<PAGE>
As filed with the Securities and Exchange Commission on September 13, 1996
Registration No. 333-_________
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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BRC HOLDINGS, INC.
(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)
P. E. ESPING COPY TO:
CHAIRMAN AND CHIEF EXECUTIVE OFFICER JEFFREY M. SONE, ESQ.
BRC HOLDINGS, INC. ARTER & HADDEN
1111 WEST MOCKINGBIRD LANE, SUITE 1400 1717 MAIN STREET, SUITE 4100
DALLAS, TEXAS 75247 DALLAS, TEXAS 75201-4605
(214) 688-1800 (214) 761-2100
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
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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. / /
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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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
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<S> <C> <C> <C> <C>
Common Stock, $.10 par value 432,835 $30.125 $13,039,154 $4,497
Shares
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</TABLE>
(1) Estimated solely for purposes of calculating the registration fee;
based upon the average of the high and low sales prices per share of the
Registrant's Common Stock reported on the Nasdaq National Market for
September 9, 1996, 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.
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<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 SEPTEMBER 13, 1996
PROSPECTUS
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432,835 SHARES
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------------------------ BRC
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BRC HOLDINGS, INC.
COMMON STOCK
The 432,835 shares of common stock, par value $.10 per share (the "Common
Stock"), of BRC Holdings, Inc. (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) September 5, 1999. 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 September 9, 1996,
the last reported sales price for the Common Stock was $30.59375 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 brokers, 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. Sales 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 discounts 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 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 COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY MISREPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
___________, 1996
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational 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 located at Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and 7
World Trade Center, 13th Floor, 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 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, 1995;
(2) the Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31, 1996 and June 30, 1996; 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, including any amendment or reports filed for the
purpose of updating such description.
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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 BRC Holdings, Inc., 1111 West Mockingbird Lane, Suite 1400, Dallas,
Texas 75247, Attention: Mr. Thomas E. Kiraly, Chief Financial Officer,
telephone (214) 688-1800.
THE COMPANY
BRC Holdings, Inc. (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, Inc. and BRC Health Care, Inc. (formerly known as CMSI,
Inc.). 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 office supplies through a
distribution network and a telemarketing organization. The Company's executive
offices are located at 1111 West Mockingbird Lane, Suite 1400, Dallas, Texas
75247, and its telephone number at that address is (214) 688-1800.
3
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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 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.
TECHNOLOGY OUTSOURCING SERVICES CONTRACTS
When providing technology outsourcing services, the Company typically
enters into multi-year contracts with its customers. Because of the size and
duration of such contracts, the termination or non-renewal of a contract by a
customer could have a material adverse impact on the Company's revenues from its
technology outsourcing services. Although the Company generally believes its
relationships with its existing technology outsourcing services customers to be
good, there can be no assurance that its customers will not terminate or fail to
renew their
4
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contracts with the Company. Additionally, there can be no assurance that the
Company will be able to attract new customers on contractual terms substantially
equivalent to those it has with existing customers.
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.
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 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,
5
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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 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 offered hereby, 6,931,891 shares of
Common Stock will be outstanding, substantially all of which will be freely
tradeable without restriction. In addition, at September 5, 1996, 1,799,524
shares of Common Stock were issuable upon the exercise of outstanding employee
and director stock options (of which 886,872 were exercisable on such date) and
options exercisable for 310,403 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 deliver 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.
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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
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.
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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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RECENT EVENTS
Effective September 5, 1996, the Company acquired The Pace Group, Inc., a
Texas corporation ("Pace"), 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 Pace pursuant to the
terms of an Agreement and Plan of Merger among the Company, Merger Corp., Pace
and the Selling Stockholders (the "Acquisition Agreement"). As a result of the
Merger, holders of all of the issued and outstanding common stock of Pace, $.001
par value per share (the "Pace Common Stock"), became entitled to receive an
aggregate of up to 432,835 shares of 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
Pace Common Stock. In addition, the Company agreed to assume the rights and
obligations of Pace with respect to certain Pace stock options and warrants,
which, subsequent to the effectiveness of the Merger, became options exercisable
for shares of the Common Stock. 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 432,835
shares of Common Stock. The expenses of this registration (other than brokerage
commissions and other similar expenses) will be paid by the Company. See "Plan
of Distribution."
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 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 "Plan of
Distribution."
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 actually be 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 sell all, some or none of the Shares that
each holds, and because the offering contemplated by this Prospectus is not nor
is anticipated to be a "firm commitment" underwritten offering, 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 also sets forth information as of September 5,
1996, concerning the beneficial ownership of Common Stock of
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each of the Selling Stockholders. All information as to beneficial ownership
has been furnished by each of the Selling Stockholders.
<TABLE>
<CAPTION>
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SHARES OF SHARES OF
SHARES OF COMMON COMMON STOCK COMMON STOCK
STOCK OWNED OFFERED IN OWNED AFTER
NAME OF STOCKHOLDER BEFORE OFFERING THE OFFERING OFFERING(1)
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NUMBER(2) PERCENT(3) NUMBER NUMBER PERCENT
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<S> <C> <C> <C> <C> <C>
Ray H. Pace 307,367 4.43% 307,367 0 0
James C. Baumgarten 34,024 * 34,024 0 0
William J. Fosick 28,381 * 28,381 0 0
P. Michael Autrey 28,381 * 28,381 0 0
Karen A. Brayer 18,916 * 18,916 0 0
Richard F. Ugarte 15,765 * 15,765 0 0
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</TABLE>
_______________
* Less than one percent (1%).
(1) Assumes all shares of Common Stock are sold in the offering.
(2) Assumes receipt of a pro rata portion of certain shares held in escrow
pursuant to the Acquisition Agreement.
(3) Percentage indicated is based upon 6,931,891 shares of Common Stock
outstanding as of September 5, 1996.
Pursuant to the terms of the Acquisition Agreement, 43,283 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) first anniversary of effective date or (2) the
completion of the next regularly scheduled audited financial statement for Pace
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 Pace 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
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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.
Substantially all of the 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.
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.
Pursuant to the terms of the Acquisition Agreement, the Company and the
Selling Stockholders agreed to indemnify each other and certain affiliated
parties from and against any losses or claims arising out of, among other
things, (1) any alleged untrue statement of a material fact or (2) any material
omission contained or referred to in the Registration Statement to which this
Prospectus forms a part. 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 Act and is
therefore unenforceable.
11
<PAGE>
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by Arter & Hadden, Dallas, Texas.
EXPERTS
The financial statements incorporated in this Registration Statement and
Prospectus by reference to the Company's Annual Report on Form 10-K for the year
ended December 31, 1995, have been so incorporated in reliance on the report of
Price Waterhouse LLP, independent accountants, given upon the authority of such
firm as experts in auditing and accounting.
12
<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
Risk Factors 4
Recent Events 9
Use of Proceeds 9
Selling Stockholders 9
Plan of Distribution 10
Legal Matters 12
Experts 12
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
432,835 SHARES
--------
---------- BRC
--------
BRC HOLDINGS, INC.
COMMON STOCK
____________________
PROSPECTUS
____________________
___________, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
SEC registration fee . . . . . . . . . . . . . . $ 4,497
Nasdaq Listing of Additional Shares fee . . . . . $ 8,657
Accounting fees and expenses. . . . . . . . . . . $ 2,500*
Legal fees and expenses . . . . . . . . . . . . . $ 5,000*
Printing and engraving expenses . . . . . . . . . $ 1,000*
Miscellaneous expenses. . . . . . . . . . . . . . $ 1,000*
---------
Total. . . . . . . . . . . . . . . . . . . . $ 22,654*
--------
--------
- -------------------
* 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.
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
--- -----------------------------------------------------------------
2.1 Agreement and Plan of Merger dated as of September 5, 1996, among
the Company, BRC Merger Corp. II, The Pace Group, Inc. and certain
individuals.
4.1 Note Purchase Agreement between the Company and P. E. Esping
(incorporated by reference to Exhibit (4)a. to the Company's Annual
Report on Form 10-K for the year ended December 31,
1993).
4.2 Amendment to Note Purchase Agreement between the Company and P. E.
Esping (incorporated by reference to Exhibit (4)b. to the Company's
Annual Report on Form 10-K for the year ended December 31, 1993).
4.3 Second Amendment to Note Purchase Agreement between the Company and
P. E. Esping (incorporated by reference to Exhibit (4)c. to the
Company's Annual Report on Form 10-K for the year ended December 31,
1993).
4.4 10% Convertible Exchangeable Note due April 1, 1998, dated January
1, 1993 (incorporated by reference to Exhibit (4)d. to the Company's
Annual Report on Form 10-K for the year ended December 31, 1993).
5.1 Opinion of Arter & Hadden.
23.1 Consent of Arter & Hadden (included in its opinion filed as
Exhibit 5.1).
23.2 Consent of Price Waterhouse LLP, independent certified public
accountants.
24.1 Powers of Attorney (filed on the signature page, Page II-4 to this
Registration Statement).
ITEM 17. UNDERTAKINGS.
(a) 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) to include any material information with respect to the
plan of distribution not previously disclosed and the Registration
Statement or any material change of such information in the
Registration Statement;.
II-2
<PAGE>
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the Registration Statement is on Form S-3, Form S-8 or Form F-3, 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 Securities Exchange Act of
1934 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.
(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) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) 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) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, 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 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 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.
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 12th day of September, 1996.
BRC HOLDINGS, INC.
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 either 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 by the following persons in the
capacities and on the dates indicated.
<TABLE>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ P. E. Esping Chairman, Chief Executive September 12, 1996
- --------------------------- Office and Director
P. E. Esping (Principal Executive Officer)
/s/ Thomas E. Kiraly Chief Financial Officer September 12, 1996
- --------------------------- (Principal Financial Officer and
Thomas E. Kiraly Principal Accounting Officer)
Director ____________, 1996
- ---------------------------
L. D. Brinkman
/s/ David H. Monnich Director September 12, 1996
- ---------------------------
David H. Monnich
/s/ Paul T. Stoffel Director September 12, 1996
- ---------------------------
Paul T. Stoffel
Director ____________, 1996
- ---------------------------
Robert E. Masterson
</TABLE>
II-4
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
--- ------------------------------------------------------------
2.1 Agreement and Plan of Merger dated as of September 5, 1996, among
the Company, BRC Merger Corp. II, The Pace Group, Inc. and certain
individuals.
4.1 Note Purchase Agreement between the Company and P. E. Esping
(incorporated by reference to Exhibit (4)a. to the Company's Annual
Report on Form 10-K for the year ended December 31, 1993).
4.2 Amendment to Note Purchase Agreement between the Company and P. E.
Esping (incorporated by reference to Exhibit (4)b. to the Company's
Annual Report on Form 10-K for the year ended December 31, 1993).
4.3 Second Amendment to Note Purchase Agreement between the Company and
P. E. Esping (incorporated by reference to Exhibit (4)c. to the
Company's Annual Report on Form 10-K for the year ended December 31,
1993).
4.4 10% Convertible Exchangeable Note due April 1, 1998, dated January
1,1993 (incorporated by reference to Exhibit (4)d. to the Company's
Annual Report on Form 10-K for the year ended December 31, 1993).
5.1 Opinion of Arter & Hadden.
23.1 Consent of Arter & Hadden (included in its opinion filed as Exhibit
5.1).
23.2 Consent of Price Waterhouse LLP, independent certified public
accountants.
24.1 Powers of Attorney (filed on the signature page, Page II-4 to this
Registration Agreement).
<PAGE>
EXHIBIT 2.1
TO
BRC HOLDINGS, INC.
REGISTRATION STATEMENT ON FORM S-3
<PAGE>
AGREEMENT AND PLAN OF MERGER
AMONG
BRC HOLDINGS, INC.
(A DELAWARE CORPORATION)
BRC MERGER CORP. II
(A TEXAS CORPORATION)
THE PACE GROUP, INC.
(A TEXAS CORPORATION)
AND CERTAIN INDIVIDUALS
<PAGE>
This Agreement and Plan of Merger (this "Agreement"), dated as of
September 5, 1996, is made by and between BRC HOLDINGS, INC., a Delaware
corporation ("BRC"), BRC MERGER CORP. II, a Texas corporation and direct
wholly owned subsidiary of BRC ("MC"), THE PACE GROUP, INC., a Texas
corporation (the "Company") (MC and the Company being collectively referred
to as the "Constituent Corporations"), RAY H. PACE, JAMES C. BAUMGARTEN,
WILLIAM J. FOSICK, P. MICHAEL AUTREY, KAREN A. BRAYER AND RICHARD F. UGARTE
(the "Individuals").
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, 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, $0.10 par value (the "BRC
Common Stock") and the shares of Common Stock of MC that are outstanding
immediately prior to the 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, $.001
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
-2-
<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:
14,500,000
Exchange Rate = ----------
MP x OS
where:
MP = $33.50.
OS = The aggregate number of issued and outstanding shares, excluding
treasury shares, of Company Common Stock at the Effective Time.
(c) 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 which number shall
equal 14,500,000/MP.
where:
MP = 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 of the Company Common Stock.
-3-
<PAGE>
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. Subject to Section
8.4, 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. No provision of this Section 2.4(a) shall modify or waive
the provisions of Sections 2.4(b), 3.9 or 8.4. Until surrendered in
accordance with the provisions of this Section 2.4, each Certificate shall
represent for all purposes only the right to receive the record holder's
applicable percentage of the Merger Consideration.
(b) At and after the Effective Time there shall be no transfers of
shares of Company Common Stock, or the rights to receive a part of the
Merger consideration represented thereby, 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.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to BRC as follows:
3.1 ORGANIZATION; QUALIFICATION. Each of the Company and The Pace Group
Services, Inc., a Texas corporation (the "Subsidiary") is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas. Each of the Company and the Subsidiary 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. Except as reflected
on SCHEDULE 3.1, each of the Company and the Subsidiary 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 their combined
financial condition or results of operations (a "Material Adverse Effect").
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 shareholders 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 (other than statutorily required shareholder
approval) 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 and against the Individuals in accordance with its terms.
-4-
<PAGE>
3.3 CAPITALIZATION.
(a) The authorized capital stock of the Company consists of 1,000,000
shares of Company Common Stock, of which, as of the date hereof, 91,505
shares of Company Common Stock are validly issued and outstanding, fully
paid and nonassessable. There are 8,995 shares of Company Common Stock
held in the treasury of the Company. SCHEDULE 3.3 sets forth an accurate
and complete list of the shareholders 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 shareholders of the Company or any other person.
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, shareholders agreements or other voting arrangements by or
between the shareholders of the Company, whether or not the Company is a
party thereto except as disclosed on SCHEDULE 3.3. 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 on or after August 31, 1995.
(b) The authorized capital stock of the Subsidiary consists of
1,000,000 shares of Common Stock $0.01 par value per share (the "Subsidiary
Stock"), of which, as of the date hereof, 1,000 shares are validly issued
and outstanding, fully paid and nonassessable. There are no shares of
Subsidiary Stock held in the treasury of the Subsidiary. Other than shares
of Subsidiary Stock held in the treasury of the Subsidiary, the Company is
the record and beneficial holder of all issued and outstanding shares of
Subsidiary Stock. No shares of capital stock of the Subsidiary have been
issued or disposed of in violation of any preemptive rights of any person.
There are no options or warrants to purchase any shares of Subsidiary
Stock, and there is no outstanding subscription, contract, convertible or
exchangeable security, option, warrant, call or other right obligating the
Subsidiary to issue, sell, exchange or otherwise dispose of, or to
purchase, redeem or otherwise acquire any ownership interest in the
Subsidiary or any securities convertible into ownership interests of the
Subsidiary.
3.4 SUBSIDIARIES; AFFILIATES. Other than the Subsidiary, the Company does
not own, except as described on SCHEDULE 3.4, 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.
3.5 GOVERNMENTAL CONSENTS AND APPROVALS. Other than filing Articles of
Merger as described herein, the execution, delivery and performance by the
Company of this Agreement and the consummation of the transactions contemplated
hereby by the Company and the Individuals require 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 by the Company or any of the
Individuals.
3.6 NO VIOLATIONS. Except as listed on SCHEDULE 3.6, 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 the provisions hereof do 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 or the Subsidiary, (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 or the Subsidiary
is a party or by which the Company or the Subsidiary may be bound, (c) result in
the creation or imposition of any lien, pledge, security interest, obligation,
restriction or other encumbrance on any of the property of the Company or the
Subsidiary, (d) violate any territorial restriction on the business of the
Company or any noncompetition or similar arrangement, or (e)
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violate any judgment, order, writ, injunction, decree, statute, rule or
regulation applicable to the Company or the Subsidiary. The Company makes no
representation or warranty regarding the effect of this Agreement, or the
transactions contemplated hereby, on any agreement or arrangement to which BRC
or any affiliate of BRC is a party.
3.7 SHAREHOLDERS. Each of the persons set forth on SCHEDULE 3.3 is
actively involved in the business and affairs of the Company and has full access
to all material financial and other information concerning the Company, its
assets, businesses and affairs, has sufficient experience in financial matters
to make an informed decision regarding the execution, delivery and performance
of this Agreement and has had the opportunity to investigate BRC, its business
and affairs and to ask for and receive such information with regard thereto as
is necessary to making an informed investment decision with regard to the BRC
Common Stock. None of the information provided by the Company to its
shareholders, to the extent relating to the Company or its business, properties,
management or prospects, contains any untrue statement of material fact or omits
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. Each of the Company's shareholders has been provided
with the Company Financial Statements (as subsequently defined) and the BRC
reports (as subsequently defined).
3.8 FINANCIAL STATEMENTS, ETC. The Company has furnished to BRC the
Company's consolidated annual financial statements for the preceding three (3)
fiscal years ending, including balance sheets as of, August 31, 1993, 1994 and
1995 and interim financial statements (including balance sheet) for the month
ended July 31, 1996, 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 and the Subsidiary
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 (subject, in the
case of unaudited statements, to normal year-end audit adjustments which will
not be material in amount or effect). Since August 31, 1995, 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, there are no
facts or circumstances related to the Company or the Individuals 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. All options issued by Ray H. Pace
to other Individuals to purchase shares of the Company Common Stock outstanding
as of March 15, 1996 have been fully exercised or terminated. To the extent
exercised, such options were exercised strictly in accordance with their
respective terms, and no loans or other compensation were provided by the
Company, directly or indirectly, in connection therewith.
3.10 LIABILITIES. SCHEDULE 3.10 hereto sets forth a complete list of the
liabilities and obligations of the Company and the Subsidiary of any nature,
whether absolute, accrued, contingent or otherwise as of August 15, 1996 which
individually exceed $10,000, or in the aggregate exceed $50,000. Each of such
liabilities or obligations is fully reflected, accrued or reserved against, to
the extent required by generally accepted accounting principles, on the July 31,
1996 balance sheet of the Company that has been given to BRC. Other than as set
forth on SCHEDULE 3.10, neither the Company nor the Subsidiary is 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 $10,000 or in the
aggregate exceed $50,000, and the Company, after due inquiry, knows of no basis
for the assertion of any such claims, liabilities or obligations.
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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 or
the Subsidiary 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, any predecessor or
successor to the Company or affiliate of the Company in its business (the
"Company Real Property"). Neither the Company nor the Subsidiary has ever
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 or any of its
assets.
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 or the Subsidiary, 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 or the
Subsidiary 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 or the Subsidiary 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 August 31, 1995, the business of the
Company and the Subsidiary have been operated in the ordinary course consistent
with past practice, other than changes that have not had, and are not reasonably
expected to have, a Material Adverse Effect on the business of the Company or
the Subsidiary.
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 or the
Subsidiary 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 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) Neither the Company nor the Subsidiary has engaged in any
transaction 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 "PBGC") has been or is expected
to be incurred with respect to any Plan by the Company
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or the Subsidiary. The Company has not and the Subsidiary 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 or the
Subsidiary to the PBGC.
(d) Full payment has been made or accrued (in a manner consistent
with past practice) of all amounts that the Company or the Subsidiary 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, to
the knowledge of the Company, 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 the Subsidiary 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-employer
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 or the
Subsidiary.
3.15 EMPLOYMENT AND LABOR MATTERS. Except as set forth on SCHEDULE 3.15,
the Company does not and the Subsidiary does not have any obligations,
contingent or otherwise, under any employment, commission, royalty or consulting
agreement. The Company and the Subsidiary are 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 or the Subsidiary 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 or the Subsidiary
because of the nature of the business conducted or to be conducted by the
Company or the Subsidiary or to the use of trade secrets or proprietary
information of others, and the employment of their respective employees does not
subject the Company or the Subsidiary 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 or their Subsidiary 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 or their Subsidiary 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 or their
Subsidiary that would have a Material Adverse Effect.
3.16 TAX MATTERS. The Company and the 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 by the Company to be required to have been filed 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,
1996, except where failure to file would not have a Material Adverse Effect.
Except for the California tax matter described on SCHEDULE 3.1, the Company and
the Subsidiary have 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
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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.
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 and the Subsidiary 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 material Proprietary Rights. Except as
reflected on SCHEDULE 3.17, no consent or approval of any third party will be
required for the use of the Proprietary Rights by the Company and the Subsidiary
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 or the Subsidiary'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 or the Subsidiary 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 except as disclosed on SCHEDULE 3.17. The Proprietary
Rights owned by the Company or the Subsidiary are owned free and clear of all
liens. The Company or the Subsidiary has taken all reasonable steps to
establish and preserve its ownership of all Proprietary Rights except as
disclosed on SCHEDULE 3.17. The Company's or the Subsidiary'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, to the
knowledge of the Company, threatened that challenge or oppose the rights of the
Company and the Subsidiary 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 or the Subsidiary of any intellectual
property right. Except as set forth on SCHEDULE 3.17, neither the Company nor
the Subsidiary has given and neither is bound by any agreement of
indemnification in connection with any Proprietary Rights or product or service
sold or performed by it. 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. Except as reflected on SCHEDULE 3.18, neither the Company
nor the Subsidiary has 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 and the Subsidiary, all of which have
been or will be made available to BRC, contain accurate and complete (in all
material respects) records of all corporate actions of the shareholders and
Boards of Directors (and committees thereof) during the periods of time in which
such minute books were maintained.
3.20 LEGAL COMPLIANCE. Each of the Company and the Subsidiary has complied
in all material respects with all applicable laws, rules, regulations and
ordinances of any 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 to
the employment of labor, other than such which, if not complied with, would not
have a Material Adverse Effect. Neither the Company nor the Subsidiary is 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.
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3.21 INSURANCE. All the insurance policies maintained by the Company and
the Subsidiary are in full force and effect, all insurance premiums have been
timely paid to date, and no such policy can be cancelled prior to Closing as a
result of the Company's execution and delivery of this Agreement. Neither the
Company nor the Subsidiary has received a notification from any such insurance
company indicating that it intends to cancel any policy of insurance currently
in effect. A description of each of the Company's and the Subsidiary's
insurance policies is attached hereto as SCHEDULE 3.21.
3.22 ACCOUNTS PAYABLE. SCHEDULE 3.22 contains a complete and accurate list
of all the Company's and the Subsidiary's aged accounts payable at August 15,
1996, showing the name of each account creditor and the amount due to each by
invoice number and date.
3.23 PRODUCT AND SERVICE WARRANTIES. There is no claim against the Company
or the Subsidiary 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, or otherwise made available to BRC, true and correct copies of all
contracts of the Company and the Subsidiary (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 or the Subsidiary.
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) 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.
(c) 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 and to each Individual 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
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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 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
20,000,000 shares of BRC Common Stock and 2,000,000 shares of Preferred Stock,
$10.00 par value, of which, as of August 15, 1996, 6,499,056 shares of BRC
Common Stock are validly issued and outstanding, fully paid and nonassessable.
As of August 15, 1996, there were 1,761 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
shareholders.
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, 1993, (ii) BRC's Annual Report on
Form 10-K for the fiscal years ended December 31, 1993, December 31, 1994, and
December 31, 1995, and BRC's Quarterly Report on Form 10-Q for the first and
second fiscal quarters of 1996, 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"). Except as described on SCHEDULE 4.5, 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 SHAREHOLDER INFORMATION. The BRC Reports, together with the other
information concerning BRC provided to the Company pursuant hereto will, as a
whole, 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 the Closing Date, the Board of
Directors of BRC shall have duly authorized this Agreement, the Articles of
Merger and the transactions contemplated hereby and thereby.
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4.8 LITIGATION AND CONTINGENT LIABILITIES. Except as set forth on
SCHEDULE 4.8, BRC has no litigation or contingent liabilities that are required
to be disclosed in the BRC Reports that are not disclosed therein or which would
be required to be disclosed if such matters were pending or overtly threatened
as of the end of the fiscal period reflected in such reports.
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 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,
1996 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
December 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 December 31, 1995
included in the BRC Reports.
4.11 ABSENCE OF CERTAIN CHANGES. Except as disclosed in the BRC Reports,
since December 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 December 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
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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. Except as set forth on SCHEDULE 4.12, 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 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.
4.13 TAX FREE REORGANIZATION.
(a) BRC has no present plan or intention following the Effective Time
to cause the Company to issue additional shares of stock that would result
in BRC losing control of the Company within the meaning of Section 368(c)
of the Code.
(b) BRC has no present plan or intention following the Effective Time
to reacquire any shares of BRC Common Stock issued in the Merger.
(c) BRC has no present plan or intention following the Effective Time
to liquidate the Company, merge the Company with or into another
corporation, sell or otherwise dispose of the stock of the Company, or
cause the Company to sell or otherwise dispose of any of its assets or of
any of the assets acquired by it from MC, except for dispositions made in
the ordinary course of business or transfers of assets to corporations
controlled by the Company.
(d) BRC and MC are not investment companies as defined in Section
368(a)(2)(F)(iii) and (iv) of the Code.
(e) MC is a recently formed corporation that is wholly owned directly
by BRC, and MC has never owned or held any assets and has never incurred
any liabilities, except for assets transferred to MC in connection with its
incorporation, all of which assets will be held by the Company immediately
following the Merger.
(f) Neither BRC nor any of its subsidiaries own, nor have any of them
owned during the past five years, any capital stock of the Company.
(g) MC will have no liabilities assumed by the Company and will not
transfer to the Company any assets subject to liabilities in the Merger.
(h) BRC and MC will pay their respective expenses, if any, and will
not pay any expenses of the Company or the Individuals incurred in
connection with the transaction.
(i) There is no intercorporate indebtedness between the Company (or
its subsidiaries) and BRC (or its subsidiaries).
4.14 GOVERNMENTAL CONSENTS AND APPROVALS. The execution, delivery and
performance by BRC of this Agreement and the consummation of the transactions
contemplated hereby by BRC require no consent, approval,
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order or authorization of, action by or in respect of, or registration or
filing with, any governmental body, court, agency or authority.
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, the Individuals 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 public announcement or other public 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 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
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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
(including copies and excerpts thereof and therefrom) that in any way relate
to Confidential Information and shall deliver to the other a sworn statement
to such effect. 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. Unless BRC and the Company
agree otherwise, during the period pending the Closing Time, the Company and the
Subsidiary and each of them:
(a) shall not issue any additional shares of Company Common Stock or
any equity securities of the Subsidiary 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;
(b) shall not enter into any contract, agreement or arrangement not
terminable on thirty days notice calling for the payment of money or the
delivery of goods, services or other performance by the Company or the
Subsidiary having an aggregate value of more than $5,000;
(c) 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 or the Subsidiary;
(d) 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 the Subsidiary or redeem, purchase or
otherwise acquire any shares of the capital stock or other securities of
the Company or the Subsidiary or rights or obligations convertible into or
exchangeable for any shares of the capital stock or other securities of the
Company or the Subsidiary;
(e) shall not intentionally take any action that, and shall not
intentionally fail to take any action the failure to take which, could
reasonably be expected to cause or permit its representations and
warranties contained in this Agreement to be untrue in any material respect
at the Closing;
(f) shall not sell any assets not in the ordinary course of business;
(g) 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 assets, 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;
(h) shall notify BRC of any emergency or other change in the normal
course of business;
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(i) 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;
(j) shall not acquire any shares of its capital stock;
(k) shall not award or pay any increase in compensation or base
salary or award or pay any special or cumulative bonus except for those
payments described on SCHEDULE 5.6;
(l) shall not enter into any employment, consulting, brokerage,
royalty or commission agreement or arrangement;
(m) shall not 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;
(n) shall deliver, promptly upon preparation thereof from time to
time, balance sheets and related statements of income and supporting
schedules and ledgers, for periods ending after the last date for which
Company Financials have been provided;
(o) shall not incur any liability outside of the ordinary course of
business in excess of $10,000 with regard to all such liabilities; or
(p) shall not enter into any agreement to do any of the things
described in clauses (a) through (o) above.
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, and shall not permit the Subsidiary to (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 or the
Subsidiary, and the Company will instruct its and the Subsidiary's 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 will prepare and/or
deliver, as appropriate, to such shareholders the BRC Reports together with
the information concerning the Company and the Subsidiary contemplated in
Section 3.7. Thereafter, until the date of the meeting of shareholders
contemplated in Section 5.3, or until the Closing Date, the Company will
provide its shareholders with such additional information concerning the
Company and the Subsidiary and their respective businesses, assets,
financial condition and prospects as any such shareholders shall reasonably
request. 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.
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(b) BRC agrees to use best efforts to file a Registration Statement
on Form S-3 with the SEC on or before the fifteenth day following the
Effective Time, to register the sale of the shares of BRC Common Stock
constituting Merger Consideration, to the extent not otherwise covered by
an effective registration statement, to use best 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 all of the
shares registered thereby or the third 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. In connection with the registration described above, BRC
will also register the BRC shares under such state securities laws as a
selling shareholder may reasonably request. All expenses of registration
(other than underwriting discounts and commissions) under the Securities
Act and state securities laws in accordance with the foregoing, including
registration, accounting, printing fees, and fees of attorneys of BRC, and
the furnishing of copies of the prospectus and such amendments or
supplements to the selling shareholders requesting same shall be borne by
BRC. Prior to the Closing Date, the Company shall undertake 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.
(d) Each of the Individuals acknowledges receipt of copies of the BRC
Reports. In addition, each of the Individuals represents and warrants to
BRC as follows:
(i) that each Individual is actively involved in the business
and affairs of the Company and has full access to all material
financial and other information concerning the Company, its assets
businesses and affairs as he deems necessary to a decision regarding
an exchange of Company Common Stock for BRC Common Stock;
(ii) that such Individual has sufficient experience in financial
matters to make an informed decision regarding entering into this
Agreement and consummating the transactions contemplated thereby;
(iii) that such Individual has had the opportunity to
investigate BRC, its businesses and affairs and to ask for and receive
such information with regard thereto as is necessary to the making of
an informed investment decision with regard to the BRC Common Stock;
and
(iv) that such Individual is acquiring the BRC Common Stock, as
an investment and without any intent of distributing same, otherwise
than pursuant to an effective registration statement or under an
exemption from the registration provisions of the Securities Act.
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5.9 TAX-FREE REORGANIZATION.
(a) BRC and the Company shall each use its best efforts to cause the
Merger to be treated (and 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(a) of the Code.
(b) To the extent permitted under applicable tax laws, the Merger
shall be reported as a reorganization within the meaning of Section
368(a)(1)(A) and Section 368(a)(2)(E) of the Code in all federal, state,
and local tax returns after the Effective Time.
(c) Each of BRC, the Company and the Subsidiary 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 or
any equity securities of the Subsidiary that would result in BRC
failing to obtain or losing control of the Company or the Subsidiary
within the meaning of Section 368(c) of the Code.
5.10 CONTINUATION OF NAME; ELECTION OF OFFICERS AND DIRECTORS.
(a) BRC will cause the Company to continue its business operations
under the name "The Pace Group, Inc." for a period of at least three (3)
consecutive years immediately following the Closing.
(b) BRC agrees to cause (A) the current officers of the Company to
continue to serve in such capacities and (B) Ray Pace to serve as a
director of the Company, each until the earlier of (i) the individual
officer's/director's voluntary resignation from his/her position as an
officer/director of the Company, or (ii) the termination of such
individual's employment with the Company.
5.11 STOCK OPTIONS. BRC covenants and agrees to grant to those employees
of the Company deemed by BRC to be critical to the business of the Company (the
"Key Employees") whose names are set forth on EXHIBIT B-1 options to purchase an
aggregate of 235,000 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-2 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-2 attached hereto.
5.12 CONFIDENTIALITY AND NON-COMPETITION AGREEMENTS. Each person whose
name is set forth on EXHIBIT C-1 shall enter into Confidentiality and
Noncompetition Agreements with the Company and BRC in substantially the form of
EXHIBIT C-2 attached hereto, providing for the payment of the aggregate amount
described opposite their respective names on EXHIBIT C-1 and restricting their
ability to compete with BRC or the Company as described on such Exhibits.
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5.13 REASONABLE BEST EFFORTS. Each of the Company, the Individuals 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.
5.14 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.
5.15 HOLDING PERIOD. Each of the Individuals agrees that he will agree not
to assign, transfer or convey any of the BRC Common Stock received or to be
received as a result of the Merger, or any interest therein, until the date of
public release of the financial results reflecting the post-merger combined
operations of BRC and TPG for a period of at least 30 days pursuant to an
agreement in substantially the form attached as Exhibit D.
5.16 BENEFIT PLAN ELIGIBILITY. To the extent permitted by applicable law,
BRC agrees to give to employees of the Company full credit for all periods of
continuous employment with the Company for eligibility, participation and
benefit accrual purposes under each of BRC's employee benefit plans (which shall
not include stock option plans, bonus plans or similar compensation related
plans) in which employees of the Company may participate on or after the Closing
Date. Notwithstanding the foregoing, BRC shall not be obligated to include
employees of the Company in BRC's benefit plans if it elects to maintain the
Company's employee benefit plans.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND THE INDIVIDUALS
Except as may be waived by the Company and the Individuals, the obligations
of the Company and the Individuals 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 of BRC and MC and the shareholder 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 and BRC, as appropriate.
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 of 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 shareholders of the Company holding of record not less than 95% of the
issued and outstanding Company Common Stock and by the requisite shareholder
vote of MC.
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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, 6.4, 6.5 and 6.7
hereof have been satisfied.
6.7 NO MATERIAL ADVERSE CHANGE. Subsequent to June 30, 1996, there shall
have occurred no material adverse change in the financial condition or results
of operations of BRC.
6.8 COMPANY'S INVESTIGATION. The investigations by the Company and its
representatives in connection with the proposed transaction shall not have
caused the Company, or its representatives, to become aware of any facts or
circumstances (even if such facts or circumstances were previously disclosed to
the Company in the schedules hereto) which relate to the business, operations,
assets, properties, liabilities, financial conditions, results of operations or
affairs of BRC that, in the sole judgment of the Company, make it inadvisable
for the Company to proceed with the transactions contemplated in this Agreement.
6.9 OPINIONS. The Company shall have received the opinion of qualified
counsel for BRC, satisfactory to the Company and its counsel, dated as of the
Closing Date, in a form and substance reasonably satisfactory to the Company.
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:
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 shareholders 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 and the Individuals in Section
5.8 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 June 30, 1996, there shall
have occurred no material adverse change in the financial condition or results
of operations of the Company.
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7.6 SHAREHOLDER 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.
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 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 SHAREHOLDER'S CERTIFICATE. Each of the Individuals shall have
executed and delivered to BRC a certificate to effect that such Individual is
unaware of any fact or circumstance related to the Company or the Company Common
Stock that would cause any of the Company's representations and warranties set
forth in Article III to be untrue.
7.13 CONFIDENTIALITY AND NONCOMPETITION AGREEMENTS. The persons whose
names are set forth on EXHIBIT C-1 shall have executed and entered into a
Confidentiality and Noncompetition Agreement each substantially in the same form
as EXHIBIT C-2 attached hereto.
7.14 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.
7.15 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.
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<PAGE>
ARTICLE VIII
INDEMNIFICATION AND SECURITY ESCROW
8.1 INDEMNITY.
(a) Subject to Section 8.4 hereof, the Company and the Individuals
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:
(i) any breach or nonperformance (partial or total) of or
inaccuracy in any representation or warranty or covenant or agreement
of the Company or the Individuals contained in this Agreement;
(ii) any breach or nonperformance (partial or total) by the
Company or the Individuals of any covenant or agreement of any of them
contained in this Agreement;
(iii) any payments, costs or expenses arising from the
disclosure on SCHEDULE 3.1 in excess of $22,500;
; provided that the BRC Indemnitees shall not make any claim for Damages
hereunder (other than Damages in excess of the amount set forth in
subsection (iii) above or Damages arising from the breach of the
representations, warranties or covenants contained in Sections 3.8, 3.10, 3.16,
3.18, 3.22 or 9.2 which shall not be subject to the "Indemnity Basket," as
defined below) until the aggregate of all such Damages exceeds Fifty Thousand
Dollars ($50,000) ("Indemnity Basket") and then only to the extent such
aggregate Damages exceed the Indemnity Basket.
(b) Except for the remedy of specific performance and except to the
extent that any of the Individuals shall have engaged in any fraud with
respect to the transactions contemplated herein, the rights and remedies
set forth in this Article VIII shall be the exclusive rights or remedies
available to the BRC Indemnitees with respect to claims for which
indemnification is provided or authorized pursuant to this Article. Such
limitation shall apply notwithstanding that such claims are asserted by a
cause of action or legal theory other than breach of contract.
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 shall be escrowed (the "Escrow") with an independent third party
of BRC's choosing and reasonably acceptable to the Company (the "Escrow Agent")
to secure and satisfy the BRC Indemnitee's right to indemnification hereunder.
The Escrow shall be governed by the Escrow Agreement in form and substance
reasonably satisfactory to BRC and the Company. The Escrow Agreement shall
provide, among other things, that subject to any claim by any BRC Indemnitee 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, any BRC
Indemnitee shall reasonably determine itself entitled to indemnification
hereunder, such BRC Indemnitee 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
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<PAGE>
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 nonappealable judgment
or other evidence of the fixing or determination of an amount giving rise to
indemnity hereunder, the Escrow Agent shall, subject to the terms and
conditions of the Escrow Agreement, distribute to such BRC Indemnitee 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 shall
be considered a single fund for satisfying claims of indemnity by any BRC
Indemnitee. Notwithstanding any other provision hereof to the contrary, the
BRC Indemnitee's right to indemnification under this Agreement 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, treating all such parties as a single class, pro rata.
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 or any Individual
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 or BRC if the average of the last reported sale
price of the BRC Common Stock as reported on the NASDAQ Stock Market
National Market System for the twenty consecutive trading days shall be
less than $30 or shall exceed $40;
(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 Merger contemplated by this
Agreement has not been consummated by September 5, 1996, 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 shareholders or the other
Constituent Corporation's shareholders fail to approve the Merger at the
shareholders' meeting called for the purpose of considering and voting on
the Merger; and
(g) by BRC if there shall have occurred a material adverse change in
the financial condition, results of operations or prospects of the Company
since June 30, 1996.
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
expressly provided for elsewhere in this Agreement.
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<PAGE>
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. Without the
express written consent of BRC, neither the Company nor the Subsidiary has or
will incur any expense in connection with the negotiation of this Agreement or
the consummation of the transactions contemplated thereby in excess of $125,000
in the aggregate with regard to all such expense.
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 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:
(i) If to the Company:
The Pace Group, Inc.
12160 Abrams Road
Suite 409
Dallas, Texas 75243
Attention: President
(ii) If to BRC or MC:
BRC Holdings, Inc.
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.
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<PAGE>
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.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
THE PACE GROUP, INC.
(A TEXAS CORPORATION)
By: /s/ Ray H. Pace
-----------------------------------------
Ray H. Pace, President
BRC HOLDINGS, INC.
(A DELAWARE CORPORATION)
By: /s/ Thomas E. Kiraly
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
BRC MERGER CORP. II
(A TEXAS CORPORATION)
By: /s/ Thomas E. Kiraly
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
INDIVIDUALS:
/s/ Ray H. Pace
--------------------------------------------
Ray H. Pace
/s/ James C. Baumgarten
--------------------------------------------
James C. Baumgarten
/s/ William J. Fosick
--------------------------------------------
William J. Fosick
/s/ P. Michael Autrey
--------------------------------------------
P. Michael Autrey
/s/ Karen A. Brayer
--------------------------------------------
Karen A. Brayer
/s/ Richard F. Ugarte
--------------------------------------------
Richard F. Ugarte
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<PAGE>
EXHIBIT 5.1
TO
BRC HOLDINGS, INC.
REGISTRATION STATEMENT ON FORM S-3
<PAGE>
[Arter & Hadden Letterhead]
September 12, 1996
BRC Holdings, Inc.
1111 West Mockingbird Lane, Suite 1400
Dallas, Texas 75247
Re: OFFERING OF SHARES OF COMMON STOCK OF BRC HOLDINGS, INC.
Ladies and Gentlemen:
On or about September 13, 1996, BRC Holdings, Inc., 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 432,835 shares of common
stock, $.10 par value per share (the "Common Stock"), 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.
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 guarantee 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.
<PAGE>
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,
/s/ ARTER & HADDEN
---------------------------
ARTER & HADDEN
<PAGE>
EXHIBIT 23.2
TO
BRC HOLDINGS, INC.
REGISTRATION STATEMENT ON FORM S-3
<PAGE>
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 our report dated
March 22, 1996, appearing on page 48 of BRC Holdings, Inc.'s Annual Report on
Form 10-K for the year ended December 31, 1995. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Dallas, Texas
September 11, 1996
