SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D/A
UNDER THE SECURITIES EXCHANGE ACT OF 1934
INTELECT COMMUNICATIONS, INC.
(NAME OF ISSUER)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
458144102
(CUSIP NUMBER)
JOHN L. THOMPSON
SJMB, L.P.
C/O SJMB, L.L.C.
777 POST OAK BLVD., SUITE 950
HOUSTON, TEXAS 77056
(713) 871-0799
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)
August 2, 2000
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
IF THE FILING PERSON HAS PREVIOUSLY FILED A STATEMENT ON SCHEDULE 13G TO REPORT
THE ACQUISITION WHICH IS THE SUBJECT OF THIS SCHEDULE 13D, AND IS FILING THIS
SCHEDULE BECAUSE OF RULE 13D-1(B)(3) OR (4), CHECK THE FOLLOWING BOX. [ ]
CHECK THE FOLLOWING BOX IF A FEE IS BEING PAID WITH THIS STATEMENT. [ ]
The information required in the remainder of this cover page shall not be
deemed to be filed for the purpose of Section 18 of the Securities Exchange Act
of 1934 ("Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act.
<PAGE>
CUSIP No. 458144102 13D/A
--------------------------------------------------------------------------------
(1) Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
SJMB, L.L.C. 76-0559974
--------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member (a) [ ]
of a Group* (b) [ ]
--------------------------------------------------------------------------------
(3) SEC Use Only
--------------------------------------------------------------------------------
(4) Source of Funds*
N/A
--------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
--------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
Delaware
--------------------------------------------------------------------------------
Number of Shares (7) Sole Voting
Beneficially Owned Power 3,911,135
by Each Reporting --------------------------------------------------
Person With (8) Shared Voting
Power 0
--------------------------------------------------
(9) Sole Dispositive
Power 3,911,135
--------------------------------------------------
(10) Shared Dispositive
Power 0
--------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
3,911,135
--------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares*
--------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
4.3%
--------------------------------------------------------------------------------
(14) Type of Reporting Person*
CO
--------------------------------------------------------------------------------
-2-
<PAGE>
ITEM 1. Security and Issuer.
This statement constitutes Amendment No. 5 to the statement on Schedule 13D
filed with the Securities and Exchange Commission on July 16, 1998, (the
"Original Filing"), with respect to shares of the common stock, par value $.01
per share (the "Common Stock"), of Intelect Communications, Inc., a Delaware
corporation ("ICOM") of 1100 Executive Drive, Richardson, Texas 75081,
beneficially owned by SJMB, L.P., a Delaware partnership ("SJMB"). This
Amendment No. 5 reflects certain material changes in the information set forth
in the Original Statement, as follows:
Except as specifically provided herein, this Amendment does not modify any of
the information previously reported on the Schedule 13D, as amended.
ITEM 5. Interest in Securities of the Issuer.
Item 5 is herby amended in its entirety to read as follows:
The Partnership beneficially owns shares of Common Stock. The Partnership has
the sole power to vote and dispose the Shares.
Effective February 12, 1998, ICOM and St. James Capital Partners, L.P. ("SJCP"),
an affiliate of the Partnership, entered into a financing arrangement pursuant
to which ICOM agreed to issue 1,500,000 warrants and a Convertible Promissory
Note in the principal amount of $15,000,000 (the "Convertible Note") in exchange
for $15,000,000 (the "Financing"). The unpaid principal amount of the
Convertible Note, together with any unpaid interest accrued thereon, is
convertible in whole or in part at any time into shares of Common Stock based on
a conversion price of $9.082, subject to adjustment for certain dilutive events.
SJCP has the right to acquire up to 1,651,618.5 shares of Common Stock upon the
conversion of the Convertible Note. The terms and conditions of the Financing
are governed by that certain Agreement of Purchase and Sale dated February 12,
1998, by and between ICOM and SJCP (the "Purchase Agreement"). The Financing
closed on February 12, 1998.
Additionally, on February 12, 1998, ICOM and SJCP executed a Registration Rights
Agreement pursuant to which ICOM granted to SJCP certain demand and piggy-back
registration rights with respect to the Shares that are issuable upon conversion
of the Convertible Note and upon exercise of the warrants issued in connection
with the Financing (the "Registration Rights Agreement"). The Registration
Rights Agreement contains standard standstill and indemnification provisions and
contains a provision providing for the amendment of the Registration Rights
Agreement to incorporate the terms of any more favorable registration rights
granted to a third party by ICOM.
-3-
<PAGE>
An Assignment and Acceptance was executed as of March 30, 1998 assigning to the
Partnership 13/15ths of SJCP's interest in and to all of SJCP's rights, and 100%
of SJCP's obligations under the Purchase Agreement and transaction documents as
of March 30, 1998 including, without limitation, such percentage interest in
SJCP's obligation to make advances, the advances owing to SJCP, the Convertible
Note held by SJCP, the warrants held by SJCP, SJCP's interest in collateral, and
SJCP's registration rights in respect of Common Stock.
Effective as of April 2, 1998, ICOM and the Partnership executed a revised
Convertible Promissory Note in the principal amount of $13,000,000 (the "Revised
Convertible Note") with an outstanding balance of $8,000,000. The terms and
conditions of the Revised Convertible Note are governed by the Assignment and
Acceptance dated March 30, 1998. Up to 880,863 shares of Common Stock shall be
issuable upon conversion of the Revised Convertible Note within the next sixty
(60) days. The Revised Convertible Note bears interest at a rate of seven
percent (7%) per annum and may be converted by the Partnership at any time. ICOM
has the right to require conversion of the Revised Convertible Note if the
market price for a share of Common Stock as of the last trade for fifteen (15)
out of seventeen (17) consecutive trading days is $13.50 or more.
1,200,000 of SJCP's 1,500,000 warrant shares were assigned to the Partnership
under the terms of the Assignment and Acceptance dated March 30, 1998. Such
warrants are presently exercisable at a price of $7.50 per share, subject to
adjustment for certain dilutive events, and are evidenced by a Warrant
Certificate dated April 2, 1998. These warrants expire on February 12, 2001.
Following the Assignment and Acceptance executed as of March 30, 1998 between
SJCP and the Partnership, the Partnership assigned a portion of the Revised
Convertible Note ($800,000) and warrants to purchase shares of Common Stock
(120,000 warrant shares) to Falcon Seaboard Investment Co., L.P., an unrelated
third party, leaving the Partnership with a Revised Convertible Note of
$12,200,000, with an outstanding balance of $7,200,000 convertible into 792,777
shares of Common Stock and warrants to purchase 1,080,000 shares of Common
Stock.
On August 13, 1999 SJMB entered into a Repayment and Exchange Agreement (the
"Agreement") related to the Note that provided among other things, SJMB the
ability to convert all accrued and unpaid principal and interest into common
stock. About that time, SJMB converted $703,631 of accrued and unpaid principal
and interest into 1,055,393 shares of common stock at $0.67 per share. Does not
include $74,632 of unpaid principal and interest (111,942 shares of common
stock) beneficially owned by Falcon Seaboard Investment Co., L.P. through a
participation agreement with SJMB. On January 19, 2000, SJMB converted an
-4-
<PAGE>
additional $5,400,000 of accrued and unpaid principal and interest into
3,280,848 shares common stock at a price equal to $1.6459 per share. Does not
include $600,000 (364,539 shares of common stock) of unpaid principal and
interest which is beneficially owned by Falcon Seaboard Investment Co., L.P.
through a participation agreement with SJMB. On April 24, 2000, SJMB converted
an additional $1,350,000 of accrued and unpaid principal and interest into
690,797 shares of common stock at a price of $1.9543 per share. Does not include
$150,000 (76,755 shares of common stock) of unpaid principal and interest which
is beneficially owned by Falcon Seaboard Investment Co., L.P. through a
participation agreement with SJMB. On June 20, 2000, SJMB converted an
additional $720,368 of accrued and unpaid principal and interest into 401,115
shares of common stock at a price of $1.7959 per share. Does not include $80,041
(44,568 shares of common stock) of unpaid principal and interest which is
beneficially owned by Falcon Seaboard Investment Co., L.P. through a
participation agreement with SJMB. As of June 21, 2000, SJMB no longer has any
convertible principal or accrued interest outstanding from ICOM.
SJMB sold the following amounts of ICOM stock on the following dates: (Does
not include shares beneficially owned by Falcon Seaboard Investment Co., L.P.
through a participation agreement with SJMB.)
December 1, 1999 318,756
December 2, 1999 731,846
March 21, 2000 190,800
March 24, 2000 36,720
March 28, 2000 160,110
March 29, 2000 120,420
March 30, 2000 70,200
March 31, 2000 306,450
April 18, 2000 16,020
May 5, 2000 130,230
May 8, 2000 144,000
June 2, 2000 242,730
June 6, 2000 54,000
June 8, 2000 45,000
June 9, 2000 28,170
June 12, 2000 31,500
June 27, 2000 47,394
June 29, 2000 132,660
June 30, 2000 64,948
July 7, 2000 14,040
July 13, 2000 45,000
July 17, 2000 94,680
July 19, 2000 76,860
July 21, 2000 49,500
July 28, 2000 90,000
-5-
<PAGE>
August 2, 2000 126,000
August 3, 2000 81,000
August 9, 2000 117,000
August 11, 2000 29,880
August 23, 2000 69,750
August 24, 2000 22,500
August 25, 2000 207,804
August 28, 2000 340,110
August 29, 2000 52,200
September 5, 2000 308,205
SJMB also holds 1,080,000 shares of common stock issuable upon the exercise of
warrants issued on April 2, 1998 and 382,500 shares of common stock issuable
upon the exercise of warrants issued on January 13, 1999 and an additional
1,621,801 shares pursuant to anti-dilution provisions in such warrants as of
November 10, 1998. (Does not include 430,642 shares of common stock and 342,700
shares of common stock issuable upon the exercise of warrants which are
beneficially owned by Falcon Seaboard Investment Co., L.P. through a
participation agreement with SJMB.) The warrants, which were filed with the
Securities and Exchange Commission on March 31, 1998 as Exhibit 10.70 in ICOM's
10-K for the year ended 1997, require ICOM to inform SJMB of events that trigger
the warrant anti-dilution provisions and the impact of such events. ICOM has not
formally informed SJMB of any such events subsequent to November 10, 1998.
However, SJMB believes that several events have occurred that trigger the
warrant anti-dilution provisions and the foregoing does not include additional
shares that will be issued to SJMB nor any adjustment to the exercise price as
the result of such subsequent events. SJMB has requested ICOM clarify the
details of any such subsequent events and is currently waiting for such
clarification. Once ICOM, in compliance with the anti-dilution provisions of the
warrants, informs SJMB of the additional warrants and adjustment to the exercise
price to be issued as a result of the subsequent event, SJMB will further amend
to reflect the additional shares to which it is a beneficial owner. In July,
2000 ICOM was served with a lawsuit in a case styled St. James Capital Partners,
L.P. and SJMB, L.P. v. Intelect Communications, Inc. filed in state district
court in Harris County, Texas. As has been previously disclosed by ICOM, ICOM
and St. James Capital Partners, L.P. ("SJCP") and SJMB, L.P. ("SJMB")(SJCP and
SJMB collectively "St. James") are in disagreement as to the operation of the
anti-dilution provisions in warrants which ICOM issued to St. James. The dispute
in question relates to warrants originally issued to St. James in April 1998 at
an exercise price of $7.50 per share to purchase an aggregate of 1.5 million
shares, and an additional 535,000 shares issued to them in January 1999 at an
exercise price of $3.20 per share. St. James has petitioned the court for
declaratory relief, among other claims, to require the ICOM to acknowledge that
St. James is entitled to a re-set of the exercise price on each of the warrants
to a price of $0.561 per share and would be entitled to an aggregate of
approximately 25 million shares to be issued upon exercise of such warrants.
(These amounts include amounts beneficially owned by Falcon Seaboard Investment
Co., L.P.)
-6-
<PAGE>
SJMB disclaims ownership of all shares subject to the participation agreement
with Falcon Seaboard Investment Co., L.P.
SJMB and the limited partners of the Partnership are entitled to profits and
losses resulting from any disposition of the Shares, excluding all shares
beneficially owned by Falcon Seaboard Investment C., L.P., in accordance with
the provisions of the Partnership's Agreement of Limited Partnership (the
"Partnership Agreement").
Dated: September 15, 2000
SJMB, L.L.C.
By: /s/ JAMES H. HARRISON
Name: James H. Harrison
Title: Vice President
SJMB, L.P.
By: SJMB, L.L.C.,
General Partner
By: /s/ JAMES H. HARRISON
Name: James H. Harrison
Title: Vice President
-7-
