SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
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
ST. JAMES CAPITAL PARTNERS, L.P.
C/O ST. JAMES CAPITAL CORP.
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)
DECEMBER 17, 1999
(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>
SCHEDULE 13D
CUSIP NO. 458144102
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| 1 | NAME OF REPORTING PERSONS
| | S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
| | St. James Capital Corp. 76-0559974
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| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP * (a)[ ]
| | (b)[ ]
| |
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| 3 | SEC USE ONLY
| |
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| 4 | SOURCE OF FUNDS*
| | N/A
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| 5 | CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
| | ITEMS 2(d) or 2(e) [ ]
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| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION
| | Delaware
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| 7 | SOLE VOTING POWER
NUMBER OF | | 860,000
SHARES ---------------------------------------------------------
BENEFICIALLY | 8 | SHARED VOTING POWER
OWNED BY EACH | | 0
REPORTING ---------------------------------------------------------
PERSON WITH | 9 | SOLE DISPOSITIVE POWER
| | 860,000
---------------------------------------------------------
|10 | SHARED DISPOSITIVE POWER
| | 0
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| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
| | 860,000
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| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
| | SHARES * [ ]
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| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
| | 1.1%
- --------------------------------------------------------------------------------
| 14 | TYPE OF REPORTING PERSON *
| | CO
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<PAGE>
ITEM 1. Security and Issuer.
St. James Capital Partners, L.P., a Delaware investment limited partnership
("SJCP"), has acquired beneficial ownership of 860,000 shares (the "Shares") of
the common stock, par value $.01 per share (the "Common Stock"), of Intelect
Communications, Inc., a Delaware corporation ("ICOM"). The address of ICOM's
offices is 1100 Executive Drive, Richardson, Texas 75081.
ITEM 2. Identity and Background.
(a)-(c) This Statement is filed by St. James Capital Corp., a Delaware
corporation ("SJCC"). SJCC is the sole general partner of SJCP, L.P., a Delaware
limited partnership ("SJCP"), and SJCC's principal business is the conduct of
the operations and business of SJCP. SJCP's principal business is merchant
banking. The principal business offices of SJCC and SJCP is 777 Post Oak Blvd.,
Suite 950, Houston, Texas 77056. The directors of SJCC are Charles Underbrink
and John Thompson, and its executive officers are Charles Underbrink, CEO, and
John Thompson, President. The business address of each of the executive officers
and directors is 777 Post Oak Blvd., Suite 950, Houston, Texas 77056.
(d)-(e) During the five years prior to the date hereof, none of SJCC nor,
to the best of its knowledge, any executive officer or director of SJCC (i) has
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction, as a result of which such person
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect or such laws.
ITEM 3. Source and Amount of Funds or other Consideration.
All of the funds used for the purchase of the Shares came from current working
capital of the Partnership, funded by its partners or from borrowed funds.
ITEM 4. Purpose of Transaction.
The Partnership has acquired its beneficial ownership in the Shares for
investment purposes only. The Partnership intends to continually review its
investment in ICOM. Depending upon future evaluations of the business prospects
of ICOM and upon other developments, including, but not limited to, general
economic and business conditions and stock market conditions, the Partnership
may determine from time to time to purchase additional shares of Common Stock,
exercise any of the warrants described in item 5, convert the Revised
Convertible Note (as defined hereinafter) and dispose of all or a portion of any
shares of Common Stock acquired, or a combination thereof.
ITEM 5. Interest in Securities of the Issuer.
Effective February 12, 1998, ICOM and St. James Capital Partners, L.P. ("SJCP")
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. SJCP had
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.
An Assignment and Acceptance was executed as of March 30, 1998 assigning to
SJMB, L.P. ("SJMB"), and affiliate of SJCP, 13/15ths of SJCP's interest in and
to all of SJCP's rights,
<PAGE>
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 SJMB executed a revised Convertible
Promissory Note an assigned 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.
1,200,000 of SJCP's 1,500,000 warrant shares were assigned to SJMB under the
terms of the Assignment and Acceptance dated March 30, 1998. Such warrants were
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.
On August 13, 1999 SJCP entered into a Repayment and Exchange Agreement (the
"Agreement") related the Note that provided, among other things, SJMB the
ability to convert all accrued and unpaid principal and interest into common
stock. At that time, SJCP converted $1,609,629 of accrued and unpaid principal
and interest into common stock. Pursuant to the Agreement, ICOM registered
2,805,987 shares of common stock which included amounts that had been converted
and the remaining accrued and unpaid principal and interest outstanding. As of
December 13, 1999, SJCP had sold 2,051,459 of the shares it received from
conversion under the Agreement.
SJCP also holds 300,000 shares of common stock issuable upon the exercise of
warrants issued on April 2, 1998 and 110,000 shares of common stock issuable
upon the exercise of warrants issued on January 13, 1999 and an additional
450,000 shares pursuant to anti-dilution provisions in such warrants as of
November 10, 1998. The warrants, which were filed as Exhibit 10.70 in ICOM's
10-K dated March 31, 1998, requires ICOM to inform SJCP 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, SJCP 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 SJCP nor any adjustment to the exercise price as
the result of such subsequent events. SJCP 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 and adjustment to the exercise price, informs SJCP of the additional
warrants to be issued as a result of the subsequent event, SJCP will further
amend to reflect the additional shares to which it is a beneficial owner and the
adjustment to the exercise price thereof.
ITEM 6. Contracts, Arrangements, Understandings, or Relationships with
Respect to Securities of the Issuer.
Effective February 12, 1998, ICOM and St. James Capital Partners, L.P. ("SJCP")
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. SJCP had
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.
An Assignment and Acceptance was executed as of March 30, 1998 assigning to
SJMB, L.P. ("SJMB"), and affiliate of SJCP, 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
<PAGE>
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 SJMB executed a revised Convertible
Promissory Note an assigned 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.
1,200,000 of SJCP's 1,500,000 warrant shares were assigned to SJMB under the
terms of the Assignment and Acceptance dated March 30, 1998. Such warrants were
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.
On August 13, 1999 SJCP entered into a Repayment and Exchange Agreement (the
"Agreement") related the Note that provided, among other things, SJMB the
ability to convert all accrued and unpaid principal and interest into common
stock. At that time, SJCP converted $1,609,629 of accrued and unpaid principal
and interest into common stock. Pursuant to the Agreement, ICOM registered
2,805,987 shares of common stock which included amounts that had been converted
and the remaining accrued and unpaid principal and interest outstanding. As of
December 13, 1999, SJCP had sold 2,051,459 of the shares it received from
conversion under the Agreement.
SJCP also holds 300,000 shares of common stock issuable upon the exercise of
warrants issued on April 2, 1998 and 110,000 shares of common stock issuable
upon the exercise of warrants issued on January 13, 1999 and an additional
450,000 shares pursuant to anti-dilution provisions in such warrants as of
November 10, 1998. The warrants, which were filed as Exhibit 10.70 in ICOM's
10-K dated March 31, 1998, requires ICOM to inform SJCP 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, SJCP 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 SJCP nor any adjustment to the exercise price as
the result of such subsequent events. SJCP 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 and adjustment to the exercise price, informs SJCP of the additional
warrants to be issued as a result of the subsequent event, SJCP will further
amend to reflect the additional shares to which it is a beneficial owner and the
adjustment to the exercise price thereof.
ITEM 7. Exhibits.
EXHIBIT NO. DESCRIPTION OF EXHIBIT
1 Assignment and Acceptance dated March 30, 1998
by and between SJCP and SJMB
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
ST. JAMES CAPITAL PARTNERS, L.P.
BY: ST. JAMES CAPITAL CORP.,
general partner
February 18, 2000
Date
/s/ JAMES H. HARRISON
Signature
<PAGE>
JAMES H. HARRISON, Vice President
Name/Title
St.James Capital Corp.
February 18, 2000
Date
/s/ JAMES H. HARRISON
Signature
JAMES H. HARRISON, Vice President
Name/Title
-7-
EXHIBIT 1
ASSIGNMENT AND ACCEPTANCE
Dated: March 30, 1998
Reference is made to the Agreement for Purchase and Sale dated as of
February 12, 1998 (as the same may be amended or modified from time-to-time, the
"Agreement") between INTELECT COMMUNICATIONS, INC., a Delaware corporation
("Borrower") and ST. JAMES CAPITAL PARTNERS, L.P. ("Assignor"). Capitalized
terms not otherwise defined in this Assignment and Acceptance shall have the
meanings assigned to them in the Agreement.
Pursuant to the terms of the Agreement, St. James Capital Partners, L.P.
wishes to assign and delegate 13/15ths of its rights and 100% of its obligations
under the Agreement. Therefore, St. James Capital Partners, L.P. ("Assignor")
and SJCP, L.P. ("Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, without recourse to the Assignor
and without representation or warranty except for the representations and
warranties specifically set forth in clauses (i) and (ii) of Section 2, 13/15ths
of its interest in and to all of the Assignor's rights, and 100% of Assignor's
obligations, under the Agreement and the Transaction Documents as of the
Effective Date (as defined below), including, without limitation, such
percentage interest in the Assignor's obligation to make Advances, the Advances
owing to the Assignor, the Note held by the Assignor, the Warrants held by the
Assignor, the Assignor's interest in the Collateral, and the Assignor's
registration rights in respect of Common Stock. The Assignor and the Assignee
agree that this Assignment shall convey an interest in outstanding advances
under the Note as of the date hereof equal to $1,000,000, and conveys to
Assignee, and Assignee hereby assumes, all remaining obligations to make
advances under the Note.
2. The Assignor (i) represents and warrants that, prior to executing this
Assignment and Acceptance, its obligation to make further Advances under the
Agreement is $12,000,000, and the aggregate outstanding principal amount of
Advances owed to it by the Borrower is $3,000,000; (ii)
<PAGE>
represents and warrants that it is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest is free and clear
of any adverse claim; (iii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties, or representations
made in or in connection with the Agreement or any other Transaction Document or
the execution, legality, validity, enforceability, genuineness, sufficiency, or
value of the Agreement or any other Transaction Document or any other instrument
or document furnished pursuant thereto; (iv) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower or any Subsidiary or the performance or observance by the Borrower of
any of its obligations under the Agreement or any other Transaction Document or
any other instrument or document furnished pursuant thereto;(v) agrees to
deliver the Note to the Borrower to exchange such Note for a new Note dated
April 2, 1998, in the principal amount of $13,000,000 payable to the order of
the Assignee; (vi) and agrees to deliver the Warrants issued by Borrower to the
Assignor to exchange such Warrants for replacement Warrants in favor of the
Assignee in respect of the Borrower's Common Stock.
3. The Assignee (i) confirms that it has received a copy of the Agreement
and the other Transaction Documents, and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Acceptance and (ii) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Agreement or any other Transaction Document are required to be performed by it
as a Purchaser.
4. The effective date for this Assignment and Acceptance shall be March 30,
1998 (the "Effective Date").
5. As of the Effective Date, (i) the Assignee shall be a Purchaser under the
Agreement for all purposes, and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Purchaser thereunder and (ii)
the Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Agreement.
2
<PAGE>
6. From and after the Effective Date, the Borrower shall make all payments
under the Agreement and the Note in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest, and
commitment fees) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Agreement and the Note for periods
prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed and
enforced in accordance with, the laws of the State of Texas.
The parties hereto have caused this Assignment and Acceptance to be duly
executed as of the date first above written.
ASSIGNOR:
ST. JAMES CAPITAL PARTNERS, L.P.
By: St. James Capital Corp.,
its General Partner
By: /s/ JAY BROWN
Name: JAY BROWN
Title: VICE-PRESIDENT
ASSIGNEE:
SJCP, L.P.
By: SJCP, L.L.C., its General Partner
By: /s/ JAY BROWN
Name: JAY BROWN
Title: VICE-PRESIDENT
3
