SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of The Securities Act
of 1934.
Date of Report (Date of earliest event reported):
MAY 4, 1999
BUFFALO CAPITAL III, LTD.
(Exact name of registrant as specified in its charter)
Commission File Number: 0-21951
COLORADO 84-1356383
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
5001 East Spring Valley Road, Suite 800
Dallas, Texas 75244
__________________________________________
Address of principal executive offices
Registrant's telephone number: (805)295-8200
7331 S. Meadow Court,
Boulder, CO 80301
________________________________________________________
(Former name or former address, if changed since last report)
<PAGE>
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) On May 4, 1999, a change in control of the registrant
occurred. On that date, Steadfast Investments, L.P., a Delaware
limited partnership, and GMK Family Holdings, L.L.C., a Delaware
limited liability company, purchased a total of 12,740,000 newly
issued shares of common stock from the Company for a purchase
price of $1,000. Accordingly, as of May 4, 1999, the issued and
outstanding common stock of the Company increased from 1,260,000
shares to 14,000,000 shares, of which 11,083,800 shares, or
approximately 79.17%, are owned by Steadfast Investments, L.P.,
and 1,656,200 shares, or approximately 11.83%, are owned by GMK
Family Holdings, L.L.C.
Steadfast and GMK acquired a controlling interest in the
Company in anticipation of a business combination transaction
between the Company and The Heritage Organization, L.L.C., or
between the Company and Steadfast Investments, L.P., the principal
owner of The Heritage Organization. The Heritage Organization,
L.L.C., is engaged in the business of providing counseling services to
high net worth individuals and families.
In conjunction with the change in ownership of a controlling
interest in the stock of the registrant, the previous officers and
directors of the registrant resigned and appointed new officers and
directors designated by the purchasers. The newly appointed officers
and directors are:
<TABLE>
<CAPTION>
Name Position
<S> <C>
Gary M. Kornman Chairman of Board
of Directors
W. Ralph Canada, Jr. President & Director
Vickie A. Walker Treasurer & Director
Terry O. Reid Secretary & Director
</TABLE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibit (2) - Stock Subscription Agreement.
SIGNATURES
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.
BUFFALO CAPITAL III, LTD.
(Registrant)
May 6, 1999
(Date)
/s/ _________________
(Signature)*
W. Ralph Canada, Jr., President
*Print name and title of signing officer under signature.
<PAGE>
Exhibit (2) - STOCK SUBSCRIPTION AGREEMENT
BUFFALO CAPITAL III, LTD.
THIS STOCK SUBSCRIPTION AGREEMENT (called and
referred to herein as the "Agreement") is made and entered into,
having an effective date as of April 22, 1999, by and between Buffalo
Capital III, Ltd., a Colorado corporation (called and referred to in this
Agreement as the "Corporation"), Steadfast Investments, L.P., a
Delaware limited partnership and GMK Family Holdings, LLC, a
Delaware limited liability company (collectively called and referred to
in this Agreement as the "Investors") and Mark DiSalvo, Gary S.
Joiner, Dean F. Sessions, and Grant W. Peck (collectively called and
referred to in this Agreement as the "Principal Shareholders"). The
Corporation, the Investors and the Principal Shareholders are
sometimes referred to in this Agreement as a "Party" or, collectively,
as "Parties."
RECITALS and STIPULATIONS
WHEREAS, the Corporation, the Principal Shareholders and
the Investors desire to enter into this Agreement pursuant to which the
Investors will purchase, and the Corporation will sell 12,740,000
shares of the Corporation's Common Stock; and
WHEREAS, there is no issued and outstanding preferred stock
of the Corporation as of the Closing Date of this Agreement; and
WHEREAS, there will be no issued and outstanding warrants
of the Corporation as of the Closing Date of this Agreement; and
WHEREAS, the Corporation, the Principal Shareholders and
the Investor desire to make certain representations, warranties,
covenants and agreements pursuant to the terms of this Agreement;
and
WHEREAS, Certain definitions are set forth in Article IX of
this Agreement and elsewhere in this Agreement.
NOW THEREFORE, in consideration of the foregoing, and in
consideration of the mutual representations, warranties, covenants,
agreements and conditions contained and set forth in this Agreement,
the Parties hereto hereby agree as follows:
ARTICLE I
SALE OF CORPORATION'S SHARES
1.1 Purchase and Sale of Common Stock. Subject to the
terms and conditions of this Agreement, on the Closing Date, the
Investors shall purchase, and the Corporation shall sell to the
Investors 12,740,000 shares of Common Stock (called and referred to
in this Agreement as the "Shares"), for a purchase price of One
Thousand Dollars ($1,000) (called and referred to in this Agreement
as the "Purchase Price"). Steadfast Investments, L.P., shall purchase
11,083,800 of the Shares for a purchase price of $870, and GMK
Family Holdings, LLC, shall purchase 1,656,200 of the Shares for a
purchase price of $130. Simultaneously the Corporation shall deliver,
or cause its Transfer Agent to deliver, to each of the Investors
certificates representing the appropriate number of Shares, and each
of the Investors shall deliver to the Corporation, by check or wire
transfer on the Closing Date, the appropriate portion of the Purchase
Price.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE PRINCIPAL
STOCKHOLDERS AND THE CORPORATION
The Corporation and each of the Principal Shareholders,
hereby jointly and severally represent and warrant to the Investor as
follows:
2.1 Filing of Reports. Since its inception, the Corporation
has duly filed with the Securities and Exchange Commission (called
and referred to in this Agreement as the "Commission") on a timely
basis, all reports, registration statements, filings and other documents
to be filed by the Corporation (called and referred to in this
Agreement as the "Disclosure Documents") as desirable or required to
be filed with the Commission by the Securities Exchange Act of 1934,
as amended (called and referred to in this Agreement as "The '34
Exchange Act") and the rules and regulations thereunder and in
accordance with the rules and regulations of the Commission. The
Corporation has furnished to the Investors a true and correct copy of
each Disclosure Document. Each Disclosure Document did not, as of
the date on which it was signed, contain any untrue statement of a fact
or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading. There have not been any changes in the
facts or circumstances described in any of the Disclosure Documents
which are adverse to the Corporation or its stockholders including by
way of example but not limited to, there being any change in the
capital stock or any increase in the liabilities, or any adverse change
in the condition (financial or otherwise) or business of the
Corporation.
2.2 Organization and Good Standing. The Corporation has
been duly organized and is validly existing as a corporation in good
standing under the laws of the State of Colorado, with full power and
authority (corporate and other) to own its properties and conduct its
business as described in the Disclosure Documents, and is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the character of the business
conducted by it or the nature of the properties owned or leased by it
makes such qualification necessary for the conduct of its business as
described in the Disclosure Documents, except where the failure to be
so qualified would not have an adverse effect on the Corporation.
2.3 No Operations. The Corporation is not, nor since its
inception has it been, engaged in the operation of any business other
than the holding of funds pending the acquisition of an operating
company. The Corporation is not, nor has it been since its inception,
party to, nor are any of its business, properties, or assets, bound by
any contracts, agreements, indentures or other instruments, whether
written or oral.
2.4 No Liabilities or Transactions. Except as set forth in
this Agreement or as described in the Disclosure Documents,
subsequent to the respective dates as of which information is given in
the Disclosure Documents, the Corporation has not incurred any
liability or obligation, direct or contingent, or entered into any
transaction (except for the transactions contemplated hereby), whether
or not in the ordinary course of business, and, except for the issuance
of additional Common Stock, pursuant to the Subscription Agreement
described in Section 6.1(e), there has not been any change in the
capital stock or any increase in the liabilities, or any adverse change
in the condition (financial or otherwise) or business of the
Corporation.
2.5 No Violation or Conflict. The Corporation is not in
violation of any provision of its Articles of Incorporation or Bylaws,
or in default in the performance of any obligation contained in any
agreement, indenture or other instrument. The performance by the
Corporation of its obligations under this Agreement and the
consummation of the transactions hereby contemplated will not
conflict with or result in a breach of the Articles of Incorporation or
Bylaws of the Corporation, or any agreement, indenture or other
instrument to which the Corporation is a party or by which it is
bound, or (assuming the accuracy of the Investors' representations and
warranties in this Agreement) any law, rule, administrative regulation
or decree of any court or governmental authority having jurisdiction
over the Corporation or its properties, or result in the creation or
imposition of any lien, charge, claim or encumbrance upon any
property or asset of the Corporation. Except as required by The '33
Securities Act or The '34 Exchange Act and applicable state
securities or blue sky laws, no consent, approval, authorization or
order of any court or governmental authority is required in connection
with the consummation of the transactions contemplated by this
Agreement. The rights granted to the Investors hereunder do not in
any way conflict with and are not inconsistent with any rights granted
to the holders of the Corporation's securities or debt instruments.
2.6 Agreement Duly Authorized. The Corporation has full
right, power and authority to enter into this Agreement and this
Agreement has been duly authorized, executed and delivered by the
Corporation and constitutes the legal, valid and binding agreement of
the Corporation, enforceable against the Corporation in accordance
with its terms (except in all cases as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting the enforcement of creditors'
rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding may be brought).
2.7 Trading of Common Stock. The request, filed with
NASD Regulation by J. Alexander Securities, Inc., pursuant to NASD
Rule 6740 and Rule 15c2-11 under the Securities Exchange Act of
1934, for clearance for unpriced quotations of the Company's
common stock on the OTC Bulletin Board, was approved on April 9,
1998. The Common Stock of the Corporation is, and since April 9,
1998, has been approved for trading and has been traded on the OTC
Bulletin Board under the symbol "BUFG".
2.8 No Actions or Proceedings. Except as set forth in the
Disclosure Documents, there are no actions, suits or proceedings
pending before or by any court or governmental agency or authority,
or any arbitrator, which seek to restrain or prohibit the consummation
of the transactions contemplated hereby or which might reasonably be
expected to result in any adverse change in the condition (financial or
otherwise) or the business of the Corporation and, to the knowledge
of the Corporation, the Principal Shareholders, the Corporation's
officers, and/or the Corporation's directors, no such action, suit or
proceeding has been threatened.
2.9 No Violation or Failure. The Corporation is not in
violation of any law, ordinance, governmental rule or regulation or
court decree to which it may be subject and the Corporation has not
failed to obtain any license, permit, franchise or other governmental
authorization necessary to the ownership of its property or to the
conduct of its business, which violation or failure to obtain is likely to
have an adverse effect on the condition (financial or otherwise) or the
business of the Corporation.
2.10 Authorized Capital Stock. Immediately upon the
consummation of this Agreement, the authorized capital stock of the
Corporation will consist of 100,000,000 shares of Common Stock, of
which 14,000,000 shares will be issued and outstanding, 10,000,000
shares of preferred stock, of which no shares will be issued and
outstanding. The shares to be issued under this Agreement, upon
issuance and payment therefor in accordance with the terms hereof,
will be duly and validly authorized and issued, fully paid and non-
assessable and will not have been issued in violation of any pre-
emptive or similar right of any person or of any federal or state law.
2.11 No Restrictions On Changes Of Officers And Board Of
Directors. None of the Corporation's Articles of Incorporation,
Bylaws, or any contract, agreement or understanding to which the
Corporation is a party, whether written or oral, restricts a majority of
the Corporation's stockholders from immediately, or at any time,
terminating and replacing all of the Corporation's officers and
immediately, or at any time, terminating and replacing all members of
the Corporation's board of directors, should a majority of the
Corporation's stockholders determine to do so.
2.12 No Employment Agreements. No person is party to
any employment agreement or other agreement related to employment
matters with the Corporation.
2.13 No Untrue Statement of Facts. No document or
statement in writing which has been supplied by or on behalf of the
Corporation or any of the Principal Stockholders in connection with
the transactions contemplated by this Agreement contains any untrue
statement of fact, or omits any statement of fact necessary to make
such statement, in light of the circumstances under which it was
made, not misleading.
2.14 Lawful Owner. Each of the stockholders is the lawful
owner of the number of shares listed opposite his or her name on
Exhibit A attached hereto, free and clear of all liens, encumbrances,
restrictions and claims of every kind, and the Corporation and each of
the stockholders has the full legal right, power and authority to enter
into this Agreement.
2.15 Restriction on Consummation. The Corporation and
none of its stockholders is subject to, or a party to, any mortgage,
lien, lease, license, permit, agreement, contract, instrument, law,
rule, ordinance, regulation, order, judgment or decree, or any other
restriction of any kind or character which affects the business
practices, operations or condition of the Corporation or any of its
assets or properties, or which would prevent consummation of the
transactions contemplated by this Agreement, compliance by the
Corporation and any of the Principal Stockholders with the terms,
conditions and provisions hereof or the continued operation of the
Corporation's business after the date hereof or the Closing Date on
substantially the same basis as heretofore operated.
2.16 No Agent or Broker. No agent, broker, person or
firm acting on behalf of any of the Sellers is, or will be, entitled to
any commission or broker's or finder's fees from such Seller in
connection with any of the transactions contemplated by this
Agreement.
2.17 No Compensation or Benefit To Any Third Person.
No person is, or will be, receiving any compensation, commission,
fees or benefits from the Corporation, any of the Principal
Stockholders or any of the Stockholders in connection with any of the
transactions contemplated by this Agreement.
2.18 Stockholder List is True and Correct. The list of
Stockholders provided to the Buyer by the Sellers (such list being the
list prepared by Corporate Stock Transfer, Inc. dated within the prior
30 days of the effective date of this Agreement), which is attached
hereto as Exhibit A sets truthfully and correctly sets forth the name
and the class and number of shares of each class of the Corporation's
capital stock owned by each stockholder of the Corporation and is a
true and correct listing of the current shareholders of the Corporation
as of the date of execution of this Agreement and shall be a true and
correct listing of the existing shareholders of the Corporation as of the
Closing Date of this Agreement
2.19 9% Limitation On Holdings of Capital Stock By Other
Stockholders. After giving effect to the transactions at the time of the
Closing contemplated hereby, other than the Investors, no stockholder
of any class of the Corporation's capital stock shall hold in excess of
9% of any class of the Corporation's capital stock.
2.20 Total of 91% of Holdings of Capital Stock By the
Investors. After giving effect to the transactions at the time of the
Closing contemplated hereby, the Investors shall hold in excess of
90.99% of any and all classes of the Corporation's capital stock
2.21 9% Limitation On Holding of Voting Power By Other
Stockholders. After giving effect to the transactions at the time of the
Closing contemplated hereby, other than the Investors, no stockholder
shall hold in excess of 9% of the combined voting power of the
Corporation's outstanding voting securities.
2.22 Truth of Representations and Warranties The
representations and warranties of the Corporation and/or any of the
Principal Stockholders contained in this Agreement shall be true and
correct on and as of the Closing Date with the same effect as though
such representations and warranties had been made on and as of such
date, and the Corporation and/or any of the Principal Stockholders
shall have delivered a certificate or certificates, dated the Closing
Date, to such effect. Neither the consummation of the transaction
contemplated hereby, nor sales of Common Stock by the Corporation
and/or any or all of the Corporation's current stockholders of all or a
portion of their shares of Common Stock, would cause any of the
representations and warranties contained in this Article II to be untrue
or incorrect in any respect and/or regard as of the Closing Date.
2.23 No Employment Agreements. No person is party to
any employment agreement or other agreement related to employment
matters with the Corporation.
2.24 No Agreements of Any Kind. No person is party to
any agreement, whether oral or written, with the Corporation and/or
any of the Principal Stockholders which is not disclosed in this
Agreement and/or attached hereto.
2.25 The Corporation Is A Reporting Company. The
Corporation has filed Form 10-SB under The '34 Exchange Act and is
registered under section 12(g) of The '34 Exchange Act, and has been
since its formation, a reporting company to the Commission under
section 12(g) of The '34 Exchange Act and all reports have been filed
as are required or desirable under the reporting requirements of
section 12(g) of The '34 Exchange Act
2.26 Change of Officers and Directors. On the Closing
Date, each of the current officers and directors of the Corporation
shall resign, after having taken any and all steps which may be
necessary or appropriate to appoint the person or persons designated
by the Investors as their successors to fill the vacancies created by
such resignation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
In connection with the purchase and sale of the Shares
hereunder, the Investors represent and warrant to the Corporation
that:
3.1 Accredited Investors. The Investors are "accredited
investors" as that term is defined in Rule 501(a) under The '33
Securities Act.
3.2 Knowledge And Experience. The Investors have the
requisite knowledge and experience in financial and business matters
to be able to evaluate the risks and benefits of an investment in the
Shares.
3.3 Economic Risk The Investors are able to bear the
economic risk of their investment in the Shares for an indefinite
period of time and acknowledges that the Shares have not been
registered under The '33 Securities Act and, therefore, cannot be sold
unless subsequently registered under The '33 Securities Act or an
exemption from such registration is available.
3.4 Review. The Investors have had an opportunity to ask
questions and receive answers concerning the terms and conditions of
the offering of the Shares and has had full access to such other
information concerning the Corporation as they have requested. The
Investors have reviewed, or have had an opportunity to review, the
following documents: (A) the Corporation's Annual Report on Form
10-KSB for the fiscal year ended May 31, 1998; (B) the Corporation's
Quarterly Report on Form 10-QSB for the quarter ended February 28,
1999; (C) such other documents which could be filed by the
Corporation or which are required to be filed by the Commission
since the Corporation's inception and (D) such other documents
requested by the Investors including, by way of example but not
limited to, all other documents filed by the Corporation with the
Commission since the Corporation's inception.
3.5 Lack of Registration. The Investors understand that the
Shares have not been registered under The '33 Securities Act and that
the Shares constitute "restricted securities" as that term is defined in
Rule 144.
3.6 No Federal Or State Investigation. The Investors
understands that no federal or state agency has made any finding or
determination as to the fairness of the investment in, or any
recommendation or endorsement of, the Shares.
3.7 Enforceable Obligation. This Agreement constitutes
the legal, valid and binding obligation of the Investors, enforceable in
accordance with its terms, and the execution, delivery and
performance of this Agreement by the Investors does not and will not
conflict with, violate or cause a breach of any agreement, contract or
instrument to which the Investors are a party or any judgment, order
or decree to which the Investors are subject.
ARTICLE IV
CONDUCT OF BUSINESS; EXCLUSIVE DEALING
4.1 Conduct of Business of the Corporation. During the
period from the date of this Agreement to the Closing Date, the
Principal Stockholders shall cause the Corporation to conduct its
operations only according to its ordinary and usual course of business.
Notwithstanding the immediately preceding sentence, before the
Closing Date, except as may be first approved by the Investors or as
it is otherwise permitted or required by this Agreement, the Principal
Stockholders will cause (a) the Corporation's charter documents to be
maintained in their form on the date of this Agreement, (b) the
Corporation to refrain from entering into any contract or commitment,
and (c) the Corporation to refrain from authorizing or issuing any
capital stock of any class or any securities convertible or exercisable
into any capital stock of any class, except for issuance of the
additional shares of Common Stock pursuant to the terms of the
Subscription Agreement referred to in Section 6.1(e) hereof. The
Principal Stockholders agree not to take any action, or omit to take
any action, which would cause the representations and warranties
contained in this Agreement to be untrue or incorrect.
ARTICLE V
COVENANTS OF THE CORPORATION AND THE PRINCIPAL
SHAREHOLDERS
The Corporation and the Principal Shareholders each jointly
and severally represents and warrants to the Investors as follow:
5.1 Conduct of Business of the Corporation. The
Corporation and the Principal Shareholders acknowledge that the
representations, warranties, agreements, undertakings and
acknowledgments are made by the Corporation and the Principal
Shareholders with the intent that they be relied upon by the Investors
in determining whether to subscribe for the Shares.
5.2 Cancellation of Warrants of the Corporation. On or
before the Closing Date, the Corporation and the Principal
Shareholders shall cancel or cause to be canceled any and all of the
Corporation's issued and outstanding Class A Warrants and Class B
Warrants.
ARTICLE VI
RESTRICTIONS ON TRANSFER
6.1 The certificates representing the Shares shall bear a
restrictive legend substantially in the following format:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (CALLED AND REFERRED TO HEREIN AS "THE '33
SECURITIES ACT") AND ARE RESTRICTED SECURITIES AS
DEFINED IN RULE 144 UNDER THE '33 SECURITIES ACT.
THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE '33
SECURITIES ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE '33 SECURITIES ACT.
<PAGE>
ARTICLE VII
CONDUCT OF BUSINESS; EXCLUSIVE DEALING
7.1 Conduct of Business of the Corporation. During the
period from the date of this Agreement to the Closing Date, the
Principal Stockholders shall cause the Corporation to conduct its
operations only according to its ordinary and usual course of business.
Notwithstanding the immediately preceding sentence, before the
Closing Date, except as may be first approved by the Investors or as
it is otherwise permitted or required by this Agreement, the Principal
Stockholders will cause (a) the Corporation's charter documents to be
maintained in their form on the date of this Agreement, (b) the
Corporation to refrain from entering into any contract or commitment,
and (c) the Corporation to refrain from authorizing or issuing any
capital stock of any class or any securities convertible or exercisable
into any capital stock of any class, except for issuance of the
additional shares of Common Stock pursuant to the terms of the
Subscription Agreement referred to in Section 6.1(e) hereof. The
Principal Stockholders agree not to take any action, or omit to take
any action, which would cause the representations and warranties
contained in this Agreement to be untrue or incorrect.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNITY; BREACHES
8.1 Survival of Representations and Warranties. All
representations and warranties of the Principal Stockholders, the
Corporation and the Investors contained in this Agreement (including
all schedules and exhibits hereto) or in any certificate, exhibit or other
instrument or document delivered pursuant to this Agreement and the
provisions of this Article VIII shall survive the execution hereof and
the Closing Date for a period of thirty-six (36) months after the
Closing Date, except that with respect to any warranty or
representation concerning any willful, intentional or knowing
misrepresentation of the Principal Stockholders, the Sellers, the
Corporation, or any of their respective officers, directors, employees,
agents or representatives, such representations and warranties shall
survive until the expiration of the applicable statute of limitations
pursuant to which any such entity may seek recovery.
Notwithstanding anything in this Agreement to the contrary, any
representation of the Sellers with respect to the ownership of the
Minority Shares shall survive the execution hereof and the Closing
Date indefinitely.
8.2 Indemnification. The Corporation and the Principal
Stockholders jointly and severally agree to indemnify and hold
Investors harmless from damages, losses or expenses, including by
way of example but not limited to, any attorneys' fees and expenses,
in the aggregate, suffered or paid, directly or indirectly, through
application of the Investors' or the Corporation's assets, as a result of
or arising out of the failure of any representation or warranty made by
any and/or all of the Sellers, of the Principal Stockholders or of the
Corporation in this Agreement or in any Schedule attached hereto,
which is represented or warranted to be true and correct in any
respects as of the date of this Agreement and as of the Closing Date.
8.3 Waivers of Breaches. The failure or delay by any
Party to insist upon the strict performance or enforcement of every
promise, duty, Term, condition, obligation, agreement, transfer,
conveyance and right contained in this Agreement shall not be deemed
a release or waiver of any of its rights, powers or any of the
provisions of this Agreement or a waiver of any breach or default by
any Party of any Term, condition, or provision of this Agreement,
nor shall any custom or practice which may grow up between the
Parties in the administration of this Agreement be construed to waive
or lessen the rights of any Party to insist upon the performance by any
other Party in strict accordance with the Terms, conditions, and
provisions set forth in this Agreement. To be effective, any waiver
must be in writing and signed by the Party so waiving, and any such
waiver shall apply only to the matter or instance so specifically
waived and shall not operate or be construed as a waiver of any
subsequent breach by any Party.
ARTICLE IX
DEFINITIONS
The definitions and explanations of terms set forth below or
elsewhere in this Agreement shall govern the meaning, interpretation
and application of such terms as used in this Agreement. Words not
defined in this Agreement shall have their ordinary meanings.
9.1 The term "Any and All Claims" shall be broadly
construed and shall mean any and all disputes, claims, causes of
action and other controversies which now exist or which may
hereafter arise at any time between any of the Parties, including by
way of example but not limitation, any and all claims sounding in
contract or in tort, any and all claims at law or in equity, any and all
causes of action under common law, any and all causes of action
under any present or future federal or state statutes or regulations,
and/or any and all disputes arising under or relating in any way to this
Agreement or any omission or commission of any act relating in any
way to this Agreement, its provisions, its terms or conditions.
9.2 The term "Authorized Arbitrator" shall be narrowly
construed and shall mean any Natural Person for which each and all
of the following requirements have been met or such other Natural
Person who is mutually agreed upon in writing by the Parties:
a) Such Natural Person shall be, at the time of his
selection as an arbitrator, an attorney who has practiced in the area of
corporate or securities law for at least ten years; and
b) Each Party shall have provided to the other
Parties written notice identifying, by name, address, firm name, firm
address, office and residence telephone numbers, each such Natural
Person being considered by the Party for selection as an arbitrator;
and
c) Such Natural Person shall have had personal
earnings from his practice in the area of corporate or securities law of
at least Three Hundred Thousand Dollars ($300,000) in the calendar
year preceding his selection as an arbitrator; and
d) Neither such Natural Person, his firm nor any
family member of such Natural Person shall have or have had, at any
time, any relationship of any kind including, by way of example but
not limitation, social, business, pecuniary, familial, or otherwise with
any of the Parties or the agents, employees, Affiliates,
Representatives or Family Members of any of the Parties. It is the
intent of this Agreement to eliminate any Person as an Authorized
Arbitrator who, for any reason, may have a tendency to be partial to
one of the Parties to this Agreement.
9.3 The term "Closing Date" shall mean May 14, 1999, or
such earlier date as may hereafter be agreed to by the Corporation and
the Investors subsequent to the receipt by either the Corporation or
the Investors, or both, as the case may be, of any requisite lender and
third party consents to the transactions contemplated hereby;
provided, however, that such date shall be no more than 30 days after
the receipt by the applicable party of the last of such consents.
9.4 The term "Common Stock" shall mean the
Corporation's Common Stock or, in the event that the outstanding
Common Stock is hereafter changed into or exchanged for different
stock or securities of the Corporation, such other stock or securities.
9.5 The term "The '33 Securities Act" shall mean the
Securities Act of 1933, and the rules and regulations promulgated
thereunder, as amended from time to time.
9.6 The term "Term" shall be broadly construed and shall
mean and include each, and any collectively, word, part, phrase,
section, clause, paragraph, sentence, term or provision of this
Agreement.
ARTICLE X
MISCELLANEOUS
10.1 Knowledge. Anywhere in this Agreement that the
terms "Acknowledge", "agree", "represent", and/or "warrant" are
used or where any representation or warranty is expressly qualified by
reference to the knowledge of any Parties, such Parties confirm that
they have made reasonable inquiry as to the matters that are the
subject of such Acknowledgement, agreement, representation and/or
warranty.
10.2 Expenses. All of the expenses relating to the
transactions contemplated by this Agreement, including, without
limitation, the fees and expenses of the counsel and financial advisors,
shall be paid by the Party incurring such expenses.
10.3 Choice of Law. Because the Parties Acknowledge that
important aspects of performance of this Agreement shall occur in the
State of Texas, even though the business activities of the Parties may
occur anywhere authorized, the Terms of this Agreement, including
their interpretation and validity, shall be governed and construed
according to the laws of the State of Texas. If any conflict or choice
of law rules would choose a law of another state, each Party waives
such rules and agrees that Texas substantive law shall nonetheless
govern. The Parties Acknowledge that the interpretation, construction
and performance of this Agreement, and all matters relating thereto,
shall be governed by and interpreted in accordance with the laws of
the State of Texas. The internal laws of the State of Texas will govern
all questions concerning the relative rights of the Corporation and its
stockholders.
10.4 Jurisdiction, Venue and Agent for Service. Without
waiving or limiting the provisions of Article XI - AGREEMENT TO
ARBITRATE, each of the Parties to this Agreement (i) consents to
the exclusive personal jurisdiction of the Texas state courts in Dallas
County, Texas and U.S. Federal courts in Dallas County, Texas, for
Any and All Claims and each of the Parties to this Agreement
Acknowledges the exclusive jurisdiction of such courts, and
irrevocably agrees to be bound by any judgment rendered thereby
relating to Any and All Claims; and (ii) Acknowledges that, as to Any
and All Claims, any and all lawsuits and other proceedings, except
proceedings to enforce arbitration awards, shall be brought in Dallas
County, Texas, and in no other jurisdiction or venue. Each of the
Parties hereby appoints the Texas Secretary of State as their agent for
service of process with respect to Any and All Claims, and waives
any and all rights to a trial by jury for Any and All Claims. If any
lawsuits and other proceedings, except proceedings to enforce
arbitration awards, are brought by any of the Parties outside the state
and federal courts in Dallas County, Texas, the other Parties in any
litigation or other proceedings attempting to terminate or remove such
litigation or other proceedings into the Texas state courts in Dallas
County, Texas, and U.S. Federal courts in Dallas County, Texas,
shall be entitled to receive from the Party instituting such litigation or
other proceedings other than in the Texas state courts in Dallas
County, Texas, and the U.S. Federal courts in Dallas County, Texas,
any and all costs and expenses, including any and all counsel fees,
incurred by the Parties attempting to terminate or remove such
litigation or other proceedings.
10.5 Captions. Titles, captions and headings of articles,
sections and subsections and of any other parts of this Agreement are
for reference purposes and convenience only. They are not intended to
reflect, restrict or to in any way limit or amplify the terms and
provisions of this Agreement, or to encompass all of the Terms and
provisions of this Agreement or to interpret or govern such Terms and
provisions. The text of the Terms and provisions themselves shall
control. Titles, captions and headings of articles, sections and
subsections and of any other parts of this Agreement are for
identification only, are otherwise not part of this Agreement and shall
not, in any way, affect the meaning or interpretation of this
Agreement.
10.6 Delivery of Notices. All notices, approvals,
disclosures, demands and other communications required or permitted
to be given under this Agreement shall be sufficiently given if it is in
writing and (i) delivered personally, (ii) sent via overnight courier or
overnight messenger service (charges prepaid) including, but not
limited to, Federal Express, United Parcel Service, U.S. Mail
overnight service, Airborne Express, Emery, (iii) sent by private
courier or private messenger service (charges prepaid) (iv) sent via
telecopy, or (v) mailed by first class mail, certified mail or registered
mail (postage prepaid), to the Parties at the following Facsimile
numbers or addresses or such properly notified changed Facsimile
number or address:
If to the Investor:
Steadfast Investments, L.P.
Attention: Terry O. Reid
Suite 800 East, Providence Towers
5001 Spring Valley Road
Dallas, Texas 75244
Facsimile: (972) 991-5140
with a copy to:
Steadfast Investments, L.P.
Attn: Vickie A. Walker
1683 South Walker Road
Pleasant View, Tennessee 37146
Facsimile: (615) 746-2472
If to GMK Family Holdings, LLC, to:
GMK Family Holdings, LLC
Attention: Terry O. Reid
Suite 800 East, Providence Towers
5001 Spring Valley Road
Dallas, Texas 75244
Facsimile: (972) 991-5140
with a copy to:
GMK Family Holdings, LLC
Attn: Vickie A. Walker
1683 South Walker Road
Pleasant View, Tennessee 37146
Facsimile: (615) 746-2472
If to the Corporation to:
Buffalo Capital III, Ltd.
Attention: Grant W. Peck
7331 S. Meadow Court
Boulder, Colorado 80301
with a copy to:
Frascona, Joiner & Goodman, P.C.
Attn: Gary S. Joiner, Esq.
4750 Table Mesa Drive
Boulder, Colorado 80303
Facsimile: (303) 494-6309
or such other Facsimile number or address or to the attention of such
other person as the recipient Party shall have specified by prior
written notice to the sending Party. Any notice under this Agreement
will be deemed to have been given when so delivered or sent or, if
mailed, five days after deposit in the U.S. mail.
10.7 Methods for Delivery of Notice. Mailed notices shall
be deemed given upon the expiration of five (5) business days after
deposit into the United States first class mail, certified mail or
registered mail, with postage fully prepaid, or if, and only if, a
requested returned receipt is returned to the sender within ten (10)
business days after deposit into the United States mail, the later date
of actual receipt as evidenced by the return receipt. All other notices
shall be deemed given upon actual receipt by the recipient. Each of
the Parties agrees to notify the other Parties in writing of any change
in addresses and Facsimile numbers set forth above, and
Acknowledges that, unless and until such written notice is given,
delivery of all notices to the addresses or Facsimile numbers set forth
above shall be effective and binding on the intended recipient.
10.8 Parties in Interest. This Agreement and/or the rights
created hereunder may be transferred, assigned, pledged or
hypothecated in whole or in part by the Buyer, but may not be
transferred, assigned, pledged or hypothecated by the Sellers and the
Corporation, other than by operation of law. This Agreement shall be
binding upon and shall inure to the benefit of and be enforceable by
the Investors and the Corporation and their respective heirs,
executors, administrators, successors and permitted assigns (including
subsequent holders of the Shares).
10.9 Multiple Copies, Counterparts, Photocopies and
Facsimiles. This Agreement may be executed in any number of
multiple copies or counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
Agreement. Further, this Agreement may be executed in any number
of Facsimile counterparts or Facsimile counterparts of the signature
page, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement. In addition,
this Agreement may contain more than one counterpart of the
signature page and this Agreement may be executed by the affixing of
the signatures of each of the Parties to one of such counterpart
signature pages. All of those counterpart signature pages, whether
Facsimile or otherwise, shall be read as though one, and they shall
have the same force and effect as though all of the signers had signed
a single signature page. In making proof of this Agreement, it shall
not be necessary to produce or account for more than one such
identical copy or counterpart. A photocopy of any executed copy or
counterpart shall be valid as an original. Likewise, a Facsimile of
any executed copy or counterpart and/or a photocopy of a Facsimile
of any executed copy or counterpart shall be valid as an original.
Facsimile transmission of any signed original document shall be the
same as delivery of an original document. At the oral or written
request of either Party, the Parties will confirm Facsimile transmitted
signatures by signing an original document.
10.10 Entire Agreement, Amendments and Supplemental
Agreements. This Agreement, including the other documents
referred to in this Agreement which form a part hereof, contains the
entire understanding and agreement between the Parties. This
Agreement supersedes all prior agreements and understandings
between the Parties with respect to such subject matter and supersedes
and preempts any prior understandings, agreements or representations
by or among the Parties, written or oral, which may have related to
the subject matter hereof in any way. This Agreement may be
amended or supplemented only by an agreement, in writing, fully
executed by the Corporation, the Principal Stockholders, and the
Investors.
10.11 Invalidity. Whenever possible, each part, section,
clause, paragraph, sentence, Term or provision of this Agreement will
be interpreted in such manner as to be effective and valid under
applicable law, but if any part, section, clause, paragraph, sentence,
Term or provision of this Agreement is held to be illegal, void,
invalid, or unenforceable by any court or arbitration panel of
competent jurisdiction, this Agreement shall be construed and
enforced as if such illegal, void, invalid, or unenforceable part,
section, clause, paragraph, sentence, Term or provision had never
comprised a part of this Agreement; and the remaining parts, sections,
clauses, paragraphs, sentences, Terms or provisions of this Agreement
shall remain in full force and effect and shall not be affected by the
illegal, void, invalid, or unenforceable part, section, clause,
paragraph, sentence, Term or provision or by its severance from this
Agreement. Furthermore, in lieu of each such illegal, invalid, or
unenforceable part, section, clause, paragraph, sentence, Term or
provision, there shall be added automatically as a part of this
Agreement a part, section, clause, paragraph, sentence, Term or
provision as similar as, in terms and effects, such illegal, invalid, or
unenforceable part, section, clause, paragraph, sentence, Term or
provision as may be possible and be legal, valid, and enforceable.
10.12 Termination of Agreement. All Parties hereto agree to
use their best efforts to fulfill the requirements of Articles VI and VII
as soon as practicable. If any precondition to the completion of the
transactions contemplated hereby is not fulfilled on or before May 14,
1999, by the Investors, this Agreement shall be null and void and of
no further force or effect.
10.13 Waivers of Breaches. The failure or delay by any
Party to insist upon the strict performance or enforcement of every
promise, duty, Term, condition, obligation, agreement, transfer,
conveyance and right contained in this Agreement shall not be deemed
a release or waiver of any of its rights, powers or any of the
provisions of this Agreement or a waiver of any breach or default by
any Party of any Term, condition, or provision of this Agreement,
nor shall any custom or practice which may grow up between the
Parties in the administration of this Agreement be construed to waive
or lessen the rights of any Party to insist upon the performance by any
other Party in strict accordance with the Terms, conditions, and
provisions set forth in this Agreement. To be effective, any waiver
must be in writing and signed by the Party so waiving, and any such
waiver shall apply only to the matter or instance so specifically
waived and shall not operate or be construed as a waiver of any
subsequent breach by any Party.
10.14 Remedies. Each of the Parties to this Agreement will
be entitled to enforce its rights under this Agreement specifically, to
recover damages and costs (including attorney's fees) caused by any
breach of any Term of this Agreement and to exercise all other rights
existing in its favor.
10.15 Complete Agreement. This Agreement sets forth the
complete agreement and understanding among the Parties and
supersedes and preempts any prior understandings, agreements or
representations by or among the Parties, written or oral, which may
have related to the subject matter hereof in any way.
ARTICLE XI
AGREEMENT TO ARBITRATE
The Parties to this Agreement, for themselves, and on behalf
of their respective employees, officers, directors, principals, attorneys
and agents, hereby agree to arbitrate as follows:
11.1 Arbitration. The Parties agree to submit to and settle
Any and All Claims by binding arbitration. On the written notice of
one Party served on the other, the Parties Acknowledge that they shall
submit to binding arbitration and Acknowledge that they shall settle
Any and All Claims by binding arbitration. Such arbitration shall
comply with and be governed, to the extent not inconsistent with this
Agreement, by the provisions of the Commercial Arbitration Rules of
the American Arbitration Association and the Supplementary
Procedures for Large, Complex Disputes of the American Arbitration
Association (as those Rules and Procedures exist as of June 1, 1998,
without regard to any subsequent amendments or revisions thereto),
and in addition thereto, the Organization shall be entitled to
immediately compel production of all data, facts and documents. In
the event that the provisions of this Article XI are inconsistent with
any term, condition or provision of the Commercial Arbitration Rules
of the American Arbitration Association or the Supplementary
Procedures for Large, Complex Disputes of the American Arbitration
Association (as those Rules and Procedures exist as of June 1, 1998,
without regard to any subsequent amendments or revisions thereto),
then the provisions of this Agreement shall control. Each of the
Parties Acknowledges that no lawsuit or court proceedings shall be
instituted or prosecuted with respect to Any and All Claims, except
for legal proceedings to enforce arbitration awards. Accordingly,
each Party waives and releases any and all rights such Party has to
any trial or other proceeding in any court, except for legal
proceedings to enforce arbitration awards. Should any Party file suit
in a court of law in conjunction with or in lieu of arbitration, or
otherwise in an attempt to ignore, negate, or circumvent this
agreement to arbitrate, the other Parties shall have the right to fully
recover their legal expenses and all other costs in defending such
action, regardless of the outcome of the action.
11.2 Selection of Arbitrators and Hearing. All arbitrators
selected must be Authorized Arbitrators. Within fifteen (15) days
after the commencement of the arbitration, the Principals shall jointly
appoint one Authorized Arbitrator as an arbitrator and the
Organization shall appoint one Authorized Arbitrator as an arbitrator.
Within ten (10) days of their appointment, the two arbitrators so
chosen shall select a third impartial Authorized Arbitrator. If either
the Principals or the Organization shall fail to appoint an arbitrator
within the prescribed time period, then the arbitration shall proceed
forward in all respects as provided in this Article XI, except that the
arbitrator timely appointed shall function as the sole arbitrator of the
dispute (and the Party that failed to timely appoint its arbitrator shall
have waived any further right to do so, and no third arbitrator shall be
selected by the sole arbitrator, the American Arbitration Association
or otherwise). If the Authorized Arbitrators selected by the Parties
are unable or fail to agree upon the third arbitrator, the third
Authorized Arbitrator shall be selected by the American Arbitration
Association within fourteen (14) days from the expiration of such ten
(10) day period. All appointments shall be immediately
communicated to all Parties in writing. All arbitration proceedings
shall take place in Dallas County, Texas, and the arbitration hearing
shall be held within sixty (60) days of the appointment of the third
Authorized Arbitrator and at a time mutually convenient to the
Parties. In the event that the time of the arbitration hearing cannot be
agreed upon by the Parties, then the time for same shall be chosen by
the American Arbitration Association upon not less than ten days'
notice to the Parties. Any of the foregoing deadlines may be extended
by written mutual agreement of the Parties. The hearing shall be
conducted in conformity with the Federal Rules of Civil Evidence,
including by way of example, but not limitation, affidavit testimony
shall not be allowed.
11.3 Costs of Arbitration. If any arbitration, action at law
or in equity is necessary to enforce or interpret the terms of this
Agreement or an award rendered by the arbitrators, the prevailing
Party shall be entitled to its attorney's fees, costs and its expenses in
addition to any other relief to which it may be entitled. However, the
costs and expenses of the arbitrators for any arbitration shall be split
evenly between the Principals and the Organization and shall be paid
monthly into an account administered by the arbitrators.
11.4 Stipulations. The Parties stipulate and agree that the
value of the consideration to be paid by the Principals under this
Agreement exceeds Fifty Thousand Dollars ($50,000), that this
Agreement involves interstate commerce, and that this Agreement is
enforceable under both the Texas Arbitration Act, Tex. Civ. Prac.
and Rem. Code at 171.001 (Vernon Supp. 1997), et seq., and the
Federal Arbitration Act, 9 U.S.C. Sec. 1, et seq.
11.5 Powers of the Arbitrators. Except as otherwise
provided in this Agreement, the arbitrators shall determine the rights
and obligations of the Parties according to the substantive and
procedural laws of the State of Texas and shall have the authority to
award any remedy or relief, whether final or provisional, whether
legal or equitable, that a court of the State of Texas could order or
grant; however, the arbitrators (i) shall have no authority to award
punitive damages, exemplary damages, or any damages except those
damages specifically provided for in this Agreement, (ii) shall not, in
any event, make any ruling, finding, or award that does not conform
to the terms and conditions of this Agreement, and (iii) shall not
make, fashion, or award any relief or award that could not be made,
fashioned, or awarded by a court of the State of Texas. The
Authorized Arbitrators shall hear and determine the outcome of the
dispute between the Parties by majority vote.
11.6 Award of the Arbitrators. The award of the arbitrators
shall be final and conclusive upon the Parties, shall be in writing and
shall specify the factual and legal bases for the award, shall be signed
by a majority of the arbitrators, and shall be rendered within thirty
(30) days of the arbitration hearing. All monetary awards shall bear
interest at the highest legal rate from the date such sums were
originally due and payable through the date such sums are paid.
Judgment upon the award rendered by the arbitrators may be entered
in any court of competent jurisdiction.
11.7 Confidentiality of the Proceedings. None of the
Parties, nor any arbitrator appointed in connection herewith, shall
disclose the existence, content or results of any arbitration hereunder
(including any information revealed in discovery or placed into
evidence in connection with those proceedings), and any proceedings
brought to enforce any arbitration award rendered hereunder shall be
filed under seal and otherwise kept confidential to the maximum
extent permitted by law. However, any one Party shall not be
restricted or hindered by the provisions of this Section 11.7 from
disclosing or using data or information clearly known to it before the
arbitration, except as otherwise provided by this Agreement.
Each signature below is binding on the Party signing at the
time signed, regardless of whether or not all other Parties named in
this Agreement sign this Agreement, and constitutes that Party's
Acknowledgment, agreement to and acceptance of every promise,
duty, term, condition, obligation, agreement, transfer, conveyance,
and right contained in this Agreement, which has been executed to be
effective as of the 22nd day of April, 1999.
"INVESTORS":
STEADFAST INVESTMENTS, L.P.
A Delaware limited partnership
By: Kornman & Associates, Inc.
In Its Capacity As:
General Partner
of Steadfast Investments, L.P
By: /s/_________________________________
Signature
By: Vickie A Walker
In Her Capacity As: Secretary-Treasurer
of Kornman & Associates, Inc.
GMK FAMILY HOLDINGS, LLC
By: /s/_________________________________
Gary M. Kornman In His
Capacity As Its Manager
"CORPORATION":
BUFFALO CAPITAL III, LTD.
A Colorado corporation
By: /s/__________________________________
Grant W. Peck
As its President
By: /s/__________________________________
Mark DiSalvo
By: /s/__________________________________
Dean F. Sessions
By: /s/__________________________________
Grant W. Peck
By: /s/__________________________________
Gary S. Joiner
