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EXHIBIT 10.45
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ARE
"RESTRICTED" SECURITIES" WITHIN THE MEANING OF RULE 144 PROMULGATED UNDER THE
SECURITIES ACT. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE SOLD OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE SECURITIES ACT.
WARRANT TO PURCHASE
Up to a maximum of 270,000 Shares
INTELECT COMMUNICATIONS SYSTEMS LIMITED
(a Bermuda corporation)
WARRANT FOR THE PURCHASE OF
Common Stock, $.01 Par Value per Share
THIS WARRANT MAY BE EXERCISED ONLY PURSUANT TO ITS TERMS
(BUT IN ANY EVENT NOT BEFORE JUNE 19, 1997) AND WILL BE VOID
AFTER 6:00 P.M. CENTRAL DAYLIGHT SAVINGS TIME ON JUNE 19, 2004
This warrant (the "Warrant") certifies that, for value received,
Amerix Electronics, Inc., ("Purchaser") is entitled, at any time and from time
to time on or after June 19, 1997 (the "Beginning Date"), and at any time prior
to 6:00 p.m. Central Daylight Savings Time on June 19, 2004 (the "Expiration
Time"), to purchase from Intelect Communications Systems Limited, a Bermuda
corporation (the "Company"), but only in accordance with and subject to the
satisfaction of the terms and conditions of this Warrant, up to the number of
shares shown above (the "Warrant Shares") of common stock, par value $.01, of
the Company (the "Common Stock"). Purchaser's right to exercise this Warrant
shall be subject to the following terms and conditions:
1. The Purchaser shall have the right to purchase, pursuant to
the terms of this Warrant, 6,750 Warrant Shares for every One Million Dollars
($1,000,000) of the products (the "Products") sold by the Company (for purposes
of this Section 1, the Company shall include any of the Company's wholly-owned
subsidiaries) and purchased from the Company and paid for on or before June 19,
2001 by the Purchaser to the Company, up to an aggregate of 270,000 Warrant
Shares. For example, if Purchaser purchases from the Company Four Million
Dollars ($4,000,000) of the Company's Products and the Company receives payment
for such purchase, Purchaser shall be entitled to acquire, upon payment to the
Company of the Exercise Price (as stated below), 27,000 Warrant Shares.
Purchaser has projected that it will purchase $40,000,000 of the Company's
Products from the Company over the next four years, and in the event Purchaser
does so purchase and pay for $40,000,000 of Products on or before June 19,
2001, it would be entitled to purchase an aggregate of 270,000 Warrant Shares,
subject to the terms of this Warrant. Purchaser shall not be entitled to
exercise this Warrant as
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to any such Warrant Shares unless and until the Company has received full
payment for all of such Products as to which the exercise of the Warrant Shares
relates. If Purchaser is entitled to acquire Warrant Shares as described
above, then Purchaser shall exercise this Warrant as to the Warrant Shares to
which it is entitled by surrendering this Warrant and paying in full, by cash
or cashier's check, in lawful money of the United States, the Exercise Price.
The Exercise Price shall be a per share price equal to the average per share
closing trading price of the Company's Common Stock on Nasdaq (or any exchange
on which the Company's Common Stock is traded) for the five (5) consecutive
trading days prior to the Beginning Date. Notwithstanding the foregoing,
Purchaser shall not be entitled to exercise this Warrant for any orders for the
Company's Products unless such orders are received by the Company and paid for
by the Purchaser on or before June 19, 2001. For purposes of this Section 1,
all orders for the Company's products since January 10, 1997 shall be counted
for purposes of determining the amount of Warrant Shares to which Purchaser is
entitled, provided such orders have been fully paid for.
2. On the exercise of all or any portion of this Warrant in the
manner provided above, the person exercising the same shall be deemed to have
become a holder of record of Common Stock (or of the other securities or
properties to which he or it is entitled on such exercise) for all purposes,
and certificates for the securities so purchased shall be delivered to the
Purchaser within a reasonable time after the Warrant shall have been exercised
as set forth above. If this Warrant shall be exercised with respect to only a
portion of the Warrant Shares covered hereby, the Purchaser shall be entitled
to receive a similar warrant of like tenor and date covering the number of
Warrant Shares with respect to which this Warrant shall not have been
exercised.
3. The Company covenants and agrees that the Warrant Shares which
may be issued on the exercise of the rights represented by this Warrant will,
upon receipt of the Exercise Price, be fully paid and nonassessable, and free
from all taxes, liens, and charges with respect to the issue thereof. 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.
4. The number of Warrant Shares purchasable pursuant to this
Warrant may be subject to adjustment from time to time as follows:
(a) If the Company issues any stock dividends on its
Common Stock and such dividends are made available to all of its
holders of Common Stock, the number of Warrant Shares exercisable
hereunder shall be proportionately increased, such adjustment to
become effective immediately after the opening of business on the day
following such record date.
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(b) If the Company shall subdivide the outstanding shares
of Common Stock into a greater number of shares, combine the
outstanding shares of Common Stock into a smaller number of shares, or
issue by reclassification any of its shares, the number of Warrant
Shares in effect immediately prior thereto shall be adjusted so that
the holder of this Warrant shall be entitled to receive, after the
occurrence of any of the events described, the number of Warrant
Shares to which the holder would have been entitled had this Warrant
been exercised immediately prior to the occurrence of such event.
Such adjustment shall become effective immediately after the opening
of business on the day following the date on which such subdivision,
combination, or reclassification, as the case may be, becomes
effective.
(c) If any capital reorganization or reclassification of
Common Stock, or consolidation or merger of the Company with another
corporation or the sale of all or substantially all of its assets to
another corporation shall be effected in such a way that holders of
Common Stock shall be entitled to receive stock, securities, or assets
with respect to or in exchange for Common Stock, then as a condition
of such reorganization, reclassification, consolidation, merger or
sale, lawful adequate provisions shall be made whereby the holder of
this Warrant shall thereafter have the right to acquire and receive on
exercise hereof such shares of stock, securities, or assets as would
have been issuable or payable (as part of such reorganization,
reclassification, consolidation, merger or sale) with respect to or in
exchange for such number of outstanding shares of Common Stock as
would have been received on exercise of this Warrant immediately
before such reorganization, reclassification, consolidation, merger or
sale. 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 shall thereafter be applicable in
relation to any shares of stock, securities, or assets thereafter
deliverable on the exercise of this Warrant. The Company will not
effect any such consolidation, merger, or sale unless prior to the
consummation thereof the successor corporation resulting from such
consolidation or merger or the corporation purchasing such assets
shall assume, by written instrument mailed or delivered to the holder
hereof at its last address appearing on the books of the Company, the
obligation to deliver to such holder such shares of stock, securities,
or assets as, in accordance with the foregoing provisions, such holder
may be entitled to acquire on exercise of this Warrant.
(d) No fraction of a share shall be issued on exercise
hereof, but, in lieu thereof, the Company, notwithstanding any other
provision hereof, may pay therefor in cash at the Exercise Price of
any such fractional share at the time of exercise.
(e) Neither the purchase or other acquisition by the
Company of any shares of Common Stock nor the sale or other
disposition by the Company of any shares of Common Stock shall affect
any adjustment of the Exercise Price or be taken into
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account in computing any subsequent adjustment of the Exercise Price.
5. This Warrant shall not be transferable or assignable by the
Purchaser.
6. The Purchaser represents, warrants and covenants to the
Company as follows:
(i) The Purchaser will acquire the Warrant Shares for its
own account for investment purposes and not with a view towards
distribution. The Purchaser understands and agrees that it must bear
the economic risks of its investment for an indefinite period of time.
The Purchaser 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. The Purchaser understands
that the offer and sale of the Warrant Shares are being made only by
means of this Warrant. No representations or warranties have been
made to the Purchaser by the Company, the officers or directors of the
Company, or any agent, employee or affiliate of any of them. The
Purchaser 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 Purchaser
has had the opportunity to ask questions of, and receive answers,
satisfactory to it from the Company's management regarding the
Company. The Purchaser 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 Purchaser,
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 Purchaser 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 Purchase has not been
organized for the purpose of acquiring the Warrant Shares;
(ii) The Purchaser is an "accredited investor" within the
meaning of Rule 501 of the Securities Act of 1933, as amended (the
"Securities Act");
(iii) The Purchaser 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 Purchaser set forth herein
in order to determine the applicability of such provisions;
(iv) The Purchaser, 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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The Purchaser understands that neither this Warrant nor the Warrant
Shares have been registered under the Securities Act and therefore it cannot
dispose of any or all of this Warrant or the Warrant Shares unless or until
such Warrant or Warrant Shares are subsequently registered under the Securities
Act or exemptions from such registration are available. Accordingly, the
shares issuable on exercise of this Warrant shall be restricted securities
within the meaning of Rule 144 promulgated under the Securities Act, and all
certificates for such shares shall contain a legend in substantially the
following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE MEANING
OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE SECURITIES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED
WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION OR OTHER COMPLIANCE UNDER THE SECURITIES ACT."
7. As used herein, the term "Common Stock" shall mean and include
the Common Stock authorized on the date of the original issue of this Warrant,
and shall also include any capital stock of any class of the Company thereafter
authorized that shall not be limited to a fixed sum or percentage in respect of
the rights of the holders thereof to participate in dividends and in the
distribution of assets on the voluntary or involuntary liquidation,
dissolution, or winding up of the Company; provided that the Warrant Shares
purchasable pursuant to this Warrant shall include only shares of the class
designated in the Company's Charter as Common Stock on the date of the original
issue of this Warrant or, in the case of any reorganization, reclassification,
consolidation, merger, or sale of assets of the character referred to in
paragraph 4(c) hereof, the stocks, securities, or assets provided for in such
paragraph.
8. This agreement shall be construed under and be governed by the
laws of the State of Texas.
9. Any notices required or permitted hereunder shall be
sufficiently given if delivered by hand or sent by registered or certified
mail, postage prepaid, addressed as follows:
If to the Purchaser, to:
Amerix Electronics, Inc.
431 E. Grand Ave.
El Segundo, Calif. 90245
Attention: Tehan Oh
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If to the Company, to:
Intelect Communications Systems Limited
1100 Executive Drive
Richardson, Texas 75081
Attention: President
or such other address as shall be furnished in writing by any party to the
other, and any such notice or communication shall be deemed to have been given
as of the date delivered by hand or three days after being so deposited in the
mails.
Dated effective this 19th day of June, 1997.
INTELECT COMMUNICATIONS SYSTEMS LIMITED
By: /s/ HERMAN M. FRIETSCH
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Herman M. Frietsch
Chairman of the Board
AMERIX ELECTRONICS, INC.
By: /s/ TEHAN OH
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Its: President
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Form of Purchase
(to be signed only upon exercise of warrant)
TO: INTELECT COMMUNICATIONS SYSTEMS LIMITED
The undersigned, the owner of the attached warrant, hereby irrevocably
elects to exercise the purchase rights represented by the warrant for, and to
purchase thereunder, ___________________ shares of common stock of Intelect
Communications Systems Limited, and herewith makes payment of $______________
therefor, and requests that the certificate(s) for such shares be delivered to
___________________________________
___________________________________
___________________________________
___________________________________
and if such shall not be all of the shares purchasable hereunder, that a new
warrant of like tenor for the balance of the shares purchasable under the
attached warrant be delivered to the undersigned.
Dated this _____ day of _____________, ______.
____________________________________
Signature
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