INTELECT COMMUNICATIONS SYSTEMS LIMITED
                                 INTELECT, INC.

                OFFER TO PURCHASE THE FIVE YEAR SIX PERCENT (6%)
                    SUBORDINATED DEBENTURES OF INTELECT, INC.
                      FOR AN AGGREGATE OF 170,000 SHARES OF
                        COMMON STOCK, $.01 PAR VALUE, OF
                     INTELECT COMMUNICATIONS SYSTEMS LIMITED
                       AND THE PAYMENT OF CERTAIN AMOUNTS
                      IN LIEU OF ISSUING FRACTIONAL SHARES


<TABLE>
<S>                                                                   <C>    
                                                                                     September 6, 1996

TO:      The  Following  Holders  of  Intelect,  Inc.  5 Year Six  Percent  (6%)
         Subordinated Debentures (the "Debenture Holders"):

         Thomas R. Moore, Trustee                                      Bharat Kinariwala
         Lucille M. Moore, Trustee                                     Rheinhold A. Sundeen, M.D., Inc.
         Dole Food Company, Inc.                                       Joe M. Chow and Marian K. Chow
         Richard G. Grey                                               Jeannette A. Bullis
         National Securities and Investments, Inc.                     Eleanor Fleming
         Franklin Tokioka                                              Jeanne Scott
         Philip J. Daunton and Nancy G. Daunton                        Carolyn Walters
         Christopher J. Stevens                                        Willis E. Hoff and Ahila D. Hoff
         Dickey Company, Nominee for                                   William H. Barkhurst and Karelyn B. Barkhurst
         Richard F. Jobe, M.D., Trustee                                   
         Leo Luther Bass                                               William H. Barkhurst
         Charles J. Hartman                                            Edwin Ducayet
         John J. Jaquette, Trustee                                     Thomas R. Howes
         Edmund M. Keating                                             Eric J. Robson
         Macario Q. Laygui and Julita A. Laygui                        Shoeb Javed
         Norma Jean Feaster                                            Toni Willems
         Kenneth G. Neifert and Ayako Neifert
</TABLE>

Ladies and Gentlemen:

         Intelect  Communications  Systems Limited  ("ICSL") and Intelect,  Inc.
("Intelect"), hereby offer to purchase, on or before 5:00 P.M., October 7, 1996,
all of those certain 5 Year Six Percent (6%) Subordinated Debentures of Intelect
dated June 29, 1995 (the  "Debentures")  issued  pursuant to that certain Option
Agreement  (the  "Option  Agreement")  dated  March 31,  1995,  by and among the
Debenture Holders, ICSL (formerly known as Challenger International,  Ltd.), and
Intelect, in






consideration  of the issuance by ICSL of an aggregate of 170,000 Common Shares,
$.01 par value, of ICSL (the "Shares"), and the payment to the Debenture Holders
of certain amounts in lieu of issuing  fractional  shares (with the aggregate of
all such amounts  totaling  $156.19 (the  "Fractional  Share  Payments")),  such
Shares and Fractional  Share  Payments to be allocated to the Debenture  Holders
pro rata in accordance with their percentage  ownership of all of the Debentures
issued  pursuant to the Option  Agreement,  all of which shall be subject to the
terms of this Offer (the "Offer").

         This Offer is being made contingent  upon all of the Debenture  Holders
surrendering to Intelect (as instructed herein) all (100%) of the Debentures and
executing and delivering to Intelect (as instructed  herein) the Release and the
Letter of Transmittal  enclosed with this Offer (the "Required Amount").  In the
event less than the Required  Amount is tendered,  Intelect and ICSL reserve the
right to withdraw this Offer.

         THE TERMS OF THIS OFFER HAVE NOT BEEN  REVIEWED  OR APPROVED IN ANY WAY
BY THE  SECURITIES  COMMISSIONER  OF ANY STATE OR THE  SECURITIES  AND  EXCHANGE
COMMISSION. THIS OFFER DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN
ANY  JURISDICTION IN WHICH SUCH OFFER OR  SOLICITATION IS NOT AUTHORIZED,  OR TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.

EXPIRATION DATE

         This Offer will expire (the  "Expiration  Date") at 5:00 P.M.,  Central
Daylight  Savings Time on October 7, 1996,  or at that hour on any later date to
which the Offer may be extended by Intelect and ICSL.

PROCEDURES FOR TENDERING DEBENTURES

         Proper Tender of  Debentures.  For  Debentures  to be validly  tendered
pursuant to the Offer you as a  Debenture  Holder  must  deliver  the  following
documents  to the person and place set forth below to be held in trust until the
Required Amount is received:

         1.       The original Debenture issued in your name;

         2.       The  enclosed  Letter of  Transmittal,  duly  executed  by the
                  registered owner of the Debenture;

         3.       The enclosed  Release in Consideration of Exchange of Property
                  (the "Release"),  duly executed by the registered owner of the
                  Debenture.  The  enclosed  Release  states  the  amount of the
                  Shares to be received by you and the amount of cash to be paid
                  to you in lieu of issuing fractional






                  shares;

         4.       If  required,  the  enclosed  Substitute  Form  W-9  (see  the
                  enclosed Instructions).


         These documents must be delivered on or before the Expiration Date to:

                  Intelect, Inc.
                  c/o Ryan & Sudan, L.L.P.
                  Two Houston Center, Suite 3900
                  909 Fannin
                  Houston, Texas 77010
                  Attention:  Robert C. Beasley

         These documents may be delivered via the enclosed addressed envelope.

         These  documents  will be held in trust by Ryan & Sudan,  L.L.P.  until
receipt of all (100%) of the Debentures and the executed Releases and Letters of
Transmittal  signed by all of the Debenture  Holders.  In the event the Required
Amount is not  received  by the  Expiration  Date  (unless  the Company and ICSL
otherwise direct Ryan & Sudan,  L.L.P. that they elect to proceed with the Offer
in the absence of receiving the tender of 100% of the Debentures,  Releases, and
Letters of Transmittal) Ryan & Sudan,  L.L.P. will immediately return to you the
Debenture you  surrendered,  the Letter of Transmittal  executed by you, and the
Release executed by you.

ISSUANCE AND REGISTRATION OF SHARES

         Upon the terms and subject to the  conditions of this Offer,  including
receipt of the Required Amount  pursuant to the terms of this Offer,  ICSL will:
(1) issue to each  Debenture  Holder the amount of shares of its Common Stock as
is set forth in the  Release  executed  by such  Debenture  Holder and deliver a
certificate  to such Debenture  Holder  representing  such shares;  (2) commence
registration of such shares with the Securities and Exchange Commission pursuant
to a Form S-3  Registration  Statement;  and (3) pay to each Debenture Holder by
check that  amount of  Fractional  Share  Payment as is set forth in the Release
executed by such Debenture Holder.

         ICSL will pay the  expenses  incurred  by ICSL in  connection  with the
registration  of  the  Shares,   including  all  registration  and  filing  fees
(including  all  expenses  incident to filing with the National  Association  of
Securities Dealers,  Inc.), printing expenses,  fees and disbursements of ICSL's
counsel  and  independent  certified  public  accountant,  and  the  expense  of
qualifying  such  Shares  under  state  blue  sky  laws,  if any.  However,  all
underwriting  expenses  incurred by the  Debenture  Holders (if any),  including
discounts  and  commissions,  shall  be  borne by such  Debenture  Holders.  The
Debenture  Holders  may  be  required  to  provide  information  concerning  the
Debenture Holders necessary to complete the Registration Statement,






and  accordingly,  as set forth in the  Letter  of  Transmittal,  the  Debenture
Holders  agree to complete and return any documents  (including  questionnaires)
necessary to enable ICSL to complete the Registration Statement.







         ICSL will pay all stock transfer taxes, if any, payable on the issuance
of the Shares pursuant to the Offer; provided,  however, that if issuance of the
Shares  is to be made  to any  person  other  than  the  Debenture  Holder,  the
Debenture Holder will be responsible for such taxes.

         FEDERAL INCOME TAX BACKUP  WITHHOLDING.  To prevent  federal income tax
backup withholding equal to 31% of the gross cash payments in lieu of fractional
shares made pursuant to the Offer,  each Debenture Holder who does not otherwise
establish  an  exemption  from  such   withholding  must  notify  ICSL  of  such
shareholder's  correct taxpayer  identification  number (which in the case of an
individual is their social  security  number),  or certify that such taxpayer is
awaiting a taxpayer identification number, and provide certain other information
by completing  the enclosed  Substitute  Form W-9 (see the enclosed  Instruction
Letter).

         ICSL MAY BE  REQUIRED  TO WITHHOLD  AND REMIT TO THE  INTERNAL  REVENUE
SERVICE (THE "IRS"),  31% OF THE GROSS PROCEEDS PAID TO ANY TENDERING  DEBENTURE
HOLDER WHO FAILS TO COMPLETE  FULLY AND SIGN THE  SUBSTITUTE  FORM W-9  INCLUDED
WITH THIS LETTER.

CONDITIONS OF THE OFFER

         NO PARTIAL  PURCHASES.  Intelect and ICSL will not accept a tender of a
portion of a  Debenture.  Therefore,  if a Debenture  Holder  tenders his or her
Debenture,  they must tender all of their  Debenture  in order for there to be a
valid tender and in order for them to receive the Shares.

         WITHDRAWAL  OF OFFER.  The Offer is  contingent  on  Intelect  and ICSL
receiving all of the  Debentures,  together with the Letters of Transmittal  and
Releases executed by the Debenture Holders (the "Required Amount"). Intelect and
ICSL reserve the right to withdraw  this Offer if less than the Required  Amount
is  tendered,  or if, in  Intelect's  or  ICSL's  sole  discretion,  it would be
inadvisable to proceed with the Offer  (including,  without  limitation,  if the
filing of the  Registration  Statement would materially and adversely affect the
business or prospects of ICSL or Intelect in view of the disclosures that may be
required).  In such case, the Debentures,  the Letters of  Transmittal,  and the
Releases will be immediately returned to the respective Debenture Holders.

                                       INTELECT, INC.

                                       /s/ Herman M. Frietsch
                                       -----------------------------------------
                                       Herman M. Frietsch, Chairman of the Board




                                       INTELECT COMMUNICATIONS SYSTEMS
                                       LIMITED

                                       /s/ Herman M. Frietsch
                                       -----------------------------------------
                                       Herman M. Frietsch, Chairman of the Board