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"). Xxxxx
Xxxxxxxxx, 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 Xxxxxx Xxxxxxx, Xxxx Xxxxxxx
and Xxxxxxxx Xxxx (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;
(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,
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/ Xxxx X. Xxxx Xx. By: /s/ Xxxxx Xxxxxxxxx
Xxxx X. Xxxx Xx. Xxxxx Xxxxxxxxx
Chairman and Chief Executive President
Officer
Address: 0000 Xxxxxx X, Xxxxx 000 Address: 0000 Xxxxxxxx Xxxxxx
Xxxxx, XX. 00000 Xxxxxx, Xxxxx 00000
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 0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxxxx, Xxxxx 00000, 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
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/ Xxxxx Yorbrough
Xxxxx Xxxxxxxxx
President
SCHEDULE OF PAYMENTS ON NOTE
Starting Principal $500,000 - 7% Simple Interest
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
_________________________________________________________________
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
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.
