NEITHER THIS WARRANT CERTIFICATE NOR THE WARRANTS REPRESENTED HEREBY NOR ANY
SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF SUCH WARRANTS, NOR ANY
INTEREST IN OR RIGHTS UNDER SAME, HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 OR THE LAWS OF ANY STATE, AND NEITHER THIS WARRANT CERTIFICATE NOR THE
WARRANTS REPRESENTED HEREBY NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON THE
EXERCISE OF SUCH WARRANTS, NOR ANY INTEREST IN OR RIGHTS UNDER SAME, MAY BE SOLD
OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
W-2003-40
ENVIROKARE TECH, INC.
COMMON STOCK PURCHASE WARRANT
Envirokare Tech, Inc., a Nevada corporation (the "Company"), for value
received and subject to the terms set forth below hereby grants to LEO KAPAKOS
and BETTY KAPAKOS, or registered successors and assigns (the "Holder"), the
right to purchase from the Company at any time or from time to time until the
date and time permitted under Section 2.1 below, THREE HUNDRED THOUSAND
(300,000) fully paid and nonassessable shares of the Common Stock, par value
$.001 per share, at the purchase price of twenty cents ($0.20) per share (the
"Exercise Price"). The Exercise Price and the number and character of such
shares of Common Stock purchasable pursuant to the rights granted under this
Warrant are subject to adjustment as provided herein.
1. Definitions. As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(a) "Common Stock" means all stock of any class or classes (however
designated) of the Company, authorized upon the Issue Date or thereafter, 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).
(b) "Issue Date" means JULY 22, 2003.
(c) "Other Securities" means any stock (other than Common Stock) and other
securities of the Company or any other Person (corporate or other) which the
Holder of this Warrant at any time shall be entitled to receive, or shall have
received, upon the exercise of this have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant to Section 3.2 hereof
or otherwise.
(d) "Person" means, without limitation, an individual, a partnership, a
corporation, a trust, a joint venture, an unincorporated organization, or a
government or any department or agency thereof.
(e) "This Warrant" means, collectively, this Warrant and all other stock
purchase warrants issued in exchange therefor or replacement thereof.
2. Exercise.
2.1 Exercise Period. The Holder may exercise this Warrant at any time on or
after the Issue Date and no later than 3:00 P.M. New York City, New York time on
JUly 22, 2005 (the "Exercise Period") in Orlando, Florida, or at such other
place as the Company may notify the Holder in writing prior to the Expiration of
the Exercise Period.
2.2 Exercise Procedure.
(a) This Warrant will be deemed to have been exercised at such time as the
Company has received all of the following items (the "Exercise Date"):
(i) a Notice of Exercise as described in Section 2.4 hereof, executed
by the Person exercising all or part of the purchase rights
represented by this Warrant (the "Purchaser");
(ii) this Warrant;
(iii)if this Warrant is not registered in the name of the Purchaser,
an Assignment or Assignments in the form set forth in Exhibit B
hereto, evidencing the assignment of this Warrant to the
Purchaser together with any documentation required pursuant to
Section 8(a) hereof; and
(iv) a check representing good funds payable to the order of the
Company in an amount equal to the product of the Exercise Price
multiplied by the number of shares of Common Stock being
purchased upon such exercise.
(b) As soon as practicable after the exercise of this Warrant in full or in
part, and in any event within ten (10) days after the Exercise Date, the Company
at its expense will cause to be issued in the name of and delivered to the
Purchaser, or as the Purchaser (upon payment by the Purchaser of any applicable
transfer taxes) may direct, a certificate or certificates for the number of
fully paid and non-assessable shares of Common Stock (or Other Securities) to
which the Purchaser shall be entitled upon such exercise, together with any
other stock or other securities and property (including cash, where applicable)
to which the Purchaser is entitled upon exercise.
(c) Unless this Warrant has expired or all of the purchase rights
represented hereby have been exercised, the Company at its expense will, within
ten (10) days after the Exercise Date, issue and deliver to or upon the order of
the Purchaser a new Warrant or Warrants of like tenor, in the name of the
Purchaser or as the Purchaser (upon payment by the Purchaser of any applicable
transfer taxes) may request, calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock remaining issuable under this
Warrant.
(d) The Common Stock (or Other Securities) issuable upon the exercise of
this Warrant will be deemed to have been issued to the Purchaser on the Exercise
Date, and the Purchaser will be deemed for all purposes to have become the
record holder of such Common Stock (or Other Securities) on the Exercise Date.
(e) The issuance of certificates for shares of Common Stock (or Other
Securities) upon exercise of this Warrant will be made without charge to the
Purchaser for any issuance tax in respect thereof or any other cost incurred by
the Company in connection with such exercise and the related issuance of shares
of Common Stock (or Other Securities).
2.3 Acknowledgement of Continuing Obligations. The Company will, at the
time of the exercise of this Warrant, upon the request of the Purchaser,
acknowledge in writing its continuing obligation to afford to the Purchaser any
rights to which the Purchaser shall continue to be entitled after such exercise
in accordance with the provisions of this Warrant, provided that if the
Purchaser shall fail to make any such request, such failure shall not affect the
continuing obligation of the Company to afford to the Purchaser any such rights.
2.4 Notice of Exercise. The Notice of Exercise shall be substantially in
the form set forth in Exhibit A hereto, except that if the shares of Common
Stock (or Other Securities) issuable upon exercise of this Warrant are not to be
issued in the name of the Purchaser, the Subscription Agreement will also state
the name of the Person to whom the certificates for the shares of Common Stock
(or Other Securities) are to be issued, and if the number of shares of Common
Stock (or Other Securities) to be issued does not include all the shares of
Common Stock (or Other Securities) issuable hereunder, it will also state the
name of the Person to whom a new Warrant for the unexercised portion of the
rights hereunder is to be delivered.
2.5 Fractional Shares. No fractional shares will be issued upon exercise of
the rights represented by this Warrant. The number of shares of Common Stock for
which this Warrant is from time to time exercised shall be reduced downward to
the nearest whole number.
3. Intentionally Omitted.
4. Adjustments.
4.1 Adjustments for Stock Splits, Etc. If the Company shall at any time
after the Issue Date subdivide its outstanding Common Stock or Other Securities,
by split-up or otherwise, or combine its outstanding Common Stock or Other
Securities, or issue additional shares of its capital stock in payment of a
stock dividend in respect of its Common Stock or Other Securities, the number of
shares issuable on the exercise of the unexercised portion of this Warrant shall
forthwith be proportionately increased in the case of a subdivision or stock
dividend, or proportionately decreased in the case of combination, and the
Exercise Price then applicable to shares covered by the unexercised portion of
this Warrant shall forthwith be proportionately decreased in the case of a
subdivision or stock dividend, or proportionately increased in the case of
combination.
4.2 Adjustment for Reclassification, Reorganization, Etc. In case of any
reclassification, capital reorganization, or change of the outstanding Common
Stock or Other Securities (other than as a result of a subdivision, combination
or stock dividend), or in the case of any consolidation of the Company with, or
merger of the Company into, another Person (other than a consolidation or merger
in which the Company is the continuing corporation and which does not result in
any reclassification or change of the outstanding Common Stock or Other
Securities of the Company), or in case of any sale or conveyance to one or more
Persons of the property of the Company as an entirety or substantially as an
entirety at any time prior to the expiration of this Warrant, then, as a
condition of such reclassification, reorganization, change, consolidation,
merger, sale or conveyance, lawful provision shall be made, and duly executed
documents evidencing the same from the Company or its successor shall be
delivered to the Holder of this Warrant, so that the Holder of this Warrant
shall have the right at any time prior to the expiration of this Warrant to
purchase, at a total price not to exceed that payable upon the exercise of the
unexercised portion of this Warrant, the kind and amount of shares of stock and
other securities and property receivable upon such reclassification,
reorganization, change, consolidation, merger, sale or conveyance by a holder of
the number of shares of Common Stock or Other Securities of the Company as to
which this Warrant was exercisable immediately prior to such reclassification,
reorganization, change, consolidation, merger, sale or conveyance, and in any
such case appropriate provision shall be made with respect to the rights and
interests of the Holder of this Warrant to the end that the provisions hereof
(including, without limitation, provisions for the adjustment of the Exercise
Price and of the number of shares purchasable upon exercise of this Warrant)
shall thereafter be applicable in relation to any shares of stock, and other
securities and property, thereafter deliverable upon exercise hereof. If, as a
consequence of any such transaction, solely cash, and no securities or other
property of any kind, is deliverable upon exercise of this Warrant, then, in
such event, the Company may terminate this Warrant by giving the Holder hereof
written notice thereof. Such notice shall specify the date (at least thirty (30)
days subsequent to the date on which notice is given) on which, at 3:00 P.M.,
New York City, New York time, this Warrant shall terminate. Notwithstanding any
such notice, this Warrant shall remain exercisable, and otherwise in full force
and effect, until such time of termination.
4.3 Certificate of Adjustment. Whenever the Exercise Price or the number of
shares issuable hereunder is adjusted, as herein provided, the Company shall
promptly deliver to the registered Holder of this Warrant a certificate of the
Treasurer of the Company, which certificate shall state (i) the Exercise Price
and the number of shares of Common Stock (or Other Securities) issuable
hereunder after such adjustment, (ii) the facts requiring such adjustment, and
(iii) the method of calculation for such adjustment and increase or decrease.
4.4 Small Adjustments. No adjustment in the Exercise Price shall be
required unless such adjustment would require an increase or decrease in the
Exercise Price of at least one percent; provided, however, that any adjustments
which by reason of this Section 4.5 are not required to be made immediately
shall be carried forward and taken into account at the time of exercise of this
Warrant or any subsequent adjustment in the Exercise Price which, singly or in
combination with any adjustment carried forward, is required to be made under
Sections 4.1 or 4.2.
5. No Dilution or Impairment. The Company will not, by amendment of its
corporate charter or By-Laws or through any reorganization, 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 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 action as may be
necessary or appropriate in order to protect the rights of the Holder of this
Warrant against dilution, or other impairment. Without limiting the generality
of the foregoing, the Company (a) will not permit the par value of any shares of
Stock (or Other Securities) receivable upon the exercise of this Warrant to
exceed the amount payable therefor upon 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 non-assessable shares of Common Stock (or Other
Securities) upon 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 agree to be bound by all the terms of this Warrant.
6. Notices. In the event of:
(a) 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 consolidation or merger of
the Company with or into any other Person; or
(b) 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 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 upon
such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up, and (iii) the
amount and character of any stock of any class or other securities of the
company, 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 be mailed at least twenty (20) days prior to the date therein
specified.
7. Reservation of Stock, etc., Issuable on Exercise of Warrant. The Company will
at all times reserve and keep available, solely for issuance and delivery upon
the exercise of this Warrant, all shares of Common Stock (or Other Securities)
from time to time issuable upon the exercise of this Warrant.
8. Disposition of This Warrant, Common Stock, Etc.
(a) The Holder of this Warrant and any transferee hereof or of the Common
Stock (or Other Securities) with respect to which this Warrant may be
exercisable, by their acceptance hereof, hereby understand and agree that this
Warrant and the Common Stock (or Other Securities) with respect to which this
Warrant may be exercisable have not been registered under the Securities Act of
1933, as amended (the "Act"), or under the securities laws of any State, and
therefore may not be sold, pledged, hypothecated, donated, or otherwise
transferred (whether or not for consideration) without an effective registration
statement under the Act and any applicable State laws, or an opinion of counsel
satisfactory to the Company and/or submission to the Company of such other
evidence as may be satisfactory to counsel to the Company, in each such case, to
the effect that any such transfer shall not be in violation of the Act and any
applicable State laws. It shall be a condition to the transfer of this Warrant
that any transferee thereof deliver to the Company its written agreement to
accept and be bound by all of the terms and conditions of this Warrant.
(b) The stock certificates of the Company that will evidence the shares of
Common Stock (or Other Securities) with respect to which this Warrant may be
exercisable will be imprinted with a conspicuous legend in substantially the
following form:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, (THE
"SECURITIES ACT') OR ANY APPLICABLE STATE SECURITIES LAW. NO INTEREST
THEREIN MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE
TRANSFERRED OR DISPOSED OF WITHOUT (A) AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAW OR (B)
RECEIPT BY THE CORPORATION OF AN ACCEPTABLE LEGAL OPINION STATING THAT SUCH
TRANSACTION IS EXEMPT FROM REGISTRATION, OR (C) THE CORPORATION OTHERWISE
SATISFYING ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION.
NEITHER THE OFFERING OF SUCH SECURITIES NOR ANY RELATED MATERIALS HAVE BEEN
REVIEWED OR APPROVED BY ANY U.S. FEDERAL OR STATE REGULATORY AUTHORITY. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE."
The Company has not agreed to register any of the Holder's shares of Common
Stock (or Other Securities) of the Company with respect to which this Warrant
may be exercisable for distribution in accordance with the provisions of the
Act, and the Company has not agreed to comply with any exemption from
registration under the Act for the resale of the Holder's shares of Common Stock
(or Other Securities) with respect to which this Warrant may be exercised.
Hence, it is the understanding of the Holder of this Warrant that by virtue of
the provisions of certain rules respecting "restricted securities" promulgated
by the SEC, the shares of Common Stock (or Other Securities) of the Company with
respect to which this Warrant may be exercisable may be required to be held
indefinitely, unless and until registered under the Act or unless an exemption
from such registration is available, in which case the Holder may still be
limited as to the number of shares of Common Stock (or Other Securities) of the
Company with respect to which this Warrant may be exercised that may be sold
from time to time.
9. Rights and Obligations of Warrant Holder. The Holder of this Warrant shall
not, by virtue hereof, be entitled to any voting rights or other rights as a
stockholder of the Company. No provision of this Warrant, in the absence of
affirmative actions by the Holder to purchase Common Stock (or Other Securities)
of the Company by exercising this Warrant, and no enumeration in this Warrant of
the rights or privileges of the Holder, will give rise to any liability of such
Holder for the Exercise Price of Common Stock (or Other Securities) acquirable
by exercise hereof or as a stockholder of the Company.
10. Transfer of Warrants. Subject to compliance with the restrictions on
transfer applicable to this Warrant referred to in Section 8 hereof, this
Warrant and all rights hereunder are transferable, in whole or in part, without
charge to the registered Holder, upon surrender of this Warrant with a properly
executed Assignment (in substantially the form attached hereto as Exhibit B), to
the Company, and the Company at its expense will issue and deliver to or upon
the order of the Holder hereof a new Warrant or Warrants in such denomination or
denominations as may be requested, but otherwise of like tenor, in the name of
the Holder or as the Holder (upon payment of any applicable transfer taxes) may
direct.
11. Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of any Warrant and, in
the case of any such loss, theft or destruction, upon delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company or, in the
case of any such mutilation, upon surrender and cancellation of such Warrant,
the Company at its expense will execute and deliver, in lieu thereof, a new
Warrant of like tenor.
12. 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.
13. Company Records. 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.
14. Miscellaneous.
14.1 Notices. All notices and other communications from the Company to the
Holder of this Warrant shall be mailed by first class mail, postage prepaid, to
such address as may have been furnished to the Company in writing by such
Holder, or, until an address is so furnished, to and at the address of the last
Holder of this Warrant who has so furnished an address to the Company. All
communications from the Holder of this Warrant to the Company shall be mailed by
first class mail, postage prepaid, to Envirokare Tech, Inc., 5850 T.G. Lee Blvd,
Suite 535, Orlando, Fl 32822 Attn: President, or such other address as may have
been furnished to the Holder in writing by the Company.
14.2 Amendment and Waiver. Except as otherwise provided herein, this
Warrant and any term hereof may be amended, waived, discharged or terminated
only by an instrument in writing signed by the party against which enforcement
of such amendment, waiver, discharge or termination is sought.
14.3 Governing Law; Descriptive Headings. This Warrant shall be construed
and enforced in accordance with and governed by the laws of the State of Nevada.
The headings in this Warrant are for purposes of reference only, and shall not
limit or otherwise affect any of the terms hereof.
Dated: July 22, 2003 Envirokare Tech, Inc.
By: /s/ George Kazantzis
------------------------
Name : George Kazantzis
Title: President
[SEAL]
Attest:
/s/ Debra Ricci
- ------------------
Name: Debra Ricci