<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 and 15(d) of the
Securities and Exchange Act of 1934
June 24, 1996
Date of Report (Date of earliest event reported)
SA TELECOMMUNICATIONS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-18048 75-2258519
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
1600 Promenade Center, 15th Floor
Richardson, Texas 75080
(Address of Principal Executive Offices) (Zip Code)
(214) 690-5888
(Registrant's Telephone Number, Including Area Code)
------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 5. Other Events.
On June 24, 1996, SA Telecommunications, Inc. (the "Company")
purchased effective as of June 14, 1996 from Howard Maddera,
William L. Johnson and Marianne Reed (the "Sellers") certain
securities of the Company in exchange for an earlier cash payment
of $308,500 and the issuance of 843,023 shares of the Company's
Common Stock. The securities purchased consisted of: (1) all
125,000 outstanding shares of its Series B Cumulative Convertible
Preferred Stock, (2) warrants to purchase an aggregate of 1,060,000
shares of the Company's Common Stock, (3) promissory notes with an
aggregate principal amount outstanding of $1,650,000 plus accrued
but unpaid interest at 11% per annum, and (4) promissory notes in
the aggregate principal amount outstanding of $1,500,000 plus
accrued but unpaid interest at 11% per annum. All such securities
were originally issued to the Sellers in connection with the
acquisition and financing thereof of U.S. Communications, Inc. by
the Company on July 31, 1996. The Company has an option to acquire
all 843,023 shares (the "Purchased Shares") of Common Stock issued
to the Sellers for an exercise price of $3.44 per share or
$2,900,000 between August 1 and October 31, 1996. The Company
granted Sellers demand registration rights and a minimum value of
$1,213,954 on the sale of the Purchased Shares under certain
circumstances. The Purchased Shares are subject to a voting
agreement giving the Company's Chairman and Chief Executive Officer
the power to vote such shares until the earlier to occur of their
transfer or June 24, 2006.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits.
Exhibit No. Document Description
20.1 Amended and Restated Purchase Agreement
dated as of June 24, 1996 between the
Company and Howard Maddera*
20.2 Amended and Restated Purchase Agreement
dated as of June 24, 1996 between the
Company and William L. Johnson*
20.3 Amended and Restated Purchase Agreement
dated as of June 24, 1996 between the
Company and Marianne Reed*
20.4 Voting Agreement dated as of June 24,
1996 between the Company and Howard
Maddera*
20.5 Voting Agreement dated as of June 24,
1996 between the Company and William L.
Johnson*
20.6 Voting Agreement dated as of June 24,
1996 between the Company and Marianne
Reed*
2
<PAGE>
_______________________
*Filed herewith
3
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
SA TELECOMMUNICATIONS, INC.
DATE: June 28, 1996 BY: /s/ Jack W. Matz, Jr.
-------------------------------
Jack W. Matz, Jr.
Chairman and Chief Executive
Officer
4
<PAGE>
EXHIBIT INDEX
Exhibit
No. Document Description
20.1 Amended and Restated Purchase Agreement dated as of June
24, 1996 between the Company and Howard Maddera*
20.2 Amended and Restated Purchase Agreement dated as of June
24, 1996 between the Company and William L. Johnson*
20.3 Amended and Restated Purchase Agreement dated as of June
24, 1996 between the Company and Marianne Reed*
20.4 Voting Agreement dated as of June 24, 1996 between the
Company and Howard Maddera*
20.5 Voting Agreement dated as of June 24, 1996 between the
Company and William L. Johnson*
20.6 Voting Agreement dated as of June 24, 1996 between the
Company and Marianne Reed*
_______________________
*Filed herewith
5
<PAGE>
Exhibit 20.1
AMENDED AND RESTATED PURCHASE AGREEMENT
This Amended and Restated Purchase Agreement ("Agreement")
dated as of June 24, 1996 is entered into by and between SA
Telecommunications, Inc., a Delaware corporation (" Buyer") and
Howard Maddera ("Seller") effective as of June 14, 1996.
WHEREAS, Seller, Marianne Reed and William L. Johnson
(collectively, the ("USC Group"), Buyer and NTS Communications,
Inc. ("NTS") entered into that certain Stock Purchase Agreement
dated as of June 30, 1995, as amended (the "Stock Purchase
Agreement"), pursuant to which the USC Group and NTS sold to
Buyer all of the issued and outstanding capital stock of U.S.
Communications, Inc., a Texas corporation ("USC");
WHEREAS, the USC Group and Buyer entered into that certain
Note, Preferred Stock & Warrant Purchase Agreement dated as of
July 31, 1995, as amended through the date hereof, pursuant to
which Seller purchased: (1) a promissory note of Buyer in the
original principal amount of $1,100,000 (the "Purchase Note"),
(2) a promissory note of Buyer in the original principal amount
of $600,000 (the "Offset Note"), (3) 50,000 shares of Buyer's
Series B Cumulative Convertible Preferred Stock (the "Preferred
Shares"), and (4) common stock purchase warrants exercisable into
420,000 shares of Buyer's Common Stock (the "Warrants");
WHEREAS, pursuant to that certain Agreement dated as of
September 21, 1995 between the USC Group and Buyer, (1) the USC
Group waived their right to convert the Preferred Shares into
Common Stock of Buyer, and (2) Buyer made a prepayment of
principal of $440,000 plus aggregate accrued interest on the
Purchase Note, reducing the outstanding principal balance of the
Purchase Note to $660,000 on March 8, 1996;
WHEREAS, Buyer has certain offset rights against the Offset
Note pursuant to the Stock Purchase Agreement, not all of which
are known on the date hereof (the "Offset Rights");
WHEREAS, the USC Group and Buyer have entered into an
Agreement dated as of February 29, 1996, extending and modifying
the payment terms of the Offset Note and the Purchase Note (the
"Modification Agreement");
WHEREAS, Buyer and the USC Group entered into a Purchase
Agreement dated as of March 8, 1996 (the "Original Purchase
Agreement"), whereby, subject to the conditions stated therein,
Buyer agreed to purchase, and Seller agreed to sell, the
Purchase Note, the Offset Note, the Preferred Shares and the
Warrants for $1,110,600, and amended the Purchase Agreement on
April 12, 1996 (the "First Amendment");
WHEREAS, Buyer and the USC Group entered into a Second
Amendment to Purchase Agreement dated as of April 18, 1996 (the
"Second Amendment"), which extended the Closing and Anticipated
Closing Date thereunder and adjusted the payment schedule;
WHEREAS, Seller desires to completely amend and restate the
Original Purchase
1
<PAGE>
Agreement as amended by the First Amendment and the Second
Amendment and to sell and transfer to Buyer, and Buyer desires to
purchase from Seller, the Purchase Note, the Offset Note, the
Preferred Shares and the Warrants (collectively referred to as
the "Instruments") subject to the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Purchase Price. On the terms and subject to the
conditions herein expressed and based on the representations,
warranties, covenants and agreements contained herein, at the
Closing (as hereinafter defined), Seller agrees to sell, transfer
and assign the Instruments to Buyer and Buyer agrees to purchase
the Instruments from Seller, for an aggregate consideration of
$1,283,400.00 (the "Purchase Price"). Buyer has paid to Seller
$123,400.00 as a principal payment on the Offset Note (the
"Deposit") under the Modification Agreement.
(a) At the Closing, the amount of the Deposit shall be
credited against the Purchase Price of the Instruments, and
the remaining $1,160,000.00 of the Purchase Price shall be
payable by the issuance to Seller in a private placement
pursuant to Section 4(2) of the Securities Act of 1933, as
amended (the "Act") of 337,209 shares of Buyer's Common
Stock, $.0001 par value (the "Shares").
(b) If the Closing does not occur on or prior to the
Anticipated Closing Date (as defined in Section 2 hereof),
(a) the second principal payment of $176,500 and the accrued
but unpaid interest on the unpaid principal amount of such
Offset Note will be due on the Anticipated Closing Date,
subject to the Offset Rights, (b) the final payment of
principal and accrued interest on the Offset Note shall
continue to be due on July 30, 1996; (c) the remaining
scheduled due dates for payment of accrued but unpaid
interest on the unpaid principal amount of the Purchase Note
shall be the Anticipated Closing Date, July 31, 1996 and
October 31, 1996 (the "Maturity Date"); (d) the final
payment of principal and accrued interest on the Purchase
Note shall continue to be the Maturity Date; and (e) such
extension and modification of the terms of the Purchase Note
and the Offset Note are hereby effected without any further
action by the parties hereto.
2. Closing. The Closing under this Agreement shall occur
at the offices of Seller at 2:00 p.m. on June 24, 1996 or such
later date on or prior to July 1, 1996 (the "Anticipated Closing
Date") as shall be required for Buyer to obtain the consent of
Norwest Bank Minnesota, National Association to the transactions
contemplated hereby (the "Bank Consent"); provided, however, in
no event shall the Anticipated Closing Date be later than July 1,
1996 even if the Bank Consent is not obtained. The time and date
on which the Closing hereunder occurs is herein called the
"Closing". At the Closing, Seller will deliver to Buyer the
documents referred to in Section 9 hereof against delivery by
Buyer to Seller of the Shares issued in the name of Seller and
the documents referred to in Section 8 hereof.
2
<PAGE>
3. Buyer's Representations. Buyer represents and warrants
to Seller (which representations and warranties shall survive the
Closing regardless of what investigations, if any, Seller shall
have made thereof prior thereto) as follows:
(a) Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware;
(b) This Agreement has been duly authorized, executed
and delivered by Buyer and is a valid and binding agreement
of Buyer enforceable against Buyer in accordance with its
terms, subject to the Bank Consent; and
(c) Upon delivery of the Shares to Seller at Closing,
the Shares will be duly authorized, validly issued and non-
assessable.
4. Seller's Representations. Seller represents and
warrants to Buyer (which representations and warranties shall
survive the Closing regardless of what investigations, if any,
Buyer shall have made thereof prior thereto) that:
(a) This Agreement has been executed and delivered by
Seller and is a valid and binding agreement of Seller
enforceable against Seller in accordance with its terms;
(b) Each of the Instruments is owned of record and
beneficially by Seller, free and clear of all liens, claims
and encumbrances of any kind;
(c) Seller possesses full authority and legal right to
sell, transfer and assign the entire legal and beneficial
ownership of each of the Instruments to Buyer, free and
clear of all liens, claims and encumbrances of any kind; and
(d) Seller has not transferred any interest in any of
the Instruments to any person or entity.
5. Representations With Respect to Shares. Seller
understands that the Shares are not registered under the Act, and
hereby makes the following representations to Buyer, with the
understanding that Buyer is relying on such representations in
issuing the Shares to Seller pursuant to an exemption from
registration under the Act:
(a) Seller is familiar with the business and financial
condition, properties, operations and prospects of Buyer,
and, at a reasonable time prior to the execution of this
Agreement, has been afforded the opportunity to ask
questions of and receive satisfactory answers from Buyer and
its officers and directors, or other persons acting on
Buyer's behalf, concerning the business and financial
condition, properties, operations and prospects of Buyer and
concerning the terms and conditions of the offer of the
Shares and has asked such questions as Seller desires to ask
and all such
3
<PAGE>
questions have been answered to the full satisfaction of
Seller. Seller has received and reviewed copies of Buyer's
(i) Annual Report on Form 10-KSB for the year ended December
31, 1995, (ii) Quarterly Reports on Form 10-QSB for the
quarter ended March 31, 1996, (iii) Current Reports on Form
8-K dated March 12, 1996 and May 23, 1996, (iv) Prospectus
dated January 3, 1996 pursuant to the Form S-3 Registration
Statement filed with the Securities and Exchange Commission
(the "Commission"); and (v) Buyer's Proxy Statement for the
Annual Meeting of Stockholders held on May 31, 1996. All
documents, records and books pertaining to a proposed
investment in the Shares which Seller has requested have
been made available to Seller.
(b) No representations or warranties have been made to
Seller by Buyer as to the tax consequences of an investment
in the Shares, or as to profits, losses or cash flow which
may be received or sustained as a result of an investment in
the Shares.
(c) Seller has reviewed with his own tax advisors the
federal, state, and local tax consequences of its investment
in the Shares and the transactions contemplated by the
Agreement, and is relying solely on such advisors in making
its investment and not on any statements or representations
of Buyer or any of its agents.
(d) Seller is not purchasing the Shares based on any
representation, oral or written, by Buyer or any person with
respect to the future value of, or income from, the Shares,
but rather upon an independent examination and judgment as
to the prospects of Buyer.
(e) Seller understands and acknowledges that Buyer has
significant outstanding indebtedness and a significant
amount of Preferred Stock issued to other investors which
such Preferred Stock has rights and preferences superior to
that of Buyer's Common Stock.
(f) Seller has such knowledge and experience in
financial and business matters that he is capable of
evaluating the merits and risks of the acquisition of the
Shares.
(g) Seller is acquiring the Shares solely for Seller's
own account, for investment purposes, and not with a view
to, or for resale in connection with, any distribution of
the Shares. Seller understands that: (i) the offer and sale
of the Shares have not been registered under the Act or any
state securities laws by reason of specific exemptions under
the provisions thereof which depend in part upon the
investment intent of Seller and/or the other representations
made by Seller in this Agreement, (ii) Buyer is relying upon
the representations, covenants and agreements contained in
this Agreement (and any supplemental information) for the
purpose of determining whether this transaction meets the
requirements for such exemptions; (iii) the Shares are
"restricted securities" under applicable federal securities
laws and that the Act and the rules of the Commission
provide in substance that Seller may dispose of the Shares
4
<PAGE>
only pursuant to an effective registration statement under
the Act or an exemption therefrom; (iv) Buyer has no
obligation to register the Shares, or to take action so as
to permit sales pursuant to the Act (including Rule 144
thereunder) except as expressly provided in this Agreement;
and (v) Seller may not at any time demand the purchase by
Buyer or any shareholder of Buyer of the Shares.
(h) Seller agrees (i) that Seller will not sell,
assign, pledge, give, transfer or otherwise dispose of the
Shares or any interest therein, or make any offer or attempt
to do any of the foregoing, except pursuant to a
registration of the Shares under the Act and all applicable
state securities laws or in a transaction which, in the
opinion of counsel of Seller (the substance of such opinion
and the identity of such counsel being satisfactory to
Buyer), is exempt from the registration provisions of the
Act and all applicable state securities laws; (ii) that
Buyer and any transfer agent for the Shares shall not be
required to give effect to any purported transfer of any of
the Shares except upon compliance with the foregoing
restrictions; and (iii) that a legend in substantially the
following form will be placed on the certificates
representing the Shares:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR PURSUANT
TO AN EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL
OF HOLDER SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED.
(i) Seller has not offered or sold any portion of the
Shares and has no present intention of dividing the Shares
with others or of reselling or otherwise disposing of any
portion of such Shares either currently or after the passage
of a fixed or determinable period of time or upon the
occurrence or nonoccurrence of any predetermined event or
circumstance.
(j) Seller is able to bear the economic risk of losing
his entire investment in the Shares.
(k) Seller is an "Accredited Investor" as such term is
defined in Rule 501 promulgated under the Act.
6. Buyer's Covenants. Buyer covenants and agrees that
between the date hereof and the Closing: (a) without the prior
written consent of Seller, Buyer shall not take any action that
would cause or tend to cause the conditions upon the obligations
of the parties hereto to effect the transactions contemplated
hereby not to be fulfilled; including, without limitation,
taking, or causing to be taken, or permitting or suffering to be
taken or to exist any action, condition or thing that would cause
the representations and warranties made by Buyer herein not to be
true, correct and accurate as of the Closing; and (b) Buyer
shall use commercially reasonable efforts to obtain the Bank
Consent and the Financing.
5
<PAGE>
7. Seller's Covenants. Seller covenants and agrees that,
between the date hereof and the Closing, without the prior
written consent of Buyer, Seller shall not take any action which
would cause or tend to cause the conditions upon the obligations
of the parties hereto to effect the transactions contemplated
hereby not to be fulfilled; including, without limitation,
taking, or causing to be taken, or permitting or suffering to be
taken or to exist any action, condition or thing that would cause
the representations and warranties made by Seller herein not to
be true, correct and accurate as of the Closing.
8. Conditions to Obligations of Seller. The obligations
of Seller under this Agreement are subject to the satisfaction at
or prior to the Closing of each of the following conditions, but
compliance with such conditions may be waived by Seller: (a) the
representations and warranties of Buyer contained in this
Agreement shall be true and correct at and as of the Closing with
the same effect as though such representations and warranties
were made at and as of the Closing, (b) Buyer shall have obtained
the Bank Consent, and (c) Buyer shall have executed the release
in substantially the form of Exhibit B hereto.
9. Conditions to Obligations of Buyer. The obligations of
Buyer under this Agreement are subject to the satisfaction at or
prior to the Closing of each of the following conditions, but
compliance with any such conditions may be waived by Buyer: (a)
Buyer shall have obtained the Bank Consent, (b) Seller shall have
delivered to Buyer the original Purchase Note and Offset Note,
stock certificates representing the Preferred Shares duly
endorsed in blank, or accompanied by stock powers duly endorsed
in blank, and the Warrants accompanied by the Assignment in the
form of Exhibit A hereto; (d) Seller shall have executed and
delivered the release in substantially the form of Exhibit C
hereto; and (e) Seller shall have executed and delivered a voting
agreement in substantially the form of Exhibit D hereto.
10. Notices. Any notice, request, instruction or other
document to be given under this Agreement after the date hereof
by any party hereto to any other party shall be in writing and
shall be delivered personally or sent by registered or certified
mail, postage prepaid, or a national overnight delivery service
to the addresses shown on the signature page of this Agreement,
or to such other address or person as any party may designate by
written notice to the others.
11. Expenses. Each of the parties hereto shall bear its
expenses separately incurred in connection with this Agreement
and with the performance of its obligations hereunder.
12. Indemnification. In the event the transactions
contemplated hereby are consummated, Seller agrees to indemnify
Buyer and to hold Buyer harmless from and against all damages,
losses and out-of-pocket expenses caused by or arising out of (a)
any breach of warranty or inaccurate or erroneous representation
of Seller contained in this Agreement or in any Exhibit or
document delivered pursuant hereto, (ii) any claim made against
Buyer in respect of the Instruments.
13. Entire Agreement. This Agreement, the documents
referred to herein and the exhibits hereto set forth all the
covenants, promises, agreements, conditions and understandings
6
<PAGE>
among the parties hereto, and there are no other covenants,
promises, agreements, conditions or understandings, whether oral
or written, among the parties hereto.
14. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas
without regard to conflicts of laws. This Agreement is
performable in Dallas County, Texas and the parties hereto agree
that the exclusive venue for any actions or claims related to
this Agreement shall be Dallas County, Texas.
15. Attorney's Fees. In the event attorneys' fees or other
costs are incurred to secure performance of any of the
obligations herein provided for, or to establish damages for the
breach thereof, or to obtain any other appropriate relief,
whether by way of prosecution or defense, the prevailing party
shall be entitled to recover reasonable attorney's fees and costs
incurred therein.
16. Finder's Fees. Each party to this Agreement represents
to the other party that it has not incurred and will not incur
any liability for brokerage fees or agents' commissions in
connection with this Agreement and the transactions contemplated
hereby.
17. Counterparts; Binding Effect. This Agreement may be
executed by the parties hereto in separate counterparts, each of
which when so executed and delivered shall be an original, but
all such counterparts shall together constitute one and the same
instrument, and all signatures need not appear on any one
counterpart. The terms of this Agreement shall be binding upon,
and inure to the benefit of, the parties and their respective
successors and permitted assigns whether so expressed or not.
18. Demand Registration Rights.
(a) Right to Demand. Subject to Sections 18(b) and
18(c) below, (i) Seller as holder of the Registrable
Securities, may make a written request ("Demand Notice") for
registration under and in accordance with the provisions of
the Act of all or part of the Registrable Securities (a
"Demand Registration"). "Registrable Securities" means the
Shares and the 66,660 shares of Common Stock owned by Seller
on the date of this Agreement, but only for so long as any
such share of Common Stock is held by Seller and continues
to be a "Restricted Security". A share of Common Stock
shall be deemed to be a Restricted Security until such time
as such share (i) has been effectively registered under the
Act and disposed of in accordance with the registration
statement covering it, or (ii) has been sold pursuant to
Rule 144 (or any similar provision then in force) under the
Act. All requests made pursuant to this Section 18(a) will
specify the aggregate number of the Registrable Securities
and other shares of Common Stock to be registered and will
also specify the intended methods of disposition thereof.
(b) Restrictions on Demand Rights.
(i) Buyer shall not be obligated to effect a
Demand Registration unless
7
<PAGE>
such Demand Registration includes all Registrable
Securities of Seller.
(ii) The rights to Demand Registration under this
Section 18 shall only be exercised by Seller between
August 31, 1996 and August 31, 1997.
(iii) Seller hereby agrees in each ninety (90)
day period following the effectiveness of the
Registration Statement for any Demand Registration,
Seller may only sell up to a number of shares equal to
one-third (1/3) of the original number of shares of
Registrable Securities (as such original number may be
hereinafter adjusted for purposes of stock splits,
reverse stock splits, etc.)
(c) Number of Demand Registrations. Seller shall be
entitled to one Demand Registration, the expenses of which
shall be borne by Buyer except as otherwise stated herein.
A Demand Registration shall not be counted as a Demand
Registration hereunder until such Demand Registration has
been declared effective and maintained continuously
effective for a period of at least one year or such shorter
period ending when all Registrable Securities included
therein have been sold in accordance with any such Demand
Registration; provided, however, if any Demand Registration
shall be withdrawn prior to effectiveness thereof at the
request of Seller, such Demand Registration shall be counted
hereunder unless Seller shall agree to pay the expenses
incurred by Buyer in connection therewith.
19. Registration Procedures. With respect to any Demand
Registration, Buyer will as expeditiously as practicable:
(a) prepare and file with the Commission a
Registration Statement which includes the Registrable
Securities and use its best efforts to cause such
Registration Statement to become and remain effective as
provided herein; provided that before filing any amendments
or supplements to a Registration Statement or Prospectus,
including documents incorporated by reference after the
initial filing of the Registration Statement, Buyer will
furnish to the Seller and the underwriters, if any, copies
of all such documents proposed to be filed at least one day
prior thereto, and Buyer will not file an amendment to a
Registration Statement or Prospectus or any supplement
thereto (including such documents incorporated by reference)
to which the underwriters, if any, shall reasonably object.
For purposes of this Agreement, "Registration Statement"
means a registration statement filed with the Commission
under the Act which includes the Registrable Securities
being registered in a Demand Registration, and "Prospectus"
means the prospectus which is part of a Registration
Statement.
(b) prepare and file with the Commission such
amendments and post-effective amendments to the Registration
Statement as may be necessary to keep the Registration
Statement effective for any Demand Registration for a period
of not less than one year, or such shorter period which will
terminate when all Registrable Securities covered by such
Registration Statement have been sold or withdrawn (but not
prior to the expiration
8
<PAGE>
of the 90-day period referred to in Section 4(3) of the Act
and Rule 174 thereunder, if applicable); cause the
Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to
Ruled 424 under the Act; and comply with the provisions of
the Act applicable to it with respect to the disposition of
all securities covered by such Registration Statement during
the applicable period in accordance with the intended
methods of disposition by the sellers thereof set forth in
such Registration Statement or supplement to the Prospectus;
Buyer shall be deemed to have used its best efforts to keep
a Registration Statement effective during the applicable
period if it complies with all rules and regulations under
the Act relating to it and the noncompliance with which
would result in Seller not being able to sell the
Registrable Securities covered by such Registration
Statement during that period;
(c) furnish to Seller and the underwriter or
underwriters, if any, without charge, at least one signed
copy of the Registration Statement and any post-effective
amendment thereto, upon request, and such number of
conformed copies thereof and such number of copies of the
Prospectus (including each preliminary Prospectus) and any
amendments or supplements thereto, and any documents
incorporated by reference therein, as Seller or underwriter
may reasonably request in order to facilitate the
disposition of the Registrable Securities being sold by
Seller (it being understood that Buyer consents to the use
of the Prospectus and any amendment or supplement thereto by
Seller and the underwriter or underwriters, if any, in
connection with the offering and sale of the Registrable
Securities covered by the Prospectus or any amendment or
supplement thereto);
(d) notify Seller at any time when a Prospectus
relating to Registrable Securities of Seller included in a
Registration Statement is required to be delivered under the
Act, when Buyer becomes aware of the happening of any event
as a result of which the Prospectus included in such
Registration Statement (as then in effect) contains any
untrue statement of a material fact or omits to state a
material fact necessary to make the statements herein (in
the case of the Prospectus or any preliminary Prospectus, in
light of the circumstances under which they were made) not
misleading and, as promptly as practicable thereafter,
prepare and file with the Commission and furnish to Seller a
supplement or amendment to such Prospectus so that, as
thereafter delivered to the purchasers of such Registrable
Securities, such Prospectus will not contain any untrue
statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading;
(e) make reasonably available for inspection by
Seller, any underwriter participating in any disposition
pursuant to the Registration Statement, and any attorney,
accountant or other agent retained by Seller or underwriter
(collectively, the "Inspectors"), all pertinent financial
and other records, pertinent corporate documents and
properties of Buyer (collectively, the "Records") as shall
be reasonably necessary to enable them to exercise their due
diligence responsibility, and cause Buyer's officers,
directors and
9
<PAGE>
employees to supply all information reasonably requested by
any such Inspector in connection with such Registration
Statement. Records and other information which Buyer
determines, in good faith, to be confidential and which it
notifies the Inspectors are confidential shall not be
disclosed by the Inspectors unless (i) the disclosure of
such Records in the opinion of counsel reasonably acceptable
to Buyer is necessary to avoid or correct a misstatement or
omission in the Registration Statement or (ii) the release
of such records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction. Seller agrees
that it will, upon leaning that disclosure of such Records
is sought in a court of competent jurisdiction, give notice
to Buyer and allow Buyer, at Buyer's expense, to undertake
appropriate action to prevent disclosure of the Records
deemed confidential;
(f) use its best efforts to cause all Registrable
Securities included in such Registration Statement to be
listed, by the date of the first sale of Registrable
Securities pursuant to such Registration Statement, on each
securities exchange on which Buyer's securities of the same
class are then listed or proposed to be listed, if any;
(g) on or prior to the date on which the Registration
Statement is declared effective, use its best efforts to
register or qualify, and cooperate with Seller, the
underwriter or underwriters, if any, and their counsel, in
connection with the registration or qualification of, the
Registrable Securities covered by the Registration Statement
for offer and sale under the securities or blue sky laws of
each state and other jurisdiction of the United States as
Seller or underwriter reasonably requests in writing, to use
its best efforts to keep each such registration or
qualification effective, including through new filings, or
amendments or renewals, during the period such Registration
Statement is required to be kept effective and to do any and
all other acts or things necessary or advisable to enable
the disposition in all such jurisdictions of the Registrable
Securities covered by the Registration Statement;
provided that Buyer will not be required to (i) qualify
generally to do business in any jurisdiction where it would
not otherwise be required to qualify but for this Section
20(g), (ii) consent to general service of process in any
such jurisdiction or (iii) subject itself to general
taxation in any such jurisdiction;
(h) cooperate with Seller and the managing underwriter
or underwriters, if any, to facilitate the timely
preparation and delivery of certificates (not bearing any
restrictive legends) representing securities to be sold
under the Registration Statement, and enable such securities
to be in such denominations and registered in such names as
the managing underwriter or underwriters, if any, or Seller
may request; and
(i) use its best efforts to cause the Registrable
Securities covered by the Registration Statement to be
registered with or approved by such other governmental
agencies or authorities within the United States as may be
necessary to enable Seller or the underwriter or
underwriters, if any, to consummate the disposition of such
securities.
10
<PAGE>
20. Cooperation by Seller.
(a) Seller will furnish to Buyer in writing such
information and affidavits as Buyer may reasonably require
in connection with any registration, qualification or
compliance with respect to such Registrable Securities.
(b) Seller, upon receipt of any notice from Buyer of
the happening of any event of the kind described in Section
19(d), will forthwith discontinue disposition of the
Registrable Securities until such Investor's receipt of the
copies of the supplemented or amended Prospectus
contemplated by Section 19(d) until it is advised in writing
(the "Advice") by Buyer that the use of the Prospectus may
be resumed, and has received copies of any additional or
supplemental filings which are incorporated by reference in
the Prospectus, and, if so directed by Buyer, Seller will,
or will request the managing underwriter or underwriters, if
any, to, deliver to Buyer all copies, other than permanent
file copies then in Seller's possession, of the Prospectus
covering such Registrable Securities current at the time of
receipt of such notice. In the event Buyer shall give any
such notice, the time periods mentioned in Section 19(d)
shall be extended by the number of days during the period
from and including the date of the giving of such notice to
and including the date when Seller shall have received the
copies of the supplemented or amended Prospectus
contemplated by Section 19(d) hereof or the Advice.
(d) At the end of any period during which Buyer is
obligated to keep any Registration Statement current and
effective as provided by Section 19 hereof (and any
extensions thereof required by subsection (c) of this
Section 20), Seller shall discontinue sales of securities
pursuant to such Registration Statement upon receipt of
notice from Buyer of its intention to remove from
registration the securities covered by such Registration
Statement which remain unsold, and Seller shall notify Buyer
of the number of securities registered which remain unsold
promptly after receipt of such notice from Buyer.
21. Holdback Agreements. Seller, if requested by the
managing underwriter or underwriters for any underwritten Demand
Registration agrees not to effect any public sale or distribution
of Registrable Securities, including a sale pursuant to Rule 144
(or any similar provision then in force) under the Act, during
the 15 days prior to, and during the 90-day period commencing on,
the effective date of such Demand Registration (except as part of
such Demand Registration).
22. Registration Expenses. All of the costs and expenses
of each registration hereunder will be borne by Buyer, including
the fees and expenses of the counsel and accountants for Buyer,
and all other costs and expenses of Buyer incident to the
preparation, printing and filing under the Act of the
Registration Statement (and all amendments and supplements
thereto) and furnishing copies thereof and of the Prospectus
included therein, and the costs and expenses incurred by Buyer in
connection with the qualification of the Registrable Securities
under the state securities or blue sky laws of various
jurisdictions, provided, that Buyer shall not bear costs
11
<PAGE>
and expenses of Seller comprising underwriters commissions,
brokerage fees, transfer taxes, or the fees and expenses of any
counsel, accountants or other representatives retained by Seller.
23. Indemnification.
(a) Indemnification by Buyer. Buyer agrees to
indemnify, to the full extent permitted by law, Seller in
its capacity as a holder of Registrable Securities, its
officers and directors and each Person who controls Seller
(within the meaning of the Act and the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), against any
losses, claims, damages, liabilities and expenses (including
attorneys fees) caused by any untrue or alleged untrue
statement of a material fact contained in any Registration
Statement, Prospectus or preliminary Prospectus or any
omission or alleged omission to state therein a material
fact necessary to make the statements therein (In the case
of the Prospectus or any preliminary Prospectus, in light of
the circumstances under which they were made) not
misleading, except insofar as the same are caused by or
contained in any information furnished to Buyer by Seller in
its capacity as a holder of Registrable Securities expressly
for use in the preparation thereof or by Seller's failure to
deliver a copy of the Registration Statement or Prospectus
or any amendments or supplements thereto after Buyer has
furnished Seller with a sufficient number of copies thereof.
Buyer will also indemnify underwriters, selling brokers,
dealer managers and
12
<PAGE>
similar securities industry professionals participating in
the distribution, their officers and directors and each
Person who controls such Persons (with the meaning of the
Act) to the controls such Persons (within the meaning of the
Act) to the same extent as provided above with respect to
the indemnification of Seller; provided, however if pursuant
to an underwritten public offering of Registrable
Securities, Buyer and any underwriters enter into an
underwriting or purchase agreement relating to such offering
which contains provisions relating to indemnification
between Buyer and such underwriters, such provision shall be
deemed to govern indemnification as between Buyer and such
underwriters.
(b) Indemnification by Seller. Seller in its capacity
as a holder of Registrable Securities agrees to indemnify,
to the full extent permitted by law, Buyer, its directors
and officers and each Person who controls Buyer (within the
meaning of the Act and the Exchange Act) against any losses,
claims, damages, liabilities and expenses (including
attorneys' fees) resulting from any untrue or alleged untrue
statement of a material fact or any omission or alleged
omission to state a material fact necessary to make the
statements in the Registration Statement or Prospectus or
preliminary Prospectus (in the case of the Prospectus or any
preliminary Prospectus, in light of the circumstances under
which they were made) not misleading, to the extent, but
only to the extent, that such untrue statement or omission
was made in reliance upon information furnished by or on
behalf of Seller in its capacity as holder of Registrable
Securities specifically for use in the preparation thereof.
In no event shall the liability of Seller hereunder be
greater in amount that the aggregate dollar amount of the
proceeds received by Seller upon the sale of the Registrable
Securities giving rise to such indemnification obligation.
Buyer shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the
distribution, to the same extent as provided above with
respect to information with respect to such Persons so
furnished by such Persons specifically for use in the
preparation of any Prospectus or Registration Statement.
(c) Conduct of Indemnification Proceedings. Any
Person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim
with respect to which it seeks indemnification and (ii)
unless in such indemnified party's reasonable judgment a
conflict of interest may exist between such indemnified and
indemnifying parties with respect to such claim, permit such
indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party.
Whether or not such defense is assumed by the indemnifying
party, the indemnifying party will not be subject to any
liability for any settlement made without its consent (but
such consent will not be unreasonably withheld). No
indemnifying party will consent to entry of any judgment or
enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation. An
indemnifying party who is not entitled to, or elects not to,
assume the defense of a claim will not be obligated to pay
the fees and expenses of more than one counsel for all
parties indemnified by such indemnifying party with respect
to such claim, unless in the reasonable judgment of any
indemnified party a conflict of interest may exist between
such indemnified party and any other of such indemnified
parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and
expenses of such additional counsel or counsels.
(d) Contribution. If for any reasons the
indemnification provided for in the preceding clauses (a)
and (b) is unavailable to an indemnified party as
contemplated by the preceding clauses (a) and (b), then the
indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such loss,
claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits
received by the indemnified party and the indemnifying
party, but also the relative fault of the indemnified party
and indemnifying party, as well as any other relevant
equitable considerations.
24. Rule 144. Buyer agrees that at all times after it has
filed a registration statement pursuant to the requirements of
the Act relating to any securities of Buyer, it will use its best
efforts to file in a timely manner all reports required to be
filed by it pursuant to the Exchange Act and, at any time and
upon request of Seller, will furnish Seller and others with such
information as may be necessary to enable Seller to effect sales
of Registrable Securities without registration pursuant to Rule
144 under the Act. Notwithstanding the foregoing, Buyer may
deregister any class of its securities under Section 12 of the
Exchange Act or suspend its duty to file reports with respect to
any class of its securities pursuant to Section 15(d) of the
Exchange Act if it is then permitted to do so pursuant to the
Exchange Act and the rules and regulations thereunder.
13
<PAGE>
25. Participation in Underwritten Registrations. Seller
may not participate in any underwritten registration hereunder
unless Seller (a) agrees to sell its Registrable Securities on
the basis provided in any underwriting arrangements approved by
Buyer, and (b) completes and executes all questionnaires, powers
of attorney, underwriting agreements and other documents
customarily required under the terms of such underwriting
arrangements.
26. Call Option. Seller hereby grants to Buyer and its
assignee a transferable option (the "Call Option") to purchase
any of the Shares during the period beginning August 1, 1996 and
ending October 31, 1996 (the "Exercise Period") at an exercise
price of $3.44 per share (the "Exercise Price"). The Call Option
may be exercised by giving Seller written notice within the
Exercise Period of its intent to exercise the Call Option
("Exercise Notice") specifying a closing date (which shall be
within the Exercise Period) and the amount of Shares to which
such Call Option is being exercised, and the payment of the
Exercise Price with respect to which the Shares are being
exercised at such closing. Upon delivery of the Exercise Notice,
Buyer's obligations under Demand Registration provisions of this
Agreement will be suspended until expiration of the Exercise
Period, and if the Call Option is exercised, such obligations
will terminate. If the Call Option is exercised, Seller shall
deliver to Buyer or its assignee stock certificates representing
the Shares for which the Call Option is being exercised,
accompanied by stock powers duly endorsed in blank, and such
Shares shall be free and clear of all liens, claims and
encumbrances of any kind.
27. Price Guarantee.
(a) Buyer agrees that if Seller exercises Seller's
right to a Demand Registration pursuant to Section 18 and
sells all the Shares on or before June 24, 1997 (the
"Guarantee Date") in a Bona Fide Sale Transaction and does
not receive at least $1,160,000.00 of gross sales proceeds
for all such Shares (the "Floor Price"), Buyer shall pay to
Seller on the date which is ten (10) business days of the
last date on which all such Shares are sold an amount (the
"Buyer Adjustment") equal to the difference between (i) the
Floor Price and (ii) the actual gross sales price received
by Seller for all such Shares; provided, however, that
Buyer's liability under this Section 27 shall not exceed
$485,582.00. " Bona Fide Sales Transaction" means a sale by
Seller through a broker/dealer registered under the Exchange
Act at a price which is at the Current Market Price for
Buyer's Common Stock on the date and at the time of sale.
"Current Market Price" means the a price between the "bid"
and "asked" price of a share of Buyer's Common Stock on the
Nasdaq SmallCap Market at the time of sale. If Seller does
not sell all of the Shares as specified in this Section
27(a), Buyer shall have no obligation under this Section
27(a).
(b) Buyer agrees that if Seller sells any of the
Shares in any manner on or before the Guarantee Date and
Seller receives aggregate gross sales proceeds in excess of
$1,600,000.00 (the "Ceiling Price") for all or a portion of
the Shares actually sold by Seller on or before the
Guarantee Date, Seller will (i) pay to Buyer within ten (10)
business days of the date of the last sale in which the
Ceiling Price is received in one or
14
<PAGE>
more transactions an amount (the "Seller Adjustment") equal to
the difference between (A) the actual gross sales price received
by Seller for the Shares so sold minus (B) the Ceiling Price, and
(ii) if Seller still owns any of the Shares on the Guarantee
Date, transfer to Buyer the remaining Shares free and clear of
any liens, claims and encumbrances of any kind for no additional
consideration through the delivery of stock certificates
representing such remaining Shares and a stock power duly
endorsed to Buyer.
(c) If Seller does not sell any Shares prior to the
Guarantee Date, neither Buyer or Seller shall have any
obligations under this Section 27.
(d) Seller shall (i) notify Buyer in writing of any
sale of Shares specifying the number of shares sold and
enclosing evidence of the gross per share sales price within
five (5) business days after each such sale and (ii) on the
Guarantee Date, provide Buyer with a complete list of all
sales of Shares by Seller from the Closing to the Guarantee
Date and the aggregate gross sales price with respect to
each sale.
28. Adjustments. In the event that as a result of
reorganization, merger, consolidation, liquidation,
recapitalization, stock split, reverse stock split, combination
of shares or stock dividends payable with respect to Buyer's
Common Stock, the outstanding shares of Common Stock of Buyer are
at any time increased or decreased or changed into or exchanged
for a different number or kind of share or other security of
Buyer or of an other corporation, then appropriate adjustments in
the number and kind of such securities then subject to the Call
Option under Section 26 and the price guarantee specified in
Section 27 shall be made effective as of the date of such
occurrence so that the position of the Buyer and Seller will be
the same as it would have been had Seller owned immediately prior
to the occurrence of such events the Common Stock subject to such
Sections 26 and 27. Such adjustment shall be made successively
whenever any event listed above shall occur and Buyer will notify
Seller of each such adjustment. Any fraction of a share
resulting from any adjustment shall be eliminated and the
Exercise Price, Floor Price and Ceiling Price adjusted
accordingly.
29. Original Purchase Agreement. This Agreement completely
amends and restates the Original Purchase Agreement as amended by
the First Amendment and the Second Amendment.
15
<PAGE>
IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the date above written.
SA TELECOMMUNICATIONS, INC. ________________________________
Howard Maddera
By: _______________________________
Jack W. Matz Jr.
Chairman and Chief Executive Officer
Address: 1600 Promenade Center Address: 110 Brentwood
Suite 1510 Levelland, TX 79336
Richardson, TX. 75080 Social Security No.__________
The undersigned, in her individual capacity as the spouse of
Seller does hereby execute this Agreement below for the purposes
of (i) indicating her understanding of, and binding her to
perform in accordance with the provisions of this Agreement, (ii)
binding her community property interest, if any, in the property
which is the subject of this Agreement (the "Property") now or
hereafter owned by her spouse, and (iii) acknowledging that if
the Property owned by her spouse is community property, it is the
special community property of such spouse, subject to the
exclusive control and dominion of said spouse.
_____________________________
Fern Maddera
16
<PAGE>
EXHIBIT A
FORM OF ASSIGNMENT
For value received, the undersigned registered holder of the
attached Common Stock Purchase Warrant (the "Warrant") hereby
sells, assigns and transfers unto SA Telecommunications, Inc. the
right represented by such Warrant to purchase all 420,000 shares
of Common Stock of SA Telecommunications, Inc. to which such
Warrant relates, and appoints Jack W. Matz, Jr. Attorney to make
such transfer on the books of SA Telecommunications, Inc.
maintained for such purpose, with full power of substitution in
the premises.
Dated: June __, 1996
________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of
Warrant)
Address: 110 Brentwood
Levelland, TX 79336
<PAGE>
Exhibit 20.2
AMENDED AND RESTATED PURCHASE AGREEMENT
This Amended and Restated Purchase Agreement ("Agreement")
dated as of June 24, 1996 is entered into by and between SA
Telecommunications, Inc., a Delaware corporation (" Buyer") and
William L. Johnson ("Seller") effective as of June 14, 1996.
WHEREAS, Seller, Marianne Reed and Howard Maddera
(collectively, the ("USC Group"), Buyer and NTS Communications,
Inc. ("NTS") entered into that certain Stock Purchase Agreement
dated as of June 30, 1995, as amended (the "Stock Purchase
Agreement"), pursuant to which the USC Group and NTS sold to
Buyer all of the issued and outstanding capital stock of U.S.
Communications, Inc., a Texas corporation ("USC");
WHEREAS, the USC Group and Buyer entered into that certain
Note, Preferred Stock & Warrant Purchase Agreement dated as of
July 31, 1995, as amended through the date hereof, pursuant to
which Seller purchased: (1) a promissory note of Buyer in the
original principal amount of $1,100,000 (the "Purchase Note"),
(2) a promissory note of Buyer in the original principal amount
of $600,000 (the "Offset Note"), (3) 50,000 shares of Buyer's
Series B Cumulative Convertible Preferred Stock (the "Preferred
Shares"), and (4) common stock purchase warrants exercisable into
420,000 shares of Buyer's Common Stock (the "Warrants");
WHEREAS, pursuant to that certain Agreement dated as of
September 21, 1995 between the USC Group and Buyer, (1) the USC
Group waived their right to convert the Preferred Shares into
Common Stock of Buyer, and (2) Buyer made a prepayment of
principal of $440,000 plus aggregate accrued interest on the
Purchase Note, reducing the outstanding principal balance of the
Purchase Note to $660,000 on March 8, 1996;
WHEREAS, Buyer has certain offset rights against the Offset
Note pursuant to the Stock Purchase Agreement, not all of which
are known on the date hereof (the "Offset Rights");
WHEREAS, the USC Group and Buyer have entered into an
Agreement dated as of February 29, 1996, extending and modifying
the payment terms of the Offset Note and the Purchase Note (the
"Modification Agreement");
WHEREAS, Buyer and the USC Group entered into a Purchase
Agreement dated as of March 8, 1996 (the "Original Purchase
Agreement"), whereby, subject to the conditions stated therein,
Buyer agreed to purchase, and Seller agreed to sell, the
Purchase Note, the Offset Note, the Preferred Shares and the
Warrants for $1,110,600, and amended the Purchase Agreement on
April 12, 1996 (the "First Amendment");
WHEREAS, Buyer and the USC Group entered into a Second
Amendment to Purchase Agreement dated as of April 18, 1996 (the
"Second Amendment"), which extended the Closing and Anticipated
Closing Date thereunder and adjusted the payment schedule;
WHEREAS, Seller desires to completely amend and restate the
Original Purchase
1
<PAGE>
Agreement as amended by the First Amendment and the Second
Amendment and to sell and transfer to Buyer, and Buyer desires to
purchase from Seller, the Purchase Note, the Offset Note, the
Preferred Shares and the Warrants (collectively referred to as
the "Instruments") subject to the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Purchase Price. On the terms and subject to the
conditions herein expressed and based on the representations,
warranties, covenants and agreements contained herein, at the
Closing (as hereinafter defined), Seller agrees to sell, transfer
and assign the Instruments to Buyer and Buyer agrees to purchase
the Instruments from Seller, for an aggregate consideration of
$1,283,400.00 (the "Purchase Price"). Buyer has paid to Seller
$123,400.00 as a principal payment on the Offset Note (the
"Deposit") under the Modification Agreement.
(a) At the Closing, the amount of the Deposit shall be
credited against the Purchase Price of the Instruments, and
the remaining $1,160,000.00 of the Purchase Price shall be
payable by the issuance to Seller in a private placement
pursuant to Section 4(2) of the Securities Act of 1933, as
amended (the "Act") of 337,209 shares of Buyer's Common
Stock, $.0001 par value (the "Shares").
(b) If the Closing does not occur on or prior to the
Anticipated Closing Date (as defined in Section 2 hereof),
(a) the second principal payment of $176,500 and the accrued
but unpaid interest on the unpaid principal amount of such
Offset Note will be due on the Anticipated Closing Date,
subject to the Offset Rights, (b) the final payment of
principal and accrued interest on the Offset Note shall
continue to be due on July 30, 1996; (c) the remaining
scheduled due dates for payment of accrued but unpaid
interest on the unpaid principal amount of the Purchase Note
shall be the Anticipated Closing Date, July 31, 1996 and
October 31, 1996 (the "Maturity Date"); (d) the final
payment of principal and accrued interest on the Purchase
Note shall continue to be the Maturity Date; and (e) such
extension and modification of the terms of the Purchase Note
and the Offset Note are hereby effected without any further
action by the parties hereto.
2. Closing. The Closing under this Agreement shall occur
at the offices of Seller at 2:00 p.m. on June 24, 1996 or such
later date on or prior to July 1, 1996 (the "Anticipated Closing
Date") as shall be required for Buyer to obtain the consent of
Norwest Bank Minnesota, National Association to the transactions
contemplated hereby (the "Bank Consent"); provided, however, in
no event shall the Anticipated Closing Date be later than July 1,
1996 even if the Bank Consent is not obtained. The time and date
on which the Closing hereunder occurs is herein called the
"Closing". At the Closing, Seller will deliver to Buyer the
documents referred to in Section 9 hereof against delivery by
Buyer to Seller of the Shares issued in the name of Seller and
the documents referred to in Section 8 hereof.
2
<PAGE>
3. Buyer's Representations. Buyer represents and warrants
to Seller (which representations and warranties shall survive the
Closing regardless of what investigations, if any, Seller shall
have made thereof prior thereto) as follows:
(a) Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware;
(b) This Agreement has been duly authorized, executed
and delivered by Buyer and is a valid and binding agreement
of Buyer enforceable against Buyer in accordance with its
terms, subject to the Bank Consent; and
(c) Upon delivery of the Shares to Seller at Closing,
the Shares will be duly authorized, validly issued and non-
assessable.
4. Seller's Representations. Seller represents and
warrants to Buyer (which representations and warranties shall
survive the Closing regardless of what investigations, if any,
Buyer shall have made thereof prior thereto) that:
(a) This Agreement has been executed and delivered by
Seller and is a valid and binding agreement of Seller
enforceable against Seller in accordance with its terms;
(b) Each of the Instruments is owned of record and
beneficially by Seller, free and clear of all liens, claims
and encumbrances of any kind;
(c) Seller possesses full authority and legal right to
sell, transfer and assign the entire legal and beneficial
ownership of each of the Instruments to Buyer, free and
clear of all liens, claims and encumbrances of any kind; and
(d) Seller has not transferred any interest in any of
the Instruments to any person or entity.
5. Representations With Respect to Shares. Seller
understands that the Shares are not registered under the Act, and
hereby makes the following representations to Buyer, with the
understanding that Buyer is relying on such representations in
issuing the Shares to Seller pursuant to an exemption from
registration under the Act:
(a) Seller is familiar with the business and financial
condition, properties, operations and prospects of Buyer,
and, at a reasonable time prior to the execution of this
Agreement, has been afforded the opportunity to ask
questions of and receive satisfactory answers from Buyer and
its officers and directors, or other persons acting on
Buyer's behalf, concerning the business and financial
condition, properties, operations and prospects of Buyer and
concerning the terms and conditions of the offer of the
Shares and has asked such questions as Seller desires to ask
and all such
3
<PAGE>
questions have been answered to the full satisfaction of
Seller. Seller has received and reviewed copies of Buyer's
(i) Annual Report on Form 10-KSB for the year ended December
31, 1995, (ii) Quarterly Reports on Form 10-QSB for the
quarter ended March 31, 1996, (iii) Current Reports on Form
8-K dated March 12, 1996 and May 23, 1996, (iv) Prospectus
dated January 3, 1996 pursuant to the Form S-3 Registration
Statement filed with the Securities and Exchange Commission
(the "Commission"); and (v) Buyer's Proxy Statement for the
Annual Meeting of Stockholders held on May 31, 1996. All
documents, records and books pertaining to a proposed
investment in the Shares which Seller has requested have
been made available to Seller.
(b) No representations or warranties have been made to
Seller by Buyer as to the tax consequences of an investment
in the Shares, or as to profits, losses or cash flow which
may be received or sustained as a result of an investment in
the Shares.
(c) Seller has reviewed with his own tax advisors the
federal, state, and local tax consequences of its investment
in the Shares and the transactions contemplated by the
Agreement, and is relying solely on such advisors in making
its investment and not on any statements or representations
of Buyer or any of its agents.
(d) Seller is not purchasing the Shares based on any
representation, oral or written, by Buyer or any person with
respect to the future value of, or income from, the Shares,
but rather upon an independent examination and judgment as
to the prospects of Buyer.
(e) Seller understands and acknowledges that Buyer has
significant outstanding indebtedness and a significant
amount of Preferred Stock issued to other investors which
such Preferred Stock has rights and preferences superior to
that of Buyer's Common Stock.
(f) Seller has such knowledge and experience in
financial and business matters that he is capable of
evaluating the merits and risks of the acquisition of the
Shares.
(g) Seller is acquiring the Shares solely for Seller's
own account, for investment purposes, and not with a view
to, or for resale in connection with, any distribution of
the Shares. Seller understands that: (i) the offer and sale
of the Shares have not been registered under the Act or any
state securities laws by reason of specific exemptions under
the provisions thereof which depend in part upon the
investment intent of Seller and/or the other representations
made by Seller in this Agreement, (ii) Buyer is relying upon
the representations, covenants and agreements contained in
this Agreement (and any supplemental information) for the
purpose of determining whether this transaction meets the
requirements for such exemptions; (iii) the Shares are
"restricted securities" under applicable federal securities
laws and that the Act and the rules of the Commission
provide in substance that Seller may dispose of the Shares
4
<PAGE>
only pursuant to an effective registration statement under
the Act or an exemption therefrom; (iv) Buyer has no
obligation to register the Shares, or to take action so as
to permit sales pursuant to the Act (including Rule 144
thereunder) except as expressly provided in this Agreement;
and (v) Seller may not at any time demand the purchase by
Buyer or any shareholder of Buyer of the Shares.
(h) Seller agrees (i) that Seller will not sell,
assign, pledge, give, transfer or otherwise dispose of the
Shares or any interest therein, or make any offer or attempt
to do any of the foregoing, except pursuant to a
registration of the Shares under the Act and all applicable
state securities laws or in a transaction which, in the
opinion of counsel of Seller (the substance of such opinion
and the identity of such counsel being satisfactory to
Buyer), is exempt from the registration provisions of the
Act and all applicable state securities laws; (ii) that
Buyer and any transfer agent for the Shares shall not be
required to give effect to any purported transfer of any of
the Shares except upon compliance with the foregoing
restrictions; and (iii) that a legend in substantially the
following form will be placed on the certificates
representing the Shares:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR PURSUANT
TO AN EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL
OF HOLDER SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED.
(i) Seller has not offered or sold any portion of the
Shares and has no present intention of dividing the Shares
with others or of reselling or otherwise disposing of any
portion of such Shares either currently or after the passage
of a fixed or determinable period of time or upon the
occurrence or nonoccurrence of any predetermined event or
circumstance.
(j) Seller is able to bear the economic risk of losing
his entire investment in the Shares.
(k) Seller is an "Accredited Investor" as such term is
defined in Rule 501 promulgated under the Act.
6. Buyer's Covenants. Buyer covenants and agrees that
between the date hereof and the Closing: (a) without the prior
written consent of Seller, Buyer shall not take any action that
would cause or tend to cause the conditions upon the obligations
of the parties hereto to effect the transactions contemplated
hereby not to be fulfilled; including, without limitation,
taking, or causing to be taken, or permitting or suffering to be
taken or to exist any action, condition or thing that would cause
the representations and warranties made by Buyer herein not to be
true, correct and accurate as of the Closing; and (b) Buyer
shall use commercially reasonable efforts to obtain the Bank
Consent and the Financing.
5
<PAGE>
7. Seller's Covenants. Seller covenants and agrees that,
between the date hereof and the Closing, without the prior
written consent of Buyer, Seller shall not take any action which
would cause or tend to cause the conditions upon the obligations
of the parties hereto to effect the transactions contemplated
hereby not to be fulfilled; including, without limitation,
taking, or causing to be taken, or permitting or suffering to be
taken or to exist any action, condition or thing that would cause
the representations and warranties made by Seller herein not to
be true, correct and accurate as of the Closing.
8. Conditions to Obligations of Seller. The obligations
of Seller under this Agreement are subject to the satisfaction at
or prior to the Closing of each of the following conditions, but
compliance with such conditions may be waived by Seller: (a) the
representations and warranties of Buyer contained in this
Agreement shall be true and correct at and as of the Closing with
the same effect as though such representations and warranties
were made at and as of the Closing, (b) Buyer shall have obtained
the Bank Consent, and (c) Buyer shall have executed the release
in substantially the form of Exhibit B hereto.
9. Conditions to Obligations of Buyer. The obligations of
Buyer under this Agreement are subject to the satisfaction at or
prior to the Closing of each of the following conditions, but
compliance with any such conditions may be waived by Buyer: (a)
Buyer shall have obtained the Bank Consent, (b) Seller shall have
delivered to Buyer the original Purchase Note and Offset Note,
stock certificates representing the Preferred Shares duly
endorsed in blank, or accompanied by stock powers duly endorsed
in blank, and the Warrants accompanied by the Assignment in the
form of Exhibit A hereto; (d) Seller shall have executed and
delivered the release in substantially the form of Exhibit C
hereto; and (e) Seller shall have executed and delivered a voting
agreement in substantially the form of Exhibit D hereto.
10. Notices. Any notice, request, instruction or other
document to be given under this Agreement after the date hereof
by any party hereto to any other party shall be in writing and
shall be delivered personally or sent by registered or certified
mail, postage prepaid, or a national overnight delivery service
to the addresses shown on the signature page of this Agreement,
or to such other address or person as any party may designate by
written notice to the others.
11. Expenses. Each of the parties hereto shall bear its
expenses separately incurred in connection with this Agreement
and with the performance of its obligations hereunder.
12. Indemnification. In the event the transactions
contemplated hereby are consummated, Seller agrees to indemnify
Buyer and to hold Buyer harmless from and against all damages,
losses and out-of-pocket expenses caused by or arising out of (a)
any breach of warranty or inaccurate or erroneous representation
of Seller contained in this Agreement or in any Exhibit or
document delivered pursuant hereto, (ii) any claim made against
Buyer in respect of the Instruments.
13. Entire Agreement. This Agreement, the documents
referred to herein and the exhibits hereto set forth all the
covenants, promises, agreements, conditions and understandings
6
<PAGE>
among the parties hereto, and there are no other covenants,
promises, agreements, conditions or understandings, whether oral
or written, among the parties hereto.
14. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas
without regard to conflicts of laws. This Agreement is
performable in Dallas County, Texas and the parties hereto agree
that the exclusive venue for any actions or claims related to
this Agreement shall be Dallas County, Texas.
15. Attorney's Fees. In the event attorneys' fees or other
costs are incurred to secure performance of any of the
obligations herein provided for, or to establish damages for the
breach thereof, or to obtain any other appropriate relief,
whether by way of prosecution or defense, the prevailing party
shall be entitled to recover reasonable attorney's fees and costs
incurred therein.
16. Finder's Fees. Each party to this Agreement represents
to the other party that it has not incurred and will not incur
any liability for brokerage fees or agents' commissions in
connection with this Agreement and the transactions contemplated
hereby.
17. Counterparts; Binding Effect. This Agreement may be
executed by the parties hereto in separate counterparts, each of
which when so executed and delivered shall be an original, but
all such counterparts shall together constitute one and the same
instrument, and all signatures need not appear on any one
counterpart. The terms of this Agreement shall be binding upon,
and inure to the benefit of, the parties and their respective
successors and permitted assigns whether so expressed or not.
18. Demand Registration Rights.
(a) Right to Demand. Subject to Sections 18(b) and
18(c) below, (i) Seller as holder of the Registrable
Securities, may make a written request ("Demand Notice") for
registration under and in accordance with the provisions of
the Act of all or part of the Registrable Securities (a
"Demand Registration"). "Registrable Securities" means the
Shares and the 66,660 shares of Common Stock owned by Seller
on the date of this Agreement, but only for so long as any
such share of Common Stock is held by Seller and continues
to be a "Restricted Security". A share of Common Stock
shall be deemed to be a Restricted Security until such time
as such share (i) has been effectively registered under the
Act and disposed of in accordance with the registration
statement covering it, or (ii) has been sold pursuant to
Rule 144 (or any similar provision then in force) under the
Act. All requests made pursuant to this Section 18(a) will
specify the aggregate number of the Registrable Securities
and other shares of Common Stock to be registered and will
also specify the intended methods of disposition thereof.
(b) Restrictions on Demand Rights.
(i) Buyer shall not be obligated to effect a
Demand Registration unless
7
<PAGE>
such Demand Registration includes all Registrable
Securities of Seller.
(ii) The rights to Demand Registration under this
Section 18 shall only be exercised by Seller between
August 31, 1996 and August 31, 1997.
(iii) Seller hereby agrees in each ninety (90)
day period following the effectiveness of the
Registration Statement for any Demand Registration,
Seller may only sell up to a number of shares equal to
one-third (1/3) of the original number of shares of
Registrable Securities (as such original number may be
hereinafter adjusted for purposes of stock splits,
reverse stock splits, etc.)
(c) Number of Demand Registrations. Seller shall be
entitled to one Demand Registration, the expenses of which
shall be borne by Buyer except as otherwise stated herein.
A Demand Registration shall not be counted as a Demand
Registration hereunder until such Demand Registration has
been declared effective and maintained continuously
effective for a period of at least one year or such shorter
period ending when all Registrable Securities included
therein have been sold in accordance with any such Demand
Registration; provided, however, if any Demand Registration
shall be withdrawn prior to effectiveness thereof at the
request of Seller, such Demand Registration shall be counted
hereunder unless Seller shall agree to pay the expenses
incurred by Buyer in connection therewith.
19. Registration Procedures. With respect to any Demand
Registration, Buyer will as expeditiously as practicable:
(a) prepare and file with the Commission a
Registration Statement which includes the Registrable
Securities and use its best efforts to cause such
Registration Statement to become and remain effective as
provided herein; provided that before filing any amendments
or supplements to a Registration Statement or Prospectus,
including documents incorporated by reference after the
initial filing of the Registration Statement, Buyer will
furnish to the Seller and the underwriters, if any, copies
of all such documents proposed to be filed at least one day
prior thereto, and Buyer will not file an amendment to a
Registration Statement or Prospectus or any supplement
thereto (including such documents incorporated by reference)
to which the underwriters, if any, shall reasonably object.
For purposes of this Agreement, "Registration Statement"
means a registration statement filed with the Commission
under the Act which includes the Registrable Securities
being registered in a Demand Registration, and "Prospectus"
means the prospectus which is part of a Registration
Statement.
(b) prepare and file with the Commission such
amendments and post-effective amendments to the Registration
Statement as may be necessary to keep the Registration
Statement effective for any Demand Registration for a period
of not less than one year, or such shorter period which will
terminate when all Registrable Securities covered by such
Registration Statement have been sold or withdrawn (but not
prior to the expiration
8
<PAGE>
of the 90-day period referred to in Section 4(3) of the Act
and Rule 174 thereunder, if applicable); cause the
Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to
Ruled 424 under the Act; and comply with the provisions of
the Act applicable to it with respect to the disposition of
all securities covered by such Registration Statement during
the applicable period in accordance with the intended
methods of disposition by the sellers thereof set forth in
such Registration Statement or supplement to the Prospectus;
Buyer shall be deemed to have used its best efforts to keep
a Registration Statement effective during the applicable
period if it complies with all rules and regulations under
the Act relating to it and the noncompliance with which
would result in Seller not being able to sell the
Registrable Securities covered by such Registration
Statement during that period;
(c) furnish to Seller and the underwriter or
underwriters, if any, without charge, at least one signed
copy of the Registration Statement and any post-effective
amendment thereto, upon request, and such number of
conformed copies thereof and such number of copies of the
Prospectus (including each preliminary Prospectus) and any
amendments or supplements thereto, and any documents
incorporated by reference therein, as Seller or underwriter
may reasonably request in order to facilitate the
disposition of the Registrable Securities being sold by
Seller (it being understood that Buyer consents to the use
of the Prospectus and any amendment or supplement thereto by
Seller and the underwriter or underwriters, if any, in
connection with the offering and sale of the Registrable
Securities covered by the Prospectus or any amendment or
supplement thereto);
(d) notify Seller at any time when a Prospectus
relating to Registrable Securities of Seller included in a
Registration Statement is required to be delivered under the
Act, when Buyer becomes aware of the happening of any event
as a result of which the Prospectus included in such
Registration Statement (as then in effect) contains any
untrue statement of a material fact or omits to state a
material fact necessary to make the statements herein (in
the case of the Prospectus or any preliminary Prospectus, in
light of the circumstances under which they were made) not
misleading and, as promptly as practicable thereafter,
prepare and file with the Commission and furnish to Seller a
supplement or amendment to such Prospectus so that, as
thereafter delivered to the purchasers of such Registrable
Securities, such Prospectus will not contain any untrue
statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading;
(e) make reasonably available for inspection by
Seller, any underwriter participating in any disposition
pursuant to the Registration Statement, and any attorney,
accountant or other agent retained by Seller or underwriter
(collectively, the "Inspectors"), all pertinent financial
and other records, pertinent corporate documents and
properties of Buyer (collectively, the "Records") as shall
be reasonably necessary to enable them to exercise their due
diligence responsibility, and cause Buyer's officers,
directors and
9
<PAGE>
employees to supply all information reasonably requested by
any such Inspector in connection with such Registration
Statement. Records and other information which Buyer
determines, in good faith, to be confidential and which it
notifies the Inspectors are confidential shall not be
disclosed by the Inspectors unless (i) the disclosure of
such Records in the opinion of counsel reasonably acceptable
to Buyer is necessary to avoid or correct a misstatement or
omission in the Registration Statement or (ii) the release
of such records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction. Seller agrees
that it will, upon leaning that disclosure of such Records
is sought in a court of competent jurisdiction, give notice
to Buyer and allow Buyer, at Buyer's expense, to undertake
appropriate action to prevent disclosure of the Records
deemed confidential;
(f) use its best efforts to cause all Registrable
Securities included in such Registration Statement to be
listed, by the date of the first sale of Registrable
Securities pursuant to such Registration Statement, on each
securities exchange on which Buyer's securities of the same
class are then listed or proposed to be listed, if any;
(g) on or prior to the date on which the Registration
Statement is declared effective, use its best efforts to
register or qualify, and cooperate with Seller, the
underwriter or underwriters, if any, and their counsel, in
connection with the registration or qualification of, the
Registrable Securities covered by the Registration Statement
for offer and sale under the securities or blue sky laws of
each state and other jurisdiction of the United States as
Seller or underwriter reasonably requests in writing, to use
its best efforts to keep each such registration or
qualification effective, including through new filings, or
amendments or renewals, during the period such Registration
Statement is required to be kept effective and to do any and
all other acts or things necessary or advisable to enable
the disposition in all such jurisdictions of the Registrable
Securities covered by the Registration Statement;
provided that Buyer will not be required to (i) qualify
generally to do business in any jurisdiction where it would
not otherwise be required to qualify but for this Section
20(g), (ii) consent to general service of process in any
such jurisdiction or (iii) subject itself to general
taxation in any such jurisdiction;
(h) cooperate with Seller and the managing underwriter
or underwriters, if any, to facilitate the timely
preparation and delivery of certificates (not bearing any
restrictive legends) representing securities to be sold
under the Registration Statement, and enable such securities
to be in such denominations and registered in such names as
the managing underwriter or underwriters, if any, or Seller
may request; and
(i) use its best efforts to cause the Registrable
Securities covered by the Registration Statement to be
registered with or approved by such other governmental
agencies or authorities within the United States as may be
necessary to enable Seller or the underwriter or
underwriters, if any, to consummate the disposition of such
securities.
10
<PAGE>
20. Cooperation by Seller.
(a) Seller will furnish to Buyer in writing such
information and affidavits as Buyer may reasonably require
in connection with any registration, qualification or
compliance with respect to such Registrable Securities.
(b) Seller, upon receipt of any notice from Buyer of
the happening of any event of the kind described in Section
19(d), will forthwith discontinue disposition of the
Registrable Securities until such Investor's receipt of the
copies of the supplemented or amended Prospectus
contemplated by Section 19(d) until it is advised in writing
(the "Advice") by Buyer that the use of the Prospectus may
be resumed, and has received copies of any additional or
supplemental filings which are incorporated by reference in
the Prospectus, and, if so directed by Buyer, Seller will,
or will request the managing underwriter or underwriters, if
any, to, deliver to Buyer all copies, other than permanent
file copies then in Seller's possession, of the Prospectus
covering such Registrable Securities current at the time of
receipt of such notice. In the event Buyer shall give any
such notice, the time periods mentioned in Section 19(d)
shall be extended by the number of days during the period
from and including the date of the giving of such notice to
and including the date when Seller shall have received the
copies of the supplemented or amended Prospectus
contemplated by Section 19(d) hereof or the Advice.
(d) At the end of any period during which Buyer is
obligated to keep any Registration Statement current and
effective as provided by Section 19 hereof (and any
extensions thereof required by subsection (c) of this
Section 20), Seller shall discontinue sales of securities
pursuant to such Registration Statement upon receipt of
notice from Buyer of its intention to remove from
registration the securities covered by such Registration
Statement which remain unsold, and Seller shall notify Buyer
of the number of securities registered which remain unsold
promptly after receipt of such notice from Buyer.
21. Holdback Agreements. Seller, if requested by the
managing underwriter or underwriters for any underwritten Demand
Registration agrees not to effect any public sale or distribution
of Registrable Securities, including a sale pursuant to Rule 144
(or any similar provision then in force) under the Act, during
the 15 days prior to, and during the 90-day period commencing on,
the effective date of such Demand Registration (except as part of
such Demand Registration).
22. Registration Expenses. All of the costs and expenses
of each registration hereunder will be borne by Buyer, including
the fees and expenses of the counsel and accountants for Buyer,
and all other costs and expenses of Buyer incident to the
preparation, printing and filing under the Act of the
Registration Statement (and all amendments and supplements
thereto) and furnishing copies thereof and of the Prospectus
included therein, and the costs and expenses incurred by Buyer in
connection with the qualification of the Registrable Securities
under the state securities or blue sky laws of various
jurisdictions, provided, that Buyer shall not bear costs
11
<PAGE>
and expenses of Seller comprising underwriters commissions,
brokerage fees, transfer taxes, or the fees and expenses of any
counsel, accountants or other representatives retained by Seller.
23. Indemnification.
(a) Indemnification by Buyer. Buyer agrees to
indemnify, to the full extent permitted by law, Seller in
its capacity as a holder of Registrable Securities, its
officers and directors and each Person who controls Seller
(within the meaning of the Act and the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), against any
losses, claims, damages, liabilities and expenses (including
attorneys fees) caused by any untrue or alleged untrue
statement of a material fact contained in any Registration
Statement, Prospectus or preliminary Prospectus or any
omission or alleged omission to state therein a material
fact necessary to make the statements therein (In the case
of the Prospectus or any preliminary Prospectus, in light of
the circumstances under which they were made) not
misleading, except insofar as the same are caused by or
contained in any information furnished to Buyer by Seller in
its capacity as a holder of Registrable Securities expressly
for use in the preparation thereof or by Seller's failure to
deliver a copy of the Registration Statement or Prospectus
or any amendments or supplements thereto after Buyer has
furnished Seller with a sufficient number of copies thereof.
Buyer will also indemnify underwriters, selling brokers,
dealer managers and
12
<PAGE>
similar securities industry professionals participating in
the distribution, their officers and directors and each
Person who controls such Persons (with the meaning of the
Act) to the controls such Persons (within the meaning of the
Act) to the same extent as provided above with respect to
the indemnification of Seller; provided, however if pursuant
to an underwritten public offering of Registrable
Securities, Buyer and any underwriters enter into an
underwriting or purchase agreement relating to such offering
which contains provisions relating to indemnification
between Buyer and such underwriters, such provision shall be
deemed to govern indemnification as between Buyer and such
underwriters.
(b) Indemnification by Seller. Seller in its capacity
as a holder of Registrable Securities agrees to indemnify,
to the full extent permitted by law, Buyer, its directors
and officers and each Person who controls Buyer (within the
meaning of the Act and the Exchange Act) against any losses,
claims, damages, liabilities and expenses (including
attorneys' fees) resulting from any untrue or alleged untrue
statement of a material fact or any omission or alleged
omission to state a material fact necessary to make the
statements in the Registration Statement or Prospectus or
preliminary Prospectus (in the case of the Prospectus or any
preliminary Prospectus, in light of the circumstances under
which they were made) not misleading, to the extent, but
only to the extent, that such untrue statement or omission
was made in reliance upon information furnished by or on
behalf of Seller in its capacity as holder of Registrable
Securities specifically for use in the preparation thereof.
In no event shall the liability of Seller hereunder be
greater in amount that the aggregate dollar amount of the
proceeds received by Seller upon the sale of the Registrable
Securities giving rise to such indemnification obligation.
Buyer shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the
distribution, to the same extent as provided above with
respect to information with respect to such Persons so
furnished by such Persons specifically for use in the
preparation of any Prospectus or Registration Statement.
(c) Conduct of Indemnification Proceedings. Any
Person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim
with respect to which it seeks indemnification and (ii)
unless in such indemnified party's reasonable judgment a
conflict of interest may exist between such indemnified and
indemnifying parties with respect to such claim, permit such
indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party.
Whether or not such defense is assumed by the indemnifying
party, the indemnifying party will not be subject to any
liability for any settlement made without its consent (but
such consent will not be unreasonably withheld). No
indemnifying party will consent to entry of any judgment or
enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation. An
indemnifying party who is not entitled to, or elects not to,
assume the defense of a claim will not be obligated to pay
the fees and expenses of more than one counsel for all
parties indemnified by such indemnifying party with respect
to such claim, unless in the reasonable judgment of any
indemnified party a conflict of interest may exist between
such indemnified party and any other of such indemnified
parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and
expenses of such additional counsel or counsels.
(d) Contribution. If for any reasons the
indemnification provided for in the preceding clauses (a)
and (b) is unavailable to an indemnified party as
contemplated by the preceding clauses (a) and (b), then the
indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such loss,
claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits
received by the indemnified party and the indemnifying
party, but also the relative fault of the indemnified party
and indemnifying party, as well as any other relevant
equitable considerations.
24. Rule 144. Buyer agrees that at all times after it has
filed a registration statement pursuant to the requirements of
the Act relating to any securities of Buyer, it will use its best
efforts to file in a timely manner all reports required to be
filed by it pursuant to the Exchange Act and, at any time and
upon request of Seller, will furnish Seller and others with such
information as may be necessary to enable Seller to effect sales
of Registrable Securities without registration pursuant to Rule
144 under the Act. Notwithstanding the foregoing, Buyer may
deregister any class of its securities under Section 12 of the
Exchange Act or suspend its duty to file reports with respect to
any class of its securities pursuant to Section 15(d) of the
Exchange Act if it is then permitted to do so pursuant to the
Exchange Act and the rules and regulations thereunder.
13
<PAGE>
25. Participation in Underwritten Registrations. Seller
may not participate in any underwritten registration hereunder
unless Seller (a) agrees to sell its Registrable Securities on
the basis provided in any underwriting arrangements approved by
Buyer, and (b) completes and executes all questionnaires, powers
of attorney, underwriting agreements and other documents
customarily required under the terms of such underwriting
arrangements.
26. Call Option. Seller hereby grants to Buyer and its
assignee a transferable option (the "Call Option") to purchase
any of the Shares during the period beginning August 1, 1996 and
ending October 31, 1996 (the "Exercise Period") at an exercise
price of $3.44 per share (the "Exercise Price"). The Call Option
may be exercised by giving Seller written notice within the
Exercise Period of its intent to exercise the Call Option
("Exercise Notice") specifying a closing date (which shall be
within the Exercise Period) and the amount of Shares to which
such Call Option is being exercised, and the payment of the
Exercise Price with respect to which the Shares are being
exercised at such closing. Upon delivery of the Exercise Notice,
Buyer's obligations under Demand Registration provisions of this
Agreement will be suspended until expiration of the Exercise
Period, and if the Call Option is exercised, such obligations
will terminate. If the Call Option is exercised, Seller shall
deliver to Buyer or its assignee stock certificates representing
the Shares for which the Call Option is being exercised,
accompanied by stock powers duly endorsed in blank, and such
Shares shall be free and clear of all liens, claims and
encumbrances of any kind.
27. Price Guarantee.
(a) Buyer agrees that if Seller exercises Seller's
right to a Demand Registration pursuant to Section 18 and
sells all the Shares on or before June 24, 1997 (the
"Guarantee Date") in a Bona Fide Sale Transaction and does
not receive at least $1,160,000.00 of gross sales proceeds
for all such Shares (the "Floor Price"), Buyer shall pay to
Seller on the date which is ten (10) business days of the
last date on which all such Shares are sold an amount (the
"Buyer Adjustment") equal to the difference between (i) the
Floor Price and (ii) the actual gross sales price received
by Seller for all such Shares; provided, however, that
Buyer's liability under this Section 27 shall not exceed
$485,582.00. " Bona Fide Sales Transaction" means a sale by
Seller through a broker/dealer registered under the Exchange
Act at a price which is at the Current Market Price for
Buyer's Common Stock on the date and at the time of sale.
"Current Market Price" means the a price between the "bid"
and "asked" price of a share of Buyer's Common Stock on the
Nasdaq SmallCap Market at the time of sale. If Seller does
not sell all of the Shares as specified in this Section
27(a), Buyer shall have no obligation under this Section
27(a).
(b) Buyer agrees that if Seller sells any of the
Shares in any manner on or before the Guarantee Date and
Seller receives aggregate gross sales proceeds in excess of
$1,600,000.00 (the "Ceiling Price") for all or a portion of
the Shares actually sold by Seller on or before the
Guarantee Date, Seller will (i) pay to Buyer within ten (10)
business days of the date of the last sale in which the
Ceiling Price is received in one or
14
<PAGE>
more transactions an amount (the "Seller Adjustment") equal
to the difference between (A) the actual gross sales price
received by Seller for the Shares so sold minus (B) the
Ceiling Price, and (ii) if Seller still owns any of the
Shares on the Guarantee Date, transfer to Buyer the
remaining Shares free and clear of any liens, claims and
encumbrances of any kind for no additional consideration
through the delivery of stock certificates representing such
remaining Shares and a stock power duly endorsed to Buyer.
(c) If Seller does not sell any Shares prior to the
Guarantee Date, neither Buyer or Seller shall have any
obligations under this Section 27.
(d) Seller shall (i) notify Buyer in writing of any
sale of Shares specifying the number of shares sold and
enclosing evidence of the gross per share sales price within
five (5) business days after each such sale and (ii) on the
Guarantee Date, provide Buyer with a complete list of all
sales of Shares by Seller from the Closing to the Guarantee
Date and the aggregate gross sales price with respect to
each sale.
28. Adjustments. In the event that as a result of
reorganization, merger, consolidation, liquidation,
recapitalization, stock split, reverse stock split, combination
of shares or stock dividends payable with respect to Buyer's
Common Stock, the outstanding shares of Common Stock of Buyer are
at any time increased or decreased or changed into or exchanged
for a different number or kind of share or other security of
Buyer or of an other corporation, then appropriate adjustments in
the number and kind of such securities then subject to the Call
Option under Section 26 and the price guarantee specified in
Section 27 shall be made effective as of the date of such
occurrence so that the position of the Buyer and Seller will be
the same as it would have been had Seller owned immediately prior
to the occurrence of such events the Common Stock subject to such
Sections 26 and 27. Such adjustment shall be made successively
whenever any event listed above shall occur and Buyer will notify
Seller of each such adjustment. Any fraction of a share
resulting from any adjustment shall be eliminated and the
Exercise Price, Floor Price and Ceiling Price adjusted
accordingly.
29. Original Purchase Agreement. This Agreement completely
amends and restates the Original Purchase Agreement as amended by
the First Amendment and the Second Amendment.
15
<PAGE>
IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the date above written.
SA TELECOMMUNICATIONS, INC.
William L. Johnson
By: _______________________________
Jack W. Matz Jr.
Chairman and Chief Executive Officer
Address: 1600 Promenade Center Address: _____________________
Suite 1510 ______________________________
Richardson, TX. 75080 Social Security No.:__________
The undersigned, in her individual capacity as the spouse of
Seller does hereby execute this Agreement below for the purposes
of (i) indicating her understanding of, and binding her to
perform in accordance with the provisions of this Agreement, (ii)
binding her community property interest, if any, in the property
which is the subject of this Agreement (the "Property") now or
hereafter owned by her spouse, and (iii) acknowledging that if
the Property owned by her spouse is community property, it is the
special community property of such spouse, subject to the
exclusive control and dominion of said spouse.
_____________________________
Shellie Johnson
16
<PAGE>
EXHIBIT A
FORM OF ASSIGNMENT
For value received, the undersigned registered holder of the
attached Common Stock Purchase Warrant (the "Warrant") hereby
sells, assigns and transfers unto SA Telecommunications, Inc. the
right represented by such Warrant to purchase all 420,000 shares
of Common Stock of SA Telecommunications, Inc. to which such
Warrant relates, and appoints Jack W. Matz, Jr. Attorney to make
such transfer on the books of SA Telecommunications, Inc.
maintained for such purpose, with full power of substitution in
the premises.
Dated: June __, 1996
(Signature must conform in all
respects to name of holder as
specified on the face of
Warrant)
Address: ____________________
_____________________________
<PAGE>
Exhibit 20.3
AMENDED AND RESTATED PURCHASE AGREEMENT
This Amended and Restated Purchase Agreement ("Agreement")
dated as of June 24, 1996 is entered into by and between SA
Telecommunications, Inc., a Delaware corporation (" Buyer") and
Marianne Reed ("Seller") effective as of June 14, 1996.
WHEREAS, Seller, William L. Johnson and Howard Maddera
(collectively, the ("USC Group"), Buyer and NTS Communications,
Inc. ("NTS") entered into that certain Stock Purchase Agreement
dated as of June 30, 1995, as amended (the "Stock Purchase
Agreement"), pursuant to which the USC Group and NTS sold to
Buyer all of the issued and outstanding capital stock of U.S.
Communications, Inc., a Texas corporation ("USC");
WHEREAS, the USC Group and Buyer entered into that certain
Note, Preferred Stock & Warrant Purchase Agreement dated as of
July 31, 1995, as amended through the date hereof, pursuant to
which Seller purchased: (1) a promissory note of Buyer in the
original principal amount of $550,000 (the "Purchase Note"), (2)
a promissory note of Buyer in the original principal amount of
$300,000 (the "Offset Note"), (3) 25,000 shares of Buyer's Series
B Cumulative Convertible Preferred Stock (the "Preferred
Shares"), and (4) common stock purchase warrants exercisable into
210,000 shares of Buyer's Common Stock (the "Warrants");
WHEREAS, pursuant to that certain Agreement dated as of
September 21, 1995 between the USC Group and Buyer, (1) the USC
Group waived their right to convert the Preferred Shares into
Common Stock of Buyer, and (2) Buyer made a prepayment of
principal of $220,000 plus aggregate accrued interest on the
Purchase Note, reducing the outstanding principal balance of the
Purchase Note to $330,000 on March 8, 1996;
WHEREAS, Buyer has certain offset rights against the Offset
Note pursuant to the Stock Purchase Agreement, not all of which
are known on the date hereof (the "Offset Rights");
WHEREAS, the USC Group and Buyer have entered into an
Agreement dated as of February 29, 1996, extending and modifying
the payment terms of the Offset Note and the Purchase Note (the
"Modification Agreement");
WHEREAS, Buyer and the USC Group entered into a Purchase
Agreement dated as of March 8, 1996 (the "Original Purchase
Agreement"), whereby, subject to the conditions stated therein,
Buyer agreed to purchase, and Seller agreed to sell, the
Purchase Note, the Offset Note, the Preferred Shares and the
Warrants for $555,300, and amended the Purchase Agreement on
April 12, 1996 (the "First Amendment");
WHEREAS, Buyer and the USC Group entered into a Second
Amendment to Purchase Agreement dated as of April 18, 1996 (the
"Second Amendment"), which extended the Closing and Anticipated
Closing Date thereunder and adjusted the payment schedule;
WHEREAS, Seller desires to completely amend and restate the
Original Purchase
1
<PAGE>
Agreement as amended by the First Amendment and the Second
Amendment and to sell and transfer to Buyer, and Buyer desires to
purchase from Seller, the Purchase Note, the Offset Note, the
Preferred Shares and the Warrants (collectively referred to as
the "Instruments") subject to the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Purchase Price. On the terms and subject to the
conditions herein expressed and based on the representations,
warranties, covenants and agreements contained herein, at the
Closing (as hereinafter defined), Seller agrees to sell, transfer
and assign the Instruments to Buyer and Buyer agrees to purchase
the Instruments from Seller, for an aggregate consideration of
$641,700.00 (the "Purchase Price"). Buyer has paid to Seller
$61,700.00 as a principal payment on the Offset Note (the
"Deposit") under the Modification Agreement.
(a) At the Closing, the amount of the Deposit shall be
credited against the Purchase Price of the Instruments, and
the remaining $580,000.00 of the Purchase Price shall be
payable by the issuance to Seller in a private placement
pursuant to Section 4(2) of the Securities Act of 1933, as
amended (the "Act") of 168,605 shares of Buyer's Common
Stock, $.0001 par value (the "Shares").
(b) If the Closing does not occur on or prior to the
Anticipated Closing Date (as defined in Section 2 hereof),
(a) the second principal payment of $88,300 and the accrued
but unpaid interest on the unpaid principal amount of such
Offset Note will be due on the Anticipated Closing Date,
subject to the Offset Rights, (b) the final payment of
principal and accrued interest on the Offset Note shall
continue to be due on July 30, 1996; (c) the remaining
scheduled due dates for payment of accrued but unpaid
interest on the unpaid principal amount of the Purchase Note
shall be the Anticipated Closing Date, July 31, 1996 and
October 31, 1996 (the "Maturity Date"); (d) the final
payment of principal and accrued interest on the Purchase
Note shall continue to be the Maturity Date; and (e) such
extension and modification of the terms of the Purchase Note
and the Offset Note are hereby effected without any further
action by the parties hereto.
2. Closing. The Closing under this Agreement shall occur
at the offices of Seller at 2:00 p.m. on June 24, 1996 or such
later date on or prior to July 1, 1996 (the "Anticipated Closing
Date") as shall be required for Buyer to obtain the consent of
Norwest Bank Minnesota, National Association to the transactions
contemplated hereby (the "Bank Consent"); provided, however, in
no event shall the Anticipated Closing Date be later than July 1,
1996 even if the Bank Consent is not obtained. The time and date
on which the Closing hereunder occurs is herein called the
"Closing". At the Closing, Seller will deliver to Buyer the
documents referred to in Section 9 hereof against delivery by
Buyer to Seller of the Shares issued in the name of Seller and
the documents referred to in Section 8 hereof.
2
<PAGE>
3. Buyer's Representations. Buyer represents and warrants
to Seller (which representations and warranties shall survive the
Closing regardless of what investigations, if any, Seller shall
have made thereof prior thereto) as follows:
(a) Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware;
(b) This Agreement has been duly authorized, executed
and delivered by Buyer and is a valid and binding agreement
of Buyer enforceable against Buyer in accordance with its
terms, subject to the Bank Consent; and
(c) Upon delivery of the Shares to Seller at Closing,
the Shares will be duly authorized, validly issued and non-
assessable.
4. Seller's Representations. Seller represents and
warrants to Buyer (which representations and warranties shall
survive the Closing regardless of what investigations, if any,
Buyer shall have made thereof prior thereto) that:
(a) This Agreement has been executed and delivered by
Seller and is a valid and binding agreement of Seller
enforceable against Seller in accordance with its terms;
(b) Each of the Instruments is owned of record and
beneficially by Seller, free and clear of all liens, claims
and encumbrances of any kind;
(c) Seller possesses full authority and legal right to
sell, transfer and assign the entire legal and beneficial
ownership of each of the Instruments to Buyer, free and
clear of all liens, claims and encumbrances of any kind; and
(d) Seller has not transferred any interest in any of
the Instruments to any person or entity.
5. Representations With Respect to Shares. Seller
understands that the Shares are not registered under the Act, and
hereby makes the following representations to Buyer, with the
understanding that Buyer is relying on such representations in
issuing the Shares to Seller pursuant to an exemption from
registration under the Act:
(a) Seller is familiar with the business and financial
condition, properties, operations and prospects of Buyer,
and, at a reasonable time prior to the execution of this
Agreement, has been afforded the opportunity to ask
questions of and receive satisfactory answers from Buyer and
its officers and directors, or other persons acting on
Buyer's behalf, concerning the business and financial
condition, properties, operations and prospects of Buyer and
concerning the terms and conditions of the offer of the
Shares and has asked such questions as Seller desires to ask
and all such
3
<PAGE>
questions have been answered to the full satisfaction of
Seller. Seller has received and reviewed copies of Buyer's
(i) Annual Report on Form 10-KSB for the year ended December
31, 1995, (ii) Quarterly Reports on Form 10-QSB for the
quarter ended March 31, 1996, (iii) Current Reports on Form
8-K dated March 12, 1996 and May 23, 1996, (iv) Prospectus
dated January 3, 1996 pursuant to the Form S-3 Registration
Statement filed with the Securities and Exchange Commission
(the "Commission"); and (v) Buyer's Proxy Statement for the
Annual Meeting of Stockholders held on May 31, 1996. All
documents, records and books pertaining to a proposed
investment in the Shares which Seller has requested have
been made available to Seller.
(b) No representations or warranties have been made to
Seller by Buyer as to the tax consequences of an investment
in the Shares, or as to profits, losses or cash flow which
may be received or sustained as a result of an investment in
the Shares.
(c) Seller has reviewed with his own tax advisors the
federal, state, and local tax consequences of its investment
in the Shares and the transactions contemplated by the
Agreement, and is relying solely on such advisors in making
its investment and not on any statements or representations
of Buyer or any of its agents.
(d) Seller is not purchasing the Shares based on any
representation, oral or written, by Buyer or any person with
respect to the future value of, or income from, the Shares,
but rather upon an independent examination and judgment as
to the prospects of Buyer.
(e) Seller understands and acknowledges that Buyer has
significant outstanding indebtedness and a significant
amount of Preferred Stock issued to other investors which
such Preferred Stock has rights and preferences superior to
that of Buyer's Common Stock.
(f) Seller has such knowledge and experience in
financial and business matters that he is capable of
evaluating the merits and risks of the acquisition of the
Shares.
(g) Seller is acquiring the Shares solely for Seller's
own account, for investment purposes, and not with a view
to, or for resale in connection with, any distribution of
the Shares. Seller understands that: (i) the offer and sale
of the Shares have not been registered under the Act or any
state securities laws by reason of specific exemptions under
the provisions thereof which depend in part upon the
investment intent of Seller and/or the other representations
made by Seller in this Agreement, (ii) Buyer is relying upon
the representations, covenants and agreements contained in
this Agreement (and any supplemental information) for the
purpose of determining whether this transaction meets the
requirements for such exemptions; (iii) the Shares are
"restricted securities" under applicable federal securities
laws and that the Act and the rules of the Commission
provide in substance that Seller may dispose of the Shares
4
<PAGE>
only pursuant to an effective registration statement under
the Act or an exemption therefrom; (iv) Buyer has no
obligation to register the Shares, or to take action so as
to permit sales pursuant to the Act (including Rule 144
thereunder) except as expressly provided in this Agreement;
and (v) Seller may not at any time demand the purchase by
Buyer or any shareholder of Buyer of the Shares.
(h) Seller agrees (i) that Seller will not sell,
assign, pledge, give, transfer or otherwise dispose of the
Shares or any interest therein, or make any offer or attempt
to do any of the foregoing, except pursuant to a
registration of the Shares under the Act and all applicable
state securities laws or in a transaction which, in the
opinion of counsel of Seller (the substance of such opinion
and the identity of such counsel being satisfactory to
Buyer), is exempt from the registration provisions of the
Act and all applicable state securities laws; (ii) that
Buyer and any transfer agent for the Shares shall not be
required to give effect to any purported transfer of any of
the Shares except upon compliance with the foregoing
restrictions; and (iii) that a legend in substantially the
following form will be placed on the certificates
representing the Shares:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR PURSUANT
TO AN EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL
OF HOLDER SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED.
(i) Seller has not offered or sold any portion of the
Shares and has no present intention of dividing the Shares
with others or of reselling or otherwise disposing of any
portion of such Shares either currently or after the passage
of a fixed or determinable period of time or upon the
occurrence or nonoccurrence of any predetermined event or
circumstance.
(j) Seller is able to bear the economic risk of losing
his entire investment in the Shares.
(k) Seller is an "Accredited Investor" as such term is
defined in Rule 501 promulgated under the Act.
6. Buyer's Covenants. Buyer covenants and agrees that
between the date hereof and the Closing: (a) without the prior
written consent of Seller, Buyer shall not take any action that
would cause or tend to cause the conditions upon the obligations
of the parties hereto to effect the transactions contemplated
hereby not to be fulfilled; including, without limitation,
taking, or causing to be taken, or permitting or suffering to be
taken or to exist any action, condition or thing that would cause
the representations and warranties made by Buyer herein not to be
true, correct and accurate as of the Closing; and (b) Buyer
shall use commercially reasonable efforts to obtain the Bank
Consent and the Financing.
5
<PAGE>
7. Seller's Covenants. Seller covenants and agrees that,
between the date hereof and the Closing, without the prior
written consent of Buyer, Seller shall not take any action which
would cause or tend to cause the conditions upon the obligations
of the parties hereto to effect the transactions contemplated
hereby not to be fulfilled; including, without limitation,
taking, or causing to be taken, or permitting or suffering to be
taken or to exist any action, condition or thing that would cause
the representations and warranties made by Seller herein not to
be true, correct and accurate as of the Closing.
8. Conditions to Obligations of Seller. The obligations
of Seller under this Agreement are subject to the satisfaction at
or prior to the Closing of each of the following conditions, but
compliance with such conditions may be waived by Seller: (a) the
representations and warranties of Buyer contained in this
Agreement shall be true and correct at and as of the Closing with
the same effect as though such representations and warranties
were made at and as of the Closing, (b) Buyer shall have obtained
the Bank Consent, and (c) Buyer shall have executed the release
in substantially the form of Exhibit B hereto.
9. Conditions to Obligations of Buyer. The obligations of
Buyer under this Agreement are subject to the satisfaction at or
prior to the Closing of each of the following conditions, but
compliance with any such conditions may be waived by Buyer: (a)
Buyer shall have obtained the Bank Consent, (b) Seller shall have
delivered to Buyer the original Purchase Note and Offset Note,
stock certificates representing the Preferred Shares duly
endorsed in blank, or accompanied by stock powers duly endorsed
in blank, and the Warrants accompanied by the Assignment in the
form of Exhibit A hereto; (d) Seller shall have executed and
delivered the release in substantially the form of Exhibit C
hereto; and (e) Seller shall have executed and delivered a voting
agreement in substantially the form of Exhibit D hereto.
10. Notices. Any notice, request, instruction or other
document to be given under this Agreement after the date hereof
by any party hereto to any other party shall be in writing and
shall be delivered personally or sent by registered or certified
mail, postage prepaid, or a national overnight delivery service
to the addresses shown on the signature page of this Agreement,
or to such other address or person as any party may designate by
written notice to the others.
11. Expenses. Each of the parties hereto shall bear its
expenses separately incurred in connection with this Agreement
and with the performance of its obligations hereunder.
12. Indemnification. In the event the transactions
contemplated hereby are consummated, Seller agrees to indemnify
Buyer and to hold Buyer harmless from and against all damages,
losses and out-of-pocket expenses caused by or arising out of (a)
any breach of warranty or inaccurate or erroneous representation
of Seller contained in this Agreement or in any Exhibit or
document delivered pursuant hereto, (ii) any claim made against
Buyer in respect of the Instruments.
13. Entire Agreement. This Agreement, the documents
referred to herein and the exhibits hereto set forth all the
covenants, promises, agreements, conditions and understandings
6
<PAGE>
among the parties hereto, and there are no other covenants,
promises, agreements, conditions or understandings, whether oral
or written, among the parties hereto.
14. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas
without regard to conflicts of laws. This Agreement is
performable in Dallas County, Texas and the parties hereto agree
that the exclusive venue for any actions or claims related to
this Agreement shall be Dallas County, Texas.
15. Attorney's Fees. In the event attorneys' fees or other
costs are incurred to secure performance of any of the
obligations herein provided for, or to establish damages for the
breach thereof, or to obtain any other appropriate relief,
whether by way of prosecution or defense, the prevailing party
shall be entitled to recover reasonable attorney's fees and costs
incurred therein.
16. Finder's Fees. Each party to this Agreement represents
to the other party that it has not incurred and will not incur
any liability for brokerage fees or agents' commissions in
connection with this Agreement and the transactions contemplated
hereby.
17. Counterparts; Binding Effect. This Agreement may be
executed by the parties hereto in separate counterparts, each of
which when so executed and delivered shall be an original, but
all such counterparts shall together constitute one and the same
instrument, and all signatures need not appear on any one
counterpart. The terms of this Agreement shall be binding upon,
and inure to the benefit of, the parties and their respective
successors and permitted assigns whether so expressed or not.
18. Demand Registration Rights.
(a) Right to Demand. Subject to Sections 18(b) and
18(c) below, (i) Seller as holder of the Registrable
Securities, may make a written request ("Demand Notice") for
registration under and in accordance with the provisions of
the Act of all or part of the Registrable Securities (a
"Demand Registration"). "Registrable Securities" means the
Shares and the 33,340 shares of Common Stock owned by Seller
on the date of this Agreement, but only for so long as any
such share of Common Stock is held by Seller and continues
to be a "Restricted Security". A share of Common Stock
shall be deemed to be a Restricted Security until such time
as such share (i) has been effectively registered under the
Act and disposed of in accordance with the registration
statement covering it, or (ii) has been sold pursuant to
Rule 144 (or any similar provision then in force) under the
Act. All requests made pursuant to this Section 18(a) will
specify the aggregate number of the Registrable Securities
and other shares of Common Stock to be registered and will
also specify the intended methods of disposition thereof.
(b) Restrictions on Demand Rights.
(i) Buyer shall not be obligated to effect a
Demand Registration unless
7
<PAGE>
such Demand Registration includes all Registrable
Securities of Seller.
(ii) The rights to Demand Registration under this
Section 18 shall only be exercised by Seller between
August 31, 1996 and August 31, 1997.
(iii) Seller hereby agrees in each ninety (90)
day period following the effectiveness of the
Registration Statement for any Demand Registration,
Seller may only sell up to a number of shares equal to
one-third (1/3) of the original number of shares of
Registrable Securities (as such original number may be
hereinafter adjusted for purposes of stock splits,
reverse stock splits, etc.)
(c) Number of Demand Registrations. Seller shall be
entitled to one Demand Registration, the expenses of which
shall be borne by Buyer except as otherwise stated herein.
A Demand Registration shall not be counted as a Demand
Registration hereunder until such Demand Registration has
been declared effective and maintained continuously
effective for a period of at least one year or such shorter
period ending when all Registrable Securities included
therein have been sold in accordance with any such Demand
Registration; provided, however, if any Demand Registration
shall be withdrawn prior to effectiveness thereof at the
request of Seller, such Demand Registration shall be counted
hereunder unless Seller shall agree to pay the expenses
incurred by Buyer in connection therewith.
19. Registration Procedures. With respect to any Demand
Registration, Buyer will as expeditiously as practicable:
(a) prepare and file with the Commission a
Registration Statement which includes the Registrable
Securities and use its best efforts to cause such
Registration Statement to become and remain effective as
provided herein; provided that before filing any amendments
or supplements to a Registration Statement or Prospectus,
including documents incorporated by reference after the
initial filing of the Registration Statement, Buyer will
furnish to the Seller and the underwriters, if any, copies
of all such documents proposed to be filed at least one day
prior thereto, and Buyer will not file an amendment to a
Registration Statement or Prospectus or any supplement
thereto (including such documents incorporated by reference)
to which the underwriters, if any, shall reasonably object.
For purposes of this Agreement, "Registration Statement"
means a registration statement filed with the Commission
under the Act which includes the Registrable Securities
being registered in a Demand Registration, and "Prospectus"
means the prospectus which is part of a Registration
Statement.
(b) prepare and file with the Commission such
amendments and post-effective amendments to the Registration
Statement as may be necessary to keep the Registration
Statement effective for any Demand Registration for a period
of not less than one year, or such shorter period which will
terminate when all Registrable Securities covered by such
Registration Statement have been sold or withdrawn (but not
prior to the expiration
8
<PAGE>
of the 90-day period referred to in Section 4(3) of the Act
and Rule 174 thereunder, if applicable); cause the
Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to
Ruled 424 under the Act; and comply with the provisions of
the Act applicable to it with respect to the disposition of
all securities covered by such Registration Statement during
the applicable period in accordance with the intended
methods of disposition by the sellers thereof set forth in
such Registration Statement or supplement to the Prospectus;
Buyer shall be deemed to have used its best efforts to keep
a Registration Statement effective during the applicable
period if it complies with all rules and regulations under
the Act relating to it and the noncompliance with which
would result in Seller not being able to sell the
Registrable Securities covered by such Registration
Statement during that period;
(c) furnish to Seller and the underwriter or
underwriters, if any, without charge, at least one signed
copy of the Registration Statement and any post-effective
amendment thereto, upon request, and such number of
conformed copies thereof and such number of copies of the
Prospectus (including each preliminary Prospectus) and any
amendments or supplements thereto, and any documents
incorporated by reference therein, as Seller or underwriter
may reasonably request in order to facilitate the
disposition of the Registrable Securities being sold by
Seller (it being understood that Buyer consents to the use
of the Prospectus and any amendment or supplement thereto by
Seller and the underwriter or underwriters, if any, in
connection with the offering and sale of the Registrable
Securities covered by the Prospectus or any amendment or
supplement thereto);
(d) notify Seller at any time when a Prospectus
relating to Registrable Securities of Seller included in a
Registration Statement is required to be delivered under the
Act, when Buyer becomes aware of the happening of any event
as a result of which the Prospectus included in such
Registration Statement (as then in effect) contains any
untrue statement of a material fact or omits to state a
material fact necessary to make the statements herein (in
the case of the Prospectus or any preliminary Prospectus, in
light of the circumstances under which they were made) not
misleading and, as promptly as practicable thereafter,
prepare and file with the Commission and furnish to Seller a
supplement or amendment to such Prospectus so that, as
thereafter delivered to the purchasers of such Registrable
Securities, such Prospectus will not contain any untrue
statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading;
(e) make reasonably available for inspection by
Seller, any underwriter participating in any disposition
pursuant to the Registration Statement, and any attorney,
accountant or other agent retained by Seller or underwriter
(collectively, the "Inspectors"), all pertinent financial
and other records, pertinent corporate documents and
properties of Buyer (collectively, the "Records") as shall
be reasonably necessary to enable them to exercise their due
diligence responsibility, and cause Buyer's officers,
directors and
9
<PAGE>
employees to supply all information reasonably requested by
any such Inspector in connection with such Registration
Statement. Records and other information which Buyer
determines, in good faith, to be confidential and which it
notifies the Inspectors are confidential shall not be
disclosed by the Inspectors unless (i) the disclosure of
such Records in the opinion of counsel reasonably acceptable
to Buyer is necessary to avoid or correct a misstatement or
omission in the Registration Statement or (ii) the release
of such records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction. Seller agrees
that it will, upon leaning that disclosure of such Records
is sought in a court of competent jurisdiction, give notice
to Buyer and allow Buyer, at Buyer's expense, to undertake
appropriate action to prevent disclosure of the Records
deemed confidential;
(f) use its best efforts to cause all Registrable
Securities included in such Registration Statement to be
listed, by the date of the first sale of Registrable
Securities pursuant to such Registration Statement, on each
securities exchange on which Buyer's securities of the same
class are then listed or proposed to be listed, if any;
(g) on or prior to the date on which the Registration
Statement is declared effective, use its best efforts to
register or qualify, and cooperate with Seller, the
underwriter or underwriters, if any, and their counsel, in
connection with the registration or qualification of, the
Registrable Securities covered by the Registration Statement
for offer and sale under the securities or blue sky laws of
each state and other jurisdiction of the United States as
Seller or underwriter reasonably requests in writing, to use
its best efforts to keep each such registration or
qualification effective, including through new filings, or
amendments or renewals, during the period such Registration
Statement is required to be kept effective and to do any and
all other acts or things necessary or advisable to enable
the disposition in all such jurisdictions of the Registrable
Securities covered by the Registration Statement;
provided that Buyer will not be required to (i) qualify
generally to do business in any jurisdiction where it would
not otherwise be required to qualify but for this Section
20(g), (ii) consent to general service of process in any
such jurisdiction or (iii) subject itself to general
taxation in any such jurisdiction;
(h) cooperate with Seller and the managing underwriter
or underwriters, if any, to facilitate the timely
preparation and delivery of certificates (not bearing any
restrictive legends) representing securities to be sold
under the Registration Statement, and enable such securities
to be in such denominations and registered in such names as
the managing underwriter or underwriters, if any, or Seller
may request; and
(i) use its best efforts to cause the Registrable
Securities covered by the Registration Statement to be
registered with or approved by such other governmental
agencies or authorities within the United States as may be
necessary to enable Seller or the underwriter or
underwriters, if any, to consummate the disposition of such
securities.
10
<PAGE>
20. Cooperation by Seller.
(a) Seller will furnish to Buyer in writing such
information and affidavits as Buyer may reasonably require
in connection with any registration, qualification or
compliance with respect to such Registrable Securities.
(b) Seller, upon receipt of any notice from Buyer of
the happening of any event of the kind described in Section
19(d), will forthwith discontinue disposition of the
Registrable Securities until such Investor's receipt of the
copies of the supplemented or amended Prospectus
contemplated by Section 19(d) until it is advised in writing
(the "Advice") by Buyer that the use of the Prospectus may
be resumed, and has received copies of any additional or
supplemental filings which are incorporated by reference in
the Prospectus, and, if so directed by Buyer, Seller will,
or will request the managing underwriter or underwriters, if
any, to, deliver to Buyer all copies, other than permanent
file copies then in Seller's possession, of the Prospectus
covering such Registrable Securities current at the time of
receipt of such notice. In the event Buyer shall give any
such notice, the time periods mentioned in Section 19(d)
shall be extended by the number of days during the period
from and including the date of the giving of such notice to
and including the date when Seller shall have received the
copies of the supplemented or amended Prospectus
contemplated by Section 19(d) hereof or the Advice.
(d) At the end of any period during which Buyer is
obligated to keep any Registration Statement current and
effective as provided by Section 19 hereof (and any
extensions thereof required by subsection (c) of this
Section 20), Seller shall discontinue sales of securities
pursuant to such Registration Statement upon receipt of
notice from Buyer of its intention to remove from
registration the securities covered by such Registration
Statement which remain unsold, and Seller shall notify Buyer
of the number of securities registered which remain unsold
promptly after receipt of such notice from Buyer.
21. Holdback Agreements. Seller, if requested by the
managing underwriter or underwriters for any underwritten Demand
Registration agrees not to effect any public sale or distribution
of Registrable Securities, including a sale pursuant to Rule 144
(or any similar provision then in force) under the Act, during
the 15 days prior to, and during the 90-day period commencing on,
the effective date of such Demand Registration (except as part of
such Demand Registration).
22. Registration Expenses. All of the costs and expenses
of each registration hereunder will be borne by Buyer, including
the fees and expenses of the counsel and accountants for Buyer,
and all other costs and expenses of Buyer incident to the
preparation, printing and filing under the Act of the
Registration Statement (and all amendments and supplements
thereto) and furnishing copies thereof and of the Prospectus
included therein, and the costs and expenses incurred by Buyer in
connection with the qualification of the Registrable Securities
under the state securities or blue sky laws of various
jurisdictions, provided, that Buyer shall not bear costs
11
<PAGE>
and expenses of Seller comprising underwriters commissions,
brokerage fees, transfer taxes, or the fees and expenses of any
counsel, accountants or other representatives retained by Seller.
23. Indemnification.
(a) Indemnification by Buyer. Buyer agrees to
indemnify, to the full extent permitted by law, Seller in
its capacity as a holder of Registrable Securities, its
officers and directors and each Person who controls Seller
(within the meaning of the Act and the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), against any
losses, claims, damages, liabilities and expenses (including
attorneys fees) caused by any untrue or alleged untrue
statement of a material fact contained in any Registration
Statement, Prospectus or preliminary Prospectus or any
omission or alleged omission to state therein a material
fact necessary to make the statements therein (In the case
of the Prospectus or any preliminary Prospectus, in light of
the circumstances under which they were made) not
misleading, except insofar as the same are caused by or
contained in any information furnished to Buyer by Seller in
its capacity as a holder of Registrable Securities expressly
for use in the preparation thereof or by Seller's failure to
deliver a copy of the Registration Statement or Prospectus
or any amendments or supplements thereto after Buyer has
furnished Seller with a sufficient number of copies thereof.
Buyer will also indemnify underwriters, selling brokers,
dealer managers and
12
<PAGE>
similar securities industry professionals participating in
the distribution, their officers and directors and each
Person who controls such Persons (with the meaning of the
Act) to the controls such Persons (within the meaning of the
Act) to the same extent as provided above with respect to
the indemnification of Seller; provided, however if pursuant
to an underwritten public offering of Registrable
Securities, Buyer and any underwriters enter into an
underwriting or purchase agreement relating to such offering
which contains provisions relating to indemnification
between Buyer and such underwriters, such provision shall be
deemed to govern indemnification as between Buyer and such
underwriters.
(b) Indemnification by Seller. Seller in its capacity
as a holder of Registrable Securities agrees to indemnify,
to the full extent permitted by law, Buyer, its directors
and officers and each Person who controls Buyer (within the
meaning of the Act and the Exchange Act) against any losses,
claims, damages, liabilities and expenses (including
attorneys' fees) resulting from any untrue or alleged untrue
statement of a material fact or any omission or alleged
omission to state a material fact necessary to make the
statements in the Registration Statement or Prospectus or
preliminary Prospectus (in the case of the Prospectus or any
preliminary Prospectus, in light of the circumstances under
which they were made) not misleading, to the extent, but
only to the extent, that such untrue statement or omission
was made in reliance upon information furnished by or on
behalf of Seller in its capacity as holder of Registrable
Securities specifically for use in the preparation thereof.
In no event shall the liability of Seller hereunder be
greater in amount that the aggregate dollar amount of the
proceeds received by Seller upon the sale of the Registrable
Securities giving rise to such indemnification obligation.
Buyer shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the
distribution, to the same extent as provided above with
respect to information with respect to such Persons so
furnished by such Persons specifically for use in the
preparation of any Prospectus or Registration Statement.
(c) Conduct of Indemnification Proceedings. Any
Person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim
with respect to which it seeks indemnification and (ii)
unless in such indemnified party's reasonable judgment a
conflict of interest may exist between such indemnified and
indemnifying parties with respect to such claim, permit such
indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party.
Whether or not such defense is assumed by the indemnifying
party, the indemnifying party will not be subject to any
liability for any settlement made without its consent (but
such consent will not be unreasonably withheld). No
indemnifying party will consent to entry of any judgment or
enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation. An
indemnifying party who is not entitled to, or elects not to,
assume the defense of a claim will not be obligated to pay
the fees and expenses of more than one counsel for all
parties indemnified by such indemnifying party with respect
to such claim, unless in the reasonable judgment of any
indemnified party a conflict of interest may exist between
such indemnified party and any other of such indemnified
parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and
expenses of such additional counsel or counsels.
(d) Contribution. If for any reasons the
indemnification provided for in the preceding clauses (a)
and (b) is unavailable to an indemnified party as
contemplated by the preceding clauses (a) and (b), then the
indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such loss,
claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits
received by the indemnified party and the indemnifying
party, but also the relative fault of the indemnified party
and indemnifying party, as well as any other relevant
equitable considerations.
24. Rule 144. Buyer agrees that at all times after it has
filed a registration statement pursuant to the requirements of
the Act relating to any securities of Buyer, it will use its best
efforts to file in a timely manner all reports required to be
filed by it pursuant to the Exchange Act and, at any time and
upon request of Seller, will furnish Seller and others with such
information as may be necessary to enable Seller to effect sales
of Registrable Securities without registration pursuant to Rule
144 under the Act. Notwithstanding the foregoing, Buyer may
deregister any class of its securities under Section 12 of the
Exchange Act or suspend its duty to file reports with respect to
any class of its securities pursuant to Section 15(d) of the
Exchange Act if it is then permitted to do so pursuant to the
Exchange Act and the rules and regulations thereunder.
13
<PAGE>
25. Participation in Underwritten Registrations. Seller
may not participate in any underwritten registration hereunder
unless Seller (a) agrees to sell its Registrable Securities on
the basis provided in any underwriting arrangements approved by
Buyer, and (b) completes and executes all questionnaires, powers
of attorney, underwriting agreements and other documents
customarily required under the terms of such underwriting
arrangements.
26. Call Option. Seller hereby grants to Buyer and its
assignee a transferable option (the "Call Option") to purchase
any of the Shares during the period beginning August 1, 1996 and
ending October 31, 1996 (the "Exercise Period") at an exercise
price of $3.44 per share (the "Exercise Price"). The Call Option
may be exercised by giving Seller written notice within the
Exercise Period of its intent to exercise the Call Option
("Exercise Notice") specifying a closing date (which shall be
within the Exercise Period) and the amount of Shares to which
such Call Option is being exercised, and the payment of the
Exercise Price with respect to which the Shares are being
exercised at such closing. Upon delivery of the Exercise Notice,
Buyer's obligations under Demand Registration provisions of this
Agreement will be suspended until expiration of the Exercise
Period, and if the Call Option is exercised, such obligations
will terminate. If the Call Option is exercised, Seller shall
deliver to Buyer or its assignee stock certificates representing
the Shares for which the Call Option is being exercised,
accompanied by stock powers duly endorsed in blank, and such
Shares shall be free and clear of all liens, claims and
encumbrances of any kind.
27. Price Guarantee.
(a) Buyer agrees that if Seller exercises Seller's
right to a Demand Registration pursuant to Section 18 and
sells all the Shares on or before June 24, 1997 (the
"Guarantee Date") in a Bona Fide Sale Transaction and does
not receive at least $580,000.00 of gross sales proceeds for
all such Shares (the "Floor Price"), Buyer shall pay to
Seller on the date which is ten (10) business days of the
last date on which all such Shares are sold an amount (the
"Buyer Adjustment") equal to the difference between (i) the
Floor Price and (ii) the actual gross sales price received
by Seller for all such Shares; provided, however, that
Buyer's liability under this Section 27 shall not exceed
$242,790.00. " Bona Fide Sales Transaction" means a sale by
Seller through a broker/dealer registered under the Exchange
Act at a price which is at the Current Market Price for
Buyer's Common Stock on the date and at the time of sale.
"Current Market Price" means the a price between the "bid"
and "asked" price of a share of Buyer's Common Stock on the
Nasdaq SmallCap Market at the time of sale. If Seller does
not sell all of the Shares as specified in this Section
27(a), Buyer shall have no obligation under this Section
27(a).
(b) Buyer agrees that if Seller sells any of the
Shares in any manner on or before the Guarantee Date and
Seller receives aggregate gross sales proceeds in excess of
$800,000.00 (the "Ceiling Price") for all or a portion of
the Shares actually sold by Seller on or before the
Guarantee Date, Seller will (i) pay to Buyer within ten (10)
business days of the date of the last sale in which the
Ceiling Price is received in one or more
14
<PAGE>
transactions an amount (the "Seller Adjustment") equal to
the difference between (A) the actual gross sales price
received by Seller for the Shares so sold minus (B) the
Ceiling Price, and (ii) if Seller still owns any of the
Shares on the Guarantee Date, transfer to Buyer the
remaining Shares free and clear of any liens, claims and
encumbrances of any kind for no additional consideration
through the delivery of stock certificates representing such
remaining Shares and a stock power duly endorsed to Buyer.
(c) If Seller does not sell any Shares prior to the
Guarantee Date, neither Buyer or Seller shall have any
obligations under this Section 27.
(d) Seller shall (i) notify Buyer in writing of any
sale of Shares specifying the number of shares sold and
enclosing evidence of the gross per share sales price within
five (5) business days after each such sale and (ii) on the
Guarantee Date, provide Buyer with a complete list of all
sales of Shares by Seller from the Closing to the Guarantee
Date and the aggregate gross sales price with respect to
each sale.
28. Adjustments. In the event that as a result of
reorganization, merger, consolidation, liquidation,
recapitalization, stock split, reverse stock split, combination
of shares or stock dividends payable with respect to Buyer's
Common Stock, the outstanding shares of Common Stock of Buyer are
at any time increased or decreased or changed into or exchanged
for a different number or kind of share or other security of
Buyer or of an other corporation, then appropriate adjustments in
the number and kind of such securities then subject to the Call
Option under Section 26 and the price guarantee specified in
Section 27 shall be made effective as of the date of such
occurrence so that the position of the Buyer and Seller will be
the same as it would have been had Seller owned immediately prior
to the occurrence of such events the Common Stock subject to such
Sections 26 and 27. Such adjustment shall be made successively
whenever any event listed above shall occur and Buyer will notify
Seller of each such adjustment. Any fraction of a share
resulting from any adjustment shall be eliminated and the
Exercise Price, Floor Price and Ceiling Price adjusted
accordingly.
29. Original Purchase Agreement. This Agreement completely
amends and restates the Original Purchase Agreement as amended by
the First Amendment and the Second Amendment.
15
<PAGE>
IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the date above written.
SA TELECOMMUNICATIONS, INC.
Marianne Reed
By: _______________________________
Jack W. Matz Jr.
Chairman and Chief Executive Officer
Address: 1600 Promenade Center Address: _____________________
Suite 1510 ______________________________
Richardson, TX. 75080 Social Security No.:__________
16
<PAGE>
EXHIBIT A
FORM OF ASSIGNMENT
For value received, the undersigned registered holder of the
attached Common Stock Purchase Warrant (the "Warrant") hereby
sells, assigns and transfers unto SA Telecommunications, Inc. the
right represented by such Warrant to purchase all 210,000 shares
of Common Stock of SA Telecommunications, Inc. to which such
Warrant relates, and appoints Jack W. Matz, Jr. Attorney to make
such transfer on the books of SA Telecommunications, Inc.
maintained for such purpose, with full power of substitution in
the premises.
Dated: June __, 1996
______________________________
(Signature must conform in all
respects to name of holder as
specified on the face of
Warrant)
Address: _____________________
______________________________
<PAGE>
Exhibit 20.4
VOTING AGREEMENT
THIS VOTING AGREEMENT (the "Agreement") made as of the 24th
day of June, 1996, by and among JACK W. MATZ, JR. or his
assignee(s) (collectively, the "Management Stockholder"), HOWARD
MADDERA (the "Individual Stockholder") and SA TELECOMMUNICATIONS,
INC., a Delaware company (the "Company")
W I T N E S S E T H:
WHEREAS, Individual Stockholder has acquired 337,209 shares
(the "Shares") of authorized common stock, par value $0.0001 per
share (the "Common Stock") of the Company pursuant to the Amended
and Restated Purchase Agreement dated as of June 24,1996 between
the Company and the Individual Stockholder; and
WHEREAS, such parties desire to enter into certain agreements
hereinafter set forth with respect to the voting of the Shares in
all matters submitted to the stockholders of theCompany for a vote
or consent.
NOW, THEREFORE, for and in consideration of the premises and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is agreed:
Section 1. This Agreement is made pursuant to the provisions
of Article 218 of the Delaware General Corporation Law and shall
become effective upon the Individual Stockholder's acquisition of
the Shares. A counterpart of this Agreement shall be deposited
with the Company at its principal offices and shall be subject to
the same rights of examination of any stockholder of the Company,
in person or by agent or attorney, as are the books and records of
the Company. A counterpart of this Voting Agreement has been
deposited with the Company at its principal office. It is intended
that this Agreement shall be specifically enforceable in accordance
with the principles of equity.
Section 2. At all meetings of the stockholders of the
Company, or with regard to any action taken pursuant to consent,
during the term of this Agreement, all Shares of Common Stock held
or owned by the Individual Stockholder shall be voted by the
Individual Stockholder in the manner designated by the Management
Stockholder.
Section 3. To the extent necessary for the enforcement
hereof, this Agreement shall be deemed to provide the Management
Stockholder an irrevocable proxy for the term hereof, which such
proxy is expressly agreed between the parties hereto to be coupled
with an interest as contemplated by applicable law.
Section 4. Any share of the Common Stock subject to this
Agreement shall remain so subject until transferred to an
"Unrelated Party". For purposes of this Agreement, "Unrelated
Party" shall mean a person or entity which is not (a) a member of
the immediate or extended
1
<PAGE>
family of the Individual Stockholder ("Family Member"), (b) a trust
for the benefit of any Family Member ("Family Trust"), (c) a
business associate or employee of the Individual Stockholder
("Business Associate"), or (d) an entity which is controlled by or
under common control with the Individual Stockholder, Family
Member, Family Trust or Business Associate. Any person proposing
to transfer any of the shares of Common Stock subject to this
Agreement other than to an Unrelated Party shall obtain a written
agreement in a form satisfactory to the Company from the
transferee that such transferee agrees to be bound by the terms of
this Agreement. The Company shall not permit the voting of shares
of Common Stock in contravention of the terms hereof. Stock
certificates representing any shares of Common Stock subject to
this Agreement shall include a legend as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
VOTING AGREEMENT DATED JUNE 24, 1996, A COPY OF WHICH IS ON
FILE AT THE COMPANY'S PRINCIPAL EXECUTIVE OFFICES.
Section 5. In case the Company is merged with, into or
consolidated with another corporation or other entity, or all or
substantially all of the assets of the Company are transferred to
another corporation or other entity, then in connection with such
transfer, the term "the Company" for all purposes of this Agreement
shall be taken to include such successor corporation, and any stock
of such successor corporation received on the account of the
ownership of the parties hereto of the stock of the Company subject
hereto prior to such merger, consolidation and transfer shall be
and become subject to this Agreement, and the parties hereto shall
use their best efforts to implement the provisions of this
Agreement to the maximum extent their voting power will permit.
Section 6. This Agreement shall automatically terminate and
expire on the earlier of a transfer by the Individual Stockholder
to a person or entity who is an Unrelated Party or ten (10) years
from the date of this Agreement.
Section 7. Unless otherwise specifically provided herein, all
notices and other communications required or permitted to be given
hereunder shall be in writing and shall be deemed to have been
duly given at the time of delivery against receipt at the
appropriate address set forth below, or at such other addresses as
shall be specified by the parties hereto, by like notice.
(a) If to the Management Stockholder:
Jack W. Matz, Jr.
1600 Promenade Center, 15th Floor
Richardson, TX 75080
(b) If to the Individual Stockholder:
2
<PAGE>
(c)
Howard Maddera
110 Brentwood
Levelland, TX 79336
(d) If to the Company:
SA Telecommunications, Inc.
1600 Promenade Center, 15th Floor
Richardson, TX 75080
or at such other address as a party hereto may specify by written
notice to the other parties to this Agreement.
Section 8. This Agreement shall be binding upon and shall
inure to the benefit of each party hereto and each such party's
heirs, legal representatives, transferees, successors and assigns.
Section 9. This Agreement may be executed in multiple
counterparts, but all counterparts taken together shall constitute
one and the same agreement, binding upon all of the parties hereto.
Section 10. If any provision of this Agreement is held to be
illegal, invalid and unenforceable under present or future laws
effective during the term of this Agreement, such provision shall
be fully severable; this Agreement shall be construed and enforced
as if such illegal, invalid, or unenforceable provision had never
comprised a part of this Agreement; and the remaining provisions
of this Agreement shall remain in full force and effect and shall
not be affected by the illegal, invalid, or unenforceable provision
or by its severance from this Agreement. Furthermore, in lieu of
each such illegal, invalid or unenforceable provision there shall
be added automatically, as part of this Agreement, a provision as
similar in terms to such illegal, invalid, or unenforceable
provision as may be possible and be legal, valid and enforceable.
Section 11. Each of the parties to this Agreement will be
entitled to enforce its rights under this Agreement specifically,
to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights existing in its favor.
The parties hereto agree and acknowledge that money damages may not
be an adequate remedy for any such breach or threatened breach of
the provisions of this Agreement and that any party may in its sole
discretion, in addition to any other available remedies, apply to
any court of law or equity of competent jurisdiction for and be
entitled to specific performance and/or injunctive relief in order
to enforce or prevent any violations of the provisions of this
Agreement.
3
<PAGE>
Section 12. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, THE STATE OF THE
PRINCIPAL PLACE OF BUSINESS OF THE COMPANY, AND THE GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE.
IN WITNESS WHEREOF, the parties hereto executed this Agreement
as of the day first above written.
Individual Stockholder:
Howard Maddera
Spousal Consent for purposes of
Community Property Laws
___________________________________
Fern Maddera
___________________________________
Management Stockholder:
Jack W. Matz, Jr.
SA TELECOMMUNICATIONS, INC.
By:
Jack W. Matz, Jr.
Chairman & Chief Executive
Officer
4
<PAGE>
Exhibit 20.5
VOTING AGREEMENT
THIS VOTING AGREEMENT (the "Agreement") made as of the 24th
day of June, 1996, by and among JACK W. MATZ, JR. or his
assignee(s) (collectively, the "Management Stockholder"), WILLIAM
L. JOHNSON (the "Individual Stockholder") and SA
TELECOMMUNICATIONS, INC., a Delaware company (the "Company")
W I T N E S S E T H:
WHEREAS, Individual Stockholder has acquired 337,209 shares
(the "Shares") of authorized common stock, par value $0.0001 per
share (the "Common Stock") of the Company pursuant to the Amended
and Restated Purchase Agreement dated as of June 24,1996 between
the Company and the Individual Stockholder; and
WHEREAS, such parties desire to enter into certain agreements
hereinafter set forth with respect to the voting of the Shares in
all matters submitted to the stockholders of theCompany for a vote
or consent.
NOW, THEREFORE, for and in consideration of the premises and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is agreed:
Section 1. This Agreement is made pursuant to the provisions
of Article 218 of the Delaware General Corporation Law and shall
become effective upon the Individual Stockholder's acquisition of
the Shares. A counterpart of this Agreement shall be deposited
with the Company at its principal offices and shall be subject to
the same rights of examination of any stockholder of the Company,
in person or by agent or attorney, as are the books and records of
the Company. A counterpart of this Voting Agreement has been
deposited with the Company at its principal office. It is intended
that this Agreement shall be specifically enforceable in accordance
with the principles of equity.
Section 2. At all meetings of the stockholders of the
Company, or with regard to any action taken pursuant to consent,
during the term of this Agreement, all Shares of Common Stock held
or owned by the Individual Stockholder shall be voted by the
Individual Stockholder in the manner designated by the Management
Stockholder.
Section 3. To the extent necessary for the enforcement
hereof, this Agreement shall be deemed to provide the Management
Stockholder an irrevocable proxy for the term hereof, which such
proxy is expressly agreed between the parties hereto to be coupled
with an interest as contemplated by applicable law.
Section 4. Any share of the Common Stock subject to this
Agreement shall remain so subject until transferred to an
"Unrelated Party". For purposes of this Agreement, "Unrelated
Party" shall mean a person or entity which is not (a) a member of
the immediate or extended
1
<PAGE>
family of the Individual Stockholder ("Family Member"), (b) a trust
for the benefit of any Family Member ("Family Trust"), (c) a
business associate or employee of the Individual Stockholder
("Business Associate"), or (d) an entity which is controlled by or
under common control with the Individual Stockholder, Family
Member, Family Trust or Business Associate. Any person proposing
to transfer any of the shares of Common Stock subject to this
Agreement other than to an Unrelated Party shall obtain a written
agreement in a form satisfactory to the Company from the
transferee that such transferee agrees to be bound by the terms of
this Agreement. The Company shall not permit the voting of shares
of Common Stock in contravention of the terms hereof. Stock
certificates representing any shares of Common Stock subject to
this Agreement shall include a legend as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
VOTING AGREEMENT DATED JUNE 24, 1996, A COPY OF WHICH IS ON
FILE AT THE COMPANY'S PRINCIPAL EXECUTIVE OFFICES.
Section 5. In case the Company is merged with, into or
consolidated with another corporation or other entity, or all or
substantially all of the assets of the Company are transferred to
another corporation or other entity, then in connection with such
transfer, the term "the Company" for all purposes of this Agreement
shall be taken to include such successor corporation, and any stock
of such successor corporation received on the account of the
ownership of the parties hereto of the stock of the Company subject
hereto prior to such merger, consolidation and transfer shall be
and become subject to this Agreement, and the parties hereto shall
use their best efforts to implement the provisions of this
Agreement to the maximum extent their voting power will permit.
Section 6. This Agreement shall automatically terminate and
expire on the earlier of a transfer by the Individual Stockholder
to a person or entity who is an Unrelated Party or ten (10) years
from the date of this Agreement.
Section 7. Unless otherwise specifically provided herein, all
notices and other communications required or permitted to be given
hereunder shall be in writing and shall be deemed to have been
duly given at the time of delivery against receipt at the
appropriate address set forth below, or at such other addresses as
shall be specified by the parties hereto, by like notice.
(a) If to the Management Stockholder:
Jack W. Matz, Jr.
1600 Promenade Center, 15th Floor
Richardson, TX 75080
(b) If to the Individual Stockholder, to the address
beneath the Individual Stockholder's name on the
signature page hereto.
2
<PAGE>
(c) If to the Company:
SA Telecommunications, Inc.
1600 Promenade Center, 15th Floor
Richardson, TX 75080
or at such other address as a party hereto may specify by written
notice to the other parties to this Agreement.
Section 8. This Agreement shall be binding upon and shall
inure to the benefit of each party hereto and each such party's
heirs, legal representatives, transferees, successors and assigns.
Section 9. This Agreement may be executed in multiple
counterparts, but all counterparts taken together shall constitute
one and the same agreement, binding upon all of the parties hereto.
Section 10. If any provision of this Agreement is held to be
illegal, invalid and unenforceable under present or future laws
effective during the term of this Agreement, such provision shall
be fully severable; this Agreement shall be construed and enforced
as if such illegal, invalid, or unenforceable provision had never
comprised a part of this Agreement; and the remaining provisions
of this Agreement shall remain in full force and effect and shall
not be affected by the illegal, invalid, or unenforceable provision
or by its severance from this Agreement. Furthermore, in lieu of
each such illegal, invalid or unenforceable provision there shall
be added automatically, as part of this Agreement, a provision as
similar in terms to such illegal, invalid, or unenforceable
provision as may be possible and be legal, valid and enforceable.
Section 11. Each of the parties to this Agreement will be
entitled to enforce its rights under this Agreement specifically,
to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights existing in its favor.
The parties hereto agree and acknowledge that money damages may not
be an adequate remedy for any such breach or threatened breach of
the provisions of this Agreement and that any party may in its sole
discretion, in addition to any other available remedies, apply to
any court of law or equity of competent jurisdiction for and be
entitled to specific performance and/or injunctive relief in order
to enforce or prevent any violations of the provisions of this
Agreement.
Section 12. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, THE STATE OF THE
PRINCIPAL PLACE OF BUSINESS OF THE COMPANY, AND THE GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE.
IN WITNESS WHEREOF, the parties hereto executed this Agreement
as of the day first above written.
3
<PAGE>
Individual Stockholder:
William L. Johnson
ADDRESS:________________________
________________________________
________________________________
Spousal Consent for purposes of
Community Property Laws
_________________________________
Shellie Johnson
__________________________________
Management Stockholder:
Jack W. Matz, Jr.
SA TELECOMMUNICATIONS, INC.
By:
Jack W. Matz, Jr.
Chairman & Chief Executive
Officer
4
<PAGE>
Exhibit 20.6
VOTING AGREEMENT
THIS VOTING AGREEMENT (the "Agreement") made as of the 24th
day of June, 1996, by and among JACK W. MATZ, JR. or his
assignee(s) (collectively, the "Management Stockholder"),
MARIANNE REED (the "Individual Stockholder") and SA
TELECOMMUNICATIONS, INC., a Delaware company (the "Company")
W I T N E S S E T H:
WHEREAS, Individual Stockholder has acquired 168,605 shares
(the "Shares") of authorized common stock, par value $0.0001 per
share (the "Common Stock") of the Company pursuant to the Amended
and Restated Purchase Agreement dated as of June 24,1996 between
the Company and the Individual Stockholder; and
WHEREAS, such parties desire to enter into certain agreements
hereinafter set forth with respect to the voting of the Shares in
all matters submitted to the stockholders of theCompany for a vote
or consent.
NOW, THEREFORE, for and in consideration of the premises and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is agreed:
Section 1. This Agreement is made pursuant to the provisions
of Article 218 of the Delaware General Corporation Law and shall
become effective upon the Individual Stockholder's acquisition of
the Shares. A counterpart of this Agreement shall be deposited
with the Company at its principal offices and shall be subject to
the same rights of examination of any stockholder of the Company,
in person or by agent or attorney, as are the books and records of
the Company. A counterpart of this Voting Agreement has been
deposited with the Company at its principal office. It is intended
that this Agreement shall be specifically enforceable in accordance
with the principles of equity.
Section 2. At all meetings of the stockholders of the
Company, or with regard to any action taken pursuant to consent,
during the term of this Agreement, all Shares of Common Stock held
or owned by the Individual Stockholder shall be voted by the
Individual Stockholder in the manner designated by the Management
Stockholder.
Section 3. To the extent necessary for the enforcement
hereof, this Agreement shall be deemed to provide the Management
Stockholder an irrevocable proxy for the term hereof, which such
proxy is expressly agreed between the parties hereto to be coupled
with an interest as contemplated by applicable law.
Section 4. Any share of the Common Stock subject to this
Agreement shall remain so subject until transferred to an
"Unrelated Party". For purposes of this Agreement, "Unrelated
Party" shall mean a person or entity which is not (a) a member of
the immediate or extended
1
<PAGE>
family of the Individual Stockholder ("Family Member"), (b) a trust
for the benefit of any Family Member ("Family Trust"), (c) a
business associate or employee of the Individual Stockholder
("Business Associate"), or (d) an entity which is controlled by or
under common control with the Individual Stockholder, Family
Member, Family Trust or Business Associate. Any person proposing
to transfer any of the shares of Common Stock subject to this
Agreement other than to an Unrelated Party shall obtain a written
agreement in a form satisfactory to the Company from the
transferee that such transferee agrees to be bound by the terms of
this Agreement. The Company shall not permit the voting of shares
of Common Stock in contravention of the terms hereof. Stock
certificates representing any shares of Common Stock subject to
this Agreement shall include a legend as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
VOTING AGREEMENT DATED JUNE 24, 1996, A COPY OF WHICH IS ON
FILE AT THE COMPANY'S PRINCIPAL EXECUTIVE OFFICES.
Section 5. In case the Company is merged with, into or
consolidated with another corporation or other entity, or all or
substantially all of the assets of the Company are transferred to
another corporation or other entity, then in connection with such
transfer, the term "the Company" for all purposes of this Agreement
shall be taken to include such successor corporation, and any stock
of such successor corporation received on the account of the
ownership of the parties hereto of the stock of the Company subject
hereto prior to such merger, consolidation and transfer shall be
and become subject to this Agreement, and the parties hereto shall
use their best efforts to implement the provisions of this
Agreement to the maximum extent their voting power will permit.
Section 6. This Agreement shall automatically terminate and
expire on the earlier of a transfer by the Individual Stockholder
to a person or entity who is an Unrelated Party or ten (10) years
from the date of this Agreement.
Section 7. Unless otherwise specifically provided herein, all
notices and other communications required or permitted to be given
hereunder shall be in writing and shall be deemed to have been
duly given at the time of delivery against receipt at the
appropriate address set forth below, or at such other addresses as
shall be specified by the parties hereto, by like notice.
(a) If to the Management Stockholder:
Jack W. Matz, Jr.
1600 Promenade Center, 15th Floor
Richardson, TX 75080
(b) If to the Individual Stockholder, to the address
beneath the Individual Stockholder's name on the
signature page hereto.
2
<PAGE>
(c) If to the Company:
SA Telecommunications, Inc.
1600 Promenade Center, 15th Floor
Richardson, TX 75080
or at such other address as a party hereto may specify by written
notice to the other parties to this Agreement.
Section 8. This Agreement shall be binding upon and shall
inure to the benefit of each party hereto and each such party's
heirs, legal representatives, transferees, successors and assigns.
Section 9. This Agreement may be executed in multiple
counterparts, but all counterparts taken together shall constitute
one and the same agreement, binding upon all of the parties hereto.
Section 10. If any provision of this Agreement is held to be
illegal, invalid and unenforceable under present or future laws
effective during the term of this Agreement, such provision shall
be fully severable; this Agreement shall be construed and enforced
as if such illegal, invalid, or unenforceable provision had never
comprised a part of this Agreement; and the remaining provisions
of this Agreement shall remain in full force and effect and shall
not be affected by the illegal, invalid, or unenforceable provision
or by its severance from this Agreement. Furthermore, in lieu of
each such illegal, invalid or unenforceable provision there shall
be added automatically, as part of this Agreement, a provision as
similar in terms to such illegal, invalid, or unenforceable
provision as may be possible and be legal, valid and enforceable.
Section 11. Each of the parties to this Agreement will be
entitled to enforce its rights under this Agreement specifically,
to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights existing in its favor.
The parties hereto agree and acknowledge that money damages may not
be an adequate remedy for any such breach or threatened breach of
the provisions of this Agreement and that any party may in its sole
discretion, in addition to any other available remedies, apply to
any court of law or equity of competent jurisdiction for and be
entitled to specific performance and/or injunctive relief in order
to enforce or prevent any violations of the provisions of this
Agreement.
Section 12. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, THE STATE OF THE
PRINCIPAL PLACE OF BUSINESS OF THE COMPANY, AND THE GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE.
IN WITNESS WHEREOF, the parties hereto executed this Agreement
as of the day first above written.
3
<PAGE>
Individual Stockholder:
Marianne Reed
ADDRESS:______________________
________________________________
________________________________
____________________________________
Management Stockholder:
Jack W. Matz, Jr.
SA TELECOMMUNICATIONS, INC.
By:
Jack W. Matz, Jr.
Chairman & Chief Executive
Officer
4
