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.
1.1 Manner 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.
1.2 When 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.
1.3 Delivery 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.
1.4 Partial Exercise.
1.4.1 Fractional 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.
1.4.2 Replacement 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.
3.1 Restrictive 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.
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.
3.2 Notice 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:
3.2.1 If (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
3.1, 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 3.2) 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.
3.2.2 If 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 3.2.1 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.
5.1 Ownership 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.
5.2 Transfer 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.
5.3 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 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 set forth in the register kept at the principal office of the
Company, or (b) if to the Company, at its principal office, 0000 Xxxxx
Xxxxxxx, Xxxx Xxxxx, Xxxxx 00000, 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: _____________________________
Xxxxxxx X. Xxxxxx, President
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.
0000 Xxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxx 00000
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
