Document:

ex10-4.htm

     

    
      

      

    

    
      Exhibit
B to Securities Purchase Agreement

      

      Warrant
No. 2008-___________

       

      ETHOS
ENVIRONMENTAL, INC.

      (a
Nevada corporation)

       

      Warrant
for the Purchase of 1,000,000

      Shares
of Common Stock, Par Value $0.0001

       

      [This
Warrant Will Be Void

      After
5:00 P.M. Mountain Time

      On
August 1, 2013]

       

       

        
          

        

         

      

      These
securities have not been registered with the U.S. Securities and Exchange
Commission (the

      “SEC”)
under the Securities Act of 1933, as amended (the “Securities Act”), and are
being

      offered
in reliance on exemptions from registration provided in Section 4(2) of
the

      Securities
Act and Rule 506 of Regulation D promulgated thereunder and

      preemption
from the registration or qualification requirements (other

      than
notice filing and fee provisions) of applicable state laws under

      the
National Securities Markets Improvement Act of 1996.

       

      
        
 

      THIS
WARRANT (this “Warrant”) certifies that, for value received, MKM Opportunity
Master Fund, Limited, a  Cayman Islands corporation, or its registered
assigns (the “Holder” or “Holders”), is entitled, at any time on or before 5:00
p.m. Pacific Standard Time on August 1, 2013 (the “Termination Date”), to
subscribe for, purchase, and receive One Million (1,000,000) shares (the
“Warrant Shares”) of fully paid and nonassessable common stock, par value $0.001
(the “Common Stock”) of Ethos Environmental, Inc., a Nevada corporation (the
“Company”). The purchase price of one share of Common Stock of the Exercise
Price, as defined in Section 1(b) below. The number of Shares to be received on
exercise of this Warrant and the Exercise Price may be adjusted on the
occurrence of certain events as described herein. If the rights represented
hereby are not exercised by 5:00 p.m. Pacific Standard Time on August 1, 2013,
this Warrant shall automatically become void and of no further force or effect,
and all rights represented hereby shall cease and expire.

       

      Subject
to the terms set forth herein, this Warrant may be assigned by the Holder in
whole or in part by execution of the form of assignment attached hereto or may
be exercised by the Holder in whole or in part by execution of the form of
exercise attached hereto and payment of the Exercise Price in the manner
described above, all subject to the terms hereof.

       

      1. Exercise.

       

      (a) Exercise
of Warrants.  Exercise of the
purchase rights represented by this Warrant may be made, in whole or in part, at
any time or times on or before the Termination Date by delivering to the Company
a duly executed  original or facsimile copy of the Notice of Exercise
form annexed hereto.  The Holder shall have the rights of a
stockholder only with respect to Shares fully paid for by the Holder under this
Warrant. On the exercise of all or any portion of this Warrant in the manner
provided herein, the Holder exercising the same shall be deemed to have become a
Holder of record of the Shares as to which this Warrant is exercised for all
purposes, and certificates for the securities so purchased shall be delivered to
the Holder within a reasonable time, but in no event longer than 10 days after
this Warrant shall have been exercised as set forth
above.   Notwithstanding anything herein to the contrary, the
Holder shall not be required to physically surrender this Warrant to the Company
until the Holder has purchased all of the Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall surrender
this Warrant to the Company for cancellation within 10 days of the date the
final Notice of Exercise is delivered to the Company.  Partial
exercises of this Warrant resulting in purchases of a portion of the total
number of Shares available hereunder shall have the effect of lowering the
outstanding number of Shares purchasable hereunder in an amount equal to the
applicable number of Shares purchased.

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      (b) Exercise
Price.  The exercise price of the Shares issuable under this
Warrant shall be $.75 per share, subject to adjustment under Section 4 hereof
(the “Exercise Price”). Within 5 business days of the date the Notice of
Exercise is delivered to the Company, the Holder shall have surrendered this
Warrant (if required) to the Company and the Company shall have
received  payment of the aggregate Exercise Price of the shares
thereby purchased by wire transfer or cashier’s check drawn on a United States
bank.

       

      (c) Cashless
Exercise.  This Warrant may be exercised at any time otherwise
permitted by means of a “cashless exercise” in which the Holder shall be
entitled to receive a certificate for the number of Shares equal to the quotient
obtained by the following formula:

      

      (A-B)*X

      A

      Where:

      

      (A) = the
Closing Price on the Trading Day immediately preceding the date
of  such election;

      

      (B) = the
Exercise Price of this Warrant, as adjusted; and

      

      (X) = the
number of Shares issuable upon exercise of this Warrant in accordance with the
terms of this Warrant by means of a cash exercise rather than a cashless
exercise.

      

      As used
herein, “Closing Price”, shall mean the first of the following clauses that
applies:  (1)
if, at the time of any such calculation, the Common Stock is listed or quoted on
the American Stock Exchange, or the New York Stock Exchange, or the NASDAQ
Market, the NASDAQ Capital Market or the Archipelago Exchange, the Closing Price
shall be the closing or last sale price reported for the last business day
immediately preceding the date of any such calculation; (2) if, at the time of any
such calculation, the Common Stock is quoted on the OTC Bulletin Board or listed
in the “Pink Sheets” published by the National Quotation Bureau Inc. or a
similar agency or organization succeeding to its function or reporting prices,
the Closing Price shall be the average of the high closing bid and low ask
prices reported for the last five (5) Trading Days immediately preceding the
date of any such calculation, or (3) in all other cases,
the Closing Price of a share of Common Stock shall be the price determined by an
independent appraiser selected in good faith by the Holder and reasonably
acceptable to the Company. As used herein, the term “Trading Day” means any day
in which any of the markets on which the Company’s Common Stock is listed or
quoted for trading on the date in question shall be open for business, or, if
the Common Stock is not listed or quoted on any markets, then a business
day.

      

      (d)           No
Fractional Shares.  No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this
Warrant.  As to any fraction of a share which the Holder would
otherwise be entitled to purchase upon such exercise, the Company shall issue to
the Holder one whole share.

      

      2. Assignment
of Warrants. In the event this Warrant is assigned in the manner provided
herein, the Company, upon request and upon surrender of this Warrant by the
Holder at the principal office of the Company accompanied by payment of all
transfer taxes, if any, payable in connection therewith, shall transfer this
Warrant on the books of the Company. If the assignment is in whole, the Company
shall execute and deliver a new Warrant or Warrants of like tenor to this
Warrant to the appropriate assignee expressly evidencing the right to purchase
the aggregate number of Shares purchasable hereunder; and if the assignment is
in part, the Company shall execute and

      deliver
to the appropriate assignee a new Warrant or Warrants of like tenor expressly
evidencing the right to purchase the portion of the aggregate number of Shares
as shall be contemplated by any such agreement, and shall concurrently execute
and deliver to the Holder a new Warrant of like tenor to this Warrant evidencing
the right to purchase the remaining portion of the Shares purchasable hereunder
that have not been transferred to the assignee.

      

      3.  Fully
Paid Shares. The Company covenants and agrees that the Shares issuable
upon the exercise of this Warrant will, on issuance pursuant to the terms of
this Warrant, be fully paid and nonassessable, free from all taxes, liens, and
charges with respect to the issue thereof, and not issued in violation of the
preemptive or similar right of any other person. The Company further covenants
and agrees that during the period within which the rights represented by this
Warrant may be exercised, the Company will have authorized and reserved a
sufficient number of Shares of Common Stock to provide for the exercise of the
rights represented by this Warrant.

      

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      4. Anti-Dilution
Protection.

      

      (a) Stock
Dividends and Splits. If the Company, at any time while this Warrant is
outstanding: (A) pays a stock dividend or otherwise makes a distribution or
distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock (which, for avoidance of
doubt, shall not include any shares of Common Stock issued by the Company
pursuant to this Warrant or the other securities issued or to be issued in this
transaction), (B) subdivides outstanding shares of Common Stock into a larger
number of shares, (C) combines (including by way of reverse stock split)
outstanding shares of Common Stock into a smaller number of shares, or (D)
issues by reclassification of shares of the Common Stock any shares of capital
stock of the Company, then in each case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common
Stock (excluding treasury shares, if any) outstanding immediately before such
event and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event and the number of shares issuable upon
exercise of this Warrant shall be proportionately and equitably
adjusted.  Any adjustment made pursuant to this Section 4(a) shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or re-classification.

      

      (b) Subsequent
Equity Sales. If at any time while this Warrant is outstanding the
Company shall offer, sell, grant any option to purchase or offer, sell or grant
any right to reprice its securities, or otherwise dispose of or issue (or
announce any offer, sale, grant or any option to purchase or other disposition)
any Common Stock or any securities of the Company or of any subsidiary of the
Company which would entitle the holder thereof to acquire at any time Common
Stock (hereinafter, “Common Stock Equivalents”), including without limitation,
any debt, preferred stock, rights, options, warrants or other instrument that is
at any time convertible into or exchangeable for or otherwise entitles the
holder thereof to receive Common Stock, entitling any Person to acquire shares
of Common Stock, at an effective price per share less than the Exercise Price
then in effect (such issuances collectively, a “Dilutive Issuance”), as adjusted
hereunder (if the holder of the Common Stock or Common Stock Equivalents so
issued shall at any time, whether by operation of purchase price adjustments,
reset provisions, floating conversion, exercise or exchange prices or otherwise,
or due to warrants, options or rights per share which is issued in connection
with such issuance, be entitled to receive shares of Common Stock at an
effective price per share which is less than the Exercise Price, such issuance
shall be deemed to have occurred for less than the Exercise Price on such date
of the Dilutive Issuance), then, the Exercise Price shall be adjusted pursuant
to the following formula:

       

      NP = OP x [OB +
(AMT/OP)]

      (OB+SI)

      where

      

      NP is the
new Exercise Price;

       

      OP is the
Exercise Price in effect immediately prior to such adjustment;

       

      OB is the
number of shares of Common Stock outstanding prior to the Dilutive
Issuance;

       

      AMT is
the dollar amount of the Dilutive Issuance, and

       

      SI is the
number of shares of Common Stock issuable in the Dilutive Issuance.

       

      The
Company shall notify the Holder in writing, no later than the business day
following the issuance of any Common Stock or Common Stock Equivalents subject
to this section, indicating therein the applicable information required by the
formula above (such notice the “Dilutive Issuance Notice”).

       

      (c) Pro Rata
Distributions.  If the Company, at any time during the term of
this Warrant, shall distribute to all holders of Common Stock evidences of its
indebtedness or assets (including cash and cash dividends) or rights or warrants
to subscribe for or purchase any security other than the Common Stock (which
shall be subject to Section 4(b) above), then in each such case the Exercise
Price shall be adjusted by multiplying the Exercise Price in effect immediately
prior to the record date fixed for determination of stockholders entitled to
receive such distribution by a fraction of which the denominator shall be the
Closing Price (defined below) determined as of the record date mentioned above,
and of which the numerator shall be such Closing Price on such record date less
the then per share fair market value at such record date of the portion of such
assets or evidence of indebtedness so distributed applicable to one outstanding
share of the Common Stock as determined by the Board of Directors in good faith,
or at the option of the Holder, by an independent appraiser selected by the
Holder. and reasonably acceptable to the Company.  In either case the
adjustments shall be described in a statement provided by the Company to the
Holder of the portion of assets or evidences of indebtedness so distributed or
such subscription rights applicable to one share of Common
Stock.  Such adjustment shall be made whenever any such distribution
is made and shall become effective immediately after the record date mentioned
above.  At the time of such adjustment, the number of shares of common
stock issuable following such adjustment shall be equitably and proportionally
adjusted upward.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      As used
herein, “Closing Price”, shall mean the first of the following clauses that
applies:  (1)
if, at the time of any such calculation, the Common Stock is listed or quoted on
the American Stock Exchange, or the New York Stock Exchange, or the NASDAQ
Market, the NASDAQ Capital Market or the Archipelago Exchange, the Closing Price
shall be the closing or last sale price reported for the last business day
immediately preceding the date of any such calculation; (2) if, at the time of any
such calculation, the Common Stock is quoted on the OTC Bulletin Board or listed
in the “Pink Sheets” published by the National Quotation Bureau Inc. or a
similar agency or organization succeeding to its function or reporting prices,
the Closing Price shall be the average of the high closing bid and low ask
prices reported for the last five (5) trading days immediately preceding the
date of any such calculation, or (3) in all other cases,
the Closing Price of a share of Common Stock shall be the price determined by an
independent appraiser selected in good faith by the Holder and reasonably
acceptable to the Company.

      

      (d) Adjustment
for Reorganization, Consolidation, Merger, etc.  In the event
that the Company shall 1) effect a
reorganization, 2) consolidate with or
merge into any other entity or 3) transfer all or
substantially all of its properties or assets to any other entity under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition precedent to the consummation of such a transaction, proper
and adequate provision shall be made whereby the Holder of this Warrant, on the
exercise hereof as provided in Section 1 above, at any time after the
consummation of any such reorganization, consolidation or merger or the
effective date of any such dissolution, shall receive in lieu of the shares of
Common Stock issuable on such exercise immediately prior to any such
consummation or effective date, the stock and other securities and property
(including cash) to which such Holder would have been entitled to receive upon
any such consummation or dissolution if the Holder had so exercised this Warrant
immediately prior to such consummation or dissolution.

      

      (e) Certificate
as to Adjustments.  The computation of any adjustments
described in this Section shall be the sole responsibility of the Company, which
shall expeditiously prepare and mail to the Holder a notice setting forth the
nature of any necessary adjustment together with the basis thereof and the
calculations therefor.  The Company shall immediately notify the
Holder of any information which bears on any of the events referenced in this
Section 4 and which may have an effect on the exercise of this
Warrant.  If the Company issues a variable rate security, the Company
shall be deemed to have issued Common Stock or Common Stock Equivalents at the
lowest possible conversion or exercise price at which such securities may be
converted or exercised in the case of a Variable Rate Transaction (as defined
below).

      

      As used
herein, the term “Variable Rate Transaction” shall mean a transaction in which
the Company issues or sells (i) any debt or equity
securities that are convertible into, exchangeable or exercisable for, or
include the right to receive additional shares of Common Stock either (A) at a conversion, exercise
or exchange rate or other price that is based upon and/or varies with the
trading prices of or quotations for the shares of Common Stock at any time after
the initial issuance of such debt or equity securities, or (B) with a conversion,
exercise or exchange price that is subject to being reset at some future date
after the initial issuance of such debt or equity security or upon the
occurrence of specified or contingent events directly or indirectly related to
the business of the Company or the market for the Common Stock (other than
pursuant to standard anti-dilution features) or (ii) enters into any
agreement, including, but not limited to, an equity line of credit, whereby the
Company may sell securities at a future determined price

       

      (f) Calculations.
All calculations under this Section 4 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section 4,
the number of shares of Common Stock deemed to be issued and outstanding as of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding.

       

      
        
           

        

        
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      (g) Voluntary
Adjustment By Company. The Company may at any time during the term of
this Warrant reduce (but not increase) the then-current Exercise Price, as the
case may be, to any amount and for any period of time deemed appropriate by the
Board of Directors of the Company.

       

      (h) Notice to
Allow Exercise by Holder. If (1) the Company shall declare
a dividend (or any other distribution) on the Common Stock; or (2) the Company shall declare
a special nonrecurring cash dividend on or a redemption of the Common Stock; or
(3) the Company shall
authorize the granting to all holders of the Common Stock rights or warrants to
subscribe for or purchase any shares of capital stock of any class or of any
rights; or (4) the
approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which
the Company is a party, any sale or transfer of all or substantially all of the
assets of the Company, of any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property; or (5) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or winding up of
the affairs of the Company; then, in each case, the Company shall cause to be
mailed to the Holder at its last address as it shall appear upon the books and
records of the Company, at least 20 calendar days prior to the applicable record
or effective date hereinafter specified, a notice stating (y) the date on which a
survey of the holders of record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to be
determined or (z) the
date on which such reclassification, consolidation, merger, sale, transfer or
share exchange is expected to become effective or close, and the date as of
which it is expected that holders of the Common Stock of record shall be
entitled to exchange their shares of the Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided, that the
unintentional failure to mail such notice or any unintentional defect therein or
in the mailing thereof shall not affect the validity of the corporate action
required to be specified in such notice.  The Holder is entitled to
exercise this Warrant during the 20-day period commencing on the date of such
notice to the effective date of the event triggering such notice.

       

      (i)           Excluded
Events. Notwithstanding any other provision in this Section 4, 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 for
services and/or pursuant to stock purchase or stock option plans or agreements
approved by the Board (but not exceeding 20% of the Company's Common Stock
outstanding as of the date hereof for all such issuances in the aggregate during
the life of this Warrant), (b) the issuance of securities to financial
institutions, suppliers or lessors in connection with commercial credit
arrangements, equipment financings or similar transactions in the ordinary
course of business, or (c) 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).

       

      5.           Notice of
Certain Events.  In the event of: (a) any taking by the Company
of a record of the holders of any class of securities of the Company for the
purpose of determining the holders thereof who are entitled to receive any
dividends 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 rights; (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 any other person, or any consolidation, share exchange, or merger
involving the Company; or (c) any voluntary or involuntary dissolution,
liquidation, or winding up of the Company, then, the Company will mail to the
Holder(s) of this Warrant, at least 20 days prior to the earliest date specified
therein, a notice specifying the date on which any such record is to be taken
for the purpose of such dividend, distribution, or right; the amount and
character of such dividend, distribution, or right; or the date on which any
such reorganization, reclassification, transfer, consolidation, share exchange,
merger, dissolution, liquidation, or winding up of the Company will occur and
the terms and conditions of such transaction or event.

       

       6.           Limitation
of Transfer. Subject to the restrictions set forth in paragraph 7 hereof,
this Warrant is transferable at the offices of the Company. On such transfer,
every Holder hereof agrees that the Company may deem and treat the registered
Holder(s) of this Warrant as the true and lawful owner(s) thereof for all
purposes, and the Company shall not be affected by any notice to the
contrary.

      

       7.           Disposition
of Warrants or Shares. Each registered owner of this Warrant, by
acceptance hereof, agrees for itself and any subsequent owner(s) that, before
any disposition is made of any Warrants or Shares of Common Stock, the owner(s)
shall give written notice to the Company describing briefly the manner of any
such proposed disposition. No such disposition shall be made unless and
until:

      

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      (a)           the
Company has received written assurances from the proposed transferee confirming
a factual basis for relying on exemptions from registration under applicable
federal and state securities laws for such transfer or an opinion from counsel
for the Holder(s) of the Warrants or Shares stating that no registration under
the Securities Act or applicable state statute is required with respect to such
disposition; or

       

      (b)           a
registration statement under the Securities Act has been filed by the Company
and declared effective by the SEC covering such proposed disposition and the
disposition has been registered or qualified, or is exempt therefrom, under the
state having jurisdiction over such disposition.

       

      8.  Restricted
Securities: Registration of Securities. The Holder acknowledges that this
Warrant is, and that the Shares issuable on exercise hereof will be, “restricted
securities” as that term is defined in Rule 144 promulgated under the Securities
Act. Accordingly, this Warrant must be taken for investment and held
indefinitely and may not be exercised or converted unless subsequently
registered under the Securities Act and/or comparable state securities laws or
unless an exemption from such registration is available. Likewise, any Shares
issued on exercise of this Warrant must be taken for investment and held
indefinitely and may not be resold unless such resale is registered under the
Securities Act and/or comparable state securities laws or unless an exemption
from such registration is available. A legend to the foregoing effect shall be
placed conspicuously on the face of all certificates for Shares issuable on
exercise of this Warrant.

       

      9.  Reports
under Exchange Act. With a view to making
available to the Holders the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell the Shares issuable on exercise of this Warrant, the
Company shall, until such Shares may be resold pursuant to the provisions of
Rule 144(k) or any similar provision:

       

      (a) make and
keep public information available, as those terms are understood and defined in
SEC Rule 144;

       

      (b) file with
the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and the Securities Exchange Act of 1934;
and

       

      (c) furnish
to any Holder, forthwith upon request (i) a written statement by the Company
that it has complied with the reporting requirements of SEC Rule 144, the
Securities Act and the Securities Exchange Act of 1934, or that it qualifies as
a registrant whose securities may be resold pursuant to Form S-2 or Form S-3;
(ii) a copy of the most recent annual or quarterly report of the Company and
such other reports and documents so filed by the Company; and (iii) such other
information as may be reasonably requested in availing any Holder of any rule or
regulation of the SEC that permits the selling of any such securities without
registration or pursuant to such form.

       

      10. [This
Section 10 is intentionally left blank]

       

      11. Governing
Law.  All
questions concerning the construction, validity, enforcement, governing law and
interpretation of this Warrant shall be determined in accordance with the
provisions of the Securities Purchase Agreement dated of even date herewith by
and between the Company and the initial Holder (the “Purchase
Agreement”).

       

      12. Notices.  Any notice, request or
other document required or permitted to be given or delivered to the Holder by
the Company shall be delivered in accordance with the notice provisions of the
Purchase Agreement.

       

      13. Limitation
of Liability.  No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant or purchase shares of
Common Stock issuable upon the exercise of this Warrant, and no enumeration
herein of the rights or privileges of Holder, shall give rise to any liability
of Holder for the purchase price of any Common Stock or as a stockholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      14. Nonwaiver
and Expenses.  No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as a waiver of
such right or otherwise prejudice Holder’s rights, powers or remedies,
notwithstanding the fact that all rights hereunder terminate on the Termination
Date.  If the Company willfully and knowingly fails to comply with any
provision of this Warrant, which results in any material damages to the Holder,
the Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.

       

      15. Remedies.  Holder,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Warrant.  The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Warrant and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be
adequate.

       

      16. Successors
and Assigns.  Subject to applicable securities laws, this
Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of Holder.  The provisions of this Warrant are
intended to be for the benefit of all Holders of this Warrant from the Initial
Exercise Date through the Termination Date, and shall be enforceable by any such
Holder or holder of Warrant Shares.

       

      17. Amendment.  This
Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.

       

      18. Severability.  Wherever
possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.

       

      19. Headings.  The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.

       

      20. Loss,
Theft, Destruction, or Mutilation. Upon receipt by the Company of
reasonable evidence of the ownership of and the loss, theft, destruction, or
mutilation of this Warrant, the Company will execute and deliver, in lieu
thereof, a new Warrant of like tenor.

       

      21.           Taxes.
The Company will pay all taxes in respect of the issue of this Warrant or the
Shares issuable upon exercise thereof.

       

      DATED
this____________ day of_______________, 2008.

      

      ETHOS
ENVIRONMENTAL, INC.

      

      

      By:
_________________________

      Enrique de Vilmorin, CEO

      

        
          
             

          

          
            7

            
              

            

          

           

        
Notice
of Exercise

       

      (to
be signed only upon exercise of Warrant)

       

      TO:          ETHOS
ENVIRONMENTAL, INC.

       

      The
undersigned, the owner of the attached Warrant, hereby irrevocable elects to
exercise the purchase

      rights
represented by the Warrant for, and to purchase thereunder,_____________shares
of Common Stock of Ethos Environmental,

      Inc., and
herewith makes payment of $therefor. Please issue the shares of Common Stock as
to which this

      Warrant
is exercised in accordance with the instructions set forth below and, if the
Warrant is being exercised with respect to less than all of the Shares to which
it pertains, prepare and deliver a new Warrant of like tenor for the balance of
the Shares purchasable under the attached Warrant.

       

      DATED
this____day of ______, 20_______

      
      

       

      
        	 	
                 Signature:

              	 	 
	 	
                
Signature
      Guaranteed:

              	 	 
	 	 	 
	 	
                 

                 

                 

                INSTRUCTIONS FOR REGISTRATION OF
      STOCK

              

      

       

                                                                    

                                                                     

      
      

       

      
        	Name:	 	 	 
	 	 	
                (Please Type or
      Print)

              	 
	Address:	 	 	 
	 	 	 	 
	 	 	 	 

      

       

      

      

      NOTICE:
The signature to the form of purchase must correspond with the name as written
upon the face of the attached Warrant in every particular without alteration or
enlargement or any change whatsoever, and must be guaranteed by a bank, other
than a savings bank, or by a trust company or by a firm having membership on a
registered national securities exchange.

      
        
           

        

        
          8ex10-1.htm

    Exhibit 10.1

     

    FIRST
AMENDMENT

    

    THIS
FIRST AMENDMENT dated as of August 8, 2008 (this “Amendment”) amends
the Fourth Amended and Restated Credit Agreement dated as of December 28, 2007
(the “Credit
Agreement”) among Middleby Marshall Inc. (the “Company”), The
Middleby Corporation (the “Parent”), various
financial institutions (the “Lenders”) and Bank of
America, N.A., as administrative agent (in such capacity, the “Administrative
Agent”).  Capitalized terms used but not defined herein have
the meanings set forth in the Credit Agreement.

     

    WHEREAS,
the parties hereto desire to amend the Credit Agreement as more fully set forth
herein;

     

    NOW,
THEREFORE, the parties hereto agree as follows:

     

    SECTION 1  Amendments.  Subject
to the satisfaction of the conditions precedent set forth in Section 3, the Credit
Agreement is amended as set forth below.

     

    1.1          Addition of
Definitions.  The following new definitions are added to
Section 1.1 in proper alphabetical sequence:

     

    Computation Date -
see Section 2.3.9.

     

    Dollar Equivalent
means, at any time (i) with respect to any amount denominated in Dollars, such
amount, and (ii) with respect to any amount denominated in a currency other than
Dollars, the equivalent amount in Dollars as determined by the Administrative
Agent at such time on the basis of the Spot Rate for the purchase of Dollars
with such currency on the most recent Computation Date.

     

    Euro and € means the single
currency of the participating member states of the European Union.

     

    Spot Rate for a
currency means the rate quoted by the Administrative Agent as the spot rate for
the purchase by the Administrative Agent of such currency with another currency
through its Foreign Exchange Trading Center (or such other office of the
Administrative Agent or an affiliate thereof as the Administrative Agent may
select for any particular currency) at approximately 11:00 a.m. (Chicago time)
on the date two Business Days prior to the date as of which the foreign exchange
computation is made.

     

    1.2           Definition of Pro Forma
EBITDA.  The definition of Pro Forma EBITDA is amended by (a)
inserting the following proviso immediately after the semi-colon (and
immediately prior to the word “and”) at the end of clause (i):

     

    provided
that in the case of the proposed Acquisition disclosed to the Administrative
Agent prior to August 1, 2008, the historical net income of the target entity
shall be increased (to account for cost savings resulting from the closing of
(a) a division of the target entity and (b) the target entity’s headquarters, as
reflected in financial information delivered to the Lenders in connection with
the First Amendment to this Agreement) by an amount equal to 

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    the
product of (i) $24,000,000 multiplied by (ii) a fraction, the numerator of which
is the remainder of 365 minus the number of days that have elapsed since the
consummation of such Acquisition and the denominator of which is
365;

     

    and
(b) deleting the first parenthetical clause in clause (ii) (which currently
reads “(or division or similar business unit)”) and substituting the following
therefor:

     

    (or
division or similar business unit, but in any event excluding, to the extent any
aspect thereof may constitute a disposition, the items referred to in subclauses (a) and
(b) of the
proviso to clause
(i) above.

     

    1.3           Definition of Stated
Amount.  The definition of Stated Amount is amended in its
entirety to read as follows:

     

    Stated Amount means,
with respect to any Letter of Credit at any date of determination, the maximum
aggregate Dollar Equivalent amount available for drawing thereunder at any time
during the remaining term of such Letter of Credit under any and all
circumstances (including after giving effect to any increase therein that may be
required by the terms thereof), plus the aggregate Dollar Equivalent amount of
all unreimbursed payments and disbursements under such Letter of
Credit.

     

    1.4           Currencies of Letters of
Credit.  Section 2.1.2 is amended by (a) replacing the
reference to “$25,000,000” with “$50,000,000” and (b) adding the following two
sentences at the end thereof:

     

    Letters
of Credit may be issued in Dollars, Euros or any other currency that (i) is
freely traded in the interbank foreign exchange markets, (ii) is freely
convertible into Dollars and (iii) has been approved by the applicable Issuing
Lender and the Administrative Agent.  In the case of a Letter of
Credit not denominated in Dollars, the Company shall reimburse the Issuing
Lender in such other currency, unless (A) the Issuing Lender (at its option)
shall have specified in in writing that it will require reimbursement in Dollars
or (B) in the absence of any such requirement for reimbursement in Dollars, the
Company shall have notified the Issuing Lender promptly following receipt of the
notice of drawing that the Company will reimburse the Issuing Lender in
Dollars.

     

    1.5           Reimbursement
Obligations.  The second sentence of Section 2.3.3 is amended
in its entirety to read as follows:

     

    If
the Company fails to reimburse the Issuing Lender by the date and time specified
in the preceding sentence, then the Administrative Agent shall promptly (a)
determine the Dollar Equivalent amount of the unreimbursed drawing (the “Unreimbursed Amount”)
and (b) notify each Lender of such unreimbursed drawing and the Dollar
Equivalent amount of such Lender’s Percentage of such Unreimbursed
Amount.

     

    1.6           Funding by Lenders to
Issuing Lenders.  The text of Section 2.3.5 is amended in its
entirety to read as follows:

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    If
an Issuing Lender makes any payment or disbursement under any Letter of Credit
and such payment or disbursement is not reimbursed (by the making of Base Rate
Loans or otherwise) by the date and time specified in the first sentence of
Section 2.3.3)
or if any reimbursement received from the Company in respect of a payment or
reimbursement under any Letter of Credit is or must be returned or rescinded
upon or during any bankruptcy or reorganization of the Company or otherwise,
each other Lender shall be obligated to fund its participation in such Letter of
Credit by paying to the Administrative Agent for the account of such Issuing
Lender its pro rata share (according to its Percentage) of the Dollar Equivalent
amount of such payment or disbursement (but no such payment by any Lender shall
diminish the obligations of the Company under Section 2.3.3),
and upon notice from the applicable Issuing Lender, the Administrative Agent
shall promptly notify each other Lender of such obligation.  Each
other Lender irrevocably and unconditionally agrees to so pay to the
Administrative Agent in immediately available funds for the applicable Issuing
Lender’s account the Dollar Equivalent amount of such other Lender’s Percentage
of such payment or disbursement.  If and to the extent any Lender
shall not have made such amount available to the Administrative Agent by 2:00
P.M. on the Business Day on which such Lender receives notice from the
Administrative Agent of such payment or disbursement (it being understood that
any such notice received after noon on any Business Day shall be deemed to have
been received on the next following Business Day), such Lender agrees to pay
interest on such amount to the Administrative Agent for the applicable Issuing
Lender’s account forthwith on demand for each day from the date such amount was
to have been delivered to the Administrative Agent to the date such amount is
paid, at a rate per annum equal to (a) for the first three days after demand,
the Federal Funds Rate from time to time in effect and (b) thereafter, the Base
Rate from time to time in effect.  Any Lender’s failure to make
available to the Administrative Agent its Percentage of the Dollar Equivalent
amount of any such payment or disbursement shall not relieve any other Lender of
its obligation hereunder to make available to the Administrative Agent such
other Lender’s Percentage of the Dollar Equivalent amount of such payment, but
no Lender shall be responsible for the failure of any other Lender to make
available to the Administrative Agent such other Lender’s Percentage of the
Dollar Equivalent amount of any such payment or disbursement.

     

    Section
1.7            Prepayments.  Section
6.3 is amended in its entirety to read as follows:

     

     6.3           Prepayments.  

     

    6.3.1        Voluntary
Prepayments.  The Company may from time to time prepay Loans in
whole or in part, without premium or penalty; provided that the
Company shall give the Administrative Agent (which, in the case of Revolving
Loans, shall promptly advise each Lender) notice thereof not later than 10:00
A.M. (or, in the case of prepayment of Swing Line Loans, 12:00 noon) on the date
of such prepayment (which shall be a Business Day), specifying the Loans to be
prepaid and the date and amount of prepayment.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    6.3.2         Mandatory
Prepayments.  If, on any Computation Date, the Administrative
Agent determines that the Total Outstandings exceed the Commitment Amount, then
(a) the Administrative Agent shall promptly notify the Company and (b) the
Company shall promptly upon receipt of such notice prepay Loans in an amount
(rounded upward, if necessary, to an integral multiple of $100,000) sufficient
to eliminate such excess.

     

    6.3.3        All
Prepayments.  Each partial prepayment of Revolving Loans shall
be in a principal amount of $500,000 or a higher integral multiple of $100,000;
provided that
if, as a result of the making of Base Rate Loans pursuant to Section 2.3.3 or
2.4.3, the
aggregate principal amount of all Revolving Loans is not at least $500,000
and/or is not an integral multiple of $100,000, then the next prepayment of
Revolving Loans shall be in an amount that causes the aggregate principal amount
of all Revolving Loans to be (a) either zero or at least $500,000 and (b) an
integral multiple of $100,000.  Each prepayment of Swing Line Loans
shall be in a principal amount of $100,000 or an integral multiple
thereof.  Any prepayment of a Eurodollar Loan on a day other than the
last day of an Interest Period therefor shall include interest on the principal
amount being repaid and shall be subject to Section 8.4.

     

    1.8           Additional Stock
Repurchases.  Clauses (vi) and (vii) of the proviso to Section
10.9 are deleted and replaced by the following:

    

    (vi)           so
long as no Event of Default or Unmatured Event of Default exists or will result
therefrom, (A) the Parent may declare cash dividends to its shareholders or
repurchase shares of its stock in an aggregate amount not exceeding, for any
Computation Period, 15% of EBITDA for such Computation Period and (B) the Parent
may make additional repurchases of shares of its stock in an aggregate amount
not exceeding, during the period from July 30, 2008 through the Termination
Date, $10,000,000; (vii) the Parent may pay cash dividends declared in
accordance with the foregoing clause (vi); and
(viii) the Company may pay dividends to the Parent to the extent necessary to
enable the Parent to pay dividends and repurchase shares to the extent permitted
by the foregoing clauses (vi) and
(vii).

    

     

    1.9           Addition of Section
2.3.9.  The
following Section 2.3.9 is added in appropriate numerical
sequence

     

    2.3.9        Non-Dollar Letters of
Credit; Currency Fluctuations.  The Issuing Lender will
determine the Dollar Equivalent of the Stated Amount of any Letter of Credit
denominated in a currency other than Dollars (i) on the date of the issuance or
renewal of such Letter of Credit; (ii) on the date of any change in the amount
available for drawing under such Letter of Credit; (iii) on the date of any
payment or disbursement under such Letter of Credit; (iv) as of the last
Business Day of each month; and (v) on any other date requested by the Issuing
Lender that issued such Letter of Credit or by the Administrative Agent (each
such date, a “Computation
Date”).

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    SECTION
2           Representations and
Warranties.  Each of the Parent and the Company represents and
warrants to the Administrative Agent and the Lenders that, immediately after the
effectiveness of the amendments set forth in Section 1 above, (a)
each warranty set forth in Section 9 of the Credit Agreement shall be true and
correct in all material respects as of the date of the execution and delivery of
this Amendment by the Parent and the Company, with the same effect as if made on
such date (except to the extent stated to relate to an earlier date, in which
case such representations and warranties shall be true and correct in all
material respects as of such earlier date), and (b) no Event of Default or
Unmatured Event of Default will exist.

     

    SECTION
3          Effectiveness.  The
amendments set forth in Section 1 shall
become effective as of the date hereof when the Administrative Agent has
received:

     

    (i)           counterparts
of this Amendment executed by the Parent, the Company, each Subsidiary of the
Company listed on the signature pages hereto and each Lender;

     

    (ii)           a
Confirmation, substantially in the form of Exhibit A, signed by
the Parent, the Company and each Subsidiary Guarantor;

     

    (iii)           a
certificate of the Secretary or an Assistant Secretary of each of the
Subsidiary Guarantors certifying the names of the officer or officers of such
entity authorized to sign the Confirmation, together with a sample of the true
signature of each such officer (it being understood that the Administrative
Agent and each Lender may conclusively rely on each such certificate until
formally advised by a like certificate of any changes therein).

     

    (iii)           all
amendment fees payable in connection with this Amendment as separately agreed to
in writing by the Company and the Administrative Agent.

     

    SECTION
4           Miscellaneous.

     

    4.1           Continuing Effectiveness,
etc.  As amended hereby, the Credit Agreement shall remain in
full force and effect and is hereby ratified and confirmed in all
respects.  After the effectiveness of this Amendment, all references
in the Credit Agreement and the other Loan Documents to “Credit Agreement” or
similar terms shall refer to the Credit Agreement as amended
hereby.

     

    4.2           Counterparts.  This
Amendment may be executed in any number of counterparts and by the different
parties on separate counterparts, (including by facsimile) and each such
counterpart shall be deemed to be an original but all such counterparts shall
together constitute one and the same Amendment.

     

    4.3           Governing
Law.  This Amendment and the rights and obligations of the
parties hereunder shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Illinois applicable to contracts made
and to be performed entirely within such State.

     

    4.4           Successors and
Assigns.  This Amendment shall be binding upon the Parent, the
Company, the Lenders and the Administrative Agent and their respective
successors and assigns, and shall inure to the benefit of the Parent, the
Company, the Lenders and the Administrative Agent and the respective successors
and assigns of the Lenders and the Administrative Agent.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    Delivered
as of the day and year first above written.

     

    MIDDLEBY
MARSHALL INC.

    

    

    By  /s/ Martin M.
Lindsay                                      

    Title  Corporate
Treasurer

    

    

    THE
MIDDLEBY CORPORATION

    

    

    By  /s/ Martin M.
Lindsay                                      

    Title  Corporate
Treasurer

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    BANK
OF AMERICA, N.A., as Administrative Agent

    

    

    By  /s/ Suzanne M.
Paul                                          

    Title  Vice
President

    

    

    BANK
OF AMERICA, N.A., as an Issuing Lender,

    as
Swing Line Lender and as a Lender

    

    

    By  /s/ Craig W.
McGuire                                       

    Title  Senior
Vice President

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    [Other
Lenders]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}]]