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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
July 29, 1996
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Date of Report (Date of earliest event reported)
SA TELECOMMUNICATIONS, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 0-18048 75-2258519
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
1600 Promenade Center, 15th Floor
Richardson, Texas 75080
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(Address of Principal (Zip Code)
Executive Offices)
(214) 690-5888
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
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<PAGE>
ITEM 5. Other Events.
This Current Report on Form 8-K is submitted to correct
exhibits 10.35, 10.37 and 10.40 (collectively referred to as the
"Exhibits") filed by SA Telecommunications, Inc., a Delaware
corporation (the "Company"), as part of the Company's Annual Report
on Form 10-KSB for the fiscal year ended December 31, 1995 (the
"Annual Report"). The corrected Exhibits are attached hereto and
incorporated herein by reference.
ITEM 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits
Exhibit No. Document Description
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10.35 Amended and Restated 9%
Convertible Subordinated
Debenture dated as of March 18,
1996 issued to Killeba
Holdings, Ltd. (filed herewith)
10.37 9% Convertible Subordinated
Debenture dated as of March 18,
1996 issued to Phillip and Rae
Huberfeld (filed herewith)
10.40 9% Convertible Subordinated
Debenture dated as of March 18,
1996 issued to Moses Elias
(filed herewith)
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
SA TELECOMMUNICATIONS, INC.
Date: July 29, 1996 By: /s/ J. David Darnell
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J. David Darnell, Vice
President, Finance and Chief
Financial Officer
<PAGE>
EXHIBIT 10.35
EXHIBIT "A"
THIS DEBENTURE, AND ANY SHARES ACQUIRED UPON CONVERSION
HEREOF, HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT") OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF (A) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL OF HOLDER
ACCEPTABLE TO COUNSEL FOR THE ISSUER THAT SUCH REGISTRATION IS NOT
REQUIRED AND THAT THE PROPOSED TRANSFER MAY BE MADE WITHOUT
VIOLATION OF THE ACT AND ANY APPLICABLE STATE SECURITIES LAW.
NOTWITHSTANDING THE FOREGOING, THIS DEBENTURE, AND ANY SHARES
ACQUIRED UPON CONVERSION HEREOF, HAVE BEEN OR WILL BE ISSUED
PURSUANT TO REGULATION D PROMULGATED UNDER THE ACT. THE
INDEBTEDNESS EVIDENCED HEREBY IS SUBJECT TO THE PROVISIONS OF A
SUBORDINATION AGREEMENT BETWEEN HOLDER AND NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION.
No. D-6
$500,000 March 18, 1996
SA TELECOMMUNICATIONS, INC.
AMENDED AND RESTATED 9% CONVERTIBLE SUBORDINATED DEBENTURE
DUE MARCH 7, 1997
SA TELECOMMUNICATIONS, INC. (the "Company"), a Delaware
corporation, for value received, and intending to be legally bound,
hereby promises to pay to the order of KILLEBA HOLDINGS, LTD. or
registered assigns, the principal amount of Five Hundred Thousand
Dollars ($500,000.00) on March 7, 1997 or such earlier date as
provided in Paragraph (a) under the heading "Conversion of
Debenture" below ("Maturity Date"), with interest from the date
hereof (computed on the basis of a 360-day year of twelve 30-day
months) payable on the Maturity Date on the unpaid principal
balance at the rate of 9% per annum until such unpaid principal
balance shall become due and payable (whether at maturity or by
acceleration or otherwise). Overdue principal payments and (to the
extent permitted by applicable law) any overdue interest shall
accrue interest at the foregoing rate per annum until paid, which
interest shall be payable on demand.
Payments of principal and interest on this Debenture shall be
made in lawful money of the United States of America by delivery of
a check payable in New York Clearing House funds to the address
provided by the payee as shown on the Debenture Register provided
neither the Company or the Holder have exercised its conversion
rights. The Company may treat the person in whose name this
Debenture is registered (the "Holder") on the Debenture Register
kept by the Company as the owner of this Debenture for the purpose
of receiving payment and for all other purposes, and the Company
shall not be affected by any notice to the contrary. This
Debenture is transferable only (i) in accordance with the terms
hereof and (ii) by surrender thereof at an office or agency of the
Company where this Debenture is payable, duly endorsed or
accompanied by a written instrument duly executed by the Holder of
this Debenture or his attorney duly authorized in writing.
<PAGE>
CONVERSION OF DEBENTURE. This Debenture may be converted into
shares of Common Stock of the Company, as follows:
(a) CONVERSION. Subject to and upon compliance with the
provisions of this section captioned "Conversion of Debenture", at
the option of the Holder, at any time following the date hereof,
the Debenture may be converted in whole, or from time to time in
part, into fully-paid and non-assessable shares of Common Stock, of
the Company (the "Shares"), at a conversion price per Share equal
to the lower of (i) seventy-five percent (75%) of the average
closing price of the Common Stock of the Company as traded on the
NASDAQ-STEL for the five days immediately preceding the date of
Holder's notice to Company of Holder's intention to exercise its
right of conversion as set forth herein or (ii) $1.75 per Share
(the "Conversion Price"). The conversion as set forth herein shall
be subject to such adjustment or adjustments, if any, of such
Conversion Price and of the securities or other property issuable
upon such conversion as set forth below, and, (i) in the case of an
election by Holder to convert, upon delivery of the Debenture to
the offices of the Company, together with the form of conversion
notice attached thereto (the "Holder's Conversion Notice"), duly
executed by the Holder thereof, and (ii) in the case of an election
by Company to convert, upon receipt by the Holder of a notice from
Company delivered to Holder's address set forth on the register of
the Company of Company's election to convert, which notice shall be
similar in form to the form of Holder's Conversion Notice attached
hereto and made a part hereof ("Company's Conversion Notice").
Upon receipt of the Company's Conversion Notice, the Holder shall
deliver the Debenture to the offices of the Company as directed by
Company. The Holder's Conversion Notice and the Company's
Conversion Notice shall state the principal amount thereof to be so
converted and shall include or be accompanied by representations as
to the Holder's investment intent substantially similar to those
contained in this Debenture. Shares issuable upon conversion of the
Debenture shall be issued in the name of the Holder and shall be
transferable only in accordance with all of the terms and
restrictions contained herein and in the Subscription Agreement of
even date hereof to which the original Holder hereof is a party.
Upon such conversion, Company shall pay all accrued and unpaid
interest through the conversion date on the Debenture or such part
thereof delivered for conversion in Company's Shares of Common
Stock at the Conversion Price. No fractional Shares shall be
issued or delivered upon conversion of the Debenture. In case the
Debenture shall be surrendered for the conversion of only a portion
of the principal amount thereof, the Company shall, at the time of
issuing the Shares of Common Stock issuable upon the conversion of
such portion, execute and deliver to the Holder of the Debenture so
surrendered a new note equal in principal amount to the unconverted
portion of the surrendered Debenture, dated the most recent date to
which interest shall have been paid on the surrendered Debenture.
HOLDER HEREBY ACKNOWLEDGES THAT IT HAS RECEIVED AND READ THE
DOCUMENTS REFERENCED IN PARAGRAPH 2(c) OF THAT CERTAIN SUBSCRIPTION
AGREEMENT OF EVEN DATE HEREWITH BY AND BETWEEN HOLDER AND COMPANY.
(b) ADJUSTMENTS.
(i) SHARES INCLUDED IN COMPUTATION. The number of
shares of Common Stock at any time outstanding for any purpose
hereunder shall not include any shares of Common Stock then owned
or held by or for the account of the Company.
(ii) SUBDIVISION OR COMBINATION. Whenever the
Company shall subdivide or combine the outstanding shares of Common
Stock issuable upon conversion of this Debenture, including stock
dividends and stock splits, the Conversion Price in effect
immediately prior to such subdivision or combination shall be
proportionately decreased in the case of subdivision or increased
in the case of combination effective at the time of such
subdivision or combination.
<PAGE>
(iii) RECLASSIFICATION OR CHANGE. Whenever any
reclassification or change of the outstanding shares of Common
Stock shall occur (other than a change in par value, or from par
value to no par, or from no par to par value, or as a result of a
subdivision or combination) effective provision shall be made
whereby the Holder shall have the right, at any time thereafter, to
receive upon conversion of this Debenture the kind of stock, other
securities or property receivable upon such reclassification or
change by a holder of the number of shares of Common Stock issuable
upon conversion of this Debenture immediately prior to such
reclassification or change. Thereafter, the rights of the Holder
with respect to the adjustment of the amount of securities or other
property obtainable upon conversion of this Debenture shall be
appropriately continued and preserved, so as to afford as nearly as
may be possible protection of the nature afforded by this paragraph
(b). The provisions of this clause (iii) shall apply to successive
transactions of the nature to which it relates.
(iv) MINIMAL ADJUSTMENTS. The Company shall not be
required to make any adjustment of the Conversion Price the amount
of which shall be less than $.10, but in such case any adjustment
that would otherwise be required to be made shall be carried
forward and shall be made at the time and together with the next
subsequent adjustment which, when aggregated with any adjustment or
adjustments so carried forward, shall amount to not less than $.10.
(c) NOTICES OF RECORD DATE. In case
(i) the Company shall declare a dividend (or make
any other distribution) on its shares of Common Stock payable
otherwise than in cash out of its earned surplus; or
(ii) the Company shall grant the holders of its
Common Stock the right to subscribe for or purchase any shares of
its capital stock of any class; or
(iii) the Company shall make any distribution on or
in respect of the Common Stock in connection with the dissolution,
liquidation or winding up of the Company; or
(iv) there is to be a reclassification or change of
the Common Stock of the Company (other than the subdivision or
combination of its outstanding shares of Common Stock), a
consolidation or merger to which the Company is a party and in
connection with which approval of any class of stockholders of the
Company is required, or a sale or conveyance of the property of the
Company as an entirety or substantially as an entirety,
then and in each such event, the Company shall mail or cause to be
mailed to the Holder a notice specifying the date on which any
record is to be taken for the purpose of such dividend,
distribution or granting of rights, or the date on which such
reclassification, consolidation or merger is expected to become
effective, and the time, if any, as of which the holders of record
of Common Stock shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
reorganization or reclassification. Such notice shall be mailed at
least 30 days prior to the record or effective date therein
specified.
(d) NOTICE OF ADJUSTMENT OF CONVERSION PRICE, ETC. If
there shall be any adjustment as provided in (b) hereof, or if
securities or property other than shares of Common Stock of the
Company shall become issuable or deliverable in lieu of shares of
such Common Stock upon the conversion of this Debenture, the
Company shall forthwith cause written notice thereof to be sent by
registered or certified mail, postage prepaid, to the Holder, which
notice shall be accompanied by a certificate of the principal
financial officer of the Company setting forth in reasonable detail
the facts requiring any such adjustment and the Conversion Price
and number of shares issuable upon the conversion of this Debenture
after such adjustment, or the kind and amount of any such
securities or property so issuable or deliverable upon the
conversion of this Debenture, as the case may be.
<PAGE>
SUBORDINATION. Company and Holder acknowledge and agree that
the indebtedness evidenced by this Debenture is subject to the
provisions of a Subordination Agreement of even date herewith by
and between Holder and Norwest Bank Minnesota, National Association
and acknowledged by the Company.
REDEMPTION OF DEBENTURE. This Debenture is subject to
redemption at the option of the Company upon 30 days prior written
notice (subject to the Holder's prior exercise of its right of
conversion as set forth above) as a whole at any time, or in part
from time to time, upon payment by the Company of 100% of the
unpaid principal amount or such portion thereof so redeemed, plus
accrued interest thereon through the date of redemption.
By accepting this Debenture, the Holder hereby acknowledges
that neither this Debenture nor any shares issuable upon conversion
hereof have been, or will be at the time of acquisition of any
shares upon conversion hereof, registered under the Securities Act
of 1933, as amended, or any state securities laws and represents
for himself and his legal representative that he is acquiring this
Debenture, and will acquire any shares issued upon conversion
hereof, for his own account, for investment purposes only and not
with a view to, or for sale in connection with, any distribution of
such securities, and agrees to reaffirm in writing this investment
representation at the time of exercise of the conversion right set
forth above.
If any of the following conditions or events ("Events of
Default") shall occur and be continuing:
(a) if the Company shall default in the payment of principal
of this Debenture when the same becomes due and payable, whether at
maturity or by declaration of acceleration or otherwise; or
(b) if the Company shall default in the payment of any
interest on this Debenture and shall fail to cure such default
within thirty days after written notice thereof from the Holder to
the Company; or
(c) if the Company shall materially default in the performance
of or compliance with any term contained herein and such default
shall not have been remedied within thirty days after written
notice thereof from the Holder to the Company; or
(d) if the Company shall make an assignment for the benefit
of creditors, or shall admit in writing its inability to pay its
debts as they become due, or a voluntary petition for
reorganization under Title 11 of the United States Code ("Title
11") shall be filed by the Company or an order shall be entered
granting relief to the Company under Title 11 or a petition shall
be filed by the Company in bankruptcy, or the Company shall be
adjudicated a bankrupt or insolvent, or shall file any petition or
answer seeking for itself any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, or
shall file any answer admitting or not contesting the material
allegations of a petition filed against the Company in any such
proceeding, or shall seek or consent to or acquiesce in the
appointment of any trustee, receiver or liquidator of the Company
or of all or any substantial part of the properties of the Company
or if the Company or its directors or majority shareholders shall
take any action looking to the dissolution or liquidation of the
Company; or
(e) if within 120 days after the commencement of an action
against the Company seeking a reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, such
action shall not have been dismissed or nullified or all orders or
proceedings thereunder affecting the operations or the business of
the Company stayed, or if the stay of any such order or proceeding
shall thereafter be set aside, or if, within 120 days after the
appointment without the consent or acquiescence of the Company of
any trustee, receiver or liquidator of the Company or of all or any
substantial part of the properties of the Company such appointment
shall not have been vacated;
<PAGE>
then, and in any such event, the Holder may at any time (unless
such Event of Default shall theretofore have been remedied) at its
option, by written notice to the Company, declare the Debenture to
be due and payable, whereupon the Debenture shall forthwith mature
and become due and payable, together with interest accrued thereon,
and thereafter interest shall be due, at the rate per annum
hereinabove provided, on the entire principal balance until the
same is fully paid, and on any overdue interest (but only to the
extent permitted by law), without presentment, demand, protest or
notice, all of which are hereby waived.
In case of a default in the payment of any principal of or
interest on the Debenture, the Company will pay to the Holder such
further amount as shall be sufficient to cover the cost and
expenses of collection, including, without limitation, reasonable
attorney's fees, expenses and disbursements. No course of dealing
and no delay on the part of Holder in exercising any right shall
operate as a waiver thereof or otherwise prejudice such Holder's
rights, powers or remedies. No right, power or remedy conferred by
this Debenture upon Holder shall be exclusive of any other right,
power or remedy referred to herein or now or hereafter available at
law, in equity, by statute or otherwise.
Notwithstanding any provision contained in this Debenture to
the contrary, the Company's liability for payment of interest shall
not exceed the limits imposed by applicable usury law. If any
provision hereof requires interest payments in excess of the then
legally permitted maximum rate, such provision shall automatically
be deemed to require such payment at the then legally-permitted
maximum rate.
All notices required or permitted to be given under this
Debenture shall be in writing (delivered by hand or sent certified
or registered mail, return receipt requested) addressed to the
following addresses:
If to Holder: At its address on the Debenture
Register of the Company
If to Company: 1912 Avenue K
Suite 100
Plano, TX 75054
Attn: J. David Darnell,
Chief Financial Officer
All notices shall be deemed given upon personal delivery or upon
deposit of such notice in the United States mails, with all postage
affixed.
This Debenture shall be governed by the laws of the State of
Texas.
SA TELECOMMUNICATIONS, INC.
By:____________________________
JACK W. MATZ, JR., Chairman
and Chief Executive Officer
<PAGE>
CONVERSION NOTICE
TO: SA TELECOMMUNICATIONS, INC.
1912 Avenue K, Suite 100
Plano, TX 75054
The undersigned Holder of this Debenture hereby irrevocably
exercises his right to convert [all] [or $ ] of this
Debenture into shares of Common Stock of SA
TELECOMMUNICATIONS, INC. at the Conversion Price of $
per share in accordance with the terms of this Debenture, and
directs that the Shares issuable and deliverable upon such
conversion be registered in the name of the undersigned and
delivered to the undersigned, together with a Debenture for the
balance of the principal amount of this Debenture, if any.
The undersigned hereby acknowledges that the Shares (i) have
not been and will not be at the time of acquisition by the
undersigned registered under the Securities Act of 1933, as
amended, or under any state securities laws, and hereby represents
and warrants to the Company that he is acquiring the Shares for his
own account, for investment, and not with a view to, or for sale in
connection with, any distribution of such Shares; and (ii) are
transferable only in accordance with all the terms and restrictions
contained in the Debenture and in the Subscription Agreement dated
March 7, 1996, as amended, to which the Holder is, or hereby agrees
to become, a party.
Dated: 19
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Witness Signature of Holder
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(Print Name of Holder)
Social Security Number or
Taxpayer ID Number:
----------
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-----------------------------
-----------------------------
Address
<PAGE>
EXHIBIT 10.37
EXHIBIT "A"
THIS DEBENTURE, AND ANY SHARES ACQUIRED UPON CONVERSION
HEREOF, HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT") OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF (A) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL OF HOLDER
ACCEPTABLE TO COUNSEL FOR THE ISSUER THAT SUCH REGISTRATION IS NOT
REQUIRED AND THAT THE PROPOSED TRANSFER MAY BE MADE WITHOUT
VIOLATION OF THE ACT AND ANY APPLICABLE STATE SECURITIES LAW.
NOTWITHSTANDING THE FOREGOING, THIS DEBENTURE, AND ANY SHARES
ACQUIRED UPON CONVERSION HEREOF, HAVE BEEN OR WILL BE ISSUED
PURSUANT TO REGULATION D PROMULGATED UNDER THE ACT. THE
INDEBTEDNESS EVIDENCED HEREBY IS SUBJECT TO THE PROVISIONS OF A
SUBORDINATION AGREEMENT BETWEEN HOLDER AND NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION.
No. D-4
$50,000 March 18, 1996
SA TELECOMMUNICATIONS, INC.
9% CONVERTIBLE SUBORDINATED DEBENTURE
DUE MARCH 18, 1997
SA TELECOMMUNICATIONS, INC. (the "Company"), a Delaware
corporation, for value received, and intending to be legally bound,
hereby promises to pay to the order of PHILIP HUBERFELD AND RAE
HUBERFELD or registered assigns, the aggregate principal amount of
Fifty Thousand Dollars ($50,000.00) on March 18, 1997 or such
earlier date as provided in Paragraph (a) under the heading
"Conversion of Debenture" below ("Maturity Date"), with interest
from the date hereof (computed on the basis of a 360-day year of
twelve 30-day months), payable on April 1, 1996 and the first day
of each calendar quarter thereafter, on the unpaid principal
balance at the rate of 9% per annum until such unpaid principal
balance shall become due and payable (whether at maturity or by
acceleration or otherwise). Overdue principal payments and (to the
extent permitted by applicable law) any overdue interest shall
accrue interest at 11% per annum until paid, which interest shall
be payable on demand.
Payments of principal and interest on this Debenture shall be
made in lawful money of the United States of America by delivery of
a check payable in New York Clearing House funds to the address
provided by the payee as shown on the Debenture Register provided
neither the Company or the Holder have exercised its conversion
rights. The Company may treat the person in whose name this
Debenture is registered (the "Holder") on the Debenture Register
kept by the Company as the owner of this Debenture for the purpose
of receiving payment and for all other purposes, and the Company
shall not be affected by any notice to the contrary. This
Debenture is transferable only (i) in accordance with the terms
hereof and (ii) by surrender thereof at an office or agency of the
Company where this Debenture is payable, duly endorsed or
accompanied by a written instrument duly executed by the Holder of
this Debenture or his attorney duly authorized in writing.
<PAGE>
CONVERSION OF DEBENTURE. This Debenture may be converted into
shares of Common Stock of the Company, as follows:
(a) CONVERSION. Subject to and upon compliance with the
provisions of this section captioned "Conversion of Debenture", at
the option of the Holder, at any time following the date hereof,
the Debenture may be converted in whole, or from time to time in
part, into fully-paid and non-assessable shares of Common Stock, of
the Company (the "Shares"), at a conversion price per Share equal
to the lower of (i) seventy-five percent (75%) of the average
closing price of the Common Stock of the Company as traded on the
NASDAQ-STEL for the five days immediately preceding the date of
Holder's notice to Company of Holder's intention to exercise its
right of conversion as set forth herein or (ii) $1.75 per Share
(the "Conversion Price"). The conversion as set forth herein shall
be subject to such adjustment or adjustments, if any, of such
Conversion Price and of the securities or other property issuable
upon such conversion as set forth below, and, (i) in the case of an
election by Holder to convert, upon delivery of the form of
conversion notice attached thereto (the "Holder's Conversion
Notice"), duly executed by the Holder thereof, and (ii) in the case
of an election by Company to convert, upon receipt by the Holder of
a notice from Company delivered to Holder's address set forth on
the register of the Company of Company's election to convert, which
notice shall be similar in form to the form of Holder's Conversion
Notice attached hereto and made a part hereof ("Company's
Conversion Notice"). Holder agrees that in the event it exercises
its right of conversion hereunder, it shall deliver the original
Debenture to the Company as promptly as practicable following the
date of such conversion. Upon receipt of the Company's Conversion
Notice, the Holder shall deliver the Debenture to the offices of
the Company as directed by Company. The Holder's Conversion Notice
and the Company's Conversion Notice shall state the principal
amount thereof to be so converted and shall include or be
accompanied by representations as to the Holder's investment intent
substantially similar to those contained in this Debenture. Shares
issuable upon conversion of the Debenture shall be issued in the
name of the Holder and shall be transferable only in accordance
with all of the terms and restrictions contained herein and in the
Subscription Agreement of even date hereof to which the original
Holder hereof is a party. Company agrees that it shall promptly
direct its transfer agent to prepare the stock certificates for the
Shares within three business days following its receipt of Holder's
Conversion Notice, and shall use its best efforts to ensure that
such certificates are issued by said transfer agent and delivered
to Holder as promptly as practicable. Upon such conversion,
Company shall pay all accrued and unpaid interest through the
conversion date on the Debenture or such part thereof delivered for
conversion in Company's Shares of Common Stock at the Conversion
Price. No fractional Shares shall be issued or delivered upon
conversion of the Debenture. In case the Debenture shall be
surrendered for the conversion of only a portion of the principal
amount thereof, the Company shall, at the time of issuing the
Shares of Common Stock issuable upon the conversion of such
portion, execute and deliver to the Holder of the Debenture so
surrendered a new note equal in principal amount to the unconverted
portion of the surrendered Debenture, dated the most recent date to
which interest shall have been paid on the surrendered Debenture.
HOLDER HEREBY ACKNOWLEDGES THAT IT HAS RECEIVED AND READ THE
DOCUMENTS REFERENCED IN PARAGRAPH 2(c) OF THAT CERTAIN SUBSCRIPTION
AGREEMENT OF EVEN DATE HEREWITH BY AND BETWEEN HOLDER AND COMPANY.
(b) ADJUSTMENTS.
(i) SHARES INCLUDED IN COMPUTATION. The number of
shares of Common Stock at any time outstanding for any purpose
hereunder shall not include any shares of Common Stock then owned
or held by or for the account of the Company.
(ii) SUBDIVISION OR COMBINATION. Whenever the
Company shall subdivide or combine the outstanding shares of Common
Stock issuable upon conversion of this Debenture, including
<PAGE>
stock dividends and stock splits, the Conversion Price in effect
immediately prior to such subdivision or combination shall be
proportionately decreased in the case of subdivision or increased
in the case of combination effective at the time of such
subdivision or combination.
(iii) RECLASSIFICATION OR CHANGE. Whenever any
reclassification or change of the outstanding shares of Common
Stock shall occur (other than a change in par value, or from par
value to no par, or from no par to par value, or as a result of a
subdivision or combination) effective provision shall be made
whereby the Holder shall have the right, at any time thereafter, to
receive upon conversion of this Debenture the kind of stock, other
securities or property receivable upon such reclassification or
change by a holder of the number of shares of Common Stock issuable
upon conversion of this Debenture immediately prior to such
reclassification or change. Thereafter, the rights of the Holder
with respect to the adjustment of the amount of securities or other
property obtainable upon conversion of this Debenture shall be
appropriately continued and preserved, so as to afford as nearly as
may be possible protection of the nature afforded by this paragraph
(b). The provisions of this clause (iii) shall apply to successive
transactions of the nature to which it relates.
(c) NOTICES OF RECORD DATE. In case
(i) the Company shall declare a dividend (or make
any other distribution) on its shares of Common Stock payable
otherwise than in cash out of its earned surplus; or
(ii) the Company shall grant the holders of its
Common Stock the right to subscribe for or purchase any shares of
its capital stock of any class; or
(iii) the Company shall make any distribution on or
in respect of the Common Stock in connection with the dissolution,
liquidation or winding up of the Company; or
(iv) there is to be a reclassification or change of
the Common Stock of the Company (other than the subdivision or
combination of its outstanding shares of Common Stock), a
consolidation or merger to which the Company is a party and in
connection with which approval of any class of stockholders of the
Company is required, or a sale or conveyance of the property of the
Company as an entirety or substantially as an entirety, then and in
each such event, the Company shall mail or cause to be mailed to
the Holder a notice specifying the date on which any record is to
be taken for the purpose of such dividend, distribution or granting
of rights, or the date on which such reclassification,
consolidation or merger is expected to become effective, and the
time, if any, as of which the holders of record of Common Stock
shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such reorganization
or reclassification. Such notice shall be mailed at least 30 days
prior to the record or effective date therein specified.
(d) NOTICE OF ADJUSTMENT OF CONVERSION PRICE, ETC. If
there shall be any adjustment as provided in (b) hereof, or if
securities or property other than shares of Common Stock of the
Company shall become issuable or deliverable in lieu of shares of
such Common Stock upon the conversion of this Debenture, the
Company shall forthwith cause written notice thereof to be sent by
registered or certified mail, postage prepaid, to the Holder, which
notice shall be accompanied by a certificate of the principal
financial officer of the Company setting forth in reasonable detail
the facts requiring any such adjustment and the Conversion Price
and number of shares issuable upon the conversion of this Debenture
after such adjustment, or the kind and amount of any such
securities or property so issuable or deliverable upon the
conversion of this Debenture, as the case may be.
<PAGE>
SUBORDINATION. Company and Holder acknowledge and agree that
the indebtedness evidenced by this Debenture is subject to the
provisions of a Subordination Agreement of even date herewith by
and between Holder and Norwest Bank Minnesota, National Association
and acknowledged by the Company.
REDEMPTION OF DEBENTURE. This Debenture is subject to
redemption at the option of the Company upon 30 days prior written
notice (provided that Holder may choose to exercise its right of
conversion hereunder at any time prior to the expiration of such
30-day period) as a whole at any time, or in part from time to
time, upon payment by the Company of 100% of the unpaid principal
amount or such portion thereof so redeemed, plus accrued interest
thereon through the date of redemption. In addition, Company shall
pay to Holder on the date of such redemption a redemption fee in
the form of delivery to Holder of 14,000 shares of Holder's
restricted common stock (the "Redemption Shares") within three
business days following the date of redemption (the "Redemption
Fee").
By accepting this Debenture, the Holder hereby acknowledges
that neither this Debenture nor any shares issuable upon conversion
hereof have been, or will be at the time of acquisition of any
shares upon conversion hereof, registered under the Securities Act
of 1933, as amended, or any state securities laws and represents
for himself and his legal representative that he is acquiring this
Debenture, and will acquire any shares issued upon conversion
hereof, for his own account, for investment purposes only and not
with a view to, or for sale in connection with, any distribution of
such securities, and agrees to reaffirm in writing this investment
representation at the time of exercise of the conversion right set
forth above.
REGISTRATION RIGHTS. With respect to the Shares issuable to
Holder upon the conversion of this Debenture, the Redemption Shares
and the Penalty Shares (as defined in Section 5(c) of that certain
Subscription Agreement of even date herewith by and between Company
and Holder (the "Subscription Agreement"), a copy of which is
appended hereto), Holder possesses those registration rights set
forth in Section 5 of the Subscription Agreement, and Section 5 of
the Subscription Agreement is incorporated herein by reference.
If any of the following conditions or events ("Events of
Default") shall occur and be continuing:
(a) if the Company shall default in the payment of principal
of this Debenture when the same becomes due and payable, whether at
maturity or by declaration of acceleration or otherwise; or
(b) if the Company shall default in the payment of any
interest on this Debenture and shall fail to cure such default
within ten days after written notice thereof from the Holder to the
Company; or
(c) if the Company shall materially default in the performance
of or compliance with any term contained herein and such default
shall not have been remedied within ten days after written notice
thereof from the Holder to the Company; or
(d) if the Company shall make an assignment for the benefit
of creditors, or shall admit in writing its inability to pay its
debts as they become due, or a voluntary petition for
reorganization under Title 11 of the United States Code ("Title
11") shall be filed by the Company or an order shall be entered
granting relief to the Company under Title 11 or a petition shall
be filed by the Company in bankruptcy, or the Company shall be
adjudicated a bankrupt or insolvent, or shall file any petition or
answer seeking for itself any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, or
shall file any answer admitting or not contesting the material
allegations of a petition filed against the Company in any such
proceeding, or shall seek or consent to or acquiesce in the
appointment of any trustee, receiver or liquidator of the Company
or of all or any substantial part of the properties of the Company
or if the Company or its directors or majority shareholders shall
take any action looking to the dissolution or liquidation of the
Company; or
<PAGE>
(e) if within 120 days after the commencement of an action
against the Company seeking a reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, such
action shall not have been dismissed or nullified or all orders or
proceedings thereunder affecting the operations or the business of
the Company stayed, or if the stay of any such order or proceeding
shall thereafter be set aside, or if, within 120 days after the
appointment without the consent or acquiescence of the Company of
any trustee, receiver or liquidator of the Company or of all or any
substantial part of the properties of the Company such appointment
shall not have been vacated;
then, and in any such event, the Holder may at any time (unless
such Event of Default shall theretofore have been remedied) at its
option, by written notice to the Company, declare the Debenture to
be due and payable, whereupon the Debenture shall forthwith mature
and become due and payable, together with interest accrued thereon,
and thereafter interest shall be due, at the rate per annum
hereinabove provided, on the entire principal balance until the
same is fully paid, and on any overdue interest (but only to the
extent permitted by law), without presentment, demand, protest or
notice, all of which are hereby waived.
In case of a default in the payment of any principal of or
interest on the Debenture, the Company will pay to the Holder such
further amount as shall be sufficient to cover the cost and
expenses of collection, including, without limitation, reasonable
attorney's fees, expenses and disbursements. No course of dealing
and no delay on the part of Holder in exercising any right shall
operate as a waiver thereof or otherwise prejudice such Holder's
rights, powers or remedies. No right, power or remedy conferred by
this Debenture upon Holder shall be exclusive of any other right,
power or remedy referred to herein or now or hereafter available at
law, in equity, by statute or otherwise.
Notwithstanding any provision contained in this Debenture to
the contrary, the Company's liability for payment of interest shall
not exceed the limits imposed by applicable usury law. If any
provision hereof requires interest payments in excess of the then
legally permitted maximum rate, such provision shall automatically
be deemed to require such payment at the then legally-permitted
maximum rate.
All notices required or permitted to be given under this
Debenture shall be in writing (delivered by hand or sent certified
or registered mail, return receipt requested) addressed to the
following addresses:
If to Holder: At its address on the Debenture
Register of the Company
If to Company: 1912 Avenue K
Suite 100
Plano, TX 75054
Attn: J. David Darnell,
Chief Financial Officer
All notices shall be deemed given upon personal delivery or upon
deposit of such notice in the United States mails, with all postage
affixed.
<PAGE>
This Debenture shall be governed by the laws of the State of
Texas.
SA TELECOMMUNICATIONS, INC.
By:---------------------------
JACK W. MATZ, JR., Chairman
and Chief Executive Officer
<PAGE>
CONVERSION NOTICE
TO: SA TELECOMMUNICATIONS, INC.
1912 Avenue K, Suite 100
Plano, TX 75054
The undersigned Holder of this Debenture hereby irrevocably
exercises his right to convert [all] [or $ ] of this
Debenture into shares of Common Stock of SA
TELECOMMUNICATIONS, INC. at the Conversion Price of $
per share in accordance with the terms of this Debenture, and
directs that the Shares issuable and deliverable upon such
conversion be registered in the name of the undersigned and
delivered to the undersigned, together with a Debenture for the
balance of the principal amount of this Debenture, if any.
The undersigned hereby acknowledges that the Shares (i) have
not been and will not be at the time of acquisition by the
undersigned registered under the Securities Act of 1933, as
amended, or under any state securities laws, and hereby represents
and warrants to the Company that he is acquiring the Shares for his
own account, for investment, and not with a view to, or for sale in
connection with, any distribution of such Shares; and (ii) are
transferable only in accordance with all the terms and restrictions
contained in the Debenture and in the Subscription Agreement dated
March 18, 1996, to which the Holder is, or hereby agrees to become,
a party.
Dated: 19
--------------------- --
- ------------------------------- -----------------------------
Witness Signature of Holder
-----------------------------
(Print Name of Holder)
Social Security Number or
Taxpayer ID Number:
----------
-----------------------------
-----------------------------
-----------------------------
Address
<PAGE>
EXHIBIT 10.40
EXHIBIT "A"
THIS DEBENTURE, AND ANY SHARES ACQUIRED UPON CONVERSION
HEREOF, HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT") OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF (A) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL OF HOLDER
ACCEPTABLE TO COUNSEL FOR THE ISSUER THAT SUCH REGISTRATION IS NOT
REQUIRED AND THAT THE PROPOSED TRANSFER MAY BE MADE WITHOUT
VIOLATION OF THE ACT AND ANY APPLICABLE STATE SECURITIES LAW.
NOTWITHSTANDING THE FOREGOING, THIS DEBENTURE, AND ANY SHARES
ACQUIRED UPON CONVERSION HEREOF, HAVE BEEN OR WILL BE ISSUED
PURSUANT TO REGULATION D PROMULGATED UNDER THE ACT. THE
INDEBTEDNESS EVIDENCED HEREBY IS SUBJECT TO THE PROVISIONS OF A
SUBORDINATION AGREEMENT BETWEEN HOLDER AND NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION.
No. D-5
$50,000 March 18, 1996
SA TELECOMMUNICATIONS, INC.
9% CONVERTIBLE SUBORDINATED DEBENTURE
DUE MARCH 18, 1997
SA TELECOMMUNICATIONS, INC. (the "Company"), a Delaware
corporation, for value received, and intending to be legally bound,
hereby promises to pay to the order of MOSES ELIAS or registered
assigns, the aggregate principal amount of Fifty Thousand Dollars
($50,000.00) on March 18, 1997 or such earlier date as provided in
Paragraph (a) under the heading "Conversion of Debenture" below
("Maturity Date"), with interest from the date hereof (computed on
the basis of a 360-day year of twelve 30-day months), payable on
April 1, 1996 and the first day of each calendar quarter
thereafter, on the unpaid principal balance at the rate of 9% per
annum until such unpaid principal balance shall become due and
payable (whether at maturity or by acceleration or otherwise).
Overdue principal payments and (to the extent permitted by
applicable law) any overdue interest shall accrue interest at 11%
per annum until paid, which interest shall be payable on demand.
Payments of principal and interest on this Debenture shall be
made in lawful money of the United States of America by delivery of
a check payable in New York Clearing House funds to the address
provided by the payee as shown on the Debenture Register provided
neither the Company or the Holder have exercised its conversion
rights. The Company may treat the person in whose name this
Debenture is registered (the "Holder") on the Debenture Register
kept by the Company as the owner of this Debenture for the purpose
of receiving payment and for all other purposes, and the Company
shall not be affected by any notice to the contrary. This
Debenture is transferable only (i) in accordance with the terms
hereof and (ii) by surrender thereof at an office or agency of the
Company where this Debenture is payable, duly endorsed or
accompanied by a written instrument duly executed by the Holder of
this Debenture or his attorney duly authorized in writing.
<PAGE>
CONVERSION OF DEBENTURE. This Debenture may be converted into
shares of Common Stock of the Company, as follows:
(a) CONVERSION. Subject to and upon compliance with the
provisions of this section captioned "Conversion of Debenture", at
the option of the Holder, at any time following the date hereof,
the Debenture may be converted in whole, or from time to time in
part, into fully-paid and non-assessable shares of Common Stock, of
the Company (the "Shares"), at a conversion price per Share equal
to the lower of (i) seventy-five percent (75%) of the average
closing price of the Common Stock of the Company as traded on the
NASDAQ-STEL for the five days immediately preceding the date of
Holder's notice to Company of Holder's intention to exercise its
right of conversion as set forth herein or (ii) $1.75 per Share
(the "Conversion Price"). The conversion as set forth herein shall
be subject to such adjustment or adjustments, if any, of such
Conversion Price and of the securities or other property issuable
upon such conversion as set forth below, and, (i) in the case of an
election by Holder to convert, upon delivery of the form of
conversion notice attached thereto (the "Holder's Conversion
Notice"), duly executed by the Holder thereof, and (ii) in the case
of an election by Company to convert, upon receipt by the Holder of
a notice from Company delivered to Holder's address set forth on
the register of the Company of Company's election to convert, which
notice shall be similar in form to the form of Holder's Conversion
Notice attached hereto and made a part hereof ("Company's
Conversion Notice"). Holder agrees that in the event it exercises
its right of conversion hereunder, it shall deliver the original
Debenture to the Company as promptly as practicable following the
date of such conversion. Upon receipt of the Company's Conversion
Notice, the Holder shall deliver the Debenture to the offices of
the Company as directed by Company. The Holder's Conversion Notice
and the Company's Conversion Notice shall state the principal
amount thereof to be so converted and shall include or be
accompanied by representations as to the Holder's investment intent
substantially similar to those contained in this Debenture. Shares
issuable upon conversion of the Debenture shall be issued in the
name of the Holder and shall be transferable only in accordance
with all of the terms and restrictions contained herein and in the
Subscription Agreement of even date hereof to which the original
Holder hereof is a party. Company agrees that it shall promptly
direct its transfer agent to prepare the stock certificates for the
Shares within three business days following its receipt of Holder's
Conversion Notice, and shall use its best efforts to ensure that
such certificates are issued by said transfer agent and delivered
to Holder as promptly as practicable. Upon such conversion,
Company shall pay all accrued and unpaid interest through the
conversion date on the Debenture or such part thereof delivered for
conversion in Company's Shares of Common Stock at the Conversion
Price. No fractional Shares shall be issued or delivered upon
conversion of the Debenture. In case the Debenture shall be
surrendered for the conversion of only a portion of the principal
amount thereof, the Company shall, at the time of issuing the
Shares of Common Stock issuable upon the conversion of such
portion, execute and deliver to the Holder of the Debenture so
surrendered a new note equal in principal amount to the unconverted
portion of the surrendered Debenture, dated the most recent date to
which interest shall have been paid on the surrendered Debenture.
HOLDER HEREBY ACKNOWLEDGES THAT IT HAS RECEIVED AND READ THE
DOCUMENTS REFERENCED IN PARAGRAPH 2(c) OF THAT CERTAIN SUBSCRIPTION
AGREEMENT OF EVEN DATE HEREWITH BY AND BETWEEN HOLDER AND COMPANY.
(b) ADJUSTMENTS.
(i) SHARES INCLUDED IN COMPUTATION. The number of
shares of Common Stock at any time outstanding for any purpose
hereunder shall not include any shares of Common Stock then owned
or held by or for the account of the Company.
(ii) SUBDIVISION OR COMBINATION. Whenever the
Company shall subdivide or combine the outstanding shares of Common
Stock issuable upon conversion of this Debenture, including
<PAGE>
stock dividends and stock splits, the Conversion Price in effect
immediately prior to such subdivision or combination shall be
proportionately decreased in the case of subdivision or increased
in the case of combination effective at the time of such
subdivision or combination.
(iii) RECLASSIFICATION OR CHANGE. Whenever any
reclassification or change of the outstanding shares of Common
Stock shall occur (other than a change in par value, or from par
value to no par, or from no par to par value, or as a result of a
subdivision or combination) effective provision shall be made
whereby the Holder shall have the right, at any time thereafter, to
receive upon conversion of this Debenture the kind of stock, other
securities or property receivable upon such reclassification or
change by a holder of the number of shares of Common Stock issuable
upon conversion of this Debenture immediately prior to such
reclassification or change. Thereafter, the rights of the Holder
with respect to the adjustment of the amount of securities or other
property obtainable upon conversion of this Debenture shall be
appropriately continued and preserved, so as to afford as nearly as
may be possible protection of the nature afforded by this paragraph
(b). The provisions of this clause (iii) shall apply to successive
transactions of the nature to which it relates.
(c) NOTICES OF RECORD DATE. In case
(i) the Company shall declare a dividend (or make
any other distribution) on its shares of Common Stock payable
otherwise than in cash out of its earned surplus; or
(ii) the Company shall grant the holders of its
Common Stock the right to subscribe for or purchase any shares of
its capital stock of any class; or
(iii) the Company shall make any distribution on or
in respect of the Common Stock in connection with the dissolution,
liquidation or winding up of the Company; or
(iv) there is to be a reclassification or change of
the Common Stock of the Company (other than the subdivision or
combination of its outstanding shares of Common Stock), a
consolidation or merger to which the Company is a party and in
connection with which approval of any class of stockholders of the
Company is required, or a sale or conveyance of the property of the
Company as an entirety or substantially as an entirety,
then and in each such event, the Company shall mail or cause to be
mailed to the Holder a notice specifying the date on which any
record is to be taken for the purpose of such dividend,
distribution or granting of rights, or the date on which such
reclassification, consolidation or merger is expected to become
effective, and the time, if any, as of which the holders of record
of Common Stock shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
reorganization or reclassification. Such notice shall be mailed at
least 30 days prior to the record or effective date therein
specified.
(d) NOTICE OF ADJUSTMENT OF CONVERSION PRICE, ETC. If
there shall be any adjustment as provided in (b) hereof, or if
securities or property other than shares of Common Stock of the
Company shall become issuable or deliverable in lieu of shares of
such Common Stock upon the conversion of this Debenture, the
Company shall forthwith cause written notice thereof to be sent by
registered or certified mail, postage prepaid, to the Holder, which
notice shall be accompanied by a certificate of the principal
financial officer of the Company setting forth in reasonable detail
the facts requiring any such adjustment and the Conversion Price
and number of shares issuable upon the conversion of this Debenture
after such adjustment, or the kind and amount of any such
securities or property so issuable or deliverable upon the
conversion of this Debenture, as the case may be.
<PAGE>
SUBORDINATION. Company and Holder acknowledge and agree that
the indebtedness evidenced by this Debenture is subject to the
provisions of a Subordination Agreement of even date herewith by
and between Holder and Norwest Bank Minnesota, National Association
and acknowledged by the Company.
REDEMPTION OF DEBENTURE. This Debenture is subject to
redemption at the option of the Company upon 30 days prior written
notice (provided that Holder may choose to exercise its right of
conversion hereunder at any time prior to the expiration of such
30-day period) as a whole at any time, or in part from time to
time, upon payment by the Company of 100% of the unpaid principal
amount or such portion thereof so redeemed, plus accrued interest
thereon through the date of redemption. In addition, Company shall
pay to Holder on the date of such redemption a redemption fee in
the form of delivery to Holder of 14,000 shares of Holder's
restricted common stock (the "Redemption Shares") within three
business days following the date of redemption (the "Redemption
Fee").
By accepting this Debenture, the Holder hereby acknowledges
that neither this Debenture nor any shares issuable upon conversion
hereof have been, or will be at the time of acquisition of any
shares upon conversion hereof, registered under the Securities Act
of 1933, as amended, or any state securities laws and represents
for himself and his legal representative that he is acquiring this
Debenture, and will acquire any shares issued upon conversion
hereof, for his own account, for investment purposes only and not
with a view to, or for sale in connection with, any distribution of
such securities, and agrees to reaffirm in writing this investment
representation at the time of exercise of the conversion right set
forth above.
REGISTRATION RIGHTS. With respect to the Shares issuable to
Holder upon the conversion of this Debenture, the Redemption Shares
and the Penalty Shares (as defined in Section 5(c) of that certain
Subscription Agreement of even date herewith by and between Company
and Holder (the "Subscription Agreement"), a copy of which is
appended hereto), Holder possesses those registration rights set
forth in Section 5 of the Subscription Agreement, and Section 5 of
the Subscription Agreement is incorporated herein by reference.
If any of the following conditions or events ("Events of
Default") shall occur and be continuing:
(a) if the Company shall default in the payment of principal
of this Debenture when the same becomes due and payable, whether at
maturity or by declaration of acceleration or otherwise; or
(b) if the Company shall default in the payment of any
interest on this Debenture and shall fail to cure such default
within ten days after written notice thereof from the Holder to the
Company; or
(c) if the Company shall materially default in the performance
of or compliance with any term contained herein and such default
shall not have been remedied within ten days after written notice
thereof from the Holder to the Company; or
(d) if the Company shall make an assignment for the benefit
of creditors, or shall admit in writing its inability to pay its
debts as they become due, or a voluntary petition for
reorganization under Title 11 of the United States Code ("Title
11") shall be filed by the Company or an order shall be entered
granting relief to the Company under Title 11 or a petition shall
be filed by the Company in bankruptcy, or the Company shall be
adjudicated a bankrupt or insolvent, or shall file any petition or
answer seeking for itself any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, or
shall file any answer admitting or not contesting the material
allegations of a petition filed against the Company in any such
proceeding, or shall seek or consent to or acquiesce in the
appointment of any trustee, receiver or liquidator of the Company
or of all or any substantial part of the properties of the Company
or if the Company or its directors or majority shareholders shall
take any action looking to the dissolution or liquidation of the
Company; or
<PAGE>
(e) if within 120 days after the commencement of an action
against the Company seeking a reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, such
action shall not have been dismissed or nullified or all orders or
proceedings thereunder affecting the operations or the business of
the Company stayed, or if the stay of any such order or proceeding
shall thereafter be set aside, or if, within 120 days after the
appointment without the consent or acquiescence of the Company of
any trustee, receiver or liquidator of the Company or of all or any
substantial part of the properties of the Company such appointment
shall not have been vacated;
then, and in any such event, the Holder may at any time (unless
such Event of Default shall theretofore have been remedied) at its
option, by written notice to the Company, declare the Debenture to
be due and payable, whereupon the Debenture shall forthwith mature
and become due and payable, together with interest accrued thereon,
and thereafter interest shall be due, at the rate per annum
hereinabove provided, on the entire principal balance until the
same is fully paid, and on any overdue interest (but only to the
extent permitted by law), without presentment, demand, protest or
notice, all of which are hereby waived.
In case of a default in the payment of any principal of or
interest on the Debenture, the Company will pay to the Holder such
further amount as shall be sufficient to cover the cost and
expenses of collection, including, without limitation, reasonable
attorney's fees, expenses and disbursements. No course of dealing
and no delay on the part of Holder in exercising any right shall
operate as a waiver thereof or otherwise prejudice such Holder's
rights, powers or remedies. No right, power or remedy conferred by
this Debenture upon Holder shall be exclusive of any other right,
power or remedy referred to herein or now or hereafter available at
law, in equity, by statute or otherwise.
Notwithstanding any provision contained in this Debenture to
the contrary, the Company's liability for payment of interest shall
not exceed the limits imposed by applicable usury law. If any
provision hereof requires interest payments in excess of the then
legally permitted maximum rate, such provision shall automatically
be deemed to require such payment at the then legally-permitted
maximum rate.
All notices required or permitted to be given under this
Debenture shall be in writing (delivered by hand or sent certified
or registered mail, return receipt requested) addressed to the
following addresses:
If to Holder: At its address on the Debenture
Register of the Company
If to Company: 1912 Avenue K
Suite 100
Plano, TX 75054
Attn: J. David Darnell,
Chief Financial Officer
All notices shall be deemed given upon personal delivery or upon
deposit of such notice in the United States mails, with all postage
affixed.
<PAGE>
This Debenture shall be governed by the laws of the State of
Texas.
SA TELECOMMUNICATIONS, INC.
By:
---------------------------------
JACK W. MATZ, JR., Chairman
and Chief Executive Officer
<PAGE>
CONVERSION NOTICE
TO: SA TELECOMMUNICATIONS, INC.
1912 Avenue K, Suite 100
Plano, TX 75054
The undersigned Holder of this Debenture hereby irrevocably
exercises his right to convert [all] [or $ ] of this
Debenture into shares of Common Stock of SA
TELECOMMUNICATIONS, INC. at the Conversion Price of $
per share in accordance with the terms of this Debenture, and
directs that the Shares issuable and deliverable upon such
conversion be registered in the name of the undersigned and
delivered to the undersigned, together with a Debenture for the
balance of the principal amount of this Debenture, if any.
The undersigned hereby acknowledges that the Shares (i) have
not been and will not be at the time of acquisition by the
undersigned registered under the Securities Act of 1933, as
amended, or under any state securities laws, and hereby represents
and warrants to the Company that he is acquiring the Shares for his
own account, for investment, and not with a view to, or for sale in
connection with, any distribution of such Shares; and (ii) are
transferable only in accordance with all the terms and restrictions
contained in the Debenture and in the Subscription Agreement dated
March 18, 1996, to which the Holder is, or hereby agrees to become,
a party.
Dated: ------------------- 19---
- --------------------------------- -------------------------
Witness Signature of Holder
-------------------------
(Print Name of Holder)
Social Security Number or
Taxpayer ID Number:
------
-------------------------
-------------------------
-------------------------
Address
