment as provided in
      this Warrant. The Expiration Date shall be March 31, 2010.

     

    1.  Exercise
      of Warrant.
      

     

    (a)  Cash
      Exercise.
      This
      Warrant may be exercised by the Holder hereof in full or in part at any time
      or
      from time to time until the Expiration Date by surrender of this Warrant and
      the
      subscription form annexed hereto (duly executed by the Holder), to the Company,
      and by making payment, in cash or by certified or official bank check payable
      to
      the order of the Company, in the amount obtained by multiplying (a) the
      number of shares of Common Stock designated by the Holder in the subscription
      form by (b) the Purchase Price then in effect. On any partial exercise the
      Company will forthwith issue and deliver to or upon the order of the Holder
      hereof a modification of this Warrant, providing in the aggregate on the face
      or
      faces thereof for the purchase of the number of shares of Common Stock for
      which
      such Warrant may still be exercised.

     

    (b)  Net
      Exercise.
      In lieu
      of exercising this Warrant as provided above, the Holder may elect to receive,
      without the payment by the Holder of any additional consideration, shares of
      Common Stock equal to the value of this Warrant (or the portion thereof being
      canceled) by surrender of this Warrant at the principal office of the Company
      together with the exercise form attached hereto indicating such election, in
      which event the Company shall issue to the holder hereof or order a number
      of
      Warrant Shares computed using the following formula:

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    
      	 	 	
               

              X
                =
                Y (A - B) ÷ A

            
	
               

              Where:

               

            	
               

              X
                =

               

            	
               

              The
                number of shares of Common Stock to be issued pursuant to this net
                exercise;

               

            
	 	
               

              Y
                =

               

            	
               

              The
                number of shares of Common Stock in respect of which the net issue
                election is made;

               

            
	 	
               

              A
                =

               

            	
               

              The
                fair market value of one share of Common Stock at the time the net
                issue
                election is made;

               

            
	 	
               

              B
                =

               

            	
               

              The
                Exercise Price (as adjusted to the date of the net issuance).

               

            


    

    


     

    For
      purposes of this Section 1(b), the fair market value of one share of Common
      Stock as of a particular date shall be determined as follows: (i) if traded
      on a securities exchange or through the Nasdaq Global Market, the value shall
      be
      deemed to be the average of the closing prices of the securities on such
      exchange or market over the thirty (30) day period ending three (3) days prior
      to the net exercise election; (ii) if traded over-the-counter, the value
      shall be deemed to be the average of the closing bid or sale prices (whichever
      is applicable) over the thirty (30) day period ending three (3) days prior
      to
      the net exercise; and (iii) if there is no active public market, the value
      shall be the fair market value thereof, as determined in good faith by the
      Board
      of Directors of the Company. Notwithstanding the foregoing, the Company shall
      not be obligated to issue more than 200,000 shares to the Holder under this
      Section 1(b) during any 90 day period.

     

    2.  Delivery
      of Stock Certificates, etc., on Exercise. As
      soon
      as practicable after the exercise of this Warrant, and in any event within
      three
      business days thereafter, the Company at its expense (including the payment
      by
      it of any applicable issue or stamp taxes) will cause to be issued in the name
      of and delivered to the Holder hereof a certificate for the number of fully
      paid
      and nonassessable shares of Common Stock (or Other Securities) to which the
      Holder shall be entitled on such exercise, plus, in lieu of any fractional
      share
      to which the Holder would otherwise be entitled, cash equal to such fraction
      multiplied by the then current fair market value (as reasonably determined
      by
      the Company) of one full share, together with any other stock or other
      securities or property (including cash, where applicable) to which the Holder
      is
      entitled upon such exercise. "Other Securities" shall mean any stock (other
      than
      Common Stock) and other securities of the Company or any other person (corporate
      or otherwise) which the Holder 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 which 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 Sections 3 or 4.

     

    3.  Adjustment.

     

    (a)  Initial
      Purchase Price; Subsequent Adjustment of Price and Number of Purchasable
      Shares.
      The
      initial purchase price for shares subject to this Warrant will be $2.50 per
      share (the “Initial Purchase Price”), and will be adjusted from time to time as
      provided below. The Initial Purchase Price or, if such price has been adjusted,
      the price per share of Common Stock as last adjusted pursuant to the terms
      hereof is referred to as the “Purchase Price” herein. Upon each adjustment of
      the Purchase Price, the Holder will thereafter be entitled to purchase, at
      the
      Purchase Price resulting from such adjustment, the number of shares of Common
      Stock obtained by multiplying the Purchase Price in effect immediately before
      such adjustment by the number of shares of Common Stock purchasable pursuant
      to
      this Warrant immediately before such adjustment and dividing the product by
      the
      Purchase Price resulting from such adjustment.

     

    
      
         

      

      
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    (b)  Definitions.
      For
      purposes of this Warrant, the following terms shall have the meanings set forth
      below:

     

      

    
      	 	(i)	
              "Exercise Price" shall mean the price, determined pursuant to
                this
                Section 3, at which shares of Common Stock shall be deliverable upon
                exercise of this Warrant.

               

            
	 	(ii)	
              "Current
                Exercise Price" shall mean the Exercise Price immediately before
                the
                occurrence of any event, which, pursuant to this Section 3, causes an
                adjustment to the Exercise Price.

            
	 	(iii)	
               "Convertible
                Securities" shall mean any indebtedness or shares of stock convertible
                into or exchangeable for Common Stock.

               

            
	 	(iv)	
              "Options"
                shall mean any rights, warrants or options to subscribe for or purchase
                Common Stock or Convertible Securities, including this
                Warrant.

            
	 	(v)	
              "Common
                Stock Outstanding" shall mean the aggregate of all Common Stock
                outstanding and all Common Stock issuable upon exercise of all outstanding
                Options and conversion of all outstanding Convertible
                Securities.

            
	 	(vi)	
              "Common
                Stock Equivalents" shall mean Convertible Securities and rights entitling
                the holder thereof to receive, directly or indirectly, additional
                shares
                of Common Stock without the payment of any consideration by such
                holder
                for such additional shares of Common Stock or Common Stock
                Equivalents.

            
	 	 


    

     

     

    (c)  Adjustments
      to Exercise Price.
      Subject
      to Section 3(c)(13) below, the Exercise
      Price
      in
      effect from time to time shall be subject to adjustment in certain cases as
      follows:

     

    
      	 	(i)	
               Issuance
                of Additional Shares of Common Stock. In
                case the Company shall at any time after the date of this Warrant
                issue or
                sell any Common Stock, Options, Convertible Securities, or Common
                Stock
                Equivalents (hereinafter the "Additional Shares of Common Stock")
                without
                consideration or for a consideration per share less than the Current
                Exercise Price, then such Current Exercise Price shall simultaneously
                with
                such issuance or sale be adjusted to an Exercise Price (calculated
                to the
                nearest cent) determined by multiplying such Current Exercise Price
                by a
                fraction,

            


    

     

    (a)  the
      numerator of which shall be (x) the number of shares of Common Stock
      outstanding at the close of business on the day immediately preceding the date
      of such issuance or sale, plus (y) the number of shares of Common Stock
      which the aggregate consideration received (or by the express provisions hereof
      is deemed to have been received) by the Company for the total number of
      Additional Shares of Common Stock so issued or sold would purchase at such
      then
      Current Exercise Price, and

     

    
      
         

      

      
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    (b)  the
      denominator of which shall be the number of shares of Common Stock outstanding
      at the close of business on the date of such issuance or sale after giving
      effect to such issuance or sale of Additional Shares of Common Stock. For the
      purpose of the calculation described in this Section 3, the number of
      shares of Common Stock outstanding shall include, in addition to the number
      of
      shares of Common Stock actually outstanding, (A) the number of shares of
      Common Stock issuable upon the exercise of this Warrant if fully exercised
      on
      the day immediately preceding the issuance or sale or deemed issuance or sale
      of
      Additional Shares of Common Stock, and (B) the number of shares of Common
      Stock which would be obtained through the exercise or conversion of all Options
      and Convertible Securities outstanding on the day immediately preceding the
      issuance or sale or deemed issuance or sale of Additional Shares of Common
      Stock.

     

    For
      purposes of this Section 3, the following provisions shall also be
      applicable:

     

    (ii)  Cash
      Consideration.
      In case
      of the issuance or sale of Additional Shares of Common Stock for cash, the
      consideration received by the Company therefor shall be deemed to be the amount
      of cash received by the Company for such shares.

     

    (iii)  Non-Cash
      Consideration.
      In case
      of the issuance (otherwise than upon conversion or exchange of Convertible
      Securities) or sale of Additional Shares of Common Stock for consideration
      other
      than cash or for consideration a part of which shall be other than cash, the
      fair value shall be determined reasonably and in good faith by the consent
      or
      vote of the Board of Directors of the Company.

     

    (iv)  Options
      and Convertible Securities.
      In case
      the Company shall in any manner issue or grant any Options or any Convertible
      Securities, the total maximum number of shares of Common Stock issuable upon
      the
      exercise of such Options or upon conversion or exchange of the total maximum
      amount of such Convertible Securities at the time such Convertible Securities
      first become convertible or exchangeable shall (as of the date of issue or
      grant
      of such Options or, in the case of the issue or sale of Convertible Securities
      other than where the same are issuable upon the exercise of Options, as of
      the
      date of such issue or sale) be deemed to be issued and to be outstanding for
      the
      purpose of this Section 3 and to have been issued for the sum of the amount
      (if any) paid for such Options or Convertible Securities and the amount (if
      any)
      payable or upon conversion or exchange of such Convertible Securities at the
      time such Convertible Securities first become convertible or exchangeable;
      provided, however, that, subject to the provisions of Section 3(c)(5), no
      further adjustment of the Current Exercise Price shall be made upon the actual
      issuance of any such Common Stock or Convertible Securities or upon the
      conversion or exchange of any such Convertible Securities.

     

    (v)  Change
      in Conversion Rate.
      If the
      rate at which any Convertible Securities referred to in Section 3(c)(4) are
      convertible into or exchangeable for shares of Common Stock shall change at
      any
      time (other than under or by reason of provisions designed to protect against
      dilution), the Current Exercise Price in effect at the time of such event shall
      forthwith be readjusted to the Exercise Price that would have been in effect
      at
      such time had such Convertible Securities still outstanding provided for such
      changed purchase price, additional consideration or conversion rate, as the
      case
      may be, at the time same were initially granted, issued or sold. If the
      additional consideration (if any) payable upon the conversion or exchange of
      any
      Convertible Securities referred to in Section 3(c)(4), or the rate at which
      any Convertible Securities referred to in Section 3(c)(4) are convertible
      into or exchangeable for shares of Common Stock, shall be reduced at any time
      under or by reason of provisions with respect thereto designed to protect
      against dilution, then in case of the delivery of shares of Common Stock upon
      conversion or exchange of any such Convertible Securities, the Exercise Price
      then in effect hereunder shall, upon issuance of such shares of Common Stock,
      be
      adjusted to such amount as would have been obtained had such Convertible
      Securities never been issued and had adjustments been made only upon the
      issuance of the shares of Common Stock delivered as aforesaid and for the
      consideration actually received for such Convertible Securities and the Common
      Stock.

     

    
      
         

      

      
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    (vi)  Termination
      of Option or Conversion Rights.
      Upon
      the termination or expiration of any right to purchase Common Stock under any
      Option or of any right to convert or exchange Convertible Securities, the
      Current Exercise Price shall, upon such termination, be changed to the Exercise
      Price that would have been in effect at the time of such expiration or
      termination had such Option or Convertible Securities, to the extent outstanding
      immediately prior to such expiration or termination, never been issued, and
      the
      shares of Common Stock issuable thereunder shall no longer be deemed to be
      Common Stock Outstanding.

     

    (vii)  Stock
      Splits; Dividends; Distributions and Combinations.
      If the
      Company shall at any time or from time to time after the date of this Warrant
      fix a record date for the effectuation of a split or subdivision of the
      outstanding shares of Common Stock or the determination of holders of Common
      Stock entitled to receive a dividend or other distribution payable in additional
      shares of Common Stock or Common Stock Equivalents, then, following such record
      date (or the date of such dividend, distribution, split or subdivision if no
      record date is fixed), the Exercise Price shall be appropriately decreased
      so
      that the number of shares of Common Stock issuable on exercise of this Warrant
      shall be increased in proportion to such increase in the number of outstanding
      shares of Common Stock (including for this purpose, Common Stock Equivalents).
      If the number of shares of Common Stock outstanding at any time after the date
      of this Warrant is decreased by a combination of the outstanding shares of
      Common Stock, then, following the record date of such combination, the Exercise
      Price shall be appropriately increased so that the number of shares of Common
      Stock issuable upon exercise of this Warrant shall be decreased in proportion
      to
      such decrease in the number of outstanding shares of Common Stock.

     

    (viii)  Other
      Dividends.
      If the
      Company shall declare a distribution payable in securities of other companies,
      evidence of indebtedness issued by the Company or other companies, assets
      (excluding cash dividends) or options or rights not referred to in
      Section 3(c)(4), then, in each such case for the purpose of this
      subsection 3, the holder of this Warrant shall be entitled to receive,
      without the payment of any additional consideration, a proportionate share
      of
      any such distribution as though it were the holder of the number of shares
      of
      Common Stock of the Company issuable upon the exercise of this Warrant as of
      the
      record date fixed for the determination of the holders of Common Stock of the
      Company entitled to receive such distribution.

     

    
      
         

      

      
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    (ix)  Recapitalizations.
      If at
      any time or from time to time there shall be a recapitalization of the Common
      Stock (other than a subdivision, combination or merger, sale of the voting
      stock
      of the Company or a sale of assets transaction provided for elsewhere in this
      Section 3), provision shall be made so that the holder of this Warrant
      shall thereafter be entitled to receive upon exercise of this Warrant the number
      of shares of stock or other securities or property of the Company or otherwise,
      to which a holder of Common Stock deliverable upon such exercise would have
      been
      entitled on such recapitalization. In any such case, appropriate adjustment
      shall be made in the application of the provisions of this Section 3 with
      respect to the rights of the holder of this Warrant after the recapitalization
      to the end that the provisions of this Section 3 (including adjustment of
      the Exercise Price then in effect and the number of shares purchasable upon
      exercise of this Warrant) shall be applicable after that event as nearly
      equivalent as may be practicable.

     

    (x)  Successive
      Changes.
      The
      above provisions of this Section 3 shall similarly apply to successive
      issuances, sales, dividends or other distributions, subdivisions and
      combinations on or of the Common Stock after the date of this
      Warrant.

     

    (xi)  Other
      Events Altering Exercise Price.
      Upon
      the occurrence of any event not specifically described in this Section 3(c)
      as reducing the Exercise Price that, in the reasonable exercise of the business
      judgment of the Board of Directors of the Company reached in good faith,
      requires, on equitable principles, the reduction of the Exercise Price, the
      Exercise Price will be so equitably reduced.

     

    (xii)  No
      Impairment.
      The
      Company will not, by amendment of its Certificate of Incorporation or through
      any reorganization, recapitalization, transfer of assets, consolidation, 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 to be observed
      or performed hereunder by the Company, but will at all times in good faith
      assist in the carrying out of all the provisions of this Section 3 and in
      the taking of all such action as may be necessary or appropriate in order to
      protect the exercise rights of the holder of this Warrant against
      impairment.

     

    (xiii)  Excluded
      Events.
      Notwithstanding any other provision in this Section 3(c) which is
      inconsistent with or contrary to the terms of this Paragraph 13, the
      Exercise Price shall not be adjusted by virtue of (a) the issuance of
      capital stock to employees, consultants, officers or directors of the Company
      pursuant to stock purchase or stock option plans or agreements approved by
      the
      Board (and not exceeding 20% of the Company's Common Stock Outstanding),
      (b) the issuance of securities in connection with acquisition transactions,
      (c) the issuance of securities to financial institutions, suppliers or
      lessors in connection with commercial credit arrangements, equipment financings
      or similar transactions, (d) exercise of this Warrant, or (e) the
      repurchase of Common Stock shares from the Company's employees, consultants,
      advisors, service providers, officers or Directors at such person's cost (or
      at
      such other price as may be agreed to by the Company's Board of
      Directors).

     

    
      
         

      

      
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    (xiv)  Certificate
      as to Adjustments.
      Upon
      the occurrence of each adjustment or readjustment of the Exercise Price pursuant
      to this Section 3, the Company, at its expense and upon request by the
      holder of this Warrant, shall compute such adjustment or readjustment in
      accordance with the terms hereof and prepare and furnish to the holder of this
      Warrant a certificate setting forth such adjustment or readjustment and showing
      in reasonable detail the facts upon which such adjustment or readjustment is
      based. The Company shall, upon the written request at any time of the holder
      of
      this Warrant, furnish or cause to be furnished to such holder a like certificate
      setting forth (a) such adjustment and readjustment, (b) the Current
      Exercise Price, and (c) the number of shares of Common Stock and the
      amount, if any, of other property which at the time would be received upon
      the
      exercise of this Warrant.

     

    4.  Further
      Assurances.
      The
      Company will take all action that may be necessary or appropriate in order
      that
      the Company may validly and legally issue fully paid and nonassessable shares
      of
      stock, free from all taxes, liens and charges with respect to the issue thereof,
      on the exercise of all or any portion of this Warrant from time to time
      outstanding.

     

    5.  Notices
      of Record Date, etc.

     

    In
      the
      event of:

     

    (a)  any
      taking by the Company of a record of the holders of any class of securities
      for
      the purpose of determining the holders thereof who are entitled to receive
      any
      dividend on, 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
      of the assets of the Company to or the sale, consolidation or merger of the
      Company with, to 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,
      at
      least 20 days prior to such record date, 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, (ii) the date on which any such reorganization,
      reclassification, recapitalization, transfer, consolidation, merger,
      dissolution, liquidation or winding up is to take place, and the time, if any
      is
      to be fixed, 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, and (iii) the amount and character
      of any stock or other securities, or rights or options with respect thereto,
      proposed to be issued or granted, the date of such proposed issue or grant
      and
      the persons or class of persons to whom such proposed issue or grant is to
      be
      offered or made. Such notice shall also state that the action in question or
      the
      record date is subject to the effectiveness of a registration statement under
      the Securities Act of 1933, as amended (the “Securities Act”), or a favorable
      vote of stockholders if either is required. Such notice shall be mailed at
      least
      20 days prior to the date specified in such notice on which any such action
      is
      to be taken or the record date, whichever is earlier.

     

    
      
         

      

      
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    6.  Reservation
      of Stock, etc., Issuable on Exercise of Warrants.
      The
      Company will at all times reserve and keep available out of its authorized
      but
      unissued shares of capital stock, solely for issuance and delivery on the
      exercise of this Warrant, a sufficient number of shares of Common Stock (or
      Other Securities) to effect the full exercise of this Warrant and the exercise,
      conversion or exchange of any other warrant or security of the Company
      exercisable for, convertible into, exchangeable for or otherwise entitling
      the
      Holder to acquire shares of Common Stock (or Other Securities), and if at any
      time the number of authorized but unissued shares of Common Stock (or Other
      Securities) shall not be sufficient to effect such exercise, conversion or
      exchange, the Company shall take such action as may be necessary to increase
      its
      authorized but unissued shares of Common Stock (or Other Securities) to such
      number as shall be sufficient for such purposes.

     

    7.  Transfer
      of Warrant.
      This
      Warrant may only be transferred in compliance with applicable law.

     

    8.  No
      Rights as a Shareholder.
      This
      Warrant shall not entitle the Holder hereof to any voting rights or other rights
      as a shareholder of the Company.

     

    9.  Notices.
      Any
      notices and other communications required or permitted under this Warrant shall
      be effective if in writing and delivered personally or sent by telecopier,
      major
      overnight courier service or registered or certified mail, postage prepaid,
      return receipt requested, addressed as follows:

     

    
      	
              If
                to Holder:

               

            	
              National
                Advisors, Inc.

              3712
                Riviera Drive

              San
                Diego, CA 92109

              Attn: Mr.
                Dennis Schmucker

              Facsimile: (619)
                531-0969

               

            
	
              If
                to the Company:

               

            	
              Ethos
                Environmental, Inc.

              6800
                Gateway Park

              San
                Diego, California 92154

              Attn: Mr.
                Enrique de Vilmorin

              Facsimile (619)
                575-9300

            


    

    


     

    Unless
      otherwise specified herein, such notices or other communications shall be deemed
      effective (a) on the date delivered, if delivered personally, (b) one
      business days after being sent, if sent by a major overnight courier service
      such as Federal Express or DHL, (c) one business day after being sent, if
      sent by telecopier with confirmation of good transmission and receipt, and
      (d) seven business days after being sent, if sent by registered or
      certified mail, postage prepaid. Each of the parties hereto shall be entitled
      to
      specify another address by giving notice as aforesaid to the other.

     

    
      
         

      

      
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    10.  Securities
      Laws.
      By
      acceptance of this Warrant, the Holder represents to the Company that this
      Warrant is being acquired for the Holder’s own account and for the purpose of
      investment and not with a view to, or for sale in connection with, the
      distribution thereof, nor with any present intention of distributing or selling
      the Warrant or the Common Stock issuable upon exercise of the Warrant. The
      Holder acknowledges and agrees that this Warrant and the Common Stock issuable
      upon exercise of this Warrant (if any) have not been (and at the time of
      acquisition by the Holder, will not have been or will not be) registered under
      the Securities Act or under the securities laws of any state, in reliance upon
      certain exemptive provisions of such statutes. The Holder further recognizes
      and
      acknowledges that because this Warrant and the Common Stock issuable upon
      exercise of this Warrant are unregistered, they may not be eligible for resale,
      and may only be resold in the future pursuant to an effective registration
      statement under the Securities Act and any applicable state securities laws,
      or
      pursuant to a valid exemption from such registration requirements.

     

    11.  Legend.
      Unless
      theretofore registered for resale under the Securities Act, each certificate
      for
      shares issued upon exercise of this Warrant shall bear the following or a
      similar legend:

     

    The
      shares represented by this certificate have not been registered under the
      Securities Act of 1933, as amended, or any applicable state securities laws.
      The
      securities have been acquired for investment and may not be resold, transferred
      or assigned in the absence of an effective registration statement for the
      securities under the Securities Act of 1933, as amended, or an opinion of
      counsel acceptable to the Company that such disposition is in compliance with
      the Securities Act and any applicable state securities laws.

     

    12.  Miscellaneous.
      This
      Warrant and any terms 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 governed by and construed in accordance with the laws of the State of
      California; provided, however, that if any California law or laws require or
      permit the application of the laws of any other jurisdiction to this Warrant,
      such California law or laws shall be disregarded with the effect that the
      remaining laws of the State of California shall nonetheless apply. 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.

     

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be executed on its
      behalf by one of its officers thereunto duly authorized.

     

    Dated:
      _____, 2007

     

    ETHOS
      ENVIRONMENTAL, INC.

     

    By: _______________________________

                                                                                       
      Enrique de Vilmorin, President

     


    
      
         

      

      
        9

        
          

        

      

       

    


    FORM
      OF
      EXERCISE

     

    ETHOS
      ENVIRONMENTAL, INC.

     

    (To
      be
      signed only on exercise of Warrant)

     

    TO: ETHOS
      ENVIRONMENTAL, INC.

     

    A. The
      undersigned Holder of the attached original, executed Warrant hereby elects
      to
      exercise its purchase right under such Warrant with respect to shares of Common
      Stock, as defined in the Warrant, of ETHOS Environmental, Inc., a Nevada
      corporation (the “Company”).

     

    B. The
      undersigned Holder is hereby paying the aggregate purchase price for such shares
      of Common Stock (the “Exercise Shares”) (i) by the enclosed certified or
      official bank check payable in United States dollars to the order of the Company
      in the amount of $___________, or (ii) by wire transfer of United States
      funds to the account of the Company in the amount of $______________, which
      transfer has been made before or simultaneously with the delivery of this Form
      of Exercise; or (iii) by electing to exercise the attached Warrant for
      __________ of the shares purchasable under the Warrant pursuant to the net
      exercise provisions of Section 1(b) of the Warrant.

     

    C. Please
      issue a stock certificate or certificates representing the appropriate number
      of
      shares of Common Stock in the name of the undersigned Holder.

     

     

    
      	
               By:

            	
              
              

            
	
               Its:

            	
              
              

            
	
               Dated: