SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Amendment No. 1)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
K.L.S. ENVIRO RESOURCES, INC.
(Name of Issuer)
COMMON STOCK
(Title of Class of Securities)
482530102
(CUSIP Number)
Jeffrey M. Jones, Esq.
DURHAM, EVANS, JONES & PINEGAR, P.C.
50 South Main Street, 850 Key Bank Tower
Salt Lake City, Utah 84144
TELEPHONE: (801) 538-2424
(Name, Address, and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 30, 1996
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 (the "Act") or otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act.
Page 1 of 13
<PAGE>
SCHEDULE 13D Page 2 of 13
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON SMD, L.L.C.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE 87-0541037
PERSON
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A (a) [X]
GROUP (b) [ ]
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS BK
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL [ ]
PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(d) OR 2(e)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Utah
- --------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER 9,681,500*
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY --------------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER 9,681,500*
REPORTING --------------------------------------------------------------
PERSON WITH 10. SHARED DISPOSITIVE POWER 0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY 9,681,500*
EACH REPORTING PERSON
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW [ ]
(11) EXCLUDES CERTAIN SHARES
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN 40.1%
ROW (11)
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON OO**
- --------------------------------------------------------------------------------
* Includes 2,561,000 shares of common stock held of record by the Reporting
Person, 20,500 shares of common stock held of record by a trust controlled
by or under common control with the Reporting Person, 500,000 shares of
common stock issuable upon conversion of 100,000 shares of Series A
Preferred Stock owned of record by Reporting Person, and 6,600,000 shares
of common stock issuable upon exercise of a presently exercisable purchase
warrant.
** The Reporting Person is a limited liability company.
<PAGE>
SCHEDULE 13D Page 3 of 13
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON RAYMOND H. KURZON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE ###-##-####
PERSON
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A (a) [X]
GROUP (b) [ ]
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS N/A
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL [ ]
PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(d) OR 2(e)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION U.S.
- --------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER 2,328,539
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY --------------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER 2,328,539
REPORTING --------------------------------------------------------------
PERSON WITH 10. SHARED DISPOSITIVE POWER 0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY 2,328,539
EACH REPORTING PERSON
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW [ ]
(11) EXCLUDES CERTAIN SHARES
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN 13.7%
ROW (11)
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON IN
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 13D Page 4 of 13
This Statement constitutes Amendment No. 1 to the Statement of Beneficial
Ownership on Schedule 13D (the "Initial 13D") filed by SMD, L.L.C., a Utah
limited liability company ("SMD"), and Raymond H. Kurzon, an individual
("Kurzon") (Kurzon and SMD are each referred to herein as a "Reporting Person"
and collectively as the "Reporting Persons"), dated as of August 12, 1996 and
pertaining to the Reporting Persons' beneficial ownership of the common stock of
K.L.S. Enviro Resources, Inc., a Nevada corporation ("KLS"). This Amendment is
being filed to reflect certain changes in the beneficial ownership of the
Reporting Persons since the filing of the Initial 13D. Except as amended below,
the information set forth in the Initial 13D remains unchanged.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On or about September 30, 1996, SMD loaned KLS $1,673,730, which loan was
due on demand, accrued interest at the rate of 12%, and is secured by all
of KLS's assets and all of the assets of KLS's subsidiaries except for
certain real property owned by KLS or its subsidiaries. The loan for
$1,673,730 arose after fonix corporation, a Delaware corporation as to
which the managers and owners of SMD are executive officers and directors
("fonix"), requested payment as to certain debts owed to fonix by KLS and
payable upon demand. KLS was unable to pay the amounts requested by fonix
at the time of the demand therefor. Consequently, the principals of SMD,
Stephen M. Studdert, Thomas A. Murdock and Roger D. Dudley, agreed to
cause SMD to loan $1,673,730 to KLS, the proceeds of which would be used
by KLS to pay down a substantial portion of the loans to KLS from fonix.
KLS agreed to proceed on that basis and the September 30, 1996 loan was
consummated, after which KLS paid to fonix $1,673,730 in satisfaction of a
portion of the loans to fonix described above. In connection with and as
consideration for that loan transaction, on September 30, 1996, KLS issued
to SMD a warrant to purchase up to 6,600,000 shares of KLS's common stock
at the exercise price of $.40 per share, which warrant expires on
September 30, 2000. SMD obtained the funds used to make the $1,673,730
loan to KLS in connection with a commercial loan made by First Security
Bank of Utah, N.A., which loan was made on the bank's customary lending
terms and is secured by shares of common stock of fonix owned by SMD.
On December 31, 1996, the board of directors of KLS approved a stock
option plan pursuant to which each member of the board of directors
received options to purchase common stock at the exercise price of $3.00
per share. Pursuant to that plan, as of December 31, 1996, KLS issued to
Kurzon options to purchase 150,000 shares of common stock, which options
are presently exercisable and expire on December 31, 2006.
ITEM 4. PURPOSE OF THE TRANSACTION.
On December 31, 1996, Stephen M. Studdert assumed a position as a director
and the Chairman of the Board of KLS, and Roger D. Dudley assumed
positions as a director and the Chief Financial Officer of KLS. Thomas A.
Murdock became a director effective July 10, 1996 in connection with
certain loans made to KLS by fonix. Each of Messrs. Studdert, Murdock and
Dudley is a manager and indirect equity owner of SMD.
<PAGE>
SCHEDULE 13D Page 5 of 13
The Reporting Persons' have acquired their respective interests in KLS
common stock (or the rights to acquire shares of common stock) included in
this Statement for investment purposes. Other than as described above,
the Reporting Persons have no plans or proposals that relate to or would
result in any of the circumstances described in subparagraphs (a) to (j)
of Item 4 of Schedule 13D.
ITEM 5. INTERESTS IN SECURITIES OF THE ISSUER.
SMD, L.L.C.
(a) Number of Shares Beneficially Owned: 2,581,500 shares
Right to Acquire: 7,100,000 shares
Percent of Class: 40.1% (based upon 16,824,244 shares of
common stock deemed to be issued and
outstanding based on representations set
forth in KLS's annual report on Form 10-KSB
for the fiscal year ended September 30,
1996 and accounting for the unissued shares
of common stock underlying the Series A
Preferred Stock and the purchase warrant).
(b) Sole Power to Vote, Direct the
Vote of, or Dispose of Shares: 9,681,500 shares
(c) Recent Transactions:
Pursuant to the transaction described in Item 4, which
discussion is incorporated herein by reference, on September
30, 1996, SMD acquired a warrant to purchase up to 6,600,000
shares of the common stock of KLS at the exercise price of
$.40 per share. That warrant is presently exercisable and
expires on September 30, 1998.
SMD disclaims beneficial ownership of presently exercisable
options to purchase a total of 450,000 shares of KLS's common
stock, which options were granted to Messrs. Studdert (150,000
shares), Murdock (150,000 shares) and Dudley (150,000 shares)
on December 31, 1996 in connection with the adoption by KLS's
board of directors of a directors' stock option plan. Messrs.
Studdert, Murdock and Dudley are the managers and control
persons of SMD.
(d) Rights with Respect to Dividends
or Sales Proceeds: N/A
(e) Date of Cessation of Five Percent
Beneficial Ownership: N/A
<PAGE>
SCHEDULE 13D Page 6 of 13
RAYMOND H. KURZON
(a) Number of Shares Beneficially Owned: 2,178,539 shares
Right to Acquire: 150,000 shares
Percent of Class: 13.7% (based upon 16,824,244 shares of
common stock issued and outstanding based
on representations set forth in KLS's
annual report on Form 10-KSB for the fiscal
year ended September 30, 1996 and
accounting for the presently unissued
shares issuable upon the exercise of Mr.
Kurzon's stock options).
(b) Sole power to Vote, Direct the
Vote of, or Dispose of Shares: 2,328,539 shares
(c) Recent Transactions:
Pursuant to the grant and issuance of directors' stock options
as described in Item 4, which description is incorporated
herein by reference, on December 31, 1996, Mr. Kurzon received
an option to purchase up to 150,000 shares of KLS's common
stock at the exercise price of $3.00 per share, which option
is presently exercisable and expires on December 31, 2006.
(d) Rights with Respect to Dividends
or Sales Proceeds: N/A
(e) Date of Cessation of Five Percent
Beneficial Ownership: N/A
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A contains the name, citizenship, office, business address and
present principal occupation of each of the managers of SMD, L.L.C.,
and is incorporated by reference from the Initial 13D.
Exhibit B is a Joint Filing Agreement among SMD, L.L.C. and Mr. Kurzon,
and is incorporated by reference from the Initial 13D.
Exhibit C is the Purchase Agreement described in the Initial 13D, which is
incorporated by reference from the Initial 13D.
Exhibit D is the collateral Agreement between SMD, L.L.C. and Mr. Kurzon
described in the Initial 13D, which is incorporated by reference
from the Initial 13D.
Exhibit E is the form of the purchase warrant issued to SMD pursuant to
the transaction described in Item 4, and is filed herewith.
<PAGE>
SCHEDULE 13D Page 7 of 13
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated as of January 28, 1997.
SMD, L.L.C.
By: /s/ Thomas A. Murdock
---------------------------------
Thomas A. Murdock, Manager
/s/ Raymond H. Kurzon
------------------------------------
Raymond H. Kurzon, Individually
<PAGE>
SCHEDULE 13D Page 8 of 13
EXHIBIT E
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE
OF THIS WARRANT HAVE NOT BEEN AND WILL NOT BE, AS OF THE
TIME OF ISSUANCE, REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY COMPARABLE STATE LAW, AND MAY
NOT BE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN EXEMPTION THEREFROM UNDER SUCH ACT. THIS WARRANT
AND SUCH SHARES MAY BE TRANSFERRED ONLY IN COMPLIANCE
WITH THE CONDITIONS SPECIFIED IN THIS WARRANT
KLS ENVIRO RESOURCES, INC.
COMMON STOCK PURCHASE WARRANT
Expiring September 30, 2000
September 30, 1996
KLS Enviro Resources, Inc., a Nevada corporation (the "Company"), for
value received, hereby certifies that SMD, L.L.C., a Utah limited liability
company, or its registered assigns, is entitled to purchase from the Company at
any time from time to time prior to 5:00 p.m., Fort Worth, Texas time, on
September 30, 1996, 6,600,000 duly authorized shares of the Company's common
stock, par value $.0001 per share (the "Warrant Stock") at a purchase price per
share of $.40, all subject to the terms and conditions set forth below.
1.Exercise of Warrant.
1.1Manner of Exercise. The holder of this Warrant may exercise
it, in whole or in part, during normal business hours on any business day by
surrendering this Warrant to the Company at the Company's principal office,
accompanied by an executed subscription agreement in substantially the form
annexed hereto as Exhibit A and by payment, in cash or by certified or official
bank check payable to the order of the Company, or by any combination of such
methods, in the amount obtained by multiplying (a) the number of shares of
Warrant Stock designated in such subscription by (b) $.40, whereupon such holder
shall be entitled to receive the number of duly authorized, validly issued,
fully paid and nonassessable shares of Warrant Stock as is indicated on the
subscription.
1.2When Exercise Effective. Each exercise of this Warrant shall
be deemed to have been effected immediately prior to the close of business on
the business day on which this Warrant shall have been surrendered to the
Company as provided in Section 1.1, and at such time the person or persons in
whose name or names any certificate or certificates for shares of Warrant Stock
shall be issued upon such exercise shall be deemed for all corporate purposes to
have become the holder of record thereof.
<PAGE>
SCHEDULE 13D Page 9 of 13
1.3Delivery of Stock Certificates. As soon as practicable after
each exercise of this Warrant, and in any event within five business days
thereafter, the Company at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of and delivered to
the holder hereof or to the person or entity such holder may direct (and upon
payment by such holder of any applicable transfer taxes), a certificate or
certificates for the number of duly authorized, validly issued, fully paid and
nonassessable shares of Warrant Stock to which the holder or its designee shall
be entitled upon such exercise.
1.4Partial Exercise.
1.4.1Fractional Shares. In the event of any partial exercise
of this Warrant, the Company will not issue certificates for any fractional
shares of the Warrant Stock to which the holder otherwise may be entitled, and
the Company shall not be obligated to refund an amount of cash comprising the
market value of any fractional share of Warrant Stock for which the Company will
not issue a certificate.
1.4.2Replacement Warrant. In the event of any partial
exercise of this Warrant, upon tender of this Warrant to the Company, the
Company shall issue a new Warrant containing the same terms and conditions as
this Warrant but calling on the face thereof for the number of shares of Warrant
Stock equal to the number of shares called for on the face of this Warrant minus
the number of shares of Warrant Stock issued upon the partial exercise of this
Warrant.
2.Adjustment of Warrant Stock Issuable Upon Exercise. If the Company
at any time or from time to time after the date of this Warrant but before
expiration effects a split or subdivision of the outstanding shares of its then
outstanding common stock into a greater number of shares of common stock, or if
the Company effects a reverse split of the outstanding shares of its common
stock into a lesser number of shares of common stock, (by reclassification or
otherwise than by payment of a dividend in common stock), then, and in each such
case, the number of shares called for on the face of this Warrant (or the face
of any replacement Warrant issued upon partial exercise) shall be adjusted
proportionally, and the exercise price with respect to such adjusted number of
shares also shall be adjusted proportionally.
3.Restrictions on Transfer.
3.1Restrictive Legends. Each replacement Warrant issued upon
partial exercise or the transfer of any Warrant shall contain a legend in
substantially the following form:
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE
OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM
UNDER SUCH ACT. THIS WARRANT AND SUCH SHARES MAY BE
TRANSFERRED ONLY IN COMPLIANCE WITH THE CONDITIONS
SPECIFIED IN THIS WARRANT.
<PAGE>
SCHEDULE 13D Page 10 of 13
Each certificate for Common Stock issued upon the exercise of any Warrant, and
each certificate issued upon the transfer of any such Common Stock, shall be
stamped or otherwise imprinted with a legend in substantially the following
form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE
SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF REGISTRATION,
OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION,
UNDER THE SECURITIES ACT OF 1933 AND APPROPRIATE STATE
SECURITIES LAWS. FURTHERMORE, NO OFFER, SALE, TRANSFER,
PLEDGE OR HYPOTHECATION IS TO TAKE PLACE UNLESS THE
COMPANY RECEIVES AN OPINION OF COUNSEL AT SHAREHOLDER'S
EXPENSE, AND SATISFACTORY TO IT, THAT AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.
3.2Notice of Proposed Transfer; Opinions of Counsel. Prior to
the transfer of any shares of Common Stock issued upon the exercise of this
Warrant and during any period during which such shares of Common Stock are not
registered by the Company under an effective registration statement filed
pursuant to the Securities Act of 1933, the holder thereof shall give written
notice to the Company, which notice shall (a) state such holder's intention to
transfer such restricted shares and to comply in all other respects with the
transfer requirements of this Warrant; (b) describe the circumstances of the
proposed transfer in sufficient detail to enable counsel to render the opinions
referred to below, and (c) designate counsel for the holder giving such notice.
The holder giving such notice shall submit a copy thereof to the counsel
designated in such notice and the Company will promptly submit a copy thereof to
its counsel. The following provisions shall then apply:
3.2.1If (a) in the opinion of counsel for the holder
designated in the notice the proposed transfer may be effected without
registration of such shares of Common Stock under the Securities Act of
1933 and any applicable state securities laws, and (b) counsel for the
Company shall not have rendered an opinion within 15 days after receipt by
the Company of such written notice that such registration is required,
such holder shall thereupon be entitled to transfer such shares of Common
Stock in accordance with the terms of the notice delivered by such holder
to the Company. Each Warrant or certificate, if any, issued upon or in
connection with such transfer shall bear the appropriate restrictive
legend set forth in Section 4.1, unless in the opinion of each such
counsel such legend is no longer required to insure compliance with the
Securities Act. If for any reason counsel for the Company (after having
been furnished with the information required to be furnished by clause (a)
of this Section 4.2) shall fail to deliver an opinion to the Company as
aforesaid, then for all purposes of this Warrant the opinion of counsel
for the Company shall be deemed to be the same as the opinion of counsel
for such holder.
<PAGE>
SCHEDULE 13D Page 11 of 13
3.2.2If in the opinion of either or both of such counsel the
proposed transfer may not legally be effected without registration of such
shares of Common Stock under the Securities Act of 1933 or applicable
state securities laws (such opinion or opinions to state the basis of the
legal conclusions reached therein), the Company will promptly so notify
the holder thereof and thereafter such holder shall not be entitled to
transfer such shares of Common Stock until receipt of a further notice
from the holder under Section 4.2.1 above or until registration of such
shares of Common Stock under the Securities Act or applicable state law
has become effective.
4.Reservation of Shares. The Company will at all times reserve and
keep available, solely for issuance and delivery upon the exercise of the
Warrants, the number of shares of Warrant Stock that would be issuable upon the
exercise of all Warrants at the time outstanding. All such shares shall be duly
authorized and, when issued upon such exercise, shall be validly issued, fully
paid and nonassessable with no liability on the part of the holders thereof.
5.Ownership, Transfer and Substitution of Warrants.
5.1Ownership of Warrants. The Company may treat the person in
whose name any Warrant is registered on the Company's records as the owner and
holder thereof for all purposes, notwithstanding any notice to the contrary.
Nevertheless, when a Warrant is properly assigned in blank, the holder thereof
may exercise the Warrant without first having a new Warrant issued.
5.2Transfer and Exchange of Warrants. Upon the surrender of any
Warrant, properly endorsed, for registration of transfer of exchange at the
principal office of the Company, the Company will execute and (upon payment by
such holder of any applicable transfer taxes) deliver to any person specified by
the holder of the Warrant a new Warrant or Warrants of like tenor, calling in
the aggregate on the face or faces of such replacement Warrants for the number
of shares of Warrant Stock called for on the face or faces of the Warrant or
Warrants so surrendered.
5.3Replacement 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 of destruction of any Warrant,
upon delivery of indemnity reasonably satisfactory to the Company in form and
amount or, in the case of any such mutilation, upon surrender of such the
Company at its expense will execute and deliver, in lieu thereof, a new Warrant
of like tenor.
6.No Rights or Liabilities as Stockholder. Nothing herein shall give
or shall be construed to give the holder of this Warrant any of the rights of a
shareholder of the Company including, without limitation, the right to vote on
matters requiring the vote of shareholders, the right to receive any dividend
declared and payable to the holders of common stock, and the right to a pro-rata
distribution upon the Company's dissolution.
7.Notices.All notices and other communications provided for herein
shall be delivered or mailed by first class mail, postage prepaid, addressed (a)
if to the holders of any Warrant, at the registered address of such holder as
<PAGE>
SCHEDULE 13D Page 12 of 13
set forth in the register kept at the principal office of the Company, or (b) if
to the Company, at its principal office, 3220 North Freeway, Fort Worth, Texas
76111, or at the address of such other principal office of the Company as the
Company shall have furnished to each holder of any Warrants in writing, provided
that the exercise of any Warrants shall be effective only in the manner provided
in Section 1.
8.Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be governed by the laws of the State of Utah.
The headings of this Warrant are inserted for convenience only and shall not be
deemed to constitute a part hereof.
9.Expiration. The right to exercise this Warrant shall expire at 5:00
p.m., Fort Worth, Texas time, on September 30, 2000.
KLS Enviro Resources, Inc.
By: /s/ Raymond H. Kurzon
---------------------------
Raymond H. Kurzon, President
<PAGE>
SCHEDULE 13D Page 13 of 13
Exhibit A
SUBSCRIPTION
(To be executed by the holder of the Warrant to exercise the right to
purchase common stock evidenced by the Warrant)
To: KLS Enviro Resources, Inc.
3220 North Freeway
Fort Worth, Texas 76111
The undersigned hereby irrevocably subscribes for ________ shares of the
Common Stock, par value $.0001 per share, of KLS Enviro Resources, Inc., a
Nevada corporation, pursuant to and in accordance with the terms and conditions
of a Warrant dated September 30, 1996 (the "Warrant"), and tenders with the
Warrant and this Subscription Agreement payment of $_____________ as payment for
the shares, and requests that a certificate for such shares be issued in the
name of the undersigned and be delivered to the undersigned at the address
stated below.
__________________________________________________
NAME
__________________________________________________
ADDRESS
__________________________________________________
__________________________________________________
SOCIAL SECURITY NUMBER
__________________________________________________
Signed
__________________________________________________
Dated
