<PAGE>
UNITED STATES
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
February 29, 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.)
1912 Avenue K, Suite 100
Plano, TX 75074-5959 75074
(Address of Principal Executive Offices) (Zip Code)
(214) 516-0662
(Registrant's Telephone Number, Including Area Code)
_________________________
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On February 29, 1996, SA Telecommunications, Inc. (the
"Company") sold all of the capital stock of its wholly-owned
subsidiary, Strategic Abstract & Title Corporation ("SATC") to
Permian Basin Title Services, Inc. ("Buyer"). SATC has developed
a proprietary information database for the offering of on-line
title abstracting and title insurance and reporting services and
operates title plants in Midland County and Ector County, Texas.
The consideration received by the Company for such sale was the
promissory note of Buyer in the original principal amount of
$500,000 with interest at 7% per annum payable over 10 years,
secured by a pledge of the stock of and guaranty by SATC and a
security interest in the assets of SATC. The Company will retain
the benefits of certain net operating losses incurred by SATC,
and the retention of such benefits was a factor in evaluating the
price range offered by interested parties responding to the
Company's advertisements for the sale of the subsidiary.
Management of the Company had determined to sell SATC on
October 4, 1995 after cancellation of the previously proposed
spin-off and distribution of SATC to Company stockholders
following the death of SATC's President, Harold Wilson. David
Yarbrough, an officer and the sole director and shareholder of
Buyer, was an employee of SATC who had been in charge of running
SATC's operations since the death of Mr. Wilson. Buyer is a
newly formed corporation created for the purchase of SATC.
Item 5. Other Events.
On March 8, 1996, the Company entered into an agreement with
Howard Maddera, William Johnson, and Marianne Reed, former
shareholders of the Company's wholly-owned subsidiary U.S.
Communications, Inc. ("USC Shareholders"), to purchase equity and
debt securities of the Company issued to the USC Shareholders in
connection with the acquisition of USC for a $3,085,000 purchase
price. The securities to be purchased by the Company consist of
promissory notes of the Company in an aggregate principal amount
of $3,150,000, 125,000 shares of the Company's Series B
Cumulative Convertible Preferred Stock and warrants exercisable
into 1,050,000 shares of the Company's Common Stock. The closing
of the agreement is subject to, among other things, the
completion of financing by the Company.
Item 7. Financial Statements and Exhibits.
(b) Pro Forma Financial Information. The disposition of
SATC does not have a material effect on the Company's
Statement of Financial Position as of December 31,
1995.
(c) Exhibits.
Exhibit No. Document Description
2.1* Stock Purchase Agreement dated February
29, 1996 between SA Telecommunications,
Inc. and Permian Basin Title Services,
Inc.
2.2* Purchase Agreement dated March 8, 1996
among SA Telecommunications, Inc.,
Howard Maddera, William L. Johnson and
Marianne Reed
99* Press Release dated March 1, 1996
_______________
*Filed herewith
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: March 12, 1996 BY: /s/ Jack W. Matz, Jr.
Jack W. Matz, Jr.
Chairman and
Chief Executive Officer
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DOCUMENT DESCRIPTION
2.1* Stock Purchase Agreement dated February
29, 1996 between SA Telecommunications,
Inc. and Permian Basin Title Services,
Inc.
2.2* Purchase Agreement dated March 8, 1996
among SA Telecommunications, Inc.,
Howard Maddera, William L. Johnson and
Marianne Reed
99* Press Release dated March 1, 1996
____________
*Filed herewith
<PAGE>
Exhibit 2.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made as
of February 29, 1996 by and between Permian Basin Title Services,
Inc., a Texas corporation ("Buyer") and SA Telecommunications,
Inc., a Delaware corporation ("Seller").
Seller owns all of the issued and outstanding shares (the
"Shares") of capital stock of Strategic Abstract & Title
Corporation, a Texas corporation (the "Company"). David
Yarbrough, an officer and director of Buyer, has been running the
operations of the Company, and is familiar with the assets,
liabilities (contingent or otherwise) and prospects of the
Company. Seller desires to sell to Buyer, and Buyer desires to
purchase from Seller the Company on an "as is" basis through the
purchase of the Shares on the terms and conditions herein set
forth. Seller and Buyer mutually covenant and 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 Shares to Buyer and Buyer agrees to purchase the
Shares from Seller, for an aggregate consideration of $500,000
payable by the promissory note of Buyer in the form of Exhibit A
hereto (the "Note").
2. Closing. The Closing under this Agreement shall occur
at the offices of Seller at 3:00 p.m. on February 29, 1996, or
such earlier date on which Seller and Buyer agree. The time and
date on which the Closing hereunder occurs is herein called the
"Closing". At the Closing, Seller will deliver to Buyer stock
certificates duly endorsed in blank, or accompanied by stock
powers duly endorsed in blank, representing the Shares against
delivery by Buyer to Seller of the Note and the documents
referred to in Section 5 hereof.
3. Buyer 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 Texas; (b) this Agreement, the
Note and the Pledge Agreement have been duly authorized, executed
and delivered by Buyer and are valid and binding agreements of
Buyer enforceable in accordance with their respective terms; (c)
the Security Agreement, the Guaranty and the Lease have been duly
authorized, executed and delivered by the Company and are valid
and binding agreements of the Company enforceable in accordance
with their respective terms, (d) Buyer is acquiring the Shares
for its own account and not with a view to the distribution
thereof within the meaning of the Securities Act of 1933, as
amended; and (e) Buyer has received assurances from the Texas
Insurance Commission and the Company's title insurance
underwriter that the Company has permission to continue to
operate its business after the transfer of the Shares to Buyer
hereunder.
4. Seller 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) as of the date hereof, that: (a)
this Agreement has been duly authorized, executed and delivered
by Seller and is a valid and binding agreement of Seller
enforceable in accordance with their respective terms; (b) the
Shares, consisting of 1,000,000 shares of Common Stock of the
Company owned by Seller, are all the issued and outstanding
shares of the Company; and (c) the Shares are owned of record and
beneficially by Seller, free from all liens, claims and
encumbrances of any kind other than the liens of Norwest Bank
Minnesota, National Association and Howard Maderra, Bill Johnson
and Marianne Reed (the "Prior Security Interests").
5. 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 executed
and delivered to Seller the Note;
<PAGE>
(c) the Company shall have executed and delivered a lease
agreement as Lessor with respect to a closing office for the
Company in substantially the form of Exhibit B hereto (the
"Lease"), a security agreement in substantially the form of
Exhibit C hereto (the "Security Agreement"), a Guaranty in
substantially the form of Exhibit D hereto (the "Guaranty"), and
such UCC-1 Financing Statements as Seller may request, (d) Buyer
shall executed and delivered a pledge agreement in substantially
the form of Exhibit E hereto, and (e) Buyer shall have executed
and delivered a Form 8023, Corporate Qualified Purchases.
6. Filing of Returns; Tax Election. After the Closing of
the transactions contemplated hereby:
(a) Seller shall include the Company in its
consolidated federal tax return and in any state or local
tax return filed on a consolidated, combined or unitary
basis through the close of business on the date of Closing
(the "Closing Date").
(b) Buyer shall make a timely election under Section
338(g) of the Internal Revenue Code of 1986, as amended (the
"Code") and Seller and Buyer shall jointly make an election
under Section 338)(h)(10) of the Code (and any corresponding
elections under state or local tax law) (collectively, a
"Section 338(h)(10) Election") with respect to the Company.
(c) Seller and Buyer shall (i) take, and cooperate
with each other to take, all actions necessary and
appropriate (including filing such forms, returns,
elections, schedules and other documents as may be required)
to effect and preserve a timely Section 338(h)(10) Election
in accordance with Section 338 of the Code and the
applicable regulations enacted from time to time thereafter,
and (ii) Seller and Buyer shall report the sale of the
Shares pursuant to this Agreement consistent with the
Section 338(h)(10) Election and shall take no position
contrary thereto or inconsistent therewith in any tax
return, any discussion with or proceeding before any taxing
authority, or otherwise.
(d) As soon as practicable after the date hereof, but
in no event later than sixty (60) days prior to the date for
filing of the consolidated Buyer tax return for 1996 (taking
into account any extensions), Seller shall prepare a
schedule setting forth (i) the modified aggregate deemed
sales price (the "MADSP") at which the Company is deemed to
have sold its assets for tax purposes as a result of the
Section 338(h)(10) Election, (ii) the adjusted grossed-up
basis (the "AGUB") at which Buyer is deemed to have
purchased its assets for tax purposes as a result of such
elections, and (iii) the allocation of MADSP and AGUB among
the assets of the Company. Such amounts shall be determined
in accordance with Section 338 of the Code and the
applicable regulations thereunder. The Seller and the Buyer
will file all tax returns (including any amended returns and
claims for refund) and information reports in a manner
consistent with such information.
7. 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, at 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.
8. 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.
9. Indemnification. It is the intent of the parties
hereto that Seller shall have no liability or obligation
whatsoever with respect to the Company and its operations and
that Buyer is purchasing the Company on an "as is" basis subject
to whatever liabilities, claims, obligations and liabilities
(whether known or unknown, contingent or otherwise) and that
Seller has made no representations with respect to the Company
other than the representations made in this Agreement, if any.
Buyer hereby agrees to indemnify and defend Seller, and its
present, past and future officers, directors, shareholders and
employees (the "Indemnified Parties"), and hold the Indemnified
Parties harmless from and against any and all claims, actions, or
causes of action,
<PAGE>
assessments, damages, losses, liabilities, costs and expenses
(including without limitation interest, penalties, costs and
reasonable attorney's fees and expenses caused by or arising out
of (i) any breach or alleged breach of warranty or inaccurate or
erroneous representation of Buyer contained in this Agreement or
in any exhibit or document delivered pursuant hereto, (ii) any
transaction, event, fact or circumstance involving the Company,
its officers, directors, employees or agents, whether existing
before or after the date of this Agreement, (iii) any guarantee
of any of the Indemnified Parties given prior to the date hereof
with respect to any business or operations of the Company. Costs
and expenses (including attorney's fees) incurred by any
Indemnified Party in defending or investigating any action, suit,
proceeding or investigation shall be paid by Buyer as they are
incurred in advance of the final disposition of such matter. If
a claim hereunder is not paid within 30 days after Buyer's
receipt thereof, the Indemnified Party may bring suit thereon
and, if successful in whole or in part, the Indemnified Party
shall be entitled to recover the cost of prosecuting such claim.
10. Post Closing Deliveries. As soon as is available,
Buyer shall furnish to Seller a copy of the articles of
incorporation of Buyer certified by the Secretary of State of
Texas and a copy of the organizational minutes adopted by Buyer
and authorizing the transactions contemplated hereunder and any
evidence of the written approval of the Texas Insurance
Commission or the Company's title insurance underwriters with
respect to the transfer of the Shares hereunder. As soon as
available, Seller shall furnish Buyer with evidence of the
release of the Prior Security Interests.
11. Entire Agreement. This Agreement and the documents
referred to herein set forth all the covenants, promises,
agreements, conditions and understandings among the parties
hereto, and there are no other covenants, promises, agreements,
conditions or understandings, whether oral or written, among the
parties hereto.
12. 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.
13. 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.
14. Counterparts. This Agreement may be executed in one or
more counterparts for the convenience of the parties hereto, all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the date above written.
SA TELECOMMUNICATIONS, INC. PERMIAN BASIN TITLE SERVICES,
INC. INC.
By: /s/ Jack W. Matz Jr. By: /s/ David Yarbrough
Jack W. Matz Jr. David Yarbrough
Chairman and Chief Executive President
Officer
Address: 1912 Avenue K, Suite 100 Address: 3918 Monclair Avenue
Plano, TX. 75074 Odessa, Texas 79762
<PAGE>
EXHIBIT A
PROMISSORY NOTE
$500,000.00 February 29, 1996
FOR VALUE RECEIVED, the undersigned, Permian Basin Title
Services, Inc., a Texas corporation ("Maker") hereby
unconditionally promises to pay to the order of SA
Telecommunications, Inc., a Delaware corporation ("Payee"), at
the offices of Payee at 1600 Promenade Center, Suite 1510,
Richardson, Texas 75080, or such other address given to Maker by
Payee, the principal sum of FIVE HUNDRED THOUSAND AND NO/100THS
DOLLARS ($500,000.00), in lawful money of the United States of
America, together with interest on the unpaid principal balance
from day-to-day outstanding until paid, calculated on the basis
of a 360-day year, at the rate of seven percent (7%) per annum
until paid.
Accrued interest on the unpaid principal balance of this
Note shall be due and payable quarterly on March 31, June 30,
September 30, December 31, commencing March, 1996 as shown on the
attached amortization schedule until paid in full. The principal
of this Note shall be due and payable in installments as shown
on the attached amortization schedule, with the entire unpaid
principal balance and accrued but unpaid interest due on December
31, 2005. Should the principal of, or any installment of the
principal or interest upon, this Note become due and payable on
any day other than a business day, the maturity thereof shall be
extended to the next succeeding business day and interest shall
be payable with respect to such extension. All payments of
principal of and interest upon this Note shall be made by Maker
to Payee in federal or other immediately available funds.
Payments made to Payee by Maker hereunder shall be applied first
to accrued interest and then to principal.
All past due principal and, to the extent permitted by
applicable law, interest upon this Note shall bear interest at
the rate of ten percent (10%) per annum until paid.
Maker and each surety, endorser, guarantor and other party
ever liable for payment of any sums of money payable on this
Note, severally waive demand for payment, presentment, protest,
notice of protest and non-payment, or other notice of default,
notice of acceleration and intention to accelerate, and agree
that their liability under this Note shall not be affected by any
renewal or extension in the time of payment hereof, or in any
indulgences, or by any release or change in any security for the
payment of this Note, and hereby consent to any and all renewals,
extensions, indulgences, releases or changes, regardless of the
number of such renewals, extensions, indulgences, releases or
changes.
No waiver by Payee of any of its rights or remedies
hereunder or under any other document evidencing or securing this
Note or otherwise shall be considered a waiver of any other
subsequent right or remedy of Payee; no delay or omission in the
exercise or enforcement by Payee of any rights or remedies shall
ever be construed as a waiver of any right or remedy of Payee;
and no exercise or enforcement of any such rights or remedies
shall ever be held to exhaust any right or remedy of Payee.
Maker reserves the right to prepay the outstanding principal
balance of this Note, in whole or in part at any time and from
time to time without premium or penalty.
It is the intention of Maker and Payee to conform strictly
to applicable usury laws. Accordingly, if the transactions
contemplated hereby would be usurious under applicable law
(including the laws of the State of Texas and the laws of the
United States of America), then, in that event, notwithstanding
anything to the contrary in any agreement entered into in
connection with or as security for this Note, it is agreed as
follows: (I) the aggregate of all consideration which constitutes
interest under applicable law that is taken, reserved, contracted
for, charged or received under this Note shall under no
circumstances exceed the maximum amount of nonusurious interest
allowed by applicable law, and any excess shall be credited on
the principal of this Note by the holder hereof (or, if this Note
<PAGE>
shall have been paid in full, refunded to the Maker); and (ii) in
the event that maturity of the indebtedness represented by this
Note is accelerated by reason of an election by the holder hereof
resulting from any default hereunder or otherwise, or in the
event of any required or permitted prepayment, then such
consideration that constitutes interest may never include more
than the maximum amount of nonusurious interest allowed by
applicable law, and excess interest, if any, provided for in this
Note or otherwise shall be canceled automatically as of the date
of such acceleration or prepayment and, if theretofore prepaid,
shall be credited on the principal of this Note (or if this Note
shall have been paid in full, refunded to the Maker).
Except to the extent that the laws of the United States may
apply to the terms hereof, the substantive laws of the State of
Texas without regard to conflicts of law principles shall govern
the validity, construction, enforcement and interpretation of
this Note.
If this Note is placed in the hands of an attorney for
collection, or if it is collected through any legal proceedings
at law or in equity or in bankruptcy, receivership or other court
proceedings, Maker promises to pay all costs and expenses of
collection including, but not limited to, court costs and the
reasonable attorneys' fees of the holder hereof.
The Payee and any other holder of this Note is entitled to
the benefits of that certain (1) Security Agreement dated as of
the date hereof between Strategic Abstract & Title Corporation, a
Texas corporation ("SATC") and Payee, (2) Guaranty dated as of
the date hereof by SATC to Payee, and (3) Pledge Agreement
between Maker and Payee, pursuant to which SATC and Maker have
granted security interests in certain of their assets to secure
the obligation of Maker hereunder and under the Stock Purchase
Agreement dated as of February 29, 1996 by and between Maker and
Payee.
All of the covenants, stipulations, promises and agreements
contained in this Note by or on behalf of Maker shall bind its
successors, legal representatives and assigns, whether so
expressed or not.
PERMIAN BASIN TITLE SERVICES, INC.
By: /s/ David Yorbrough
David Yarbrough
President
<PAGE>
SCHEDULE OF PAYMENTS ON NOTE
Starting Principal $500,000 - 7% Simple Interest
<TABLE>
<S> <C> <C>
YEAR 1 - 1996 Interest Due Date Due
------------ --------
$ 1,458.33 03/31/96
4,374.99 06/30/96
" 09/31/96
" 12/31/96
Total Int. Paid 1996 $ 14,583.33
Total Int. Accrued to Note $ 14,583.33
Note $500,000.00
-----------
New Principal $514,583.33 for 01/01/97
_________________________________________________________________
YEAR 2 - 1997 Interest Due Date Due
------------ --------
$ 6,753.06 Each Qtr.
Total Int. Paid 1997 $ 27,012.24
Total Int. Accrued to Note $ 9,008.59
Note $514,583.33
-----------
New Principal $523,591.92 for 01/01/98
_________________________________________________________________
YEAR 3 - 1998 Interest Due Date Due
------------ --------
$ 9,162.86 Each Qtr.
Total Int. Paid 1998 $ 36,651.44
Total Int. Accrued to Note .00
-----------
New Principal $523,591.92 for 01/01/99
_________________________________________________________________
YEAR 4 - 1999 Interest Due Date Due
------------ --------
$ 9,162.86 Each Qtr.
Principal Due $ 50,000.00 12/31/99
-----------
New Principal $473,591.92 for 01/01/2000
_________________________________________________________________
<PAGE>
YEAR 5 - 2000 Interest Due Date Due
------------ --------
$ 8,287.86 Each Qtr.
Principal Due $ 50,000.00 12/31/2000
-----------
New Principal $423,591.92 for 01/01/2001
_________________________________________________________________
YEAR 6 - 2001 Interest Due Date Due
------------ --------
$ 7,412.86 Each Qtr.
Principal Due $ 50,000.00 12/31/2001
-----------
New Principal $373,591.92 for 01/01/2002
_________________________________________________________________
YEAR 7 - 2002 Interest Due Date Due
------------ --------
$ 6,537.86 Each Qtr.
Principal Due $ 50,000.00 12/31/2002
-----------
New Principal $323,591.92 for 01/01/2003
_________________________________________________________________
YEAR 8 - 2003 Interest Due Date Due
------------ --------
$ 5,662.86 Each Qtr.
Principal Due $ 50,000.00 12/31/2003
-----------
New Principal $273,591.92 for 01/01/2004
_________________________________________________________________
YEAR 9 - 2004 Interest Due Date Due
------------ --------
$ 4,787.86 Each Qtr.
Principal Due $ 50,000.00 12/31/2004
-----------
New Principal $223,591.92 for 01/01/2005
_________________________________________________________________
YEAR 10 - 2005 Interest Due Date Due
------------ --------
$ 3,912.86 Each Qtr.
Principal Due $223,591.92 12/31/2005
_________________________________________________________________
BALANCE .00 01/01/2006
</TABLE>
<PAGE>
SCHEDULE OF OMITTED EXHIBITS
TO
STOCK PURCHASE AGREEMENT
Pursuant to Item 601(b)(2), the following exhibits to the
Stock Purchase Agreement filed as Exhibit 2.1 to the Current
Report on Form 8-K for SA Telecommunications, Inc. (the
"Registrant") dated February 29, 1996 have been omitted from the
exhibit so filed.
Document Exhibit to Stock Purchase Agreement
Lease Agreement B
Security Agreement C
Guaranty D
Pledge Agreement E
The Registrant hereby undertakes to supplementally furnish a
copy of any omitted exhibit to the Commission promptly upon
request.
<PAGE>
Exhibit 2.2
PURCHASE AGREEMENT
This Purchase Agreement dated as of March 8, 1996 is entered
into by and among SA Telecommunications, Inc., a Delaware
corporation (the " Purchaser"), and Howard Maddera, William L.
Johnson and Marianne Reed (collectively the "Sellers").
WHEREAS, Sellers, Purchaser and NTS Communications, Inc.
("NTS") entered into that certain Stock Purchase Agreement dated
as of June 30, 1995, as amended through the date hereof (the
"Stock Purchase Agreement"), pursuant to which Sellers and NTS
sold to Purchaser all of the issued and outstanding capital stock
of U.S. Communications, Inc., a Texas corporation ("USC");
WHEREAS, Sellers and Purchaser 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 Sellers purchased: (1) promissory notes of Purchaser in an
aggregate original principal amount of $2,750,000 (the "Purchase
Notes"), (2) promissory notes of Purchaser in an aggregate
original principal amount of $1,500,000 (the "Offset Notes"), (3)
an aggregate of 125,000 shares of Purchaser's Series B Cumulative
Convertible Preferred Stock (the "Preferred Shares"), and (4)
common stock purchase warrants exercisable into 1,050,000 shares
of Purchaser's Common Stock (the "Warrants"), in the amounts set
forth beside each of the Sellers' names on Exhibit A hereto;
WHEREAS, pursuant to that certain Agreement dated as of
September 21, 1995 between Sellers and Purchaser, (1) Sellers
waived their right to convert the Preferred Shares into Common
Stock of Purchaser, and (2) Purchaser made an aggregate
prepayment of principal of $1,100,000 plus aggregate accrued
interest of $17,813.83 on the Purchase Notes, reducing the
outstanding principal balance of the Purchase Notes to $1,650,000
on the date hereof;
WHEREAS, Purchaser has certain offset rights against the
Offset Notes pursuant to the Stock Purchase Agreement, not all of
which are known on the date hereof (the "Offset Rights");
WHEREAS, Sellers and Purchaser have entered into an
Agreement dated as of February 29, 1996 extending and modifying
the payment terms of the Offset Notes and the Purchase Notes (the
"Modification Agreement");
WHEREAS, Sellers desire to sell and transfer to Purchaser,
and Purchaser desires to purchase from the Sellers, the Purchase
Notes, the Offset Notes, 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:
<PAGE>
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 Shares from Seller, for an aggregate consideration of
$3,085,000 (the "Purchase Price") allocated as follows: (a)
$1,650,000 for the Purchase Notes and the Offset Notes, (b)
$1,250,000 for the Preferred Shares and any accrued but unpaid
dividends thereon, (c) $1 for the Warrants, (d) $184,999 for
interest on the Purchase Notes and Offset Notes.
2. March 8 Payment. In accordance with the Modification
Agreement, simultaneously with the execution of this Agreement,
Buyer has delivered to Sellers checks for an aggregate of
$308,500 as a principal payment on the Offset Notes allocated
among Sellers as set forth on Exhibit B hereto (the "Deposit"),
and if the Closing occurs, the amount of the Deposit shall be
credited against the Purchase Price of the Instruments and the
remainder of the Purchase Price shall be payable at the Closing
as set forth on Exhibit C hereto. If the Closing does not occur
on or prior to the Anticipated Closing Date, in accordance with
the Modification Agreement: (a) the second principal payment as
set forth on Exhibit B hereto and the accrued but unpaid interest
on the unpaid principal amount of such Offset Notes 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 Notes 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 Notes
shall be the Anticipated Closing Date, April 30, 1996, July 31,
1996 and October 31, 1996 (the "Maturity Date"); (d) the final
payment of principal and accrued interest on the Purchase Notes
shall continue to be the Maturity Date; and (e) such extension
and modification of the terms of the Purchase Notes and the
Offset Notes 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 3:00 p.m.. on April 1, 1996 or such
later date on or prior to April 15, 1996 (the "Anticipated
Closing Date") as shall be required for Purchaser to (a) complete
the financing of the purchase price set forth in Section 1 and 2
hereof (the "Financing"), and (b) obtain the consent of Norwest
Bank Minnesota, National Association to the transactions
contemplated hereby and the Financing thereof (the "Bank
Consent"); provided, however, in no event shall the Anticipated
Closing Date be later than April 15, 1996 even if the Bank
Consent is not obtained and the Financing is not complete. The
time and date on which the Closing hereunder occurs is herein
called the "Closing". At the Closing, Sellers will deliver to
Purchaser the documents referred to in Section 8 hereof against
delivery by Buyer to Sellers of the Purchase Price due at Closing
as set forth on Exhibit C hereto and the documents referred to in
Section 7 hereof.
3. Buyer Representations. Buyer represents and warrants
to Sellers (which representations and warranties shall survive
the Closing regardless of what investigations, if any, Sellers
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; and (b) this
Agreement has been duly authorized, executed and delivered by
Buyer and is a valid and
<PAGE>
binding agreement of Buyer enforceable against Buyer in
accordance with its terms, subject to the Bank Consent.
4. Sellers Representations. Sellers jointly and severally
represent and warrant 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 each of Sellers and is a valid and binding agreement of each
of Sellers enforceable against each of Sellers in accordance with
its terms; (b) each of the Instruments is owned of record and
beneficially by Sellers as set forth on Exhibit A hereto, free
and clear of all liens, claims and encumbrances of any kind; (c)
each of Sellers 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) none of Sellers has
transferred any interest in any of the Instruments to any person
or entity.
5. Buyer's Covenants. Buyer covenants and agrees that
between the date hereof and the Closing: (a) without the prior
written consent of Howard Maddera on behalf of all Sellers, 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.
6. Sellers' Covenants. Sellers jointly and severally
covenant and agree that, between the date hereof and the Closing,
without the prior written consent of Buyer, none of Sellers shall
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
Sellers herein not to be true, correct and accurate as of the
Closing.
7. Conditions to Obligations of Sellers. The obligations
of Sellers 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 Howard
Maddera on behalf of all Sellers: (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, (c)
Buyer shall pay the remainder of the Purchase Price as set forth
on Exhibit C hereto, and (d) Buyer shall have executed the
releases in substantially the form of Exhibits D-1, D-2 and D-3
hereto.
8. 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
<PAGE>
conditions, but compliance with any such conditions may be waived
by Buyer: (a) Buyer shall have obtained the Bank Consent, (b)
Buyer shall have completed the Financing; (c) Sellers shall have
delivered to Buyer the original Purchase Notes and Offset Notes,
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 E hereto; and (d) Sellers shall have executed and
delivered the release in substantially the form of Exhibit F
hereto.
9. 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, at 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.
10. 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.
11. Indemnification. In the event the transactions
contemplated hereby are consummated, each of Sellers hereby
jointly and severally agree 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 Sellers contained in
this Agreement or in any Exhibit or document delivered pursuant
hereto, (ii) any claim made against Buyer in respect of the
Instruments.
12. Entire Agreement. This Agreement, the documents
referred to herein and the exhibits hereto set forth all the
covenants, promises, agreements, conditions and understandings
among the parties hereto, and there are no other covenants,
promises, agreements, conditions or understandings, whether oral
or written, among the parties hereto.
13. 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.
14. 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 attorneys' fees and costs
incurred therein.
15. 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.
16. 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
<PAGE>
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.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the date above written.
SA TELECOMMUNICATIONS, INC. /s/ Howard Maddera
INC. Howard Maddera
By: /s/ Jack W. Matz Jr. /s/ William L. Johnson
Jack W. Matz Jr. William L. Johnson
Chairman and Chief
Executive Officer /s/ Marianne Reed
Marianne Reed
Address: 1912 Avenue K, Suite 100 Address for all Sellers:
Plano, TX. 75074 c/o Howard Maddera
110 Brentwood
Levelland, TX 79336
<PAGE>
SPOUSAL CONSENTS
The undersigned, each in their individual capacity as the spouse
of the person listed opposite their respective name, does hereby
execute this Agreement below for the purposes of (i) indicating
his or her understanding of, and binding him or her to perform in
accordance with the provisions of this Agreement, (ii) binding
his or her community property interest, if any, in the property
which is the subject of this Agreement (the "Property") now or
hereafter owned by his or her spouse, and (iii) acknowledging
that if the Property owned by his or her spouse is community
property, it is the special community property of such spouse,
subject to the exclusive control and dominion of said spouse.
Spouse Seller Date
- ------ ------ ----
/s/ Shellie Johnson William L. Johnson March 7, 1996
Name: Shellie Johnson
/s/ Fern Maddera Howard Maddera March 7, 1996
Name: Fern Maddera
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
Shares of
Series B
Name of Purchase Preferred
Seller Notes Offset Notes Stock Warrants
- ------- -------- ------------ --------- --------
<S> <C> <C> <C> <C>
Howard
Maddera $1,100,000 $600,000 50,000 420,000
William L.
Johnson $1,100,000 $600,000 50,000 420,000
Marianne
Reed $ 500,000 $300,000 25,000 210,000
</TABLE>
<PAGE>
EXHIBIT B
<TABLE>
<CAPTION>
Name of Seller First Installment Second Installment
of Principal of Principal on
on 3/8/96 Anticipated Closing Date
- -------------- ----------------- ------------------------
<S> <C> <C>
Howard Maddera $123,400 $176,600
William L. Johnson $123,400 $176,600
Marianne Reed $ 61,700 $ 88,300
-------- --------
TOTAL $308,500 $441,500
</TABLE>
<PAGE>
EXHIBIT C
<TABLE>
<CAPTION>
Portion of Purchase Portion of Purchase
Name of Seller Price Payable Price Payable
On 3/8/96 At Closing
- -------------- ------------------- -------------------
<S> <C> <C>
Howard Maddera $123,400 $1,110,600
William L. Johnson $123,400 $1,110,600
Marianne Reed $ 61,700 $ 555,300
________ __________
Total $308,500 $2,276,500
</TABLE>
<PAGE>
EXHIBIT E
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 ____________ shares
of Common Stock of SA Telecommunications, Inc. to which such
Warrant relates, and appoints 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: April __, 1996 ________________________________________
(Signature must conform in all respects
to name of holder as specified on the
face of Warrant)
Address:________________________________
________________________________________
<PAGE>
Exhibit 99
FOR IMMEDIATE RELEASE
SA TELECOMMUNICATIONS SELLS
STRATEGIC ABSTRACT & TITLE CORPORATION
PLANO, TEXAS, March 1, 1996 - SA Telecommunications, Inc.
(NASDAQ - STEL), today announced it has completed the sale of stock
of its wholly-owned subsidiary, Strategic Abstract & Title
Corporation (SATC), to Permian Basis Title Services, Inc.
SATC owns a proprietary information database offering on-line title
abstracting and title insurance and reporting services. The
company operates from two plants in Midland County and Ector
County, Texas.
Commenting on the sale, Jack W. Matz, Chairman and Chief Executive
Officer of SA Telecommunications stated that: "The sale of SATC is
in line with our Company's strategy of focusing on its primary
business of providing telecommunications services."
Based in Plano, Texas, SA Telecommunications is a global
telecommunications interexchange carrier providing domestic and
international telecommunications services to its customer base from
over 20 offices across the Southwestern United States.
# # #
For more information:
Jack W. Matz, Jr. - Chief Executive Officer
SA Telecommunications, Inc.
Tel: 214-516-0662
Fax: 214-881-0656
