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As filed with the Securities and Exchange Commission on November 3, 1995
Registration No. 33-_________
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-----------------------
BUSINESS RECORDS CORPORATION HOLDING COMPANY
(Exact name of Registrant as specified in its charter)
Delaware 75-1533071
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1111 West Mockingbird Lane, Suite 1400
Dallas, Texas 75247
(214) 688-1800
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
<TABLE>
<S> <C>
P. E. ESPING Copy to:
Chairman and Chief Executive Officer JEFFREY M. SONE, ESQ.
Business Records Corporation Holding Company Arter, Hadden, Johnson & Bromberg
1111 West Mockingbird Lane, Suite 1400 1717 Main Street, Suite 4100
Dallas, Texas 75247 Dallas, Texas 75201-4605
(214) 688-1800 (214) 761-4780
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
</TABLE>
-----------------------
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.
-----------------------
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<CAPTION>
===============================================================================================
Proposed Proposed
Maximum Maximum
Amount Offering Aggregate Amount of
Title of Each Class of to be Price Offering Price Registration
Securities to be Registered Registered Per Share(1) (1) Fee
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.10 par value........ 121,112 $37.00 $4,481,144 $1,546.00
Shares
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</TABLE>
(1) Estimated solely for purposes of calculating the registration fee; based
upon the closing sales price of the Registrant's Common Stock as listed on
the Nasdaq Stock Market's National Market on October 31, 1995, in
accordance with Rule 457(c).
-----------------------
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until this Registration Statement shall
become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
================================================================================
<PAGE>
BUSINESS RECORDS CORPORATION HOLDING COMPANY
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Item of Form S-3 Prospectus Caption or Location
-------------------------------------------- -----------------------------------------------
<S> <C> <C>
1. Forepart of the Registration Statement
and Outside Front Cover Page of
Prospectus............................... Cover of the Registration Statement; Cross
Reference Sheet; Outside Front Cover Page of
Prospectus
2. Inside Front and Outside Back Cover
Pages of Prospectus...................... Inside Front and Outside Back Cover Pages of
Prospectus
3. Summary Information, Risk Factors
and Ratio of Earnings to Fixed
Charges.................................. Prospectus Summary; Risk Factors; The Company
4. Use of Proceeds............................. Use of Proceeds
5. Determination of Offering Price............. Not Applicable
6. Dilution.................................... Not Applicable
7. Selling Security Holders.................... Recent Events; Selling Stockholders; Plan of
Distribution
8. Plan of Distribution........................ Outside Front Cover Page of Prospectus; Plan
of Distribution
9. Description of Securities to be Registered.. Not Applicable
10. Interests of Named Experts and Counsel...... Not Applicable
11. Material Changes............................ Recent Events; Selling Stockholders
12. Incorporation of Certain Information
by Reference............................ Incorporation of Certain Documents by Reference
13. Disclosure of Commission Position
on Indemnification for Securities
Act Liabilities......................... Not Applicable
</TABLE>
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+ REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+ SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR +
+ MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+ BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+ THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+ SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+ UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion - Dated November 3, 1995
PROSPECTUS
- --------------------------------------------------------------------------------
121,112 Shares
[LOGO OF BUSINESS RECORDS CORP. HOLDING CO.]
BUSINESS RECORDS CORPORATION HOLDING COMPANY
Common Stock
The 121,112 shares of common stock, par value $.10 per share (the "Common
Stock"), of Business Records Corporation Holding Company (the "Company") to
which this Prospectus relates (the "Shares") are being offered on behalf of and
for the account of certain stockholders (the "Selling Stockholders") of the
Company. The Company anticipates that the Shares will be offered for sale until
the earlier of (i) the sale of all of such Shares or (ii) August 18, 1997. The
Company has agreed to pay substantially all of the expenses of registration in
connection with this offering but will not receive any of the proceeds from the
sale of the Shares being offered hereby. All brokerage commissions and other
similar expenses incurred by the Selling Stockholders will be borne by the
Selling Stockholders. The aggregate proceeds to the Selling Stockholders of the
Company from the sale of the Shares will be the purchase price of the Shares
sold, less the aggregate brokerage commissions and underwriters' discounts, if
any, and other expenses of issuance and distribution not borne by the Company.
See "Use of Proceeds," "Plan of Distribution" and "Selling Stockholders."
The Common Stock is included in the Nasdaq Stock Market's National Market
(the "Nasdaq National Market") under the symbol "BRCP." On October 31, 1995, the
last reported sales price for the Common Stock was $37.00 per share .
This offering is currently not being underwritten. However, the Selling
Stockholders, brokers, dealers or underwriters that participate with the Selling
Stockholders in the distribution of the Shares may be deemed "underwriters," as
that term is defined in the Securities Act of 1933, as amended (the "Securities
Act"), and any commissions received by broker-dealers, agents or underwriters
and any profit on the resale of the Shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. It is
anticipated that all Shares being offered hereby, when sales thereof are made,
will be made in one or more transactions (which may involve one or more block
transactions) through customary brokerage channels, either through brokers
acting as brokers or agents for the sellers, or through dealers or underwriters
acting as principals who may resell the Shares in the Nasdaq National Market or
in privately negotiated sales, or otherwise, or by a combination of such methods
of offering. Each sale may be made either at market prices prevailing at the
time of the sales or at negotiated prices.
To the extent required, the specific number of Shares to be sold, the
purchase price, the public offering price, the names of any such agents, dealers
or underwriters and any applicable commissions or discount with respect to a
particular offer will be set forth in an accompanying Prospectus Supplement.
See "Risk Factors" for a discussion of certain material factors that should
be considered in connection with an investment in the Shares of Common Stock
offered hereby.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COM-
MISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
November ___, 1995
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission may be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
following Regional Offices of the Commission: Chicago Regional Office,
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661; and New York Regional Office, 7 World Trade Center, New York,
New York 10048. Copies of such material may be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates.
The Common Stock is included in the Nasdaq National Market, and reports,
proxy statements and other information concerning the Company may be inspected
and copied at the offices of the Nasdaq National Market at 1735 K Street, N.W.,
Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act with respect to the Shares of Common Stock offered
hereby. This Prospectus omits certain information contained in that Registration
Statement. For further information with respect to the Company and the Shares
offered hereby, reference is hereby made to the Registration Statement, its
exhibits and schedules and those documents incorporated by reference into the
Registration Statement. The Registration Statement may be inspected without
charge at the office of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and copies may be obtained therefrom at prescribed rates. Statements
contained herein concerning provisions of documents are necessarily summaries of
such documents, and each statement is qualified in its entirety by reference to
the copy of the applicable document filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission under the
Exchange Act are hereby incorporated by reference into this Prospectus:
(1) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994;
(2) the Company's Quarterly Report on Form 10-Q for the fiscal
quarters ended March 31, 1995 and June 30, 1995; and
(3) the description of the Company's Common Stock which is contained
in that Registration Statement on Form 8-A filed with the
Commission on February 16, 1988, as amended.
2
<PAGE>
All reports and other documents filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date of this Prospectus and prior to the termination of the offering of the
Shares made hereby shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of filing of such reports and documents. Any
statement contained in a document incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus and the
Registration Statement of which it is a part to the extent that a statement
contained herein or in a subsequently filed document modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus or the
Registration Statement.
Upon written or oral request, the Company will provide without charge to
each person, including any beneficial owner, to whom a copy of this Prospectus
is delivered, a copy of any and all of the documents incorporated herein by
reference (other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents). Requests should be
directed to Business Records Corporation Holding Company, 1111 West Mockingbird
Lane, Suite 1400, Dallas, Texas 75247, Attention: Mr. Thomas E. Kiraly, Chief
Financial Officer, telephone (214) 688-1800.
3
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more
detailed information appearing elsewhere in this Prospectus or in the
documents incorporated by reference.
The Company
Business Records Corporation Holding Company (the "Company") provides
a variety of information management and data processing products and
services to local governments and health care institutions through two
wholly owned subsidiaries: Business Records Corporation ("BRC") and BRC
Health Care, Inc. (formerly known as CMSI, Inc.) ("BHC"). The Company's
products and services can be classified into four major categories: (1)
technology outsourcing services, (2) election products and services, (3)
governmental records management, and (4) other products and services. The
majority of these products and services are distributed on a direct basis.
In addition to these direct sales organizations, the Company also sells
certain binders and local government supplies through a distribution
network and a telemarketing organization.
The complete mailing address, and the telephone number of the
Company's principal executive offices are:
BUSINESS RECORDS CORPORATION HOLDING COMPANY
1111 West Mockingbird Lane, Suite 1400
Dallas, Texas 75247
(214) 688-1800
The Offering
Common Stock Offered by the Selling Stockholders . . . 121,112 shares
Percent of Outstanding Common Stock Offered
by the Selling Stockholders . . . . . . . . . . . . . . 1.9%/(1)/
Nasdaq National Market Symbol . . . . . . . . . . . . . BRCP
Use of Proceeds . . . . . . . . . . . . . . . . . . . . The Company will not
receive any of the
proceeds from the sale
of the Shares being
offered hereby.
____________________
/(1)/ Percentage indicated is based upon 6,443,171 shares of Common Stock
outstanding as of October 27, 1995 and does not include shares of
Common Stock issuable upon the exercise of outstanding stock options
(certain of which will be exercisable during and immediately after the
offering) or shares otherwise issued by the Company after the date
thereof.
4
<PAGE>
RISK FACTORS
Prospective investors should carefully consider the following information,
in addition to the other information contained in this Prospectus and any
Prospectus Supplement, before purchasing the Shares of Common Stock offered
hereby.
Competition
The market for information management services is intensely competitive.
The Company's major competitors for its technology outsourcing services are
other providers of information systems outsourcing services. Some of these
competitors are substantially larger and have greater resources than the
Company. The Company's major competitors for its other products and services are
typically small, regional providers of software products and services which
compete with the Company in certain market areas based primarily on price. The
Company is routinely subject to competitive bidding. Management believes that
the Company's competitiveness is directly related to its ability to maintain
effective pricing and service. There can be no assurance that the Company will
be able to compete successfully with existing or future competitors or that
existing competition in the Company's markets will not intensify. Finally, many
businesses or governmental entities who constitute the Company's target market
elect, or may elect in the future, to provide information management services
internally, through existing or new departments. To the extent that the
Company's potential customer base elects to provide or continue providing
information management services internally, the market for the Company's
services will be reduced.
Seasonal and Other Variations
Due to the nature of the Company's election products and services business,
the Company's revenues have historically increased in "even-numbered" years due
to Congressional and Presidential elections and the related increase in the
demand for election products and services. Conversely, the revenue reported by
the Company in "odd-numbered" years from election products and services has
historically tended to decrease. Additionally, because the volume of real estate
transactions tends to be higher from February through October than in the months
of November through January, the revenues generated by governmental records
management products and services are somewhat seasonal. Since the Company's
fixed operating expenses do not typically decrease proportionately during the
seasonal and "odd-numbered" year lows in revenue, the Company's profitability is
also, generally, at its lowest level at these times.
General Economic Conditions
Revenues from the Company's governmental records management products and
services are materially affected by changes in the volume of nationwide real
estate transactions which, in turn, are largely dependent upon general economic
conditions existing in the United States at any particular time. To the extent
economic and other factors affect real estate sales nationwide, the Company's
revenues associated with governmental records management products and services
may be affected in a similar fashion.
5
<PAGE>
Government Regulation
During recent years, numerous legislative proposals have been introduced or
proposed in Congress and in some state legislatures that would effect major
changes in the U.S. health care system nationally and at the state level. Among
the proposals under consideration are cost controls on hospitals, insurance
market reforms to increase the availability of group health insurance to small
businesses, requirements that all businesses offer health insurance coverage to
their employees and the creation of a single government health insurance plan
that would cover all citizens. In addition, Congress continues to consider
proposals to modify the Medicare and Medicaid programs, primarily to reduce the
cost thereof to the government. It is not clear at this time what proposals will
be adopted, if any, or, if adopted, what effect, if any, such proposals would
have on the Company's business. Since many of the Company's customers are health
care related entities, there can be no assurance that currently proposed or
future health care legislation or the changes in the administration or
interpretation of governmental health care programs will not have a material
adverse effect on the financial results or operations of the Company.
Anti-Takeover Effect of Certificate of Incorporation and Delaware Law
The Company's Certificate of Incorporation, as amended, contains, among
other things, a provision authorizing the issuance of "blank check" preferred
stock. The issuance of preferred stock, while providing desirable flexibility in
connection with the possible acquisitions and other corporate purposes, could
have the effect of making it more difficult for a third party to acquire a
majority of the outstanding voting stock of the Company. Furthermore, certain
provisions of the Company's Certificate of Incorporation and of Delaware law
could delay or make more difficult a merger, tender offer or proxy contest
involving the Company.
Product Liability and Errors and Omissions
Although the Company has not experienced any significant product liability,
errors and omissions, or other related claims, the sale and support of the
Company's products and services may entail risk of such claims. Although the
Company does maintain certain product liability, errors and omissions, and
general liability insurance, and the Company routinely structures its contracts
to include limitations of its liability, a successful claim brought against the
Company could have a material adverse effect on the Company's business,
operating results and financial condition.
Dependence on Existing Management and Key Employees
The Company is dependent in large part on the experience, knowledge and
customer relationships of existing management and key sales and marketing
personnel. The loss of the services of any one or more of the Company's current
executive officers, senior managers, or senior sales and marketing personnel
could have a material adverse effect upon the Company. Additionally, due to the
service nature of the Company's business, the Company's success is dependent
upon its ability to attract and retain qualified employees to develop and
operate its
6
<PAGE>
business. The Company generally has not entered into any employment agreement
with, or obtained keyman life insurance for, any of its existing management or
key employees.
Shares Eligible for Future Sale
Upon the sale of all of the Shares of Common Stock offered hereby,
6,443,171 shares of Common Stock will be outstanding, substantially all of which
will be freely tradeable without restriction. In addition, at October 27, 1995,
1,497,866 shares of Common Stock were issuable upon the exercise of outstanding
employee and director stock options (of which 665,029 were exercisable on such
date) and options exercisable for 669,706 shares of Common Stock remain
available for grant under the Company's various stock option plans. Any shares
issued upon the exercise of stock options may be freely sold in the public
market (except to the extent issued to affiliates of the Company). Any future
sale of substantial amounts of Common Stock in the open market by the Selling
Stockholders, by employees or directors exercising stock options, by
stockholders whose shares have been registered with the Commission, by the
Company or by other stockholders may adversely impact the market price of the
Common Stock.
Changes in Computer Technology
The Company relies upon computerized software and hardware to render the
vast majority of its products and services. While the Company routinely updates
its products and trains its personnel to incorporate and rely upon advances in
computer technology, significant changes or advancements in computer technology,
to the extent not rapidly incorporated by the Company, could cause obsolescence
of the Company's existing products and could negatively impact the Company's
ability to compete for certain service contracts. In addition, technological
change has significantly affected in the past, and can be expected to
significantly affect in the future, both demand for the Company's services and
the manner in which they are delivered. No assurance can be given that changes
in technology will not render some of the Company's services or products
unnecessary or permit the Company's customers to provide them less expensively
internally.
Limited Protection by Patents and Copyright
The Company maintains only a limited number of patents pertaining to the
products it has developed and markets. Due to the specialized nature of the
Company's products, the Company may be subject to increased competition in the
event products are developed by a competitive enterprise which rely upon similar
technologies and design features.
Risks Associated with the Conduct of Public Elections
A significant portion of the Company's business involves the sale of
equipment, supplies and services to support local government jurisdictions which
conduct public elections. While, as a practice, the Company does not directly
tabulate votes or otherwise conduct public elections, and audit trails exist to
ensure accuracy in the tabulation process, the Company may be subject to
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liabilities associated with the inaccurate tabulation of an election for public
office to the extent such errors occur through a use of the Company's election
products and services.
Additionally, based on existing public laws, elections for public office
are currently conducted by numerous local government jurisdictions throughout
the United States through the primary use of voting at public polling places, or
precincts. To the extent public election laws are changed or modified such that
voting is conducted in a different manner, through a use of telecommunications
technology to enable remote voting, or through different methods, the Company
may be subject to risks associated with the adaptation of its existing products
and services to respond to such changes.
Potential Significant Industry Transactions
Significant industry transactions such as acquisitions and dispositions of
divisions, subsidiaries and other business transactions between and among
participants in the information management services industry have occurred with
some frequency in the past, and management expects this trend to continue in the
foreseeable future. Although the Company regularly engages in discussions
concerning such industry transactions with other industry participants, the
Company is currently not subject to any definitive agreements in this regard.
Whether the Company proceeds with any of these discussions and whether the
Company ultimately negotiates and/or consummates any significant industry
transactions will depend, among other things, upon the business and prospects of
the Company, industry conditions, investment and growth opportunities available
to the Company, stock market conditions, availability and suitability of
financing for such transactions, regulatory and legal considerations and other
plans and requirements of the Company. No assurance can be given that, if
consummated, any such significant industry transactions could be successfully
integrated into the Company's business.
Liquidity and Capital Resources
Although management considers the Company to be well capitalized and to
have adequate resources for its current business needs, many transactions which
may present themselves in the future will be beyond the Company's ability to
consummate absent the incurrence of debt or the issuance of additional equity.
There can be no assurance, if the Company were to elect to obtain debt or equity
financing for a transaction, as to the terms of any such debt or securities
issuance or to the effect thereof upon the Company's operating results or
financial position.
8
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THE COMPANY
Historical Background
Business Records Corporation Holding Company, a Delaware corporation (the
"Company"), provides a variety of information management and data processing
products and services to local governments and health care institutions through
two wholly-owned subsidiaries: Business Records Corporation ("BRC") and BRC
Health Care, Inc. (formerly known as CMSI, Inc.) ("BHC").
The Company was originally organized as Cronus Industries, Inc. in
September 1976. In the years immediately following its inception, the Company
acquired and operated several divisions in a diverse number of industries. In
1983, the Company acquired BRC.
From 1984 through 1987, the Company's BRC subsidiary expanded its
operations through numerous acquisitions of small, privately-held corporations.
BRC focused its acquisitions on businesses which provided information systems
and services to county and local governments. The corporations acquired by BRC
generally provided products associated with land records indexing and
micrographic reproduction, election systems and supplies, and governmental
software.
During 1986 and 1987, the Company divested its then existing operating
subsidiaries with the exception of BRC. In May of 1990, the Company changed its
name from Cronus Industries, Inc. to Business Records Corporation Holding
Company.
In recent years, the Company has expanded its strategic focus on providing
specialized information products and services. In particular, BRC began
developing marketing programs, methodologies and personnel to provide
information systems outsourcing and related data processing services to local
governments.
As a part of its efforts to enter the information systems outsourcing
market, the Company consummated the acquisition of BHC, a privately-held Oregon
corporation, on May 14, 1993. BHC was formed in 1970 and has grown since that
time primarily through providing information systems outsourcing services,
consulting services and other management services to local governments and
health care institutions.
Products and Services
The Company's information management and data processing products and
services can be classified into four major categories: (1) technology
outsourcing services, (2) election products and services, (3) governmental
records management, and (4) other products and services. The majority of these
products and services are distributed on a direct basis using several regional
marketing organizations. In addition to these direct sales organizations, the
Company also sells certain binders and local government supplies through a
distributor network and a telemarketing organization.
9
<PAGE>
Technology Outsourcing Services. The Company provides a variety of
technology outsourcing services, including on-site resource management,
strategic planning, remote data processing, and a variety of implementation
services. In addition to these services, the Company also provides certain
related proprietary software.
When providing on-site resource management, the Company typically enters
into multi-year contracts with customers to provide direct management of a
client's information systems department. These contracts usually involve the
Company's hiring of a client's information systems personnel and the assumption
of responsibility for a client's ongoing information systems operations. In some
cases, the Company will also acquire a client's computer equipment.
Under on-site resource management contracts, the Company's personnel
typically work with a client's senior management through a strategic planning
process to determine the objectives and requirements which the institution has
for its information systems department. Then, pursuant to this plan, the Company
will execute a number of tasks to fulfill the client's objectives. These tasks
may involve providing assistance in the selection of new hardware and software,
assisting in changes to existing software and undertaking other related
activities which affect the performance of the information systems department.
On-site resource management contracts are usually negotiated based on a
multi-year, fixed fee basis with provisions for annual inflation adjustments. In
addition, however, the Company often undertakes special projects on the client's
behalf on a time and materials or project fee basis.
In addition to on-site resource management, the Company also provides
remote data processing services to certain customers. The Company currently
operates two data centers for purposes of providing these services. In most
cases, these data centers provide processing capacity for non-proprietary
applications which are specific to the client's industry. However, the Company
is currently undertaking an effort to market remote processing of its
proprietary software to local governments.
The Company also offers for license or relies upon certain specialized
proprietary software packages. The Company provides claims processing services
to HMO third party administrators, indemnity insurance carriers and prepaid
dental health plans. The Company relies on one of two proprietary claims
management systems in providing these services. The Company also provides a
variety of specialized software to assist local and county governments in
automating financial, public protection, tax assessment and tax collection
information systems processing functions. Additionally, the Company provides
specialized software to assist manufacturers and retailers of eye wear.
Technology outsourcing services constituted 43% of the Company's revenues
during 1994 as compared to 38% and 10% during 1993 and 1992, respectively.
Substantially all of the increase in technology outsourcing services from 1992
to 1993 was due to the acquisition of BHC in May of 1993.
10
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Election Products and Services. The Company provides a variety of election
products and services including integrated election systems, ballots, election
supplies, election coding services and election night support services to
governmental election jurisdictions for use in conducting elections for public
office.
The Company offers hardware systems which record and tabulate votes at
precinct and central count locations. Optical scan and punch card systems
comprise the primary election systems offered by the Company. Optical scan
systems allow voters to use a pencil to mark their choices directly on their
ballot card. Punch card systems require voters to indicate choices by using a
specialized stylus to punch their choices onto a ballot. More advanced punch
card and optical scan systems involve the integration of a microcomputer
tabulation system to coordinate and report summaries of various precinct
results. Improved voter ease, security and speed of tabulation are major
advantages offered by the Company's voting equipment.
As a part of its election products and services, the Company currently
provides printing services for county governments and election jurisdictions.
These printing services include ballot printing, legal form printing and other
supplies, including a complete "precinct kit" which contains all supplies and
forms necessary for conducting an election. The Company also provides a variety
of election coding (programming) services and equipment rental options.
Additionally, the Company provides training for poll workers and voting judges
and election night support in the form of technicians, backup equipment or
telephone support to customers.
In the ordinary course of business, the Company holds patents and
trademarks in association with major election products which it manufactures.
None of these patents and trademarks are material to the Company's business as a
whole.
Election products and services accounted for approximately 30%, 25% and 50%
of the Company's total revenues for 1994, 1993 and 1992, respectively.
Governmental Records Management. County and municipal governments are
responsible for recording and indexing real property transactions. Typically,
these governmental entities have relied upon manual methods to record deeds and
other title documents and to maintain alphabetical indexes of transactions. The
Company provides microfilm, optical recording and computer indexing services to
counties and municipal governments to organize and automate the recording and
indexing of deeds, real property liens and other legal documents.
The Company provides two types of computerized indexing services: data
entry performed by customers using the Company's microcomputers in the
customers' offices and data entry performed by Company personnel at centers
operated by the Company. With each type of indexing service, the Company
provides periodic updates for each customer using mainframe computers located in
Dallas, Texas and Syracuse, New York.
The Company also provides record re-creation services to a number of
customers. These services provide archival-quality reprints of old records with
microfilm backup copies, thereby reducing required storage space and improving
security in case of fire or other loss. As part of
11
<PAGE>
its current recording and records re-creation services, the Company provides
custom record binders imprinted to the specifications of each customer.
Governmental records management constituted 17%, 24% and 26% of the
Company's revenues during 1994, 1993 and 1992, respectively.
Other Products and Services. In addition to providing technology
outsourcing services, election products and services and governmental records
management, the Company also provides a variety of other products and services.
These products and services include: county records binders, title services and
information reselling services.
The Company provides county records binders through its Enduro binders
division ("Enduro"). Enduro markets high-quality, custom leather records binders
through a nationwide distributor market. These binders are typically used by
counties for the long-term storage of county records. Enduro additionally
markets several styles of commercial binders.
The Company provides certain title companies in North Central Texas with a
variety of title plant update services. Title companies in Texas are required to
maintain extensive files of real property data called "title plants." Title
plants contain the information needed to perform title searches and to
underwrite title insurance policies. The Company provides its customers with
daily updates of their title plants. These updates are offered in various
formats including copies of each deed (or other document) and installation in
the customer's office of microcomputer-based title plant storage products. The
Company also sells title plants of certain Texas counties to firms that have a
need for title search capabilities.
The Company also resells a variety of public records data to nationwide
credit bureaus and other providers of information retrieval services.
Other products and services constituted 10%, 13% and 14% of the Company's
revenues during 1994, 1993 and 1992, respectively.
Customers
The large majority of the Company's products and services are provided to
county and local governments throughout the United States. In addition to
governmental organizations, the Company also provides services to hospitals,
third party administrators, indemnity insurance carriers, prepaid dental health
plans, vision care specialists and other organizations providing healthcare
related services. The Company also provides services to title companies in North
Central Texas and provides other specialized products to a small base of
commercial customers.
12
<PAGE>
RECENT EVENTS
Effective August 18, 1995, the Company acquired Clinical Resource Systems,
Inc., a Texas corporation ("CRSI"), as a wholly-owned subsidiary through the
merger (the "Merger") of BRC Merger Corp., a Texas corporation and indirect
wholly-owned subsidiary of the Company ("Merger Corp.") with and into CRSI
pursuant to the terms of an Agreement and Plan of Merger among the Company,
Merger Corp., CRSI and certain of the Selling Stockholders ("Acquisition
Agreement"). As a result of the Merger, holders of all of the issued and
outstanding Common Stock of CRSI, $0.002 par value per share (the "CRSI Common
Stock"), and the holders of certain indebtedness of CRSI, became entitled to
receive an aggregate of up to 121,112 shares of BRC Common Stock, subject to
adjustment under certain circumstances for breaches of representations and
warranties contained in the Acquisition Agreement in exchange for all of the
issued and outstanding CRSI Common Stock and such indebtedness. In addition, the
Company agreed to assume the rights and obligations of CRSI with respect to
certain CRSI stock options and warrants, which, subsequent to the effectiveness
of the Merger, became options exercisable for shares of the Common Stock of BRC.
The Company granted certain registration rights to the persons receiving its
Common Stock in the Acquisition Agreement and pursuant thereto has registered
for sale in the offering made hereby 121,112 shares of Common Stock. The cost of
this registration (other than brokerage commissions and other similar expenses)
will be paid by the Company. See, "Selling Stockholders."
Except as set forth in the preceding paragraph, none of the Selling
Stockholders held any position or office or had any other material relationship
with the Company within the past three fiscal years.
USE OF PROCEEDS
The Shares of Common Stock being offered hereby are for the account of the
Selling Stockholders. Accordingly, the Company will not receive any of the
proceeds from the sale of the Shares by the Selling Stockholders. See, "Selling
Stockholders."
SELLING STOCKHOLDERS
The following table sets forth the name of each of the Selling Stockholders
and the number of Shares that may be offered by each. The number of Shares that
may be actually sold by each of the Selling Stockholders will be determined by
each such Selling Stockholder, and may depend upon a number of factors,
including, among other things, the market price of the Common Stock. Because
each of the Selling Stockholders may offer all, some or none of the Shares that
each holds, and because the offering contemplated by this Prospectus is
currently not being underwritten, no estimate can be given as to the number of
Shares that will be held by each of the Selling Stockholders upon or prior to
termination of this offering. See "Plan of Distribution." The table below sets
forth information as of October 27, 1995, concerning the
13
<PAGE>
beneficial ownership of the Shares of each of the Selling Stockholders.
All information as to beneficial ownership has been furnished by each of
the Selling Stockholders.
<TABLE>
<CAPTION>
Shares of Shares of
Shares of Common Common Stock Common Stock
Stock Owned Offered in Owned After
Before Offering the Offering Offering*
------------------------- ------------ ---------------
Name of Stockholder Number/(1)/ Percent/(2)/ Number Number Percent
- ----------------------------- ----------- ------------ ------------ ------ -------
<S> <C> <C> <C> <C> <C>
Charles B. Owen, M.D. 60,939 ** 60,939 0 0
- ---------------------------------------------------------------------------------------
Robert G. McConnell 14,756 ** 14,756 0 0
- ---------------------------------------------------------------------------------------
Don Pippin 8,415 ** 8,415 0 0
- ---------------------------------------------------------------------------------------
Christina G. Novelli 8,415 ** 8,415 0 0
- ---------------------------------------------------------------------------------------
Andrew Galewsky 4,712 ** 4,712 0 0
- ---------------------------------------------------------------------------------------
Elizabeth Owen 2,857 ** 2,857
- ---------------------------------------------------------------------------------------
Brent W. Bost 2,356 ** 2,356 0 0
- ---------------------------------------------------------------------------------------
James Frederic Kirby 2,019 ** 2,019 0 0
- ---------------------------------------------------------------------------------------
Shirley C. Bourque 1,963 ** 1,963 0 0
- ---------------------------------------------------------------------------------------
Holland Family Limited 1,876 ** 1,876 0 0
Partnership
- ---------------------------------------------------------------------------------------
Gary Pinkerton 1,683 ** 1,683 0 0
- ---------------------------------------------------------------------------------------
Dr. John A. Henderson, IV 1,245 ** 1,245 0 0
- ---------------------------------------------------------------------------------------
Brent W. Bost, M.D., P.A. 1,009 ** 1,009 0 0
Pension and Profit
Sharing Plan
- ---------------------------------------------------------------------------------------
Utley Group II, Ltd. 841 ** 841 0 0
- ---------------------------------------------------------------------------------------
Roger Bryan Yandell 740 ** 740 0 0
- ---------------------------------------------------------------------------------------
N. Jeff Alford 673 ** 673 0 0
- ---------------------------------------------------------------------------------------
Randall D. Benson 639 ** 639 0 0
- ---------------------------------------------------------------------------------------
Elizabeth Szalay 420 ** 420 0 0
- ---------------------------------------------------------------------------------------
J. Eric Weldon, M.D. 420 ** 420 0 0
- ---------------------------------------------------------------------------------------
John Taylor 420 ** 420 0 0
- ---------------------------------------------------------------------------------------
Juan Elias Davila 420 ** 420 0 0
- ---------------------------------------------------------------------------------------
Michael L. Smith and 420 ** 420 0 0
Mary Florio Smith
- ---------------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Shares of Shares of
Shares of Common Common Stock Common Stock
Stock Owned Offered in Owned After
Before Offering the Offering Offering*
------------------------- ------------ ---------------
Name of Stockholder Number/(1)/ Percent/(2)/ Number Number Percent
- ----------------------------- ----------- ------------ ------------ ------ -------
<S> <C> <C> <C> <C> <C>
Paine Weber f/b/o Stuart 420 ** 420 0 0
Scott Kacy, M.D.
- ---------------------------------------------------------------------------------------
James F. Kirby, M.D. Profit 336 ** 336 0 0
Sharing Plan
- ---------------------------------------------------------------------------------------
Carlos Arroyo 336 ** 336 0 0
- ---------------------------------------------------------------------------------------
James D. Karasik 336 ** 336 0 0
- ---------------------------------------------------------------------------------------
James M. Morgan, III 336 ** 336 0 0
- ---------------------------------------------------------------------------------------
V.M. Tammareddi, M.D. 336 ** 336 0 0
- ---------------------------------------------------------------------------------------
Southwest Texas Urology 259 ** 259 0 0
Pension Fund Trust
- ---------------------------------------------------------------------------------------
Doreen Mowers 168 ** 168 0 0
- ---------------------------------------------------------------------------------------
Daniel G. Stroud 168 ** 168 0 0
- ---------------------------------------------------------------------------------------
James M. Harris 168 ** 168 0 0
- ---------------------------------------------------------------------------------------
LaMendola Family Limited 168 ** 168 0 0
Partnership
- ---------------------------------------------------------------------------------------
Pamela St. Amand, M.D., 168 ** 168 0 0
P.A. Pension Plan
and Trust
- ---------------------------------------------------------------------------------------
Philip L. Leggett 168 ** 168 0 0
- ---------------------------------------------------------------------------------------
Andrew Park Bourque 96 ** 96 0 0
- ---------------------------------------------------------------------------------------
Joe H. Ward, Jr. and 84 ** 84 0 0
Bettie B. Ward
- ---------------------------------------------------------------------------------------
Neil A. Burrell, D.P.M. 84 ** 84 0 0
- ---------------------------------------------------------------------------------------
Justin Wade Parker Trust 56 ** 56 0 0
- ---------------------------------------------------------------------------------------
Kyle Lawrence Parker Trust 56 ** 56 0 0
- ---------------------------------------------------------------------------------------
Matthew Paul Parker Trust 56 ** 56 0 0
- ---------------------------------------------------------------------------------------
Tom Wilbanks 42 ** 42 0 0
- ---------------------------------------------------------------------------------------
John Abe Henderson, III, 33 ** 33 0 0
M.D.
- ---------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
_______________
* Assumes all shares of Common Stock are sold.
** Represents less than one percent (1%).
/(1)/ Assumes receipt of a pro rata portion of certain shares held in
escrow pursuant to the Acquisition Agreement.
/(2)/ Percentage indicated is based upon 6,443,171 shares of Common Stock
outstanding as of October 27, 1995.
Pursuant to the terms of the Acquisition Agreement, 12,111 shares of Common
Stock were placed in escrow (the "Escrow") with KeyCorp Shareholder Services,
Inc. to secure and satisfy the Company's right to indemnification thereunder.
Subject to a claim by the Company for indemnity, the Escrow shall remain in
effect until the earlier of (1) August 18, 1996 or (2) the completion of the
next regularly scheduled audited financial statement for CRSI as the surviving
corporation after the Merger. Upon termination of the Escrow, the remaining
shares of Common Stock therein shall be distributed pro rata to the record
holders of the CRSI Common Stock whereupon such shares may be offered and sold
in the offering made hereby.
PLAN OF DISTRIBUTION
The Company will receive no proceeds from the sale of the Shares by the
Selling Stockholders. The Shares may be sold from time to time to purchasers
directly by the Selling Stockholders. Alternatively, the Selling Stockholders
may sell the Shares in one or more transactions (which may involve one or more
block transactions) on the Nasdaq National Market, in privately negotiated
transactions or otherwise or in a combination of such transactions; each sale
may be made either at market prices prevailing at the time of such sale or at
negotiated prices; some or all of the Shares may be sold through broker-dealers
acting as brokers or agents on behalf of the Selling Stockholder or to broker-
dealers acting as principals for resale by such dealers; and in connection with
such sales, such broker-dealers may receive compensation in the form of
commissions, discounts or fees from the Selling Stockholder and/or the
purchasers of such shares for whom they may act as broker or agent. It is
anticipated that the Selling Stockholders will offer all of the Shares for sale.
All expenses of registration incurred in connection with this offering are being
borne by the Company, but all brokerage commissions and other similar expenses
incurred by the Selling Stockholders will be borne by the Selling Stockholders.
At the time a particular offer of Shares is made, to the extent required, a
supplement to this Prospectus (the "Prospectus Supplement") will be distributed
that will identify and set forth the aggregate amount of Shares being offered
and the terms of the offering, including the name or names of any underwriters,
dealers or agents, the purchase price paid by any underwriter for Shares
purchased from the Selling Stockholders, any commissions, discounts and other
items constituting compensation from the Selling Stockholders and any
commissions, discounts or concessions allowed or reallowed or paid to dealers,
including the proposed selling price to the public.
16
<PAGE>
The Selling Stockholders and any dealer acting in connection with the
offering of any of the Shares or any broker executing or selling orders on
behalf of the Selling Stockholders may be deemed to be "underwriters" within the
meaning of the Securities Act, in which event any profit on the sale of any or
all of the Shares and any commissions, discounts or concessions received by any
such dealers or brokers may be deemed to be underwriting commissions and
discounts under the Securities Act. Any dealer or broker participating in any
distribution of the Shares may be required to deliver a copy of this Prospectus,
including the Prospectus Supplement, if any, to any person who purchases any of
the Shares from or through such dealer or broker.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the Shares may not simultaneously engage in market
making activities with respect to the Shares for a period of nine business days
prior to the commencement of such distribution. The Selling Stockholders will be
subject to applicable provisions of the Exchange Act and the rules and
regulations promulgated thereunder, including without limitation rules 10b-6 and
10b-7, which provisions may limit the timing of purchases and sales of the
Shares by the Selling Stockholders.
In order to comply with certain states' securities laws, if applicable, the
Shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers. In certain states, the Shares may not be sold unless the
Shares have been registered and qualify for sale in such state, or unless an
exemption from registration or qualification is available and is obtained.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Arter, Hadden, Johnson & Bromberg, Dallas, Texas.
EXPERTS
The financial statements incorporated in this Registration Statement and
Prospectus by reference to the Annual Report on Form 10-K for the year ended
December 31, 1994, have been so incorporated in reliance on the report of Price
Waterhouse L.L.P., independent accountants, given the authority of said firm as
experts in auditing and accounting.
17
<PAGE>
================================================================================
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offer made by this Prospectus, and, if given
or made, such information or representations must not be relied upon as having
been authorized by the Company, the Selling Stockholders or any other person.
This Prospectus does not constitute an offer to sell or the solicitation of any
offer to buy any security other than the Shares of Common Stock offered by this
Prospectus, nor does it constitute an offer to sell or a solicitation of any
offer to buy the Shares of Common Stock by anyone in any jurisdiction in which
such offer or solicitation is not authorized, or in which the person making such
offer or solicitation is not qualified to do so, or to any person to whom it is
unlawful to make such offer or solicitation. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that information contained herein is correct as of any time
subsequent to the date hereof.
-------------------------------------------------------
TABLE OF CONTENTS
-----------------
Page
----
Available Information 2
Incorporation of Certain Documents
by Reference 2
Prospectus Summary 4
Risk Factors 5
The Company 9
Recent Events 13
Use of Proceeds 13
Selling Stockholders 13
Plan of Distribution 16
Legal Matters 17
Experts 17
================================================================================
================================================================================
121,112 SHARES
[LOGO OF BUSINESS RECORDS CORP. HOLDING CO.]
BUSINESS RECORDS CORPORATION
HOLDING COMPANY
COMMON STOCK
____________________
PROSPECTUS
____________________
November ___, 1995
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
SEC registration fee................................ $ 1,546
NASDAQ Listing of Additional Shares................. $ 2,458
Accounting fees and expenses........................ $ 2,500*
Legal fees and expenses............................. $ 5,000*
Printing and engraving expenses..................... $ 1,000*
Miscellaneous expenses.............................. $ 1,000*
-------
Total.......................................... $13,504*
=======
- --------------
* Estimated
No portion of the above noted expenses is to be borne by the Selling
Stockholders.
Item 15. Indemnification of Directors and Officers.
Article "Ninth" of the Certificate of Incorporation contains provisions
which eliminate the personal liability of the Company's directors for monetary
damages resulting from breaches of their fiduciary duty to the fullest extent
permitted by Delaware General Corporation Law (the "DGCL"). Article VI of the
Company's Bylaws contain provisions requiring the indemnification of the
Company's directors and officers upon and pursuant to the terms specified
therein and under the applicable provisions of the DGCL. The Company believes
that these provisions are necessary to attract and retain qualified persons as
directors and officers.
Section 145 of the DGCL provides broad authority for indemnification of
officers and directors. Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Securities Act
and is therefore unenforceable.
II-1
<PAGE>
Item 16. Exhibits.
The exhibits listed below are filed as part of or incorporated by reference
in this Registration Statement. Where such filing is made by incorporation by
reference to a previously filed report or registration statement, such report or
registration statement is identified in parentheses. See the Index of Exhibits
included with the exhibits filed as part of this Registration Statement.
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibit
--- -------------------------------------------------------------------------------------------------
<C> <S>
2.1 Agreement and Plan of Merger among the Registrant, BRC Merger Corp., Clinical Resource
Systems, Inc. and certain individuals (filed herewith)
4.1 Note Purchase Agreement between the Company and P. E. Esping (filed as Exhibit (4)a. to the
Company's Annual Report on Form 10-K for the year ended December 31, 1993, and incorporated
herein by reference)
4.2 Amendment to Note Purchase Agreement between the Company and P. E. Esping (filed as Exhibit
(4)b. to the Company's Annual Report on Form 10-K for the year ended December 31, 1993, and
incorporated herein by reference).
4.3 Second Amendment to Note Purchase Agreement between the Company and P. E. Esping (filed as
Exhibit (4)c. to the Company's Annual Report on Form 10-K for the year ended December 31,
1993, and incorporated herein by reference)
4.4 10% Convertible Exchangeable Note due April 1, 1998, dated January 1, 1993 (filed as Exhibit
(4)d. to the Company's Annual Report on Form 10-K for the year ended December 31, 1993, and
incorporated herein by reference)
5.1 Opinion of Arter, Hadden, Johnson & Bromberg as to the validity of the securities being offered
(filed herewith)
23.1 Consent of Arter, Hadden, Johnson & Bromberg (included in its opinion filed as Exhibit 5.1)
23.2 Consent of Price Waterhouse LLP, independent certified public accountants (filed herewith)
24.1 Powers of Attorney (filed on the signature page, Page II-4 to this Registration Statement)
</TABLE>
Item 17. Undertakings.
(a) Rule 415 Offering. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement;
(iii) previously disclosed and the Registration Statement or
any material change of such information to include any material
information with respect to the plan of distribution not in the
Registration Statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the Registration Statement is on Form S-3 [or] Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-2
<PAGE>
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) Filings incorporating subsequent Exchange Act documents by reference.
The undersigned Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(h) Request for acceleration of effective date. Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the Company's
Certificate of Incorporation, Bylaws or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(i) Rule 430. The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
[Remainder of Page Intentionally Left Blank]
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Dallas, State of Texas,
on the 2nd day of November, 1995.
BUSINESS RECORDS CORPORATION
HOLDING COMPANY
By: /s/ P. E. Esping
-------------------------------------
P. E. Esping
Chairman and Chief Executive Officer
POWERS OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints P. E. Esping and Thomas E. Kiraly and
both of them, his true and lawful attorneys-in-fact and agents with full power
of substitution and re-substitution, for him and in his name, place and stead,
in any and all capacities, to sign any and all amendments (including post-
effective amendments) to this Registration Statement, and to file the same with
all exhibits thereto and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, with full power and authority to do and to perform
each and every act and thing requisite necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on the 2nd day of November, 1995, by
the following persons in the capacities indicated:
Signatures Title
---------- -----
/s/ P. E. Esping Chairman, Chief Executive Officer
--------------------------- and Director
P. E. Esping (Principal Executive Officer)
/s/ Thomas E. Kiraly Chief Financial Officer,
--------------------------- (Principal Financial Officer and
Thomas E. Kiraly Principal Accounting Officer)
/s/ L. D. Brinkman Director
---------------------------
L. D. Brinkman
/s/ David H. Monnich Director
---------------------------
David H. Monnich
/s/ Paul T. Stoffel Director
---------------------------
Paul T. Stoffel
/s/ Robert E. Masterson Director
---------------------------
Robert E. Masterson
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibit
- ----------------------------------------------------------------------------------------------
<C> <S>
2.1 Agreement and Plan of Merger among the Registrant, BRC Merger Corp., Clinical
Resource Systems, Inc. and certain individuals (filed herewith)
4.1 Note Purchase Agreement between the Company and P. E. Esping (filed as Exhibit
(4)a. to the Company's Annual Report on Form 10-K for the year ended December
31, 1993, and incorporated herein by reference)
4.2 Amendment to Note Purchase Agreement between the Company and P. E. Esping
(filed as Exhibit (4)b. to the Company's Annual Report on Form 10-K for the year
ended December 31, 1993, and incorporated herein by reference).
4.3 Second Amendment to Note Purchase Agreement between the Company and P. E.
Esping (filed as Exhibit (4)c. to the Company's Annual Report on Form 10-K for the
year ended December 31, 1993, and incorporated herein by reference)
4.4 10% Convertible Exchangeable Note due April 1, 1998, dated January 1, 1993 (filed
as Exhibit (4)d. to the Company's Annual Report on Form 10-K for the year ended
December 31, 1993, and incorporated herein by reference)
5.1 Opinion of Arter, Hadden, Johnson & Bromberg as to the validity of the securities
being offered (filed herewith)
23.1 Consent of Arter, Hadden, Johnson & Bromberg (included in its opinion filed as
Exhibit 5.1)
23.2 Consent of Price Waterhouse LLP, independent certified public accountants (filed
herewith)
24.1 Powers of Attorney (filed on the signature page, Page II-4 to this Registration
Agreement)
</TABLE>
<PAGE>
EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
AMONG
BUSINESS RECORDS CORPORATION
HOLDING COMPANY
(a Delaware corporation)
BRC MERGER CORP.
(a Texas corporation)
CLINICAL RESOURCE SYSTEMS, INC.
(a Texas corporation)
and certain Individuals
<PAGE>
This Agreement and Plan of Merger (this "Agreement"), dated as of July ___,
1995, is made by and between BUSINESS RECORDS CORPORATION HOLDING COMPANY, a
Delaware corporation ("BRC"), BRC MERGER CORP., a Texas corporation and indirect
wholly owned subsidiary of BRC ("MC"), CLINICAL RESOURCE SYSTEMS, INC., a Texas
corporation (the "Company") (MC and the Company being collectively referred to
as the "Constituent Corporations"), Charles B. Owen, M.D., Robert G. McConnell,
M.D., Don Pippin, Jr., Christina G. Novelli and Andrew Galewsky (the
"Individuals") and Charles B. Owen, M.D., Elizabeth Owen and Robert G.
McConnell, M.D. (the "Noteholders").
In consideration of the mutual covenants and agreements contained herein,
the parties hereto covenant and agree as follows:
ARTICLE I
THE MERGER
1.1 Merger. Upon the terms and subject to the conditions hereof, and in
accordance with the provisions of the Texas Business Corporation Act (the
"TBCA"), at the Effective Time (as hereinafter defined), MC shall be merged with
and into the Company (the "Merger"), and the Company shall be the surviving
corporation (the Company, in its capacity as the surviving corporation, is
sometimes referred to herein as the "Surviving Corporation") and, as such, shall
continue to be governed by the laws of the State of Texas. The terms and
conditions of the Merger shall be governed by this Agreement and the form of
Agreement of Merger attached hereto as Exhibit "A" (the "Agreement of Merger").
-----------
The Constituent Corporations, subject to the approval of their respective
shareholders in accordance with the provisions of this Agreement, adopt this
Agreement, together with the foregoing form of Agreement of Merger, as a "plan
of reorganization" within the meaning of Section 368 of the Internal Revenue
Code of 1986, as amended (the "Code").
1.2 Continuation of Corporate Existence. Except as may otherwise be set
forth herein, the corporate existence and identity of the Company, with all its
purposes, powers, franchises, privileges, rights and immunities, shall continue
unaffected and unimpaired by the Merger, and the corporate existence and
identity of MC, with all its purposes, powers, franchises, privileges, rights
and immunities, at the Effective Date shall be merged with and into that of the
Company, and the Surviving Corporation shall be vested fully therewith and the
separate corporate existence and identity of MC shall thereafter cease except to
the extent continued by statute.
1.3 Effective Time, Effective Date. The Merger shall become effective
(the "Effective Time") upon the issuance of a Certificate of Merger relating to
the Merger by the Secretary of State of the State of Texas.
1.4 Corporate Governance.
(a) The Articles of Incorporation of the Company, as in effect at the
Effective Time, shall continue in full force and effect and shall
constitute the Articles of Incorporation of the Surviving Corporation.
(b) The Bylaws of the Company, at the Effective Time, shall continue
in full force and effect and shall constitute the Bylaws of the Surviving
Corporation.
(c) The person or persons who are the directors of MC immediately
prior to the Effective Time, shall after the Effective Time serve as the
directors of the Surviving Corporation until their successors have been
duly elected and qualified in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation. The persons who are
officers of MC immediately prior to the Effective Time shall, after the
Effective Time, serve as the officers of the Surviving Corporation until
their successors have been duly elected and qualified in accordance with
the Bylaws of the Surviving Corporation. In addition, certain officers of
the Company designated by BRC prior to the Effective Time
<PAGE>
shall be officers of the Surviving Corporation following the Effective Time
until their successors have been duly elected and qualified.
1.5 Rights and Liabilities of the Surviving Corporation. The Surviving
Corporation shall have the following rights and obligations:
(a) The Surviving Corporation shall have all the rights, privileges,
immunities and powers and shall be subject to all the duties and
liabilities of a corporation organized under the laws of the State of
Texas.
(b) The Surviving Corporation shall possess all of the rights,
privileges, immunities and franchises, of either a public or private
nature, of the Company and MC and all property, real, personal and mixed,
and all debts due on whatever account, including subscription to shares,
and all other intangible property rights, contract rights and causes of
action, and every other interest of or belonging or due to the Company and
MC shall be taken and deemed to be transferred or invested in the Surviving
Corporation without further act or deed.
(c) At the Effective Time, the Surviving Corporation shall thereafter
be responsible and liable for all liabilities and obligations of the
Company and MC, and any claim existing or action or proceeding pending by
or against the Company or MC may be prosecuted as if the Merger had not
occurred, or the Surviving Corporation may be substituted in its place.
Neither the rights of creditors nor any liens upon the property of the
Company or MC shall be impaired by the Merger.
1.6 Closing. Consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place at such time as the Company and BRC
shall mutually agree ("Closing Date"). Unless otherwise agreed by the Company
and BRC, the Closing shall occur on the day (the "Effective Date") during which
the Effective Time shall occur. Closing shall occur at the offices of Arter,
Hadden, Johnson & Bromberg, 1717 Main Street, Suite 4100, Dallas, Texas. Each
party will cause to be prepared, executed and delivered all appropriate and
customary documents as any party or its counsel may reasonably request for the
purpose of consummating the transactions contemplated by this Agreement. All
actions taken at the Closing shall be deemed to have been taken simultaneously
at the time the last of any such actions is taken or completed.
ARTICLE II
CONVERSION OF SHARES; TREATMENT OF OPTIONS
2.1 Conversion of Shares.
(a) The shares of Common Stock of BRC (the "BRC Common Stock") and the
shares of Common Stock of MC that are outstanding immediately prior to
Effective Time shall remain outstanding after the Effective Time. Each
share of Common Stock of MC shall be converted into one share of the Common
Stock of the Surviving Corporation.
(b) At the Effective Time, except as provided in Sections 2.3 and 8.4
hereof, each holder of issued and outstanding shares of Common Stock,
$0.002 par value per share, of the Company (the "Company Common Stock")
shall be entitled to receive in exchange therefor, that number of shares of
BRC Common Stock equal to the number of shares of Company Common Stock
owned by such holder multiplied by the Exchange Rate. Each share of
Company Common Stock held in the treasury of the
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<PAGE>
Company, if any, shall be cancelled as of the Effective Time and no portion
of the Merger Consideration (as hereinafter defined) shall be payable with
respect thereto. The Exchange Rate shall be calculated in accordance with
the following formula:
Exchange Rate = (4,300,000-NP+EP)/MP
--------------------
(OS + OO)
where:
EP = The aggregate exercise price for all Company Options (as defined
below) having an exercise or conversion price equal to or less than
the product of MP (as defined below) multiplied by the Exchange Rate.
MP = 35.00
NP = The aggregate of all outstanding principal and accrued but unpaid
interest on the Shareholder Notes (as defined in Section 5.13) as
determined in accordance with Section 5.13.
OS = The aggregate number of issued and outstanding shares, excluding
treasury shares, of Company Common Stock at the Effective Time. OS
shall not include shares of BRC Common Stock issued pursuant to
Section 5.13 hereof.
OO = The aggregate number of shares of Company Common Stock which could be
received by all of the holders (the "Optionholders") of the Company's
rights and obligations under all stock options granted by the Company,
or any other security, instrument or agreement exercisable for or
convertible into Company Common Stock, which are outstanding and
unexercised at the Effective Time (the "Company Options"), to the
extent that the exercise or conversion price thereof is less than or
equal to the product of MP multiplied by the Exchange Rate, assuming,
for this purpose only, that all such Company Options are fully vested
and exercisable on such date.
(c) At the Effective Time and subject to the provisions of this
Section 2.1(c), BRC shall assume all of the Company's rights and
obligations under the Company Options to the Optionholders which were
outstanding and unexercised immediately prior to the Effective Time. Such
Company Options shall be assumed in accordance with their terms and
conditions as in effect at the Effective Time, except that (i) each Company
Option shall thereafter evidence the right to purchase that number of whole
shares of BRC Common Stock (rounded down) equal to the number of Company
Options evidenced thereby multiplied by the Exchange Rate with such options
having a new per share option exercise price equal to the existing option
exercise price divided by the Exchange Rate and (ii) each reference in any
Option Agreement between the Optionholder and the Company, which,
immediately prior to the Effective Time, represented the right to receive
Company Common Stock upon exercise ("Company Option Agreements") to the
Company and Company Common Stock shall be deemed to be references to BRC
and BRC Common Stock, respectively, and such Company Option Agreement shall
be amended accordingly at the Closing Date. Notwithstanding the foregoing,
BRC shall be entitled to substitute for any agreement constituting a
Company Option (or that part of such agreement) an option agreement under
an existing BRC option plan having substantially similar terms as the
Company Option in question, as modified hereby.
(d) The Exchange Rate and the calculations described herein shall be
subject to appropriate adjustment in the event of a stock split, stock
dividend or recapitalization subsequent to the date of this Agreement
applicable to shares of Company Common Stock or BRC Common Stock held of
record on or before the Effective Date. As used in this Agreement, "Merger
Consideration" shall be equal to the gross number of shares of BRC Common
Stock exchanged by BRC for the Company Common Stock and Company Options;
which number shall equal (4,300,000-NP+EP)/MP.
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<PAGE>
where:
EP = As defined in Section 2.1(b) above.
MP = As defined in Section 2.1(b) above.
NP= As defined in Section 2.1(b) above.
2.2 Fractional Shares. No scrip or fractional shares of BRC Common Stock
shall be issued in the Merger. All fractional shares of BRC Common Stock to
which a stockholder of the Company would otherwise be entitled at the Effective
Time shall be aggregated. If a fractional share results from such aggregation,
such stockholder of the Company shall be entitled, after the later of (a) the
Effective Time or (b) the surrender of such stockholder's stock certificates
which represent shares of Company Common Stock, to receive from BRC an amount in
cash, in lieu of such fractional share, based on MP (as defined in 2.1(b)
above).
2.3 Dissenting Shares.
(a) To the extent that appraisal rights are available under the TBCA,
shares of Company Common Stock that are issued and outstanding immediately
prior to the Effective Time and that have not been voted for adoption of
the Merger and with respect of which appraisal rights have been properly
demanded in accordance with the applicable provisions of the TBCA ("Company
Dissenting Shares") shall not be converted into the right to receive the
consideration provided for in Sections 2.1 and 2.2 at or after the
Effective Time unless and until the holder of such shares withdraws his
demand for such appraisal (in accordance with the applicable provisions of
the TBCA) or becomes ineligible for such appraisal. If a holder of Company
Dissenting Shares withdraws his demand for such appraisal (in accordance
with the applicable provisions of the TBCA) or becomes ineligible for such
appraisal, then, as of the Effective Time or the occurrence of such event,
whichever later occurs, such holder's Company Dissenting Shares shall cease
to be Company Dissenting Shares and shall be converted into and represent
the right to receive the consideration provided for in Sections 2.1 and
2.2.
(b) After the Effective Time, the Company, as the Surviving
Corporation, shall be the entity obligated to pay the fair value of any
shares held by any stockholder of the Company who has complied with the
requirements of the TBCA for recovery of the fair value of his or her
shares.
2.4 Exchange of Shares.
(a) Promptly after the Effective Date, BRC shall cause its transfer
agent (the "Agent") to mail to each record holder of certificates
representing Company Common Stock (the "Certificates"), a letter of
transmittal and instructions for use in effecting the surrender of the
Certificates and any payment for fractional shares. Upon surrender to the
Agent of a Certificate, together with such letter of transmittal duly
executed, the holder of such Certificate shall be entitled to receive in
exchange therefor a certificate or certificates and cash, if applicable,
representing his, her or its percentage of the Merger Consideration as
provided in this Article II and such surrendered Certificate shall then be
cancelled. Any certificate representing shares of BRC Common Stock issued
pursuant hereto shall bear such restrictive legend or legends as BRC shall
deem reasonably necessary to assure compliance with applicable securities
laws. If issuance is to be made to a person other than the person in whose
name the Certificate surrendered is registered, it shall be a condition of
issuance that the Certificate so surrendered shall be properly endorsed or
otherwise in proper form for transfer and that the person requesting such
issuance shall pay transfer or other taxes required by reason of the
payment to a person other than the registered holder of the Certificate or
Certificates surrendered or established to the satisfaction of BRC that
such tax has been paid or is not applicable. Until surrendered in
accordance with the provisions of this Section 2.4, each Certificate shall
represent for all purposes only the right to receive his, her or its
percentage of the Merger Consideration.
-4-
<PAGE>
(b) At and after the Effective Time there shall be no transfers of
shares of Company Common Stock which were outstanding immediately prior to
the Effective Time on the stock transfer books of the Company. If, after
the Effective Time, Certificates are presented to BRC, they shall be
cancelled and exchanged for that part of the Merger Consideration provided
in this Article II.
(c) The Company shall use its best efforts following the Merger to
cause the Optionholders to exchange the Company Option Agreements for new
agreements with BRC evidencing the new options to acquire BRC Common Stock.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to BRC as follows:
3.1 Organization; Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas. The Company has full corporate power and authority to own and lease all
of the properties and assets it now owns and leases and to carry on its business
as now being conducted. The Company is duly qualified as a foreign corporation
and is in good standing to do business in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification necessary, except where the failure to so qualify
would not have a material adverse effect on the financial condition or results
of operations (with respect to the Company, a "Material Adverse Effect") of the
Company.
3.2 Authority Relative to this Agreement. The Company has full power and
authority (corporate and otherwise) to execute, deliver and perform this
Agreement and, subject to the approval of the Merger by the stockholders of the
Company, to consummate the transactions contemplated hereby. The execution and
delivery by the Company of this Agreement and the other documents contemplated
hereby, and the consummation of the transactions contemplated hereby, have been
or will be duly and validly authorized by the Board of Directors of the Company
and no other corporate proceedings on the part of the Company are necessary with
respect thereto. This Agreement has been duly and validly executed and
delivered by the Company and constitutes a legal, valid and binding obligation
of the Company, enforceable against it in accordance with its terms.
3.3 Capitalization. The authorized capital stock of the Company consists
of 510,000,000 shares of Company Common Stock, of which, as of the date hereof,
2,983,892 shares of Company Common Stock are validly issued and outstanding,
fully paid and nonassessable. There are 10,000 shares of Company Common Stock
held in the treasury of the Company. Schedule 3.3 sets forth an accurate and
------------
complete list of the stockholders of the Company and the number of shares of
Company Common Stock owned thereby. No shares of capital stock of the Company
have been issued or disposed of in violation of any preemptive rights of any
stockholders of the Company or any other person. Except for options and
warrants to purchase 380,668 shares of Company Common Stock as more particularly
described on Schedule 3.3 hereto, there is no outstanding subscription,
------------
contract, convertible or exchangeable security, option, warrant, call or other
right obligating the Company to issue, sell, exchange or otherwise dispose of,
or to purchase, redeem or otherwise acquire any ownership interest of the
Company or any securities convertible into any ownership interest of the
Company. There are no voting trusts, stockholders agreements or other voting
arrangements by or between the stockholders of the Company, whether or not the
Company is a party thereto. Except as set forth on Schedule 3.3 hereto, no
------------
distribution, payment or dividend of any kind has been declared, paid or
distributed by the Company on or with respect to any of its capital stock at any
time.
3.4 Subsidiaries; Affiliates. The Company does not own any equity, profit
sharing, participation or other interest in any entity. The Company does not
have any loans outstanding to any of its affiliates or any entity controlled by
or under common control with any of its affiliates.
-5-
<PAGE>
3.5 Governmental Consents and Approvals. The execution, delivery and
performance by the Company of this Agreement and the consummation of the
transactions contemplated hereby requires no consent, approval, order or
authorization of, action by or in respect of, or registration or filing with,
any governmental body court, agency, or authority.
3.6 No Violations. The execution, delivery and performance of this
Agreement and the Agreement of Merger by the Company, the consummation by the
Company of the transactions contemplated hereby or compliance by the Company
with any of the provisions hereof does not and will not (a) conflict with or
result in any material breach or violation of any provision of the Articles of
Incorporation or Bylaws of the Company, (b) result in a default, or give rise to
any right of termination, cancellation or acceleration or loss of any material
benefit, or require the consent, approval, waiver or other action by any person,
entity or authority under any of the provisions of any note, bond, mortgage,
indenture, license, trust, agreement, lease or other instrument or obligation to
which the Company is a party or by which the Company may be bound, (c) result in
the creation or imposition of any material claim, lien, pledge, security
interest, obligation, restriction or other encumbrance on any of the property of
the Company, or (d) violate any judgment, order, writ, injunction, decree,
statute, rule or regulation applicable to the Company.
3.7 Information Statement. On the date of mailing the Information
Statement (as defined in Section 5.8 below) and on the meeting date for the
Company's shareholders, the information relating to the Company and its
business, properties, management, stockholders or securities contained in the
Information Statement will not contain any untrue statement of material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
3.8 Financial Statements, Etc. The Company has furnished to BRC the
Company's financial statements for the preceding 39 months including balance
sheets as of December 31, 1992, 1993 and 1994 and for the quarter ended March
31, 1995, together with related statements of income and supporting schedules
and ledgers for such periods (collectively, the "Company Financial Statements").
The Company Financial Statements have been prepared from, and are in accordance
with, the books and records of the Company and fairly present, in all material
respects, the financial position of the Company as of the date thereof and the
results of operations and changes in financial position therefor for the period
then ended, in each case in conformity with generally accepted accounting
principles, consistently applied. There has been no change in accounting
principles applicable to, or methods of accounting utilized by, the Company,
except as noted in the Company Financial Statements. The books and records of
the Company have been and are being maintained in accordance with good business
practice, reflect only valid transactions, are complete and correct in all
material respects, and fairly present in all material respects a basis for the
financial position and results of operation of the Company set forth in the
Company Financial Statements.
3.9 Pooling. To the Company's knowledge, after due inquiry, the Company
is not aware of any facts or circumstances related to the Company which would
negate the availability of pooling-of-interests accounting treatment (as
determined in accordance with Accounting Principles Board Opinion No. 16 and the
rules and regulations of the Securities and Exchange Commission ("SEC")) for the
transactions contemplated by this Agreement.
3.10 Liabilities. Schedule 3.10 hereto sets forth a complete list of the
-------------
liabilities and obligations of the Company of any nature, whether absolute,
accrued, contingent or otherwise which individually exceed $5,000, or in the
aggregate exceed $15,000. Each of such liabilities or obligations is fully
reflected, accrued or reserved against, to the extent required by generally
accepted accounting principles, on the March 31, 1995 balance sheet of the
Company that has been given to BRC. Other than as set forth on Schedule 3.10,
the Company is not liable upon or with respect to, or obligated in any other way
to provide funds in respect of or to guarantee or assume in any manner, any
debt, obligation or liability of any person, corporation or other entity which
individually exceed $5,000 or in the aggregate exceed $15,000, and the Company,
after due inquiry, knows of no basis for the assertion of any such claims,
liabilities or obligations.
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<PAGE>
3.11 Title to and Condition of Assets and Property.
(a) Except as set forth on Schedule 3.11 hereto and except for
-------------
dispositions of assets in the ordinary course of business, the Company has
good and marketable title to or valid leasehold interest in the assets
reflected on the Company's balance sheet or acquired after the date thereof
or used in its business.
(b) No hazardous or toxic material (as hereinafter defined) exists in
any structure located on, or exists on or under the surface of, any real
property owned, leased or otherwise used by the Company, successor to the
Company or affiliate to the Company in its business (the "Company Real
Property"). The Company is not and has never been in material violation of
any environmental law. For purposes of this section, "hazardous or toxic
material" shall mean waste, substance, materials, smoke, gas or particulate
matter designated as hazardous, toxic or dangerous under any environmental
law. For purposes of this section, "environmental law" shall include the
Comprehensive Environmental Response Compensation and Liability Act, the
Clean Air Act, the Clean Water Act and any other applicable federal, state
or local environmental, health or safety law, rule or regulation relating
to or imposing liability or standards concerning or in connection with
hazardous, toxic or dangerous waste, substance, materials, smoke, gas or
particulate matter. There are not any environmental assessments or audits
of the Company Real Property.
3.12 Investigation or Litigation. Except as disclosed on Schedule 3.12
-------------
hereto, (i) no material investigation or review by any governmental entity with
respect to the Company, including without limitation, investigations or reviews
relating to hazardous substances, pollution or the environment, discrimination
in employment, trade practices, and competition in pricing is pending or, to the
best of the Company's knowledge, threatened, nor has any governmental entity
indicated in writing to the Company an intention to conduct any such
investigation or review, and (ii) there is no action, suit or proceeding
pending, or, to the best of the Company's knowledge, threatened against the
Company at law or in equity, or before any federal, state, municipal or other
court or authority of competent jurisdiction.
3.13 Absence of Changes. Since March 31, 1995, the business of the Company
has been operated in the ordinary course consistent with past practice, other
than changes that neither have had, nor reasonably may be expected to have, a
Material Adverse Effect on the business of the Company.
3.14 Pension Matters
(a) Schedule 3.14 contains a list of all employee benefit plans
-------------
relating to employee benefits with respect to which the Company has or may
incur any future or contingent, obligations, including without limitation,
all plans, agreements or arrangements relating to deferred compensation,
pensions, profit sharing, retirement income or other benefits, stock
purchase and stock option plans, bonuses, severance agreements, health
benefits, insurance benefits and all other employee benefits or fringe
benefits (collectively, the "Plans").
(b) Each Plan has been administered and operated in all material
respects in accordance with its terms and applicable law. Except as listed
on Schedule 3.14 hereto, none of the Plans require "qualification" within
-------------
the meaning of Section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Code"). No liability under ERISA or similar statute has been
incurred or, based upon existing facts, may be expected to be incurred with
respect to any Plan, that would, individually or in the aggregate, be
material in amount.
(c) The Company has not engaged in any transactions in connection with
which it, directly or indirectly, will be subject to either a civil penalty
assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section
4975 of the Code. No liability of the Pension Benefit Guaranty Corporation
(the
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<PAGE>
"PBGC") has been or is expected to be incurred with respect to any Plan by
the Company. The Company has not instituted proceedings to terminate any
Plan. No "reportable event" within the meaning of Section 4043(b) of ERISA
has occurred with respect to any Plan. There exists no condition or set of
circumstances that presents a material risk of termination or partial
termination of any Plan which would result in liability on the part of the
Company to the PBGC.
(d) Full payment has been made or accrued (in a manner consistent with
past practice) of all amounts that the Company was or will be required
under the terms of any Plan to have paid as contributions to such Plan on
or before the Closing Date, and no accumulated funding deficiencies (as
defined in Section 302 of ERISA and Section 4012 of the Code), whether or
not waived, exists with respect to any such Plan and any contributions or
distributions of securities related to calendar year 1994 shall have been
consummated.
(e) Other than claims in the ordinary course for benefits under the
Plans, there are no actions, suits, claims or proceedings, pending or
threatened, nor does there exist any basis therefor, that would result in
any liability with respect to any Plan or trust thereof to the Company or
any Plan or trust thereof, which would, individually or in the aggregate,
be material in amount.
(f) No Plan is subject to Title IV of ERISA or is a multi-employment
plan within the meaning of Section 3(37) of ERISA.
(g) No termination or partial termination of any Plan in accordance
with its terms will result in any liability to the Company.
3.15 Employment and Labor Matters. Except as set forth on Schedule 3.15,
-------------
the Company does not have any obligations, contingent or otherwise, under any
employment, commission, royalty or consulting agreement. The Company is in
substantial compliance with all federal, state or other applicable laws,
domestic or foreign, regarding employment and employment practices, terms and
conditions of employment and wages and hours, and has not and is not engaged in
any unfair labor practice. No employee of the Company is in violation of any
term of any employment contract, or any other contract or agreement with or any
restrictive covenant or any other common law obligation to a former employer
relating to the right of any such employee to be employed by the Company because
of the nature of the business conducted or to be conducted by the Company or to
the use of trade secrets or proprietary information of others, and the
employment of the Company's employees does not subject the Company to liability
in connection with such covenants or agreements. Except as disclosed on
Schedule 3.15, there are no pending petitions for recognition of a labor union
- -------------
or association as the bargaining agent for any employees of the Company and, to
the best knowledge of the Company, there are not presently any material
organizing efforts by any union or other groups seeking to represent any
presently unorganized employees of the Company as their bargaining agent. There
are no labor strikes, work stoppages or other employment troubles, other than
routine grievance matters, now pending or, to the best knowledge of the Company,
threatened against the Company that would have a Material Adverse Effect.
3.16 Tax Matters. The Company has duly filed all federal, state, county,
local and foreign income, excise, sales, customs, property, withholding, social
security and other tax and information returns and reports reasonably believed
to be required to have been filed by it to the date hereof, or, in the
alternative, has obtained extensions for filing in accordance with established
procedures, and has paid or made provision for payment of all taxes (including
interest and penalties) shown as due on the returns or reports, and with respect
to all periods ending prior to January 1, 1995, except where failure to file
would not have a Material Adverse Effect. The Company has no material liability
for any taxes of any nature whatsoever other than as shown on the Company's
Financial Statements. The federal income tax returns of the Company have been
audited or barred by applicable statute of limitations for all fiscal years to
and including 1987, and all material deficiencies asserted as a result of such
audits have been paid, fully settled or adequately provided for in the Company's
Financial Statements.
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<PAGE>
3.17 Proprietary Rights. The Company owns or validly licenses the right to
use all technology, proprietary information, know-how, ideas (patented or
unpatented), data, licenses, customer lists, processes, formulas, trade secrets,
telephone numbers, computer software, computer programs, designs, inventions,
trademarks, trademark registrations and applications therefor, registered and
common law copyrights, and registered copyright applications, trade names
(whether or not registered or registrable), service marks, service mark
registrations and applications therefor (collectively, the "Proprietary Rights")
necessary to conduct the business of the Company as the business is presently
being conducted. Schedule 3.17 sets forth a complete and correct list
-------------
(including, where applicable, registration numbers and dates of filing, renewal
and termination) of all Proprietary Rights. No consent or approval of any third
party will be required for the use of the Proprietary Rights by the Company
after the consummation of the transactions contemplated hereby and the
transactions hereunder will not result in any breach of any agreement relating
to any Proprietary Rights. No claim or opposition has been asserted by any
person or entity to the ownership of or the Company's right to use any of the
Proprietary Rights or challenging or questioning the validity or effect of any
license or agreement relating thereto, and there is no valid basis for any such
claim or assertion. The Company has ownership of, or valid licenses to use all
of, the Proprietary Rights. Each of the Proprietary Rights is valid and
subsisting, has not been cancelled, abandoned or otherwise terminated and, if
applicable, has been duly asserted, registered and filed. The Proprietary
Rights owned by the Company are owned free and clear of all liens. The Company
has taken all reasonable steps to establish and preserve its ownership of all
Proprietary Rights. The Company's use of the Proprietary Rights will not, and
the conduct of the business as presently conducted does not, infringe on or
violate the rights of any other person or entity. No proceedings have been
instituted, are pending or are threatened that challenge or oppose the rights of
the Company with respect to any of the Proprietary Rights. The Company has not
received any notice or inquiry from any person or entity of any alleged
infringement by the Company. The Company has not given and is not bound by any
agreement of indemnification in connection with any Proprietary Rights or
product or service sold or performed by the Company. Set forth on Schedule 3.17
-------------
is a list of all confidentiality agreements and all other contracts, royalty
agreements, licenses or other understandings or arrangements entered into
relating to the Proprietary Rights and all such contracts are in full force and
effect.
3.18 No Brokers. The Company has not employed any broker, agent or finder
or incurred any liability for any brokerage fees, commissions or finders' fees
in connection with the transactions contemplated hereby.
3.19 Records. The respective minute books, books of account, stock record
books and other records of the Company, all of which have been or will be made
available to BRC, contain accurate and complete records of all corporate actions
of the stockholders and Boards of Directors (and committees thereof) during the
periods of time in which such minute books were maintained.
3.20 Legal Compliance. The Company has complied in all material respects
with all applicable laws, rules, regulations and ordinances, government or
governmental agency having jurisdiction over it, its property or businesses
including those relating to trademarks, trade names or copyrights, any zoning,
occupational safety or environmental protection laws, any antitrust, trade
regulation and trade practices laws or any laws relating the employment of
labor, other than such which, if not complied with, would not have a Material
Adverse Effect. The Company is not in violation of, or in default under, any
terms or provisions of any mortgage, indenture, security agreement, lease,
contract, agreement, instrument, or, arbitration, or judgment or decree other
than such violations or defaults which would not have a Material Adverse Effect.
3.21 Insurance. All the insurance policies maintained by the Company are
in full force and effect, all insurance premiums have been timely paid to date,
and no such policy can be cancelled as a result of the Company's execution and
delivery of this Agreement prior to Closing. The Company has not received a
notification from any such insurance company indicating that it intends to
cancel any policy of insurance currently in effect.
3.22 Accounts Payable. Schedule 3.22 contains a complete and accurate list
-------------
of all the Company's aged accounts payable at March 31, 1995, showing the name
of each account creditor and the amount due to each by invoice number and date.
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<PAGE>
3.23 Product and Service Warranties. There is no claim against or
liability of the Company on account of product or service warranties or with
respect to the manufacture, sale or lease of products or performance of
services, and there is no basis for any such claim on account of products
heretofore manufactured, sold or leased or services performed.
3.24 Contracts; Oral Commitments; Defaults. The Company has provided BRC
with true and correct copies of all contracts of the Company (summaries of all
oral commitments) that are material to the business of the Company or that would
otherwise be required to be filed as a "material contract" pursuant to Item
601(b)(10) of Regulation S-K if the Company were a public company. There exists
no material breach or default under any of such contracts that would have a
Material Adverse Effect on the Company.
3.25 Disclosure.
(a) The Company has delivered or made available to BRC complete and
accurate copies of all documents listed on the schedules delivered as a
part hereof and all other information requested for deciding whether to
consummate the transactions hereby. No representation or warranty of the
Company contained in this Agreement or statement in the schedules hereto
contains any untrue statement. No representation or warranty of the
Company contained in this Agreement or statement in the schedules hereto
omits to state a material fact necessary in order to make the statements
herein or therein, in light of the circumstances under which they were
made, not misleading.
(b) There is no fact known to the Company which has specific
application to BRC and which could have a Material Adverse Effect but which
has not been set forth in this Agreement or the schedules hereto.
(c) The disclosures in the schedules hereto shall relate only to the
representations and warranties in the Section of this Agreement to which
they expressly relate and to no other representation or warranty in this
Agreement.
(d) In the event of any inconsistency between the statements in the
body of this Agreement and those in the schedules hereto (other than an
exception expressly set forth as such in the schedules in relation to a
specifically identified representation or warranty), those in this
Agreement shall control.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BRC
BRC represents and warrants to the Company as follows:
4.1 Organization; Qualification. BRC is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
BRC has full corporate power and authority to own and lease all of the
properties and assets it now owns and leases and to carry on its business as now
being conducted. BRC is duly qualified as a foreign corporation and is in good
standing to do business in each jurisdiction in which the property owned, leased
or operated by it or the nature of the business conducted by it makes such
qualification necessary, except where the failure to so qualify would not have a
material adverse effect on the financial condition or results of operations
(with respect to BRC, a "Material Adverse Effect") of BRC.
4.2 Authority Relative to this Agreement, Conflicts. BRC has full power
and authority (corporate and otherwise) to execute, deliver and perform this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery by BRC of this Agreement and the other documents contemplated
hereby, and the consummation of the transactions contemplated hereby, have been
or will be duly and validly authorized by the Board of Directors of BRC and no
other corporate proceedings on the part of BRC are necessary with respect
thereto. This Agreement has been duly and validly executed and delivered by
BRC, and constitutes a legal, valid
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and binding obligation of BRC, enforceable against it in accordance with its
terms. The execution and delivery of this Agreement and the Agreement of Merger
do not, and the consummation of the transactions contemplated hereby and thereby
will not, violate any provision of the Certificate of Incorporation or Bylaws of
BRC, and will not violate any provision of, or result in the breach or
acceleration of or default under or require any consent or approval of a third
party not obtained prior to the Effective Date, of any mortgage, indenture, loan
agreement, note, debenture, security agreement, lease, contract, agreement,
instrument, order, arbitration award, judgment or decree to which BRC or any
subsidiary of BRC is a party or by which BRC or any subsidiary of BRC is bound,
except for any violation, breach acceleration, default or consent or approval
the occurrence of which or the failure to obtain of which, as the case may be,
would not have a Material Adverse Effect.
4.3 Capitalization. The authorized capital stock of BRC consists of
10,000,000 shares of BRC Common Stock, of which, as of April 30, 1995, 6,228,929
shares of BRC Common Stock are validly issued and outstanding, fully paid and
nonassessable. As of April 30, 1995, there were no shares of BRC Common Stock
held in the treasury of BRC.
4.4 Dividends and Distributions. From December 31, 1993 to the date
hereof, BRC has not declared or paid any dividends on any shares of its capital
stock, nor has it made any other payments or distributions thereon to its
stockholders.
4.5 BRC Reports; Financial Statements. BRC has made available to the
Company (i) each registration statement, proxy statement and information
statement prepared by it since December 31, 1992, (ii) BRC's Annual Report on
Form 10-K for the fiscal years ended December 31, 1992, December 31, 1993, and
December 31, 1994, and BRC's Quarterly Report on Form 10-Q for the first fiscal
quarter of 1995, and (iii) each of BRC's Reports on Form 8-K relating to an
event or transaction occurring since December 31, 1992, each in the form
(including exhibits) filed with the SEC (collectively, the "BRC Reports"). Each
of the consolidated balance sheets included in or incorporated by reference into
the BRC Reports (including the related notes and schedules) fairly presents, in
all material respects, the consolidated financial position of BRC and its
subsidiaries as of its date, and each of the consolidated statements of income
and of cash flow included in or incorporated by reference into the BRC Reports
(including any related notes and schedules) fairly presents, in all material
respects, the results of operations, retained earnings and cash flows, as the
case may be, of BRC and its subsidiaries for the periods set forth therein
(subject, in the case of unaudited statements to normal year-end audit
adjustments which will not be material in amount or effect), in each case in
accordance with generally accepted accounting principles consistently applied
during the periods.
4.6 Information Statement. On the date of mailing the Information
Statement (as defined in Section 5.8) and on the Effective Date, the information
relating to BRC and its subsidiaries and its or their business, properties,
management, stockholders or securities contained in the Information Statement
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
4.7 Due Authorization. Not later than thirty (30) days following the date
hereof (the "Reference Date"), the Board of Directors of BRC shall have duly
authorized this Agreement, the Articles of Merger and the transactions
contemplated hereby and thereby.
4.8 Litigation and Contingent Liabilities. BRC has no litigation or
contingent liabilities that are required to be disclosed in the BRC Reports that
are not disclosed therein.
4.9 Employment Matters. Except as disclosed in the BRC Reports, there are
no pending petitions for recognition of a labor union or association as the
bargaining agent for any employees of BRC or any BRC subsidiary and, to the best
knowledge of BRC, there are not presently any material organizing efforts by any
union or other group seeking to represent any presently unorganized employees of
BRC or any BRC subsidiary as their bargaining agent. There are no labor
strikes, work stoppages or other employment troubles, other than routine
grievance
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matters, now pending or, to the best knowledge of BRC, threatened, against BRC
or any BRC subsidiary that would have a Material Adverse Effect.
4.10 Tax Matters. BRC and each BRC subsidiary have duly filed all federal,
state, county, local and foreign income, excise, sales, customs, property,
withholding, social security and other tax and information returns and reports
reasonably believed to be required to have been filed by them to the date
hereof, or, in the alternative, have obtained extensions for filing in
accordance with established procedures, and have each paid or made provision for
payment of all taxes (including interest and penalties) shown as due on the
returns and reports, and with respect to all periods ending prior to, January 1,
1995 except where failure to file would not have Material Adverse Effect. BRC
and each BRC subsidiary have no material liability for any taxes of any nature
whatsoever other than as shown on BRC's Consolidated Balance Sheet as of March
31, 1995 included in the BRC Reports, for the period then ended and all years
and periods prior thereto. The federal income tax returns of BRC and its
subsidiaries have been audited or barred by applicable statute of limitations
for all fiscal years to and including 1987, and all material deficiencies
asserted as a result of such audits have been paid, fully settled or adequately
provided for in BRC's Consolidated Balance Sheet as of March 31, 1995 included
in the BRC Reports.
4.11 Absence of Certain Changes. Except as disclosed in the BRC Reports,
since March 31, 1995, BRC and each BRC subsidiary have conducted their
respective businesses only in, and have not engaged in any material transaction
other than according to, the ordinary and usual course of such businesses and,
except as set forth on the list attached hereto as Schedule 4.11, there has not
-------------
been (i) any material adverse change in the financial condition, earnings or
business; or (ii) any change by BRC in accounting principles, practices or
methods that would be required to be disclosed in the BRC Reports pursuant to
the rules and regulations promulgated by the SEC. Since March 31, 1995, except
as provided for herein or as disclosed in the BRC Reports and other than in the
ordinary course of business and in a manner consistent with past practices or
where same is not required by applicable law to be disclosed in the BRC Reports,
neither BRC nor any BRC subsidiary has: (1) authorized the creation or issuance
of or issued, sold or disposed of or created any obligation to issue, sell or
dispose of any capital stock, equity interest, notes, bonds or other securities,
or obligations convertible into or exchangeable for any stock, equity interest,
notes, bonds or other securities, or any option to purchase any of the
foregoing; (2) declared, set aside or made any dividend payment or other
distribution on its capital stock or equity payment or other distribution on its
capital stock or equity interests, or directly or indirectly redeemed, purchased
or otherwise acquired any shares or portion thereof or entered into any
agreement in respect of the foregoing or effected any stock split,
reclassification or combination; (3) adopted a plan of complete or partial
liquidation, dissolution, restructuring or reorganization; (4) amended its
certificate of incorporation or bylaws; (5) merged or consolidated with or into
any entity or enterprises or sold, leased, abandoned or otherwise disposed of
all or substantially all of its assets or acquired the stock, equity interests
or assets of any entity or enterprise; (6) purchased, sold, assigned or
transferred any material tangible assets or any patent, trademark, trade name,
copyright, license, franchise, construction permit or other intangible assets or
property, mortgaged, pledged or granted or suffered to exist any lien, security
interest or other encumbrance or charge on any material assets or properties,
tangible or intangible, except for liens for taxes not yet due and such other
liens, security interests, encumbrances or charges that do not have a Material
Adverse Effect or waived any rights of material value or cancelled any material
debts or claims; (7) incurred any indebtedness for borrowed money or liability
or obligation (absolute or contingent), in each case other than such which are
not material; (8) entered into any material contracts or agreements or material
amendments or modifications to material contracts or agreements; (9) incurred
any damage, destruction or similar loss (whether or not covered by insurance),
or otherwise suffered any loss, in each case other than such which are not
material; or (10) entered into any commitment, written or oral (other than this
Agreement), to do any of the things described in this Section 4.11.
4.12 Legal Compliance. BRC and each BRC subsidiary have complied in all
material respects with all applicable laws, rules, regulations and ordinances of
each, governmental or governmental agency having jurisdiction over it, its
property or businesses, including those relating to trademarks, trade names or
copyrights, and any zoning, occupational safety or environmental protection
laws, any antitrust, trade regulation and trade practices laws or any laws
relating to the employment of labor, other than such which, if not complied
with, would
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<PAGE>
not have a Material Adverse Effect. Neither BRC, nor any BRC subsidiary, is in
violation of, or in default under, any terms or provisions of any mortgage,
indenture, security agreement, lease, contract, agreement, instrument, order,
arbitration award, judgment or decree other than such violations or defaults
which do not have a Material Adverse Effect.
ARTICLE V
ADDITIONAL COVENANTS
5.1 Notice of any Material Change. Each of the Company and BRC shall,
promptly after the first notice or occurrence thereof but not later than the
Closing Date, advise the other in writing of any event or the existence of any
state of facts that (a) would make any of its representations and warranties in
this Agreement untrue in any material respect; or (b) would otherwise constitute
a material adverse change in its financial position or results of operations.
No notice hereunder will have any effect for the purpose of determining the
satisfaction of or compliance with the conditions to the obligations of the
parties set forth elsewhere in this Agreement.
5.2 Cooperation. Each of the Company and BRC shall use its best efforts
to:
(a) proceed promptly to make or give the necessary applications,
notices, requests and filings to obtain at the earliest practicable date
and, in any event, before the Closing Date, the approvals, authorizations
and consents necessary to consummate the transactions contemplated by this
Agreement;
(b) cooperate with and keep the other informed in connection with this
Agreement; and
(c) take such actions as the other party may reasonably request to
consummate the transactions contemplated by this Agreement and use its best
efforts and diligently attempt to satisfy, to the extent within its
control, all conditions precedent to the obligations to close this
Agreement.
5.3 Shareholder Meeting. Each of the Company and MC shall as soon as
practicable take all steps necessary to duly call, give notice of, convene and
hold, as soon as practicable, a special meeting of its shareholders (or a
unanimous consent of the shareholders in lieu of such meeting) for the purpose
of adopting and approving the Merger and all actions that require the approval
of MC's and the Company's shareholders under applicable law. The Board of
Directors of the Company has determined by the unanimous vote of all of its
directors that the Merger is advisable and in the best interest of its
shareholders, and, to the extent consistent with its fiduciary obligations, will
unanimously recommend to the shareholders the adoption and approval of the
Merger and the transactions contemplated hereby. If, at the special meeting of
the shareholders of the Company, less than ninety-five percent (95%) of shares
of Company Common Stock required to duly approve this Agreement and the Merger
would be voted in favor thereof, at the request of BRC, the Company will, to the
extent consistent with its Board's fiduciary obligations, adjourn the special
meeting on one or more occasions to a convenient date not later than thirty (30)
days after the original date of the special meeting and will use its best
efforts to solicit from its shareholders proxies in favor of approving the
Merger.
5.4 Public Announcements. The parties agree to consult with each other
prior to making any announcement or other disclosure concerning the transactions
contemplated by this Agreement. Except as otherwise required by law or
regulations (including, without limitation, those laws and regulations
promulgated by or for the SEC), neither party may make a public announcement
regarding the Merger or the transactions contemplated by this Agreement without
the prior written consent of the other party. Without limiting the foregoing,
the parties, subject to complying with their obligations under applicable law,
do not currently intend to make any announcement concerning the transactions
proposed hereby prior to the Effective Date.
5.5 Access; Confidentiality. From the date of this Agreement until the
Effective Date, the Company and BRC shall each provide the other with such
information and permit the other's officers and representatives such
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access during normal business hours to their respective properties and records
as the other may from time to time reasonably request if, and to the extent that
any such investigation shall be conducted in such manner as not to interfere
unreasonably with the operation of the business of the other or the other's
subsidiaries. No such investigation shall alter or diminish any of the
representations or warranties made under this Agreement. The Company and BRC
each recognize, acknowledge and agree that any of the information to be provided
hereunder is proprietary to the business of the other (hereinafter "Confidential
Information"). By way of illustration, but not limitation, Confidential
Information shall include trade secrets, processes, formulas, data, know-how,
software, documentation, object code, standards, specifications, inventions,
customer information, accounting data and the like. The Company and BRC agree,
therefore, except as directed in writing by the other party, neither party will
at any time during or after the term of this Agreement, use or disclose any
Confidential Information to any person or entity whatsoever, or permit any
person whatsoever to examine and/or make copies of or reports or documents from
any Confidential Information, and that upon termination of this Agreement, both
parties shall turn over to the other all documents, papers and other matter in
its possession or under its control that in any way relate to Confidential
Information. Confidential Information shall not include information which (1)
is or becomes generally available to the public other than as a result of a
disclosure in breach of this Agreement or (2) is or becomes required by
applicable law to be disclosed.
5.6 Conduct of Business Prior to Closing Date.
(a) Unless BRC and the Company agree otherwise, during the period
pending the Closing Time, the Company:
(1) shall not issue any additional shares of Company Common
Stock, except in connection with the exercise of options or other
instruments described on Schedule 3.3, or change the outstanding
------------
number of shares of Company Common Stock into a different number of
shares or a different class by reason of reclassification,
recapitalization, split-up, combination, exchange of shares,
readjustment, stock split, stock dividend or otherwise;
(2) shall not issue, sell or grant options, warrants or rights to
purchase or subscribe to, or enter into any arrangement or contract
with respect to the issuance or sale of any of the capital stock of
the Company or rights or obligations convertible into or exchangeable
for any shares of the capital stock of the Company;
(3) shall not declare, pay or set aside for payment any dividend
or other distribution in respect of the capital stock or other equity
securities of the Company or redeem, purchase or otherwise acquire any
shares of the capital stock or other securities of the Company or
rights or obligations convertible into or exchangeable for any shares
of the capital stock or other securities of the Company;
(4) shall not intentionally take any action that, and shall not
intentionally fail to take any action the failure to take which, would
cause or permit its representations and warranties contained in this
Agreement to be untrue in any material respect at the Closing;
(5) shall not sell any assets not in the ordinary course of
business;
(6) shall conduct its operations in the ordinary and usual course
of business consistent with past and current practices, and shall use
its good faith efforts to maintain and preserve intact its business
organization and goodwill, to retain the services of its key officers
and employees, and to maintain satisfactory relationships with
suppliers, customers, and others having business relationships with
it;
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<PAGE>
(7) shall notify BRC of any emergency or other change in the
normal course of Company business;
(8) shall not settle, compromise or discharge any lawsuit, claim
or proceeding or enter into an agreement to do any of the foregoing
without the prior written consent of BRC;
(9) shall not acquire any shares of its capital stock;
(10) shall not award or pay any increase in compensation or base
salary or award or pay any special or cumulative bonus;
(11) enter into any employment, consulting, brokerage, royalty or
commission agreement or arrangement;
(12) enter into, or modify any agreement, arrangement,
understanding or transaction of any kind or character with any
Individual or any person or entity affiliated or associated with any
Individual; or
(13) enter into any agreement to do any of the things described
in clauses (1) through (12) above.
(b) Each of BRC and the Company agrees that, after the date hereof
(and except for the Merger and related transactions specifically
contemplated by this Agreement), it will not take or omit to take any
action which would cause the Merger not to qualify as a reorganization
within the meaning of Section 368 of the Code, including without
limitation:
(1) any sale, exchange, distribution, transfer or other
disposition of the assets of the Company that would cause the Merger
to fail to satisfy the "continuity of business enterprise" requirement
of Section 1.368-1(d) of the regulations promulgated pursuant to the
Code or the "substantially all of the properties" requirements of
Section 368(a)(2)(E) of the Code;
(2) any reacquisition of shares of the Company's Common Stock
that would result in BRC failing to obtain or losing control of the
Company within the meaning of Section 368(c) of the Code.
5.7 No Solicitations. From the date hereof until the Closing Date or
until this Agreement is terminated as provided in this Agreement, the Company
shall not directly or indirectly (i) solicit or initiate discussion with or (ii)
enter into negotiations or agreements with, or furnish any information that is
not publicly available to, any corporation, partnership, person or other entity
or group (other than BRC, MC or their authorized representatives pursuant to
this Agreement) concerning any proposal for an acquisition of substantial
assets, sale or acquisition of shares of stock or securities or other takeover
or business combination transaction (a "Company Acquisition Proposal") involving
the Company, and the Company will instruct its officers, directors, advisors and
its financial and legal representatives and consultants not to take any action
contrary to the foregoing provisions of this sentence. The Company will notify
BRC promptly in writing if the Company becomes aware that any inquiries or
proposals are received by, any information is requested from or any negotiations
or discussions are sought to be initiated with, the Company with respect to a
Company Acquisition Proposal.
5.8 Securities Matters.
(a) In connection with the meeting of the Company's shareholders to be
called pursuant to Section 5.3 hereof, the Company shall prepare an
Information Statement ("Information Statement") relating to the Merger, the
respective businesses of BRC and the Company and such other matters as
shall be
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reasonably necessary to provide the shareholders of the Company with the
information necessary to make an informed investment decision regarding the
Merger, the BRC Common Stock constituting Merger Consideration and
exercising any rights arising from the Merger and relating to the Company
Common Stock. The Information Statement shall be reasonably acceptable in
substance to BRC. BRC shall provide for use in connection with the
Information Statement, sufficient copies of its most recent Annual Report
to Stockholders, including its Report on Form 10-K constituting a part
thereof, its most recent proxy statement and its Report on Form 10-Q for
the period ending March 31, 1995, together with such other information
concerning it, its businesses and prospects as the Company shall reasonably
request. Not later than twenty (20) days prior to the shareholder meeting
called for in Section 5.3, the Company and its Board of Directors shall
cause to be mailed to each of the record holders of Company Common Stock as
of the record date for such shareholder meeting the Information Statement,
together with a form of proxy naming one or more members of the Board of
Directors of the Company as proxy for the purpose of voting in favor of the
Merger. Notwithstanding any provision of the foregoing to the contrary, it
is the intent of the Company to conduct the solicitation and other
transactions contemplated in this Section 5.8(a) in such a manner as to
comply with one or more exemptions from the registration provisions of the
Securities Act, including, but not limited to, Rule 505 thereunder, and any
applicable state securities or blue sky laws. Each of the parties hereto
shall use its or his best reasonable efforts to assure compliance with such
exemptions from registration.
(b) BRC agrees to use reasonable efforts to file a Registration
Statement on Form S-3 with the SEC as soon as reasonably practicable
following the Effective Time to register the sale of the shares of BRC
Common Stock constituting Merger Consideration together with any BRC Common
Stock issued pursuant to Company Options described on Schedule 3.3, to the
------------
extent not otherwise covered by an effective registration statement, to use
reasonable efforts to cause such Registration Statement to become effective
as promptly as practicable thereafter and, subject to applicable law, to
maintain the effectiveness of such Registration Statement until the earlier
of the sale of the shares registered thereby or the second anniversary of
the Closing Date; provided, however, that each shareholder of the Company
desiring to become a selling shareholder thereunder shall execute a normal
and customary registration rights agreement with BRC in connection with the
Closing, or thereafter, to, among other things, assure compliance with
applicable securities laws and which registration rights agreement shall
have customary provisions relating to the provision of information and
indemnification. Prior to the Closing Date, the Company shall undertake,
in the Information Statement or otherwise, to advise shareholders of the
Company and all affiliates of the Company of the resale restrictions
imposed by federal securities laws, including Rule 145 under the Securities
Act, on shares of BRC Common Stock, received by them pursuant to and in
connection with the Merger.
(c) Subject to applicable law, the Company, the Individuals and BRC
each agree to indemnify the other and its respective directors, officers,
agents, employees, and each person who may be controlled by it or be under
common control with BRC or the Company, respectively, within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act,
and to hold each other harmless from and against any losses, claims,
damages or liabilities, joint or several, to which they, or any of them,
may become subject insofar as such losses,claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any alleged
untrue statement of any material fact included in information pertaining to
it and its subsidiaries contained or referred to in the Information
Statement or the Registration Statement or upon any alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading.
5.9 Irrevocable Proxy. The Individuals hereby irrevocably appoint the
Chairman and Chief Executive Officer of BRC, with full power of substitution,
the attorney and proxy of the Individuals, with full power of substitution, to
vote all Company Common Stock held, owned or controlled beneficially or of
record, including, without limitation, any shares of Company Common Stock which
the Individual has the right to direct the vote of, by the Individuals on the
record date for the Company stockholders' meeting, in favor of the Merger
contemplated
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hereby according to the number of votes that the Individuals would be entitled
to vote if personally present at the meeting of Company stockholders called and
held for the primary purpose of considering the Merger. Further, such
Individuals covenant not to take any action inconsistent with the consummation
of the transactions contemplated by this Agreement. The proxy contained in this
Section 5.9 is granted to BRC in connection with their agreement to merge the
Company with and into MC and, because coupled with an interest thereby, shall be
irrevocable to the fullest extent permitted by law; provided, however, that such
Proxy will become revocable upon the termination of this Agreement by BRC, MC or
the Company in accordance with the terms of Article VII of this Agreement. The
Individuals agree to cause the Company to make appropriate notation of the proxy
contained herein on the stock transfer records of the Company and elsewhere as
appropriate to document and protect said proxy.
5.10 Stock Options. BRC covenants and agrees to grant to those employees
of the Company deemed critical to the business of the Company (the "Key
Employees") options to purchase an aggregate of 100,000 shares of BRC Common
Stock ("BRC Options"); provided, however, that the issuance of such BRC Options
is subject to, among other terms and conditions contained in the Stock Option
Agreement substantially in the same form as Exhibit B attached hereto. The BRC
---------
Options shall bear an exercise price equal to the market price of the BRC Common
Stock on the date of grant and 33.333% of such options shall vest on each of the
three anniversary dates of the date of grant subject to continued employment
through such date and the attainment by the Company of financial performance
goals described in exhibits to the Option Agreement attached hereto as Exhibit
-------
B. Such BRC Options shall be exercisable for a period of ten years from the
date of grant and shall be subject to Closing and to the execution by the
employee of a Confidentiality and Noncompetition Agreement with BRC and the
Company, substantially in the same form as Exhibit C attached hereto. Further,
---------
BRC shall have received, prior to Closing, a list ("Key Employee List") from the
Company designating the Key Employees and the number of BRC Options attributable
to each . BRC shall have the right to approve the names and number of BRC
Options listed on the Key Employee List, which such approval shall not be
unreasonably withheld.
5.11 Confidentiality and Non-competition Agreements. Charles B. Owen and
Andrew Galewsky shall enter into confidentiality and non-competition agreements
with the Company and BRC in substantially the form of Exhibit C attached hereto
and providing further for the payment of $200,000 to Mr. Owen and $50,000 to Mr.
Galewsky and restricting their ability to compete with BRC or the Company for
the later of five (5) years from the execution of such agreement or three (3)
years from the date upon which their employment with the Company or BRC shall
terminate, respectively.
5.12 Reasonable Best Efforts. Each of the Company and BRC shall take all
necessary corporate and other action and use its reasonable best efforts to
obtain all necessary consents, authorizations, and approvals and to make all
necessary filings required to carry out the transactions contemplated by this
Agreement, to satisfy the conditions specified in Articles V, VI and VII hereof
at the earliest practicable date and otherwise to perform its obligations under
this Agreement.
5.13 Company Indebtedness. Attached hereto as Schedule 5.13 is a list of
-------------
all shareholders of the Company to whom the Company has outstanding indebtedness
in the form of notes, credit agreements or other instruments (the "Shareholder
Notes"). Opposite each name set forth on Schedule 5.13 is the outstanding
-------------
principal and accrued interest owed such party with respect to Shareholder Notes
as of June 30, 1995. By their execution hereof, the Noteholders agree that,
subject to the provisions of Section 8.4, at the Closing, effective as of the
Effective Time, each of the Shareholder Notes and all of the record and
beneficial interest therein, shall be exchanged for that number of shares of BRC
Common Stock equal to (i) the sum of the then outstanding principal amount and
accrued but unpaid interest thereon, divided by (ii) the MP. Each of the record
holders of the Shareholder Notes shall execute an endorsement with regard
thereto in form and substance reasonably satisfactory to BRC and shall otherwise
satisfy BRC as to such party's beneficial and record ownership of the
Shareholder Note in question and the conveyance thereof to BRC free and clear of
all liens, claims or encumbrances of any kind.
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5.14 Releases. Following the Effective Time, the Company and BRC shall use
their best reasonable efforts to obtain the release of the Individuals from any
guarantees or other personal obligations under or with respect to the contracts
and agreements described on Schedule 5.14 hereto.
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ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY
Except as may be waived by the Company, the obligations of the Company to
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction, on or before the Closing Date, of each of the following
conditions:
6.1 Compliance. BRC or MC shall have, or shall have caused to be,
satisfied or complied with and performed in all material respects all terms,
covenants and conditions of this Agreement to be complied with or performed by
BRC or MC on or before the Closing Date.
6.2 Resolutions. The Company shall have received copies of resolutions
duly adopted by the Board of Directors and the stockholder of MC approving the
execution and delivery of this Agreement, and the consummation of the
transactions contemplated hereby, certified as of the Closing Date by the
Secretary of MC.
6.3 Representations and Warranties. All of the representations and
warranties made by BRC or MC in this Agreement shall have been true and correct
in all material respects as of the date hereof, and shall be true and correct in
all material respects at the Closing Date with the same force and effect as if
such representations and warranties had been made at and as of the Closing Date,
except for changes permitted or contemplated by this Agreement; provided,
however, if one or more the representations and warranties made by BRC in this
Agreement were not true and correct in all material respects when made or would
not be true and correct in all material respects as of the Closing Date, but if
information is disclosed in the Information Statement/Prospectus that if stated
in this Agreement to have been an exception to one or more representations of
BRC would have caused such representations and warranties to be true and correct
in all material respects, then this condition shall be satisfied.
6.4 Shareholder Approval. The Merger shall have been approved and adopted
by the requisite shareholder vote of the shareholders of the Company and MC.
6.5 Consents; Litigation. All authorizations, consents, orders or
approvals of, or declarations or filings with, or expirations or terminations of
waiting periods imposed by any governmental entity, and all required third-party
consents, the failure to obtain which would have a Material Adverse Effect on
BRC shall have been filed, occurred or been obtained. No action, suit or
proceeding shall have been instituted before any court or other governmental
entity to restrain, modify, enjoin or prohibit the carrying out of the
transactions contemplated hereby.
6.6 Certificates. The Company shall have received a certificate or
certificates, executed on behalf of BRC by an executive officer of BRC, to the
effect that the conditions contained in Sections 6.1, 6.3 and 6.4 hereof have
been satisfied.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF BRC AND MC
Except as may be waived by BRC and MC, the obligations of BRC and MC to
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction, on or before the Closing Date, of each of the following
conditions:
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7.1 Compliance. The Company shall have, or shall have caused to be,
satisfied or complied with and performed in all material respects all terms,
covenants and conditions of this Agreement to be complied with or performed by
them on or before the Closing Date.
7.2 Resolutions. BRC shall have received copies of resolutions duly
adopted by the Board of Directors and the stockholders of the Company approving
the execution and delivery of this Agreement, and the consummation of the
transactions contemplated hereby, certified as of the Closing Date by the
Secretary of the Company.
7.3 Representations and Warranties. All of the representations and
warranties made by the Company in this Agreement shall have been true and
correct in all material respects as of the date hereof, and shall be true and
correct in all material respects at the Closing Date with the same force and
effect as if such representations and warranties had been made at and as of the
Closing Date, except for changes permitted or contemplated by this Agreement.
7.4 Opinions. The Company shall have received the opinion of qualified
Texas counsel for the Company, satisfactory to BRC and its counsel, dated as of
the Closing Date, in form and substance reasonably acceptable to BRC.
7.5 No Material Adverse Change. Subsequent to March 31, 1995, there shall
have occurred no material adverse change in the financial condition or results
of operations of the Company.
7.6 Shareholder, Optionholder and Noteholder Approval. The Merger and the
provisions of this Agreement shall have been duly approved and adopted by the
record holders of not less than ninety-five percent (95%) of the issued and
outstanding Company Common Stock as of the record date of the shareholders'
meeting contemplated in Section 5.3 hereof and the holders of Company Options
shall have consented to this Agreement and to the conversion or modification of
the Company Options contemplated hereby. The record and beneficial holders of
all Shareholder Notes shall have consented to the Merger, this Agreement and to
the exchange of BRC Common Stock for the Shareholder Notes contemplated in
Section 5.13 and such exchange shall have been consummated.
7.7 Consent. All authorizations, consents, orders or approvals of, or
declarations or filings with, or expirations or terminations of waiting periods
imposed by, any governmental entity, and all required third-party consents, the
failure to obtain which would have a Material Adverse Effect on the Surviving
Corporation shall have been filed, occurred or been obtained.
7.8 Legislation. No law or legally binding regulation shall have been
enacted that does or would prohibit, restrict or delay consummation of the
transactions or any of the conditions to the consummation of the transactions or
that does or would have a Material Adverse Effect on the Company.
7.9 Litigation. There shall be no effective injunction, writ or
preliminary restraining order or any other order of any nature issued by a court
or governmental agency of competent jurisdiction restraining or prohibiting
consummation or altering the terms of any of the transactions provided for
herein, or actions seeking damages based upon the foregoing which BRC reasonably
deems material.
7.10 BRC's Investigation. The investigations by BRC and its
representatives in connection with the proposed transaction shall not have
caused BRC, or its representatives to become aware of any facts or circumstances
(even if such facts or circumstances were previously disclosed to BRC or MC in
the schedules hereto) which relate to the business, operations, assets,
properties, liabilities, financial conditions, results of operation or affairs
of the Company that, in the sole judgment of BRC, make it inadvisable for BRC to
proceed with the transactions contemplated by this Agreement.
7.11 Pooling Treatment. BRC shall have received the reasonable assurances
of Price Waterhouse LLP, BRC's independent public accountants, to BRC's
satisfaction, that the transactions contemplated by this Agreement
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<PAGE>
qualify for pooling-of-interests accounting treatment in accordance with
Accounting Principles Board Opinion No. 16 and the rules and regulations of the
SEC.
7.12 Confidentiality and Noncompetition Agreements. The persons whose
names are set forth on Schedule 7.12 shall have executed and entered into a
-------------
Confidentiality and Noncompetition Agreement each substantially in the same form
as Exhibit C attached hereto.
---------
7.13 Company Certificates. BRC shall have received certificates, executed
on behalf of the Company by the executive officers of the Company to the effect
that the conditions in Sections 7.1, 7.3, 7.5, 7.6, 7.7, 7.8 and 7.9 hereof have
been satisfied.
7.14 Other Matters. The Company shall have delivered to BRC, in form and
substance reasonably satisfactory to counsel for BRC, such certificates and
other evidence as BRC may reasonably request as to the satisfaction of the
conditions contained in this Agreement.
ARTICLE VIII
INDEMNIFICATION AND SECURITY ESCROW
8.1 Indemnity. Subject to Section 8.4 hereof, the Company and the
Noteholders agree to indemnify and hold BRC and MC, their respective officers,
directors, agents, attorneys and accountants ("BRC Indemnitees") harmless from
any and all damages, losses which shall include any diminution in value,
liabilities (joint or several), payments, obligations, penalties, claims,
litigation, demands, defenses, judgments, suits, proceedings, costs,
disbursements or expenses of any kind or nature whatsoever (collectively,
"Damages"), directly or indirectly resulting from, relating to or arising out
of:
(a) any breach or nonperformance (partial or total) of or inaccuracy
in any representation or warranty or covenant or agreement of the Company
or the Noteholders contained in this Agreement;
(b) any breach or nonperformance (partial or total) by the Company or
the Noteholders of any covenant or agreement of any of them contained in
the Agreement;
(c) any claims based on any Plans of whatsoever nature or for salary
or other compensation and benefits attributable to service or employment by
the Company prior to the Closing;
(d) any losses or costs of defending against any claims which may be
made against BRC, MC or the Company by any person claiming violations of
any local, state or federal laws relating to the employment relationship,
including, but not limited to, wages, hours, concerted activity,
nondiscrimination, occupational health and safety and the payment and
withholding of taxes, where such claims arise out of circumstances
occurring prior to the Closing Time.
8.2 Indemnification if Negligence of Indemnitee. The indemnification
provided in this Article VIII shall be applicable whether or not negligence of
the applicable BRC Indemnitee is alleged or proven.
8.3 No Third Party Beneficiaries. The foregoing indemnification is given
solely for the purpose of protecting the parties of this Agreement and the BRC
Indemnitees and shall not be deemed extended to, or interpreted in any manner to
confer any benefit, right or cause of action, upon, any other person or entity.
8.4 Security Escrow. On the Closing Date, ten percent (10%) of the Merger
Consideration and ten percent (10%) of the amount to be paid to the Noteholders
pursuant to Section 5.13 hereof shall be escrowed (the "Escrow") with an
independent third party of BRC's choosing (the "Escrow Agent") to secure and
satisfy BRC's right to indemnification hereunder. The Escrow shall be governed
by the Escrow Agreement in form and substance
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<PAGE>
reasonably satisfactory to BRC and the Company. The Escrow Agreement shall
provide, among other things, that subject to any claim by BRC for indemnity
hereunder, the Escrow shall remain in effect until the earlier of (1) the first
anniversary of the Effective Date or (2) the completion of the next regularly
scheduled audited financial statement for the Surviving Corporation. In the
event that at any time prior to termination of the Escrow, BRC shall reasonably
determine itself entitled to indemnification hereunder, BRC shall deliver notice
to the Escrow Agent of the aggregate value of its claims for indemnity and the
Escrow Agent shall retain in the Escrow that number of shares of BRC Common
Stock equal to the aggregate amount of such claims divided by the MP (as defined
in Section 2(b)). From time to time, upon submission to the Escrow Agent of a
final judgment or other evidence of the fixing or determination of an amount
giving rise to indemnity hereunder, the Escrow Agent shall distribute to BRC
from the Escrow that number of shares of BRC Common Stock having an aggregate
value, based upon the MP, equal to such claim. For all purposes hereunder, the
amount held in the Escrow with respect to the Merger Consideration and payments
to Noteholders under Section 5.13, shall be considered a single fund for
satisfying claims of indemnity by BRC. Notwithstanding any other provision
hereof to the contrary, BRC's right to indemnification hereunder shall be
limited to the shares of BRC Common Stock held in the Escrow. Upon termination
of the Escrow, the remaining shares of BRC Common Stock held therein shall be
distributed pro rata to the record holders of the Company Common Stock and the
Noteholders, treating all such parties as a single class, pro rata. For such
purposes, the Shareholder Notes shall have a value equal to the outstanding
principal and accrued but unpaid interest thereon as of the Effective Time and
shares of the Company Common Stock outstanding as of the Effective Time shall be
valued in accordance with the following formula:
Value Per Share = ($4,300,000 - NP + EP)
----------------------
OS + OO
where:
EP = as defined in Section 2.1(b) above.
NP = as defined in Section 2.1(b) above.
OS = as defined in Section 2.1(b) above.
OO = as defined in Section 2.1(b) above.
ARTICLE IX
MISCELLANEOUS
9.1 Termination. In addition to the provisions regarding termination set
forth elsewhere herein, this Agreement and the transactions contemplated hereby
may be terminated at any time on or before the Closing Date:
(a) by mutual consent of the Boards of Directors of the Company and
BRC;
(b) by the Company if any representation or warranty of BRC or by BRC
if any representation or warranty of the Company contained herein shall
have been incorrect or breached in any material respect, as to which notice
shall have been given to such party, and shall not have been cured or
otherwise resolved to the reasonable satisfaction of the other party on or
before the Closing Date, or by either the Company or BRC if any condition
to the consummation of the transactions contemplated hereunder that must be
fulfilled by the other to its satisfaction has (in the good faith judgment
of a majority of the Board of Directors) become impractical to be
fulfilled;
(c) by the Company if the average of the last reported sale price of
the BRC Common Stock as reported on the National Market System of the
National Association of Securities Dealers for any three consecutive
trading days shall be less than $31.50 or by BRC if such average shall
exceed $38.50;
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<PAGE>
(d) by either BRC or the Company if any permanent injunction or other
order
of a court or other competent authority preventing the consummation of the
transactions shall have become final and nonappealable;
(e) by either the Company or BRC if the transactions contemplated by
this Agreement have not been consummated by September 1, 1995, unless such
failure of consummation is due to the failure of the terminating party to
perform or observe the covenants, agreements and conditions hereof to be
performed or observed by it at or before the Closing Date;
(f) by either MC or the Company if its stockholders or the other
Constituent Corporation's stockholders fail to approve the Merger at the
stockholders' meeting called for the purpose of considering and voting on
the Merger; and
(g) by BRC if, prior to the mailing of the Information Statement,
there shall have occurred a material adverse change in the financial
condition, results of operations or prospects of the Company or, if, after
the mailing of the Information Statement, there shall have occurred a
material change in the financial condition, results of operations or
prospects of the Company or BRC that is not disclosed in the Information
Statement or supplement thereto.
If this Agreement is rightfully terminated pursuant to this Section 9.1, no
party hereto (or any of its directors or officers) shall have any liability or
further obligation to any other party to this Agreement, except to the extent
set forth in Section 5.5 hereof.
9.2 Expenses. If the transactions contemplated by this Agreement are not
consummated, each party hereto shall pay its own expenses incurred in connection
with this Agreement and the transactions contemplated hereby.
9.3 Entire Agreement. This Agreement and the exhibits and schedules
hereto contain the complete agreement among the parties with respect to the
transactions contemplated hereby and supersede all prior agreements and
understandings among the parties with respect to such transactions. Section and
other headings are for reference purposes only and shall not affect the
interpretation or construction of this Agreement. The parties hereto have not
made any representation or warranty except as expressly set forth in this
Agreement or in any certificate or schedule delivered pursuant hereto. The
obligations of any party under any agreement executed pursuant to this Agreement
shall not be affected by this section.
9.4 Survival of Representations and Warranties. The representations and
warranties of each party contained herein or in any exhibit, certificate,
document or instrument delivered pursuant to this Agreement shall survive the
Closing until the earlier of (1) the first anniversary of the Effective Date or
(2) the completion of the next regularly scheduled audited financial statement
for the Company a consolidated financial statement (including the operating
results of the Company) of BRC.
9.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute only one original.
9.6 Notices. All notices, demands, requests or other communications that
may be or are required to be given, served or sent by any party to any other
party pursuant to this Agreement shall be in writing and shall be mailed by
first-class, registered or certified mail, return receipt requested, postage
prepaid, or transmitted by hand delivery, addressed as follows:
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(i) If to the Company:
Clinical Resource Systems, Inc.
3701 North Lamar, Suite 207
Austin, Texas 78705
Attention: President
(ii) If to BRC or MC:
Business Records Corporation Holding Company
1111 West Mockingbird, Suite 1400
Dallas, Texas 75247
Attention: President
Each party may designate by notice in writing a new address to which any notice,
demand, request or communication may thereafter be so given, served or sent.
Each notice, demand, request or communication that is mailed, delivered or
transmitted in the manner described above shall be deemed sufficiently given,
served, sent and received for all purposes at such time as it is delivered to
the addressee (with the return receipt, the delivery receipt or the affidavit of
messenger being deemed conclusive evidence of such delivery) or at such time as
delivery is refused by the addressee upon presentation.
9.7 Successors and Assigns. This Agreement and the rights, interests and
obligations hereunder shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns.
9.8 Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Texas.
9.9 Waiver and Other Action. This Agreement may be amended, modified or
supplemented only by a written instrument executed by the parties against which
enforcement of the amendment, modification or supplement is sought.
9.10 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable, such provision shall be fully severable, and
this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision were never a part hereof; the remaining provisions
hereof shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance; and in lieu of
such illegal, invalid or unenforceable provision, there shall be added
automatically as part of this Agreement, a provision as similar in its terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
CLINICAL RESOURCE SYSTEMS, INC.
(a Texas corporation)
By:
----------------------------
Charles B. Owen, M.D.
President
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<PAGE>
BUSINESS RECORDS CORPORATION
HOLDING COMPANY
(a Delaware corporation)
By: /s/Jerry Morrison
----------------------------
Name: Jerry Morrison
--------------------------
Title: Executive Vice President
-------------------------
BRC MERGER CORP.
(a Texas corporation)
By: /s/Thomas E. Kiraly
----------------------------
Name: Thomas E. Kiraly
--------------------------
Title: Executive Vice President
-------------------------
NOTEHOLDERS:
-------------------------------
Charles B. Owen, M.D.
-------------------------------
Elizabeth Owen
-------------------------------
Robert G. McConnell, M.D.
INDIVIDUALS:
-------------------------------
Charles B. Owen, M.D.
(an Individual)
-------------------------------
Robert G. McConnell, M.D.
(an Individual)
-------------------------------
Don Pippin, Jr.
(an Individual)
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<PAGE>
-------------------------------
Christina G. Novelli
(an Individual)
-------------------------------
Andrew Galewsky
(an Individual)
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<PAGE>
EXHIBIT 5.1
November 2, 1995
Business Records Corporation
Holding Company
1111 West Mockingbird, Suite 1500
Dallas, Texas 75247
RE: OFFERING OF SHARES OF COMMON STOCK OF BUSINESS RECORDS CORPORATION
HOLDING COMPANY
Ladies and Gentlemen:
On or about November 3, 1995, Business Records Corporation Holding Company,
a Delaware corporation (the "Company"), expects to file with the Securities and
Exchange Commission a Registration Statement on Form S-3 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Act"). Such
Registration Statement relates to the offering (the "Offering") of up to 121,112
shares of common stock, $.10 par value per share (the "Common Stock"), held by
certain stockholders of the Company (the "Selling Stockholders"). This firm has
acted as counsel to you in connection with the preparation and filing of the
Registration Statement, and you have requested our opinion with respect to
certain legal aspects of the Offering.
In rendering our opinion, we have examined and relied upon the original or
copies, certified to our satisfaction, of (1) the Certificate of Incorporation,
as amended, and the Bylaws, as amended, of the Company; (2) copies of
resolutions of the Board of Directors of the Company authorizing the Offering,
the issuance of the shares to the Selling Stockholders and related matters; (3)
the Registration Statement and the exhibits thereto; and (4) such other
documents and instruments as we have deemed necessary. In our examinations, we
have assumed the genuineness of all signatures and the authenticity of all
documents submitted to us as originals, and the conformity to original documents
of all documents submitted to us as certified or reproduction copies. As to
various questions of fact material to this opinion, we have relied, to the
extent we deem reasonably appropriate, upon representations or certificates of
officers or directors of the Company and upon documents, records and instruments
furnished to us by the Company, without independent check or verification of
their accuracy.
Based upon the foregoing examination and subject to the comments and
assumptions noted below, we are of the opinion that the shares of Common Stock
to be sold by the Selling Stockholders in the Offering were validly issued and
fully paid and are nonassessable.
<PAGE>
Business Records Corporation
November __, 1995
Page 2
This opinion is limited in all respects to the General Corporation Law of
the State of Delaware as in effect on the date thereof; however, we are not
members of the Bar of the State of Delaware and our knowledge of its General
Corporation Law is derived from a reading of the most recent compilation of that
statute available to us without consideration of any judicial or administrative
interpretations thereof.
We bring to your attention the fact that this legal opinion is an
expression of professional judgement and not a guaranty of result. This opinion
is given as of the date hereof, and we assume no obligation to update or
supplement such opinion to reflect any facts or circumstances that may hereafter
come to our attention or any changes in laws or judicial decisions that may
hereafter occur.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Prospectus forming a part of the Registration Statement. In
giving such consent, we do not admit that we have come within the category of
persons whose consent is required by Section 7 of the Act or the rules and
regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
ARTER, HADDEN, JOHNSON & BROMBERG
/s/ Arter, Hadden, Johnson & Bromberg
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of Business Records
Corporation Holding Company of our report dated March 21, 1995, appearing on
page 42 of the Annual Report on Form 10-K for the year ended December 31, 1994.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
Price Waterhouse LLP
Dallas, Texas
November 2, 1995
