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Exhibit 10.79
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
40,500 Shares
INTELECT COMMUNICATIONS, INC.
(a Delaware 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, 2001
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 date hereof) (the "Beginning Date"), and
at any time prior to 6:00 p.m. Central Daylight Savings Time on June 19, 2001
(the "Expiration Time"), to purchase from Intelect Communications, Inc., a
Delaware corporation (the "Company"), but only in accordance with and subject
to the satisfaction of the terms and conditions of this Warrant, 40,500 shares
(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, 40,500 Warrant Shares at an exercise price of
$3.6313 per share (the "Exercise Price"). 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.
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
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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.
(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
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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 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
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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.
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. The Company agrees to register or qualify the Warrant Shares
(but not this Warrant) for sale as follows:
(a) If, at any time during the period in which the rights
represented by this Warrant are exercisable or the holder hereof owns
the Warrant Shares, the Company proposes to file a registration
statement or notification under the Securities Act for the primary or
secondary sale of any debt or equity security, it will give written
notice at least 30 days prior to the filing of such registration
statement or notification to the holders of this Warrant and the
Warrant Shares of its intention to do so. The Company agrees that,
after receiving written notice from the warrant holder of his desire
to include his Warrant Shares in such proposed registration statement
or notification, the
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Company shall afford the holders of this Warrant and the Warrant
Shares the opportunity to have their Warrant Shares included therein.
Notwithstanding the provisions of this paragraph 7(a), the Company
shall have the right, at any time after it shall have given written
notice pursuant to this paragraph (whether or not a written request
for inclusion of the Warrant Shares shall be made) to elect not to
file any such proposed registration statement or notification or to
withdraw the same after the filing but prior to the effective date
thereof. In no event shall the Company be obligated to include the
Warrant Shares in any registration statement or notification under
this paragraph 7(a) if: (i) in the written opinion of the
underwriter, the inclusion of the Warrant Shares in such registration
statement or notification would be materially detrimental to the
proposed offering of debt or equity securities pursuant to which the
Company gave notice to the holders under this paragraph; or (ii) in
the opinion of counsel for the Company, concurred in by counsel for
the holder hereof, that the Warrant Shares are not considered
"restricted securities" within the meaning of Rule 144 promulgated
under the Securities Act and that registration under the Securities
Act is therefore not required.
(b) In connection with the filing of a registration
statement, notification, or post-effective amendment under this
section, the Company covenants and agrees:
(i) to pay all expenses of such registration
statement, notification, or post-effective amendment,
including, without limitation, printing charges, legal fees
and disbursements of counsel for the Company, blue sky
expenses, accounting fees and filing fees, but not including
legal fees and disbursements of counsel to the holders and any
sales commissions on Warrant Shares offered and sold;
(ii) to take all necessary action which may
reasonably be required in qualifying or registering the
Warrant Shares included in a registration statement,
notification or post-effective amendment for the offer and
sale under the securities or blue sky laws of such states as
requested by the holders; provided that the Company shall not
be obligated to execute or file any general consent to service
of process or to qualify as a foreign corporation to do
business under the laws of any such jurisdiction; and
(iii) to utilize its best efforts to keep the same
effective for a period of not less than 90 nor more than 120
days.
(c) Indemnification; Contribution.
(i) Indemnification by the Company. The Company
agrees to indemnify and hold harmless the holder of this
Warrant from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue
statement or alleged untrue statement of a material fact
contained in any such registration
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statement or prospectus contained therein or in any amendment
or supplement thereto or in any preliminary prospectus, or
arising out of or based upon any omission or alleged omission
to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or
expenses arise out of, or are based upon, any such untrue
statement or omission or allegation thereof based upon
information furnished in writing to the Company by the holder
or on the holder's behalf expressly for use therein.
(ii) Indemnification by Holders. The holder of
this Warrant agrees to indemnify and hold harmless, severally
and not jointly, the Company, its directors and officers and
each person, if any, who controls the Company within the
meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to the holders, but only with
respect to information furnished in writing by a holder or on
a holder's behalf expressly for use in any such registration
statement or prospectus relating to the Warrant Shares, any
amendment or supplement thereto or any preliminary prospectus,
and only in an amount not to exceed the proceeds of any
Warrant Shares sold by any such holder thereunder. In case
any action or proceeding shall be brought against the Company
or its directors or officers, or any such controlling person,
in respect of which indemnity may be sought against the
holder, the holder shall have the rights and duties given to
the Company, and the Company or its directors or officers or
such controlling person shall have the rights and duties given
to the holder, by the preceding subsection hereof.
(iii) Conduct of Indemnification Proceedings. If
any action or proceeding (including any governmental
investigation) shall be brought or asserted against any person
entitled to indemnification under subsections (i) or (ii)
above (an "Indemnified Party") in respect of which indemnity
may be sought from any party who has agreed to provide such
indemnification (an "Indemnifying Party"), the Indemnifying
Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such
Indemnified Party, and shall assume the payment of all
expenses. Such Indemnified Party shall have the right to
employ separate counsel in any such action and to participate
in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party
unless (A) the Indemnifying Party has agreed to pay such fees
and expenses or (B) the named parties to any such action or
proceeding (including any impleaded parties) include both such
Indemnified Party and the Indemnifying Party, and such
Indemnified Party shall have been advised by counsel that
there is a conflict of interest on the part of counsel
employed by the Indemnifying Party to represent such
Indemnified Party (in which case, if such Indemnified Party
notifies the Indemnifying Party in writing that it elects to
employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the
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right to assume the defense of such action or proceeding on
behalf of such Indemnified Party; it being understood,
however, that the Indemnifying Party shall not, in connection
with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the
same jurisdiction arising out of the same general allegations
or circumstances, be liable for the fees and expenses of more
than one separate firm of attorneys (together with appropriate
local counsel) at any time for all such Indemnified Parties,
which firm shall be designated in writing by such Indemnified
Parties). The Indemnifying Party shall not be liable for any
settlement of any such action or proceeding effected without
its written consent, but if settled with its written consent,
or if there be a final judgment for the plaintiff in any such
action or proceeding, the Indemnifying Party shall indemnify
and hold harmless such Indemnified Parties from and against
any loss or liability (to the extent stated above) by reason
of such settlement or judgment.
(iv) Contribution. If the indemnification
provided for in this Section 7(c) is unavailable to the
Indemnified Parties in respect of any losses, claims, damages,
liabilities or judgments referred to herein, then each
Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages,
liabilities and judgments in the following manner as between
the Company on the one hand and each holder on the other, in
such proportion as is appropriate to reflect the relative
fault of the Company on the one hand and each holder on the
other in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable
considerations. The relative fault of the Company on the one
hand and of the holder on the other shall be determined by
reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to
information supplied by such party, and the party's relative
intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. No person
guilty of fraudulent misrepresentation (within the meaning of
subsection 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation.
(v) Survival. The indemnity and contribution
agreements contained in this Section 7(c) shall remain
operative and in full force and effect regardless of (A) any
termination of this Agreement, (B) any investigation made by
or on behalf of any Indemnified Party or by or on behalf of
the Company and (C) the consummation of the sale or successive
resale of the Warrant Shares.
8. 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
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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.
9. This agreement shall be construed under and be governed by the
laws of the State of Texas.
10. 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
If to the Company, to:
Intelect Communications, Inc.
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 as of February 20, 1998.
INTELECT COMMUNICATIONS, INC.
By: /s/ Ed Ducayet
Ed Ducayet, Vice President
& CFO
AMERIX ELECTRONICS, INC.
By: /s/ Tehan Oh
Its: President
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Form of Purchase
(to be signed only upon exercise of warrant)
TO: INTELECT COMMUNICATIONS, INC.
The undersigned, the owner of the attached warrant, hereby irrevocable
elects to exercise the purchase rights represented by the warrant for, and to
purchase thereunder, _____ shares of common stock of Intelect Communications,
Inc., and herewith makes payment of $______ therefor, and requests that the
certificate(s) for such shares be delivered to _____ _________, at
____________________________________________, 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 _____________, ______.
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Signature
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