EXHIBIT 4.5
THE SECURITIES REPRESENTED BY THIS WARRANT AND THE COMMON STOCK ISSUABLE THEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY OTHER APPLICABLE SECURITIES LAW AND, ACCORDINGLY, THE
SECURITIES REPRESENTED BY THIS WARRANT AND THE COMMON STOCK ISSUABLE THEREBY MAY
NOT BE RESOLD, PLEDGED, OR OTHERWISE TRANSFERRED, EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER, OR IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER, THE SECURITIES ACT AND IN ACCORDANCE WITH ANY OTHER
APPLICABLE SECURITIES LAWS.
FORM OF WARRANT
to Purchase Common Stock of
INTELECT COMMUNICATIONS, INC.
Expiring on March 8, 2002
This Common Stock Purchase Warrant (the "Warrant") certifies that for
value received, [NAME OF HOLDER] (the "Holder") is entitled to subscribe for and
purchase from the Company (as hereinafter defined), in whole or in part, 300,000
shares of duly authorized, validly issued, fully paid and nonassessable shares
of Common Stock (as hereinafter defined) at the Exercise Price (as hereinafter
defined), subject, however, to the provisions and upon the terms and conditions
hereinafter set forth. This Warrant and all rights hereunder shall expire at
5:00 p.m., Houston, Texas time, on March 8, 2002.
As used herein, the following terms shall have the meanings set forth
below:
"COMPANY" shall mean Intelect Communications, Inc., a Delaware
corporation, and shall also include any successor thereto with respect to the
obligations hereunder, by merger, consolidation or otherwise.
"COMMON STOCK" shall mean and include the Company's Common Stock, par
value $0.01 per share, authorized on the date of the original issue of this
Warrant.
"EXERCISE PRICE" shall mean the lesser of (i) $2.00 per share of Common
Stock, or (ii) the price per share of Common Stock equal to the lowest Market
Price for five (5) consecutive trading days for the period beginning on December
2, 1998 and ending on February 1, 1999, provided that such price shall not be
less than $1.00 per share.
"MARKET PRICE" for any day, when used with reference to Common Stock,
shall mean the price of said Common Stock determined as follows: (x) the last
reported sale price for the Common Stock on such day on the principal securities
exchange on which the Common Stock is listed or admitted to trading or if no
such sale takes place on such date, the average of the closing bid and asked
prices thereof as officially reported, or, if not so listed or admitted to
trading on any securities exchange, the last sale price for the Common Stock on
the National Association of Securities Dealers National Market on such date, or,
if there shall have been no trading on such date or if the Common Stock shall
not be listed on such system, the average of the closing bid and asked prices in
the over-the-counter market as furnished by any NASD
member firm selected from time to time by the Company for such purpose; or (y)
if the Common Stock shall not be listed or admitted to trading as provided in
clause (x) above, the fair market value of the Common Stock as determined in
good faith by the Board of Directors of the Company.
"WARRANT SHARES" shall mean the shares of Common Stock purchased or
purchasable by the holder hereof upon the exercise of the Warrant.
ARTICLE I
EXERCISE OF WARRANT
1.1 METHOD OF EXERCISE. The Warrant represented hereby may be exercised by
the Holder hereof, in whole or in part, at any time and from time to time on or
after the later of March 3, 1999 or the date upon which the shareholders of the
Company approve the proposal to amend the Company's Amended and Restated
Certificate of Incorporation to increase the authorized shares of Common Stock
to 100,000,000 shares (the "Charter Amendment Proposal") until 5:00 p.m.,
Houston, Texas time, on March 8, 2002. To exercise the Warrant, the Holder
hereof shall deliver to the Company (i) a written notice in the form of the
Subscription Notice attached as an exhibit hereto, stating therein the election
of such Holder to exercise the Warrant in the manner provided in the
Subscription Notice; and (ii) payment in full of the Exercise Price in cash or
by bank check for all Warrant Shares purchased hereunder. The Warrant shall be
deemed to be exercised on the date of receipt by the Company of the Subscription
Notice, accompanied by payment for the Warrant Shares and surrender of this
Warrant, as aforesaid, and such date is referred to herein as the "Exercise
Date". Upon such exercise, the Company shall, as promptly as practicable and in
any event within ten (10) business days, issue and deliver to such Holder a
certificate or certificates for the full number of the Warrant Shares purchased
by such Holder hereunder, and shall, unless the Warrant has expired or has been
redeemed, deliver to the Holder hereof a new Warrant representing the portion,
if any, that shall not have been exercised, in all other respects identical to
this Warrant. As permitted by applicable law, the Person in whose name the
certificates for Common Stock are to be issued shall be deemed to have become a
holder of record of such Common Stock on the Exercise Date and shall be entitled
to all of the benefits of such holder on the Exercise Date, including without
limitation the right to receive dividends and other distributions for which the
record date falls on or after the Exercise Date and to exercise voting rights.
1.2 RESERVATION OF SHARES. Beginning at such time as this Warrant is
exercisable, the Company shall reserve at all times so long as the Warrant
remains outstanding, free from preemptive rights, out of its treasury Common
Stock or its authorized but unissued shares of Common Stock, or both, solely for
the purpose of effecting the exercise of the Warrant, a sufficient number of
shares of Common Stock to provide for the exercise of the Warrant.
1.3 VALID ISSUANCE. All shares of Common Stock that may be issued upon
exercise of the Warrants will, upon issuance by the Company, be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issuance thereof.
1.4 NO FRACTIONAL SHARES. The Company shall not be required to issue
fractional shares of Common Stock on the exercise of this Warrant. If any
fraction of a share of Common Stock would be issuable on the exercise of this
Warrant, the Company shall pay an amount in cash calculated by it to be
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equal to the Market Price of one share of Common Stock at the time of such
exercise multiplied by such fraction computed to the nearest whole cent.
ARTICLE II
TRANSFER
2.1 OWNERSHIP OF WARRANT. The Company may deem and treat the person in
whose name the Warrant is registered as the Holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary unless agreed to in writing by the Company.
2.2 RESTRICTIONS ON TRANSFER OF WARRANTS. The Holder of the Warrant agrees
that the Warrant is not transferrable without the prior written consent of the
Company and any such transfer without such consent shall be void and without
effect; PROVIDED, HOWEVER, the Holder may on prior written notice to the
Company, assign this Warrant to an "accredited investor" (as such term is
defined under Rule 501(a) of Regulation D as promulgated under the Securities
Act of 1933). Subject to the restrictions on transfer of the Warrant in this
Section 2.2, the Company, from time to time, shall register the transfer of the
Warrant in such books upon surrender of this Warrant at the Company's principal
office, properly endorsed or accompanied by appropriate instruments of transfer
and written instructions for transfer satisfactory to the Company. Upon any such
transfer and upon payment by the Holder or its transferee of any applicable
transfer taxes, a new Warrant shall be issued to the transferee and the
transferor (as their respective interests may appear) and the surrendered
Warrant shall be canceled by the Company. The Holder shall pay all taxes and all
other expenses and charges payable in connection with the transfer of the
Warrant pursuant to this Section 2.2.
2.3 COMPLIANCE WITH SECURITIES LAWS. Notwithstanding any other provisions
contained in this Warrant, the Holder hereof understands and agrees that the
following restrictions and limitations shall be applicable to all Warrant Shares
and to all resales or other transfers thereof pursuant to the Securities Act,
and that as a condition to the exercise of such warrant that the following are
and will be true and correct:
(A) The Holder hereof agrees that the Warrant Shares shall not be
sold or otherwise transferred unless the Warrant Shares are registered
under the Securities Act and applicable state securities or blue sky laws
or are exempt therefrom.
(B) A legend in substantially the following form will be placed on
the certificate(s) evidencing the Warrant Shares:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY OTHER APPLICABLE SECURITIES LAW AND,
ACCORDINGLY, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT
BE RESOLD, PLEDGED, OR OTHERWISE TRANSFERRED, EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER, OR IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER, THE
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SECURITIES ACT AND IN ACCORDANCE WITH ANY OTHER
APPLICABLE SECURITIES LAWS."
(C) Stop transfer instructions will be imposed with respect to the
Warrant Shares so as to restrict resale or other transfer thereof, subject
to this Section 2.3.
(D) The Holder is an "accredited investor" within the meaning of
Rule 501 of Regulation D as promulgated under the Securities Act of 1933,
and will be so as a condition of purchasing any of the Warrant Shares. The
Holder will acquire the Warrant Shares for its own account for investment
purposes and not with a view towards distribution. The Holder must bear
the economic risk of the investment for an indefinite period of time
because the Warrant Shares have not been registered under the Securities
Act and therefore cannot be sold unless they are subsequently registered
under the Securities Act or an exemption from such registration is
available. The Holder has received and carefully reviewed copies of all
documents filed by the Company as of the time of each exercise with the
Securities and Exchange Commission. No representations or warranties have
been made to the Holder by the Company, the officers or directors of the
Company, or any agent, employee or affiliate of any of them. The Holder is
aware that the purchase of the Warrant Shares involves a high degree of
risk and that it may sustain, and has the financial ability to sustain,
the loss of its entire investment. The Holder has had the opportunity to
ask questions of, and receive answers, satisfactory to it from the
Company's management regarding the Company. The Holder understands that no
Federal or State governmental authority has made any finding or
determination relating to the fairness of an investment in the Warrant
Shares and that no Federal or State governmental authority has recommended
or endorsed, or will recommend or endorse, the investment herein. The
Holder, in making the decision to purchase the Warrant Shares subscribed
for, has relied upon independent investigations made by it and has not
relied on any information or representations made by third parties. The
Holder has significant assets, and upon consummation of the purchase of
the Warrant Shares, will continue to have significant assets exclusive of
the Warrant Shares. The Holder understands that the Warrant Shares are
being offered and sold to it in reliance on specific provisions of Federal
and State securities laws and that the Company is relying upon the truth
and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of the Holder set forth herein in order
to determine the applicability of such provisions. The Holder, in making
the decision to purchase the Warrant Shares subscribed for, has relied
upon independent investigations made by it and has not relied on any
information or representations made by third parties.
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ARTICLE III
ANTI-DILUTION
3.1 ANTI-DILUTION PROVISIONS. If the outstanding shares of the Company's
Common Stock shall be subdivided into a greater number of shares or a dividend
in Common Stock shall be paid in respect of Common Stock, the Exercise Price in
effect immediately prior to such subdivision or at the record date of such
dividend shall simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend be proportionately reduced.
If outstanding shares of Common Stock shall be combined into a smaller number of
shares, the Exercise Price in effect immediately prior to such combination
shall, simultaneously with the effectiveness of such combination, be
proportionately increased. When any adjustment is required to be made in the
Exercise Price, the number of Warrant Shares purchasable upon the exercise of
this Warrant shall be changed to the number determined by dividing (i) an amount
equal to the number of shares issuable upon the exercise of this Warrant
immediately prior to such adjustment, multiplied by the Exercise Price in effect
immediately in effect prior to such adjustment, by (ii) the Exercise Price in
effect immediately after such adjustment.
3.2 REORGANIZATIONS AND ASSET SALES. If any capital reorganization or
reclassification of the capital stock of the Company, or any consolidation,
merger or share exchange of the Company with another Person, or the sale,
transfer or other disposition of all or substantially all of its assets to
another Person shall be effected in such a way that a holder of Common Stock of
the Company shall be entitled to receive capital stock, securities or assets
with respect to or in exchange for their shares, then as part of any such
reorganization, reclassification, consolidation, merger or sale, as the case may
be, lawful provision shall be made so that the Holder of this Warrant shall have
the right thereafter to receive upon exercise hereof the kind and amount of
share of stock or other securities or property which such holder would have been
entitled to receive if, immediately prior to any such reorganization,
reclassification, consolidation, merger or sale, as the case may be, such holder
had held the number of shares of Common Stock which were the purchasable upon
the exercise of this Warrant. In any such case, appropriate adjustment (as
reasonably determined in good faith by the Board of Directors of the Company)
shall be made in the application of the provisions set forth herein with respect
to the rights and interests thereafter of the Holder of this Warrant, such that
the provisions set forth herein (including provisions with respect to adjustment
of the Exercise Price) shall thereafter be applicable, as nearly as is
reasonably practicable, in relation to any shares of stock or other securities
or property thereafter deliverable upon the exercise of this Warrant.
3.3 NOTICE OF ADJUSTMENT. Whenever the Exercise Price or the number of
Warrant Shares issuable upon the exercise of the Warrant shall be adjusted as
herein provided, or the rights of the Holder hereof shall change by reason of
other events specified herein, the Company shall compute the adjusted Exercise
Price and the adjusted number of Warrant Shares in accordance with the
provisions hereof and shall prepare a notice setting forth the adjusted Exercise
Price and the adjusted number of Warrant Shares issuable upon the exercise of
the Warrant or specifying the other shares of stock, securities or assets
receivable as a result of such change in rights, and showing in reasonable
detail the facts and calculations upon which such adjustments or other changes
are based. The Company shall cause to be mailed to the Holder hereof copies of
such notice stating that the Exercise Price and the number of Warrant Shares
purchasable upon exercise of the Warrant have been adjusted and setting forth
the adjusted Exercise Price and the adjusted number of Warrant Shares
purchasable upon the exercise of the Warrant.
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ARTICLE IV
MISCELLANEOUS
4.1 ENTIRE AGREEMENT. This Warrant, together with the Agreement, contain
the entire agreement between the Holder hereof and the Company with respect to
the Warrant Shares purchasable upon exercise hereof and the related transactions
and supersedes all prior arrangements or understandings with respect thereto.
4.2 GOVERNING LAW; VENUE. This warrant shall be governed by and construed
in accordance with the laws of the State of Texas. Venue for any dispute arising
under this Warrant shall lie in the state or federal courts of Harris County,
Texas.
4.3 WAIVER AND AMENDMENT. Any term or provision of this Warrant may be
waived at any time by the party which is entitled to the benefits thereof and
any term or provision of this Warrant may be amended or supplemented at any time
by agreement of the Holder hereof and the Company, except that any waiver of any
term or condition, or any amendment or supplementation, of this Warrant shall be
in writing. A waiver of any breach or failure to enforce any of the terms or
conditions of this Warrant shall not in any way effect, limit or waive a party's
rights hereunder at any time to enforce strict compliance thereafter with every
term or condition of this Warrant.
4.4 ILLEGALITY. In the event that any one or more of the provisions
contained in this Warrant shall be determined to be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in any other respect and the remaining
provisions of this Warrant shall not, at the election of the party for whom the
benefit of the provision exists, be in any way impaired.
4.5 COPY OF WARRANT. A copy of this Warrant shall be filed among the
records of the Company.
4.6 NOTICE. Any notice or other document required or permitted to be given
or delivered to the Holder or the Company hereof shall be in writing and will
deemed to have been delivered: (i) upon receipt, when delivered personally; (ii)
upon receipt, when sent by facsimile (provided a confirmation of transmission is
mechanically generated and kept on file by the sending party); or (iii) one (1)
day after deposit with a nationally recognized overnight delivery service, in
each case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be: any notice or other document
required or permitted to be given or delivered to the Company shall be sent to
the offices of the Company at 1100 Executive Drive, Richardson, Texas 75081,
Attn: Chief Executive Officer, Telecopy No. (972) 367-2271 or such other address
as shall have been furnished in writing by the Company to the Holder of this
Warrant, with a copy to Philip P. Sudan, Jr., Esq., Ryan & Sudan, L.L.P., 909
Fannin, 39th Floor, Houston, Texas 77010, Telecopy No. (713) 652-0503. Any
notice sent or required to be sent hereunder to the Holder shall be sent to the
address of the Holder as contained in the corporate records of the Company or
such other address as shall have been furnished in writing by the Holder to the
Company.
4.7 LIMITATION OF LIABILITY; NOT STOCKHOLDERS. No provision of this
Warrant shall be construed as conferring upon the Holder hereof the right to
vote, consent, receive dividends or receive notices (other
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than as herein expressly provided) in respect of meetings of stockholders for
the election of directors of the Company or any other matter whatsoever as a
stockholder of the Company. No provision hereof, in the absence of affirmative
action by the Holder hereof to purchase shares of Common Stock, and no mere
enumeration herein of the rights or privileges of the Holder hereof, shall give
rise to any liability of such Holder for the purchase price of any shares of
Common Stock or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.
4.8 EXCHANGE, LOSS, DESTRUCTION, ETC. OF WARRANT. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of
this Warrant, and in the case of any such loss, theft or destruction upon
delivery of a bond of indemnity or such other security in such form and amount
as shall be reasonably satisfactory to the Company, or in the event of such
mutilation upon surrender and cancellation of this Warrant, the Company will
make and deliver a new Warrant of like tenor, in lieu of such lost, stolen,
destroyed or mutilated Warrant. Any Warrant issued under the provisions of this
Section 4.8 in lieu of any Warrant alleged to be lost, destroyed or stolen, or
in lieu of any mutilated Warrant, shall constitute an original contractual
obligation on the part of the Company. This Warrant shall be promptly canceled
by the Company upon the surrender hereof in connection with any exchange or
replacement. The Company shall pay all taxes (other than securities transfer
taxes or income taxes) and all other expenses and charges payable in connection
with the preparation, execution and delivery of Warrants pursuant to this
Section 4.8.
4.9 HEADINGS. The Article and Section and other headings herein are for
convenience only and are not a part of this Warrant and shall not affect the
interpretation thereof.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in
its name.
Dated: December 2, 1998
INTELECT COMMUNICATIONS, INC.
By: __________________________________
Name: Herman M. Frietsch
Title: Chairman and Chief
Executive Officer
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SUBSCRIPTION NOTICE
The undersigned, the holder of the foregoing Warrant, hereby elects to
exercise purchase rights represented thereby for and to purchase thereunder,
________ shares of the Common Stock covered by such Warrant, and herewith makes
payment in full for such shares pursuant to Section 1.1 of such Warrant, and
requests (a) that certificates for such shares (and any other securities or
other property issuable upon such exercise) be issued in the name of, and
delivered to _____________________________________ and (b), if such shares shall
not include all of the shares issuable as provided in such Warrant, that a new
Warrant of like tenor and date for the balance of the shares issuable thereunder
be delivered to the undersigned.
______________________________
Date: ___________________________
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ASSIGNMENT
For value received, _______________________, hereby sells, assigns, and
transfers unto _________________________ the within Warrant, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint ________________________ attorney, to transfer such Warrant on the books
of the Company, with full power of substitution.
____________________________
Date: _____________________________
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