THIS WARRANT AND THE SHARES OF COMMON SHARES ISSUED UPON ITS
EXERCISE ARE SUBJECT TO THE RESTRICTIONS ON
TRANSFER SET FORTH IN SECTION 4 OF THIS WARRANT
Warrant No. 4 Number of Shares: 70,063
(subject to adjustment)
Date of Issuance: August 8, 1996
INTELECT COMMUNICATIONS SYSTEMS LIMITED
COMMON SHARES PURCHASE WARRANT
(Void after August 7, 2001)
Intelect Communications Systems Limited, a Bermuda company (the "Company"),
for value received, hereby certifies that ▇▇▇▇▇▇▇ & Associates, Inc. or its
registered assigns (the "Registered Holder"), is entitled, subject to the
terms set forth below, to purchase from the Company, at any time or from
time to time on or after the date of issuance and on or before August 7,
2001, at not later than 5:00 p.m. (Boston, Massachusetts time), 70,063
common shares, $.01 par value per share (the "Common Shares"), of the
Company. The shares purchasable upon exercise of this Warrant, and the
Purchase Price per share (defined below), each as adjusted from time to
time pursuant to the provisions of this Warrant, are hereinafter referred
to as the "Warrant Shares" and the "Purchase Price," respectively.
1. EXERCISE.
(a) This Warrant may be exercised by the Registered Holder, in whole
or in part, by surrendering this Warrant, with the purchase form appended hereto
as EXHIBIT I duly executed by such Registered Holder or by such Registered
Holder's duly authorized attorney, at the principal office of the Company, or at
such other office or agency as the Company may designate, accompanied by payment
in full, in lawful money of the United States, of the Purchase Price payable in
respect of the number of Warrant Shares purchased upon such exercise. For
purposes hereof, the Purchase Price shall be equal to $8.56375 per share.
(b) The Registered Holder may, at its option, elect to pay some or
all of the Purchase Price payable upon an exercise of this Warrant by canceling
a portion of this Warrant exercisable for such number of Warrant Shares as is
determined by dividing ti) the total Purchase Price payable in respect of the
number of Warrant Shares being purchased upon such exercise by (ii) the excess
of the Fair Market Value per share of Common Stock as of the effective date of
exercise, as determined pursuant to Subsection l(c) below (the "Exercise Date")
over the Purchase Price per share. The Fair Market Value per share of Common
Stock shall be determined as follows:
(i) If the Common Stock is listed on a national securities
exchange, the Nasdaq National Market, the Nasdaq system, or another nationally
recognized exchange or trading system as of the Exercise Date, the Fair Market
Value per share of the Common Stock shall be deemed to be the last reported sale
price per share of Common Stock thereon on the Exercise Date; or, if no such
price is reported on such date, such price on the next preceding business day
(provided that if no such price is reported on the next preceding business day,
the Fair Market Value per share of Common Stock shall be determined pursuant to
clause (ii)).
(ii) If the Common Stock is not listed on a national
securities exchange, the Nasdaq National Market, the Nasdaq system or another
nationally recognized exchange or trading system as of the Exercise Date, the
Fair market Value per share of Common Stock shall be deemed to be the amount
most recently determined by the Board of Directors to represent the fair market
value per share of the Common Stock including without limitation a determination
for purposes of granting Common Stock options or issuing Common Stock under an
employee benefit plan of the Company); and upon request of the Registered
Holder, the Board of Directors (or a representative thereof) shall promptly
notify the Registered Holder of the Fair Market Value per share of Common Stock.
Notwithstanding the foregoing, if the Board of Directors has not made such a
determination within the three month period prior to the Exercise Date, then (A)
the Fair Market Value per share of Common Stock shall be the amount next
determined by the Board of Directors to represent the fair market value per
share of the Common Stock (including without limitation a determination for
purposes of granting Common Stock options or issuing Common Stock under an
employee benefit plan of the Company), (B) the Board of Directors shall make
such a determination within 15 days of a request by the Registered Holder that
it do so, and (C) the exercise of this Warrant pursuant to Subsection l(b) shall
be delayed until such determination is made.
(c) Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which this
Warrant shall have been surrendered to the Company as provided in subsections
l(a) and lib) above. At such time, the person or persons in whose name or names
any certificates for Warrant Shares shall be issuable upon such exercise as
provided in subsection l(d) below shall be deemed to have become the holder or
holders of record of the Warrant Shares represented by such certificates.
(d) As soon as practicable after the exercise of this Warrant in
full or in part, and in any event within 10 days thereafter, the Company, at its
expense, will cause to be issued in the name of, and delivered to, the
Registered Holder, or as such Holder (upon payment by such Holder of any
applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of full
Warrant Shares to which such Registered Holder shall be entitled upon such
exercise plus, in lieu of any fractional share to which such Registered Holder
would otherwise be entitled, cash in an amount determined pursuant to Section 3
hereof; and
(ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, calling in the aggregate on the
face or faces thereof for the number
of Warrant Shares equal (without giving effect to any adjustment therein) to the
number of such shares called for on the face of this Warrant minus the number of
such shares purchased by the Registered Holder upon such exercise.
2. ADJUSTMENTS.
(a) If outstanding shares of the Company's Common Shares shall be
subdivided into a greater number of shares or a dividend in Common shares shall
be paid in respect of Common Shares, the Purchase 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 Shares shall be combined into a smaller number of shares, the
Purchase 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 Purchase 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 Purchase Price in effect immediately prior to such
adjustment, by (ii) the Purchase Price in effect immediately after such
adjustment.
(b) If there shall occur any capital reorganization or
reclassification of the Company's Common Shares (other than a change in par
value or a subdivision or combination as provided for in subsection 2(a) above),
or any consolidation or merger of the Company with or into another corporation,
or a transfer of all or substantially all of the assets of the Company, 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 Registered
Holder of this Warrant shall have the right thereafter to receive upon the
exercise hereof the kind and amount of shares of stock or other securities or
property which such Registered 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 registered Holder had held the number
of shares of Common Shares which were then 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 Registered Holder of this Warrant, such that the
provisions set forth in this Section 2 (including provisions with respect to
adjustment of the Purchase 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.
(c) When any adjustment is required to be made in the Purchase
Price, the Company shall promptly mail to the Registered Holder a certificate
setting forth the Purchase Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. Such certificate shall also
set forth the kind and amount of stock or other securities or property into
which this Warrant shall be exercisable following the occurrence of any of the
events specified in subsection 2(a) or (b) above.
3. FRACTIONAL SHARES. The Company shall not be required upon the exercise
of this Warrant to issue any fractional shares, but shall make an adjustment
therefor in cash on the basis of the Fair Market Value (defined below) per share
of Common Shares. For purposes hereof, Fair Market Value shall be determined as
follows:
(i) If the Common Shares are listed on a national securities
exchange, the Nasdaq National Market, the Nasdaq system, or another nationally
recognized exchange or trading system as of the Exercise Date, the Fair Market
Value per share of the Common Shares shall be deemed to be the last reported
sale price per share of the Common Shares thereon on the Exercise Date; or, if
no such price is reported on such date, such price on the next preceding
business day (provided that if no such price is reported on the next preceding
business day, the Fair Market Value per share of Common Shares shall be
determined pursuant to clause ( ii)).
(ii) If the Common Shares are not listed on a national
securities exchange, the Nasdaq National Market, the Nasdaq system or another
nationally recognized exchange or trading system as of the Exercise Date, the
Fair Market Value per share of the Common Shares shall be deemed to be the
amount most recently determined by the Board of Directors to represent the fair
market value per share of the Common Shares (including without limitation a
determination for purposes of granting Common Shares options or issuing Common
Shares under an employee benefit plan of the Company); and, upon request of the
Registered Holder, the Board of Directors (or a representative thereof) shall
promptly notify the Registered Holder of the Fair Market Value per share of
Common Shares. Notwithstanding the foregoing, if the Board of Directors has not
made such a determination within the three-month period prior to the Exercise
Date, then (A) the Fair Market Value per share of Common Shares shall be the
amount next determined by the Board of Directors to represent the fair market
value per share of the Common Shares including without limitation a
determination for purposes of granting Common Shares options or issuing Common
Shares under an employee benefit plan of the Company), and the Board of
Directors shall make such a determination within 15 days of a request by the
Registered Holder that it do so.
4. REQUIREMENTS FOR TRANSFER.
(a) This Warrant and the Warrant Shares shall not be sold or
transferred unless either (i) they first shall have been registered under the
Securities Act of 1933, as amended the "Act"), or (ii) the Company first shall
have been furnished with an opinion of legal counsel, reasonably satisfactory to
the Company, to the effect that such sale or transfer is exempt from the
registration requirements of the Act.
(b) Notwithstanding the foregoing, no registration or opinion of
counsel shall be required for (i) a transfer by a Registered Holder which is a
partnership to a partner of such partnership or a retired partner of such
partnership who retires after the date hereof, or to the estate of any such
partner or retired partner, if the transferee agrees in writing to be subject to
the terms of this Section 4, or (ii) a transfer made in accordance with Rule 144
under the Act.
(c) Each certificate representing Warrant Shares shall bear a legend
substantially in the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may
not be offered, sold or otherwise transferred, pledged or
hypothecated unless and until such securities are registered
under such Act or an opinion of counsel satisfactory to the
Company is obtained to the effect that such registration is not
required."
The foregoing legend shall be removed from the certificates representing any
Warrant Shares, at the request of the holder thereof, at such time as they
become eligible for resale pursuant to Rule 144(k) under the Act.
5. REGISTRATION UPON CLOSING.
(a) Subject to the terms and conditions hereof, within fifteen (15) days
after the closing of the transactions contemplated by the Convertible Securities
Subscription Agreements between the Company and the Buyers named therein of even
date herewith (the "Closing Date"), the Company shall, at the Company's cost and
expense (other than the fees and disbursements of counsel for the Registered
Holder and the underwriting discounts and brokerage commissions, if any, payable
in respect of the Warrant shares sold by the Registered Holder) prepare and file
with the Securities and Exchange Commission (the "Commission") a registration
statement on Form S-3 (if the same is available),with respect to all of the
Warrant Shares and will use all reasonable efforts to cause such registration
statement to become effective promptly. If Form S-3 is not available to the
Company for such registration statement, the Company shall use its best efforts
to promptly file the registration statement on an appropriate alternative form.
(b) Except as set forth below, the Company shall keep effective the
registration statement contemplated by this Section 5 and shall from time to
time amend or supplement such registration statement, for a period of not less
than two (2) years, as extended by any period of time during which the
registration statement is not effective pursuant to Section 5(c) below, unless
all of the Warrant Shares set forth in such registration statement have
theretofore been sold.
(c) The Company may terminate or suspend the effectiveness of any
registration statement to be filed pursuant to Section 5(a) one time for a
period of not more than 30 days if the Company shall deliver to the Registered
Holder a certificate signed by the President or Chief Financial Officer of the
Company stating that in the good faith judgment of the Board of Directors of the
Company it would (i) be seriously detrimental to the Company for such
registration statement to be effected or remain effective at such time, (ii)
interfere with any proposed or pending material corporate transaction involving
the Company or any of its subsidiaries or (iii) result in any premature
disclosure thereof.
6. FUTURE DEMAND REGISTRATION.
(a) If, at any one time following thirty (30) days after the
termination of the effectiveness of the registration statement prepared and
filed in accordance with Section 5, the Company receives a written request from
the Registered Holder, the Company shall, at the
Company's sole cost and expense (other than the fees and disbursements of
counsel for such Registered Holder and the underwriting discounts and
commissions, if any, payable in respect of the Warrant Shares sold by such
Registered Holder), prepare and file with the Commission an additional
registration statement sufficient to permit the public offering and sale of the
number of Warrant Shares set forth in such request. The Company shall file such
registration statement on Form S-3 (if the same is available to the Company for
such registration) within thirty (30) days of the receipt of the request. If
Form S-3 is not available to the Company for such registration statement, the
Company shall use its best efforts to promptly file the registration statement
on an appropriate alternative form. The Company will use all reasonable efforts
to cause such registration statement to become effective promptly.
Notwithstanding anything to the contrary set forth above, the Company shall not
be obligated to effect any such registration, qualification or compliance,
pursuant to this Section 6(a): (1) if the Company shall furnish to the
Registered Holder a certificate signed by the President or the Chief Financial
Officer of the Company stating that in the good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company and
its shareholders for such registration to be effected at such time, in which
event the Company shall have the right to defer the filing of the registration
statement for a period of not more than 30 days after receipt of the request of
the Registered Holder; or (2) in any particular jurisdiction in which the
Company would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration, qualification or
compliance.
(b) The Company shall keep effective the registration statement
contemplated by this Section 2 and shall from time to time amend or supplement
such registration statement, for a period of not less than three years.
(c) The Company shall not be obligated to file more than two (2)
registration statements under this Agreement.
(d) The Company shall furnish to the Registered Holder such numbers
of copies of a prospectus in conformity with the requirements of the Securities
Act, and such other documents as may reasonably be requested in order to
facilitate the disposition of the Warrant Shares owned by the Registered Holder.
7. THE COMPANY COVENANTS.
(a) The Company's obligations pursuant to Sections 1 and 2 hereof
shall continue for five years after the Closing Date or until all Warrant Shares
have been sold, whichever event occurs first.
(b) In the event of a registration pursuant to the provisions of
Sections 5 and 6, the Company shall use all reasonable efforts to cause the
Warrant Shares so registered to be registered or qualified for sale under the
securities or blue sky laws of such jurisdictions as the Registered Holder may
reasonably request; provided, however, that the Company shall not be required to
qualify to do business in any state by reason of this Section 7(b) in which it
is not otherwise required to qualify to do business.
(c) The Company shall notify the Registered Holder promptly when
such registration statement has become effective or a supplement to any
prospectus forming a part of such registration statement has been filed.
(d) The Company shall advise the Registered Holder, promptly after
it shall receive notice or obtain knowledge of the issuance of any stop order by
the Commission suspending the effectiveness of such registration statement, or
the initiation or threatening of any proceeding for that purpose, and promptly
use all reasonable efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such stop order should be issued.
(e) The Company shall promptly notify the Registered Holder, at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event of which it has knowledge as a
result of which the prospectus included in such registration statement, as then
in effect, would include an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing, and at the reasonable request of each Investor prepare and furnish to
them such number of copies of a supplement to or an amendment of such prospectus
as may be necessary so that, as thereafter delivered to the purchasers of such
Warrant Shares or securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made.
(f) If requested by the underwriter for any underwritten offering of
Warrant Shares on behalf of the Registered Holder pursuant to a registration
requested under Sections 5 and 6, the Company and the Registered Holder will
enter into an underwriting agreement with such underwriter for such offering,
which shall be reasonably satisfactory in substance and form to the Company and
the Company's counsel, the Registered Holder, and the underwriter, and such
agreement shall contain such representations and warranties by the Company and
each Investor and such other terms and provisions as are customarily contained
in an underwriting agreement with respect to secondary distributions solely by
selling stockholders, including, without limitation, indemnities substantially
to the effect and to the extent provided in Section 8.
8. INDEMNIFICATION: MISCELLANEOUS OPERATIVE PROVISIONS.
(a) Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless the Registered Holder, its respective officers,
directors, partners, employees, agents, and counsel, and each person, if any,
who controls any such person within the meaning of Section 15 of the Securities
Act or Section 20(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") from and against any and all loss, liability, charge, claim,
damage, and expense whatsoever (which shall include, for all purposes of this
Section 8, but not be limited to, reasonable attorneys' fees and any and all
reasonable expenses whatsoever incurred in investigating, preparing, or
defending against any litigation, commenced or threatened, or any claim
whatsoever), arising out of, based upon, or in connection with any untrue
statement or alleged untrue statement of a material fact contained (A) in any
registration statement,
preliminary prospectus, or final prospectus (as from time to time amended and
supplemented) or any amendment or supplement thereto, relating to the sale of
any of the Warrant Shares or (B) in any application or other document or
communication (in this Section 8 collectively called an "application") executed
by or on behalf of the Company or based upon written information furnished by or
on behalf of the Company filed in any jurisdiction in order to register or
qualify any of the Warrant Shares under the securities or blue sky laws thereof
or filed with the Commission or any securities exchange; or any omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements made therein not misleading, unless (x) such
statement or omission was made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Registered Holder
for inclusion in any registration statement, preliminary prospectus, or final
prospectus, or any amendment or supplement thereto, or in any application, as
the case may be, or (y) such loss, liability, charge, claim, damage or expense
arises out of the Registered Holder's failure to comply with the terms and
provisions of this Agreement. The foregoing agreement to indemnify shall be in
addition to any liability the Company may otherwise have, including liabilities
arising under this Agreement.
If any action is brought against the Registered Holder or any of their
respective officers, directors, partners, employees, agents, or counsel, or any
controlling persons of such person (an "indemnified party") in respect of which
indemnity may be sought against the Company pursuant to the foregoing paragraph,
such indemnified party or parties shall promptly notify the Company in writing
of the institution of such action (but the failure so to notify shall not
relieve the Company from any liability other than pursuant to this Section 8(a)
unless, the failure to so notify shall prejudice any rights or defenses with
respect to such claim) and the Company shall promptly assume the defense of such
action, including the employment of counsel (reasonably satisfactory to such
indemnified party or parties) provided that the indemnified party shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless:
(i) the employment of such counsel shall have been authorized in
writing by the Company in connection with the defense of such action; or
(ii) such indemnified party or parties shall have reasonably
concluded, based on an opinion of counsel reasonably satisfactory to the
Company, that there may be one or more legal defenses available to it or them or
to other indemnified parties which are different from or additional to those
available to the Company, in any material respect, and that as a result thereof
a conflict of interest would arise absent separate representation of the
parties.
In the event of clauses (i) or (ii) above, such fees and expenses shall be borne
by the Company and the Company shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties. Anything in this
Section 8 to the contrary notwithstanding, the Company shall not be liable for
any settlement of any such claim or action effected without its written consent,
which shall not be unreasonably withheld. The Company shall not, without the
prior written consent of each indemnified party that is not released as
described in this sentence, settle or compromise any action, or permit a default
or consent to the entry of judgment in
or otherwise seek to terminate any pending or threatened action, in respect of
which indemnity may be sought hereunder (whether or not any indemnified party is
a party thereto) unless such settlement, compromise, consent, or termination
includes an unconditional release of each indemnified party from all liability
in respect of such action. The Company agrees promptly to notify the Investor of
the commencement of any litigation or proceedings against the Company or any of
its officers or directors in connection with the sale of any Warrant Shares or
any preliminary prospectus, prospectus, registration statement, or amendment or
supplement thereto, or any application relating to any sale of any Warrant
Shares.
(b) Each Registered Holder agrees to indemnify and hold harmless the
Company, each director of the Company, each officer of the Company who shall
have signed any registration statement covering Warrant Shares by the Registered
Holder, each other person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Exchange Act, and
its or their respective counsel, to the same extent as the foregoing indemnity
from the Company to the Registered Holder in Section 8(a) but only with respect
to statements or omissions, if any, made in any registration statement,
preliminary prospectus, or final prospectus (as from time to time amended and
supplemented) or any amendment or supplement thereto, or in any application, in
reliance upon and in conformity with written information furnished to the
Company with respect to the Registered Holder by or on behalf of the Registered
Holder, for inclusion in any such registration statement, preliminary
prospectus, or final prospectus, or any amendment or supplement thereto, or in
any application, as the case may be. If any action shall be brought against the
Company or any other person so indemnified based on any such registration
statement, preliminary prospectus, or final prospectus, or any amendment or
supplement thereto, or in any application, and in respect of which indemnity may
be sought against the Registered Holder pursuant to this Section 8(b) the
Registered Holder shall have the rights and duties given to the Company, and the
Company and each other person so indemnified shall have the rights and duties
given to the indemnified parties, by the provisions of Section 8(a).
(c) To provide for just and equitable contribution, if (i) an indemnified
party makes a claim for indemnification pursuant to Section 8(a) or 8(b)
(subject to the limitations thereof) but it is found in a final judicial
determination, not subject to further appeal, that such indemnification may not
be enforced in such case, even though this Agreement expressly provides for
indemnification in such case, or (ii) any indemnified or indemnifying party
seeks contribution under the Securities Act, the Exchange Act or otherwise, then
the Company (including for this purpose any contribution made by or on behalf of
any director of the Company, any officer of the Company who signed any such
registration statement, any controlling person of the Company as one entity, and
the Registered Holder, included in such registration in the aggregate (including
for this purpose any contribution by or on behalf of an indemnified party), as a
second entity, shall contribute to the losses, liabilities, claims, damages, and
expenses whatsoever to which any of them may be subject, on the basis of
relevant equitable considerations such as the relative fault of the Company and
the Registered Holder in connection with the facts which resulted in such
losses, liabilities, claims, damages, and expenses. The relative fault, in the
case of an untrue statement, alleged untrue statement, omission, or alleged
omission shall be determined by, among other things, whether such statement,
alleged statement, omission or alleged omission relates to information supplied
by the Company or by the Registered Holder, and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement, alleged statement,
omission, or alleged omission. The Company and the Registered Holder agree that
it would be unjust and inequitable if the respective obligations of the Company
and the Registered Holder for contribution were determined by pro rata or per
capita allocation of the aggregate losses, liabilities, claims, damages, and
expenses (even if the Registered Holder and the other indemnified parties were
treated as one entity for such purpose) or by any other method of allocation
that does not reflect the equitable considerations referred to in this Section
8(c). In no case shall the Registered Holder be responsible for a portion of the
contribution obligation imposed on the Registered Holder in excess of such
Registered Holder's pro rata share based on the number of Common Shares owned by
each Registered Holder and included in such registration as compared to the
total number of Common Shares included in such registration. No person guilty of
a fraudulent misrepresentation (within the meaning of Section ll(f) of the
Securities Act) shall be entitled to contribution from any person who is not
guilty of such fraudulent misrepresentation. For purposes of this Section 8(c)
each person, if any, who controls any Registered Holder within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act and each
officer, director, partner, employee, agent, and counsel of any Registered
Holder or control person shall have the same rights to contribution as the
Registered Holder or control person and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20(a)
of the Exchange Act, each officer of the Company who shall have signed any such
registration statement, each director of the Company, and its or their
respective counsel shall have the same rights to contribution as the Company,
subject to each case to the provisions of this Section 8(c). Anything in this
Section 8(c) to the contrary notwithstanding, no party shall be liable for
contribution with respect to the settlement of any claim or action effected
without its written consent. This Section 8(c) is intended to supersede any
right to contribution under the Securities Act, the Exchange Act or otherwise.
(d) Remedies. In the event of a breach by any party of its obligations
under this Agreement, the other party, in addition to being entitled to exercise
all rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement.
(e) Agreements and Waivers. The provisions of this Warrant, including the
provisions of this sentence, may not be amended, modified or supplemented,
unless such amendment, modification or supplement is in writing and signed by
the parties hereto.
(f) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, or telecopied, initially to the address set forth
below, and thereafter at such other address, notice of which is given in
accordance with the provisions of this Section 8(f).
(i) if to the Company:
Intelect Communications Systems Limited
▇▇▇▇ House, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax: 441/▇▇▇-▇▇▇▇
(ii) if to the Registered Holder at the address specified from
time to time to the
All such notices and communications shall be deemed to have been duly given:
when delivered by hand, if personally delivered; two business days after being
deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; and when receipt is acknowledged, if telecopied.
(g) Reasonable Cooperation of the Registered Holder. The Registered
Holder shall cooperate in all reasonable respects with the filing of the
registration statement contemplated hereby. Without limiting the foregoing, the
Registered Holder shall furnish to the Company (or any regulatory authority)
such written information and representations that the Company may reasonably
request in order to facilitate any registration of the Warrant Shares hereunder.
9. NO IMPAIRMENT. The Company will not, by amendment of its charter or
through reorganization, consolidation, merger, dissolution, sale of assets or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the holder of
this Warrant against impairment.
10. NOTICES OF RECORD DATE. ETC. In case:
(a) the Company shall take a record of the holders of its Common
Shares (or other stock or securities at the time deliverable upon the exercise
of this Warrant) for the purpose of entitling or enabling them to receive any
dividend or other distribution, or to receive any right to subscribe for or
purchase any shares of stock of any class or any other securities, or to receive
any other right; or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the surviving entity), or any
transfer of all or substantially all of the assets of the Company; or
(c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company, then, and in each such case, the Company will mail or
cause to be mailed to the Registered Holder of this Warrant a notice specifying,
as the case may be, (i) the date on which a record is to be taken for the
purpose of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, or (ii) the effective date on
which such reorganization, reclassification, consolidation, merger, transfer,
dissolution, liquidation or winding-up is to take place, and the time, if any is
to be fixed, as of which the holders of record of Common Shares (or such other
stock or securities at the time deliverable upon the exercise of this Warrant)
shall be entitled to exchange their shares of Common Shares (or such other stock
or securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or
winding-up. Such notice shall be mailed at least ten (10) days prior to the
record date or effective date for the event specified in such notice.
11. RESERVATION OF SHARES. The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant,
such number of Warrant Shares and other stock, securities and property, as from
time to time shall be issuable upon the exercise of this Warrant.
12. EXCHANGE OF WARRANTS. Upon the surrender by the Registered Holder of
any Warrant or Warrants, properly endorsed, to the Company at the principal
office of the Company, the Company will, subject to the provisions of Section 4
hereof, issue and deliver to or upon the order of such Holder, at the Company's
expense, a new Warrant or Warrants of like tenor, in the name of such Registered
Holder or as such Registered Holder (upon payment by such Registered Holder of
any applicable transfer taxes) may direct, calling in the aggregate on the face
or faces thereof for the number of shares of Common Shares called for on the
face or faces of the Warrant or Warrants so surrendered.
13. REPLACEMENT OF WARRANTS. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.
14. TRANSFERS. ETC.
(a) The Company will maintain a register containing the names and
addresses of the Registered Holders of this Warrant. Any Registered Holder may
change its or his address as shown on the warrant register by written notice to
the Company requesting such change.
(b) Subject to the provisions of Section 4 hereof, this Warrant and
all rights hereunder are transferable, in whole or in part, upon surrender of
this Warrant with a properly executed assignment (in the form of EXHIBIT II
hereto) at the principal office of the Company.
(c) Until any transfer of this Warrant is made in the warrant
register, the Company may treat the Registered Holder of this Warrant as the
absolute owner hereof for all purposes; PROVIDED, HOWEVER, that if and when this
Warrant is properly assigned in blank, the Company may (but shall not be
obligated to) treat the bearer hereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary.
15. MAILING OF NOTICES, ETC. All notices and other communications from the
Company to the Registered Holder of this Warrant shall be mailed by first-class
certified or registered mail, postage prepaid, to the address furnished to the
Company in writing by the last Registered Holder of this Warrant who shall have
furnished an address to the Company in writing. All notices and other
communications from the Registered Holder of this Warrant or in connection
herewith to the Company shall be mailed by first-class certified or registered
mail, postage prepaid, to the Company at its principal office set forth below.
If the Company should at any time change the location of its principal office to
a place other than as set forth below, it shall give prompt written notice to
the Registered Holder of this Warrant and thereafter all references
in this Warrant to the location of its principal office at the particular time
shall be as so specified in such notice.
16. NO RIGHTS AS SHAREHOLDER. Until the exercise of this Warrant, the
Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company.
17. CHANGE OR WAIVER. Any term of this Warrant may be changed or waived
only by an instrument in writing signed by the party against which enforcement
of the change or waiver is sought.
18. HEADINGS. The headings in this Warrant are for purposes of reference
only and shall not limit or otherwise affect the meaning of any provision of
this Warrant.
19. GOVERNING LAW. This Warrant will be governed by and construed in
accordance with the laws of Bermuda.
Intelect Communications Systems
Limited
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
[Corporate Seal] Title: President
ATTEST:
____________________
EXHIBIT I
PURCHASE FORM
To:__________________ Dated:_________________
The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. ), hereby irrevocably elects to purchase Common Shares covered by
such Warrant. The undersigned herewith makes payment of $ , representing the
full purchase price for such shares at the price per share provided for in such
Warrant. Such payment takes the form of $__________ in lawful money of the
United States.
Signature:_________________________
Address: _________________________
_________________________
EXHIBIT II
ASSIGNMENT FORM
FOR VALUE RECEIVED, ____________________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant (No. ) with respect to the number of shares of Common Shares covered
thereby set forth below, unto:
NAME OF ASSIGNEE ADDRESS NO. OF SHARES
---------------- ------- -------------
Dated:____________ Signature:____________________________
Dated:____________ Witness:______________________________
