<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13D-1(A)
RAWLINGS SPORTING GOODS COMPANY, INC.
-------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
------------------------------------------------
(Title of Class of Securities)
754459105
--------------
(CUSIP Number)
ROBERT S. PRATHER, JR.
PRESIDENT
BULL RUN CORPORATION
4370 PEACHTREE ROAD
ATLANTA, GEORGIA 30319
(404) 261-8333
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
with a copy to:
STEPHEN A. OPLER
ALSTON & BIRD LLP
1201 WEST PEACHTREE ROAD, N.W.
ATLANTA, GEORGIA 30309-3424
(404) 881-7693
November 21, 1997
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ]
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
Page 1 of 12 Pages
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SCHEDULE 13D
CUSIP No. 754459105 PAGE 2 OF 10 PAGES
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1 NAME OF REPORTING PERSON
Bull Run Corporation
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) 91-1117599
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
BK
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Georgia
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7 SOLE VOTING POWER
NUMBER 80,000 + A RIGHT TO ACQUIRE 925,804
OF
SHARES ----------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH
REPORTING ----------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 80,000 + A RIGHT TO ACQUIRE 925,804
----------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
80,000 + A RIGHT TO ACQUIRE 925,804
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.6%
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14 TYPE OF REPORTING PERSON*
CO
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Page 2 of 12 Pages
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Item 1. Security and Issuer
This statement relates to the common stock, par value $0.01 per share (the
"Common Stock"), of Rawlings Sporting Goods Company, Inc., a Delaware
corporation (the "Company"). The Company's principal executive offices are
located at 1859 Intertech Drive, Fenton, Missouri 63026.
ITEM 2. IDENTITY AND BACKGROUND
(a) The statement is filed by Bull Run Corporation, a Georgia corporation
("Bull Run").
(b) The address of the principal business and principal office of Bull Run is
4370 Peachtree Road, N.E., Atlanta, Georgia 30319.
(c) The principal business of Bull Run is that of a corporation engaged in
accumulation of significant and/or controlling investment positions in selective
companies. In addition, the Company, through its wholly-owned subsidiary
Datasouth Computer Corporation, designs, manufactures and markets dot matrix and
thermal printers for industrial applications. Information concerning the
directors and executive officers of Bull Run is contained on Schedule A hereto.
----------
(d) Neither Bull Run nor, to the best of its knowledge, any of its directors
or executive officers, has, during the last five years, been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) Neither Bull Run nor, to the best of its knowledge, any of its directors
or executive officers, has, during the past five years, been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, Federal or State securities laws or finding any violation with
respect to such laws.
(f) Each of Bull Run's directors and executive officers is a United States
citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The total amount of funds required by Bull Run to purchase the Warrant (as
defined below) pursuant to the Purchase Agreement described in Item 4, is
$2,842,218. Fifty percent of the purchase price, or $1,421,109, was paid to the
Company on November 21, 1997 from a loan to Bull Run from NationsBank, N.A.,
pursuant to a Sixth Modification of Loan Agreement, attached hereto as Exhibit
2. The remaining fifty percent of the purchase price, plus interest accrued, at
the rate of seven percent (7%) per annum, from November 21, 1997 until the date
of payment will be due on the earlier to occur of the date of exercise or the
date of expiration of the Warrant. In the event that the Warrant is exercised in
part, at the date of such exercise a percentage of the remaining portion of the
purchase price shall be payable in an amount equal to (A) (i) the percentage of
the Warrant being exercised multiplied by (ii) $1,421,109 plus (B) interest
accruing from November 21, 1997 to the date of such exercise, at the rate of
seven percent (7%) per annum.
Page 3 of 12 Pages
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The total amount of funds required by Bull Run to purchase the 80,000 shares
of the Common Stock purchased in the open market on November 26, 1997 described
in Item 4 (including a $3.00 transaction fee) is $902,503. The source of these
funds will be a loan to Bull Run from NationsBank, N.A. and the purchase price
will be paid on or before December 2, 1997.
The purchase price for the Additional Warrant (as defined below), if any,
shall be based on the Black-Scholes Option Pricing Model measured at the time
the Additional Warrant is purchased. The purchase price for any additional Open
Market Purchases (as defined below), if any, shall be based on the market price
in effect at the time of the purchase of such shares of Common Stock.
ITEM 4. PURPOSE OF TRANSACTION
On November 21, 1997 (the "Closing Date"), Bull Run entered into an Investment
Purchase Agreement (the "Purchase Agreement") with the Company. Pursuant to the
Purchase Agreement, Bull Run purchased warrants to purchase 925,804 shares of
Common Stock, subject to adjustment (the "Warrant"); the purchase price for the
Warrant was $3.07 per share of Common Stock into which the Warrant is
exerciseable. The Warrant is exercisable for shares of Common Stock at the
option of Bull Run at any time after (i) the price of the last reported trade of
the Company's Common Stock on the NASDAQ Stock Market is at least $16.50 for
twenty (20) consecutive trading days, and (ii) Bull Run or its affiliates
beneficially own at least five percent (5%) of the outstanding Common Stock.
The Warrant is exercisable initially at $12.00 per share, subject to adjustment,
and must be exercised on or before November 21, 2001. Pursuant to Rule 13d-4
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), Bull
Run disclaims beneficial ownership of the shares of Common Stock purchaseable
upon exercise of the Warrant.
During the six (6) month period beginning on the Closing Date (or such longer
period as provided below), Bull Run may purchase on the open market a number of
shares of the Common Stock not to exceed 10.1% of the outstanding shares of the
Common Stock (the "Open Market Purchases"). In accordance with the Purchase
Agreement, the Company will take no action to oppose the Open Market Purchases,
provided that nothing in the Purchase Agreement shall restrict the Company's
obligation to provide any disclosures regarding the Company, its operations and
financial condition necessary or appropriate to comply with applicable
securities laws.
The six (6) month period during which Bull Run may make the Open Market
Purchases as provided above shall be suspended and tolled during such times as
and for as long as:
(a) (i) any nominee of Bull Run to the Company's Board of Directors or any
affiliate or associate of Bull Run is a member of the Company's Board
of Directors or is an officer of the Company and (ii) any officers or
directors of the Company are prohibited from trading in the Common
Stock pursuant to any policies or procedures of the Company;
(b) (i) any nominee of Bull Run to the Company's Board of Directors or any
affiliate or associate of Bull Run is a member of the Company's Board
of Directors or is an officer of the Company and (ii) any officers or
directors of the Company are
Page 4 of 12 Pages
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prohibited from trading in the Common Stock of the Company at the
direction of the Company's Board of Directors or legal advisors; or
(c) Bull Run has informed the Company that Bull Run believes that it
may have knowledge of material non-public information relating to the
Company and Bull Run has received neither (i) reasonably satisfactory
written confirmation from the Company that the information in question
is not material non-public information nor (ii) written confirmation
from the Company that such information has been publicly disclosed in
a manner and on terms reasonably satisfactory to Bull Run.
On the earlier of (i) the date that Bull Run first acquires 10.1% of the
outstanding Common Stock (other than through exercise of the Warrant) or (ii)
the first business day that is six (6) months (or such longer period as provided
above) after the Closing Date (the "Acquisition Completion Date") or within ten
(10) business days thereafter, Bull Run shall have the option to purchase an
additional warrant (having the same terms as the Warrant) exercisable into a
number of shares of Common Stock equal to the lesser of (a) five percent (5.0%)
of the outstanding shares of Common Stock on the Acquisition Completion Date, on
a fully-diluted basis, or (b) the difference between (i) ten percent (10.0%) of
the outstanding shares of Common Stock on the Acquisition Completion Date, on a
fully-diluted basis, and (ii) the percentage of outstanding shares of Common
Stock owned by Bull Run on the Acquisition Completion Date (which percentage
shall not include any shares which may be acquired or were acquired upon
exercise of the Warrant).
Strategic Marketing Agreement. In connection with the transactions
-----------------------------
contemplated by the Purchase Agreement, and as a condition thereto, on November
21, 1997, the Company entered into a Strategic Marketing Agreement with Host
Communications, Inc. ("Host"). Host is a privately-held company, of which Bull
Run is the direct owner of 4.5% and the indirect owner of 24.2% of Host's
outstanding common stock and 51.5% of Host's outstanding preferred stock. Bull
Run's indirect investment in Host is through its 51.5% ownership of Capital
Sports Properties, Inc., whose assets consist solely of Host common and
preferred stock.
Standstill Agreement. Bull Run and the Company have entered into a Standstill
--------------------
Agreement, dated as of the Closing Date, pursuant to which Bull Run agreed that
it will not, and will cause each of its respective affiliates and associates not
to, directly or indirectly, acquire, offer to acquire, or agree to acquire, by
purchase or otherwise, beneficial ownership (within the meaning of Rule 13d-3 of
the Exchange Act) of any shares of Common Stock on and following the Acquisition
Completion Date, if as a result, the shares of Common Stock beneficially owned
(within the meaning of Rule 13d-3 of the Exchange Act) in the aggregate by Bull
Run and its affiliates and associates would represent more than 10.1% of the
outstanding shares of Common Stock at such time (the computation of such
percentage shall not include any shares of Common Stock issuable or issued upon
exercise of the Warrant or the Additional Warrant). Bull Run and its affiliates
and associates may from time to time after the Acquisition Completion Date,
acquire, by purchase or otherwise beneficial ownership (within the meaning of
Rule 13d-3 of the Exchange Act) of shares of Common Stock in an amount which
would not cause the aggregate shares of Common Stock beneficially owned (within
the meaning of Rule 13d-3 of the Exchange Act) by Bull Run and its affiliates
and associates to exceed 10.1% of the outstanding shares of Common Stock at such
time (the computation of such percentage shall not include any shares of Common
Stock issuable or issued
Page 5 of 12 Pages
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upon exercise of the Warrant or the Additional Warrant). Bull Run and its
affiliates and associates are also restricted by the Standstill Agreement in the
voting of Common Stock owned by them and in their participation or assistance in
certain types of corporate events, including without limitation, tender offers,
business combinations, recapitalizations and proxy contests.
Board Representation. Pursuant to the Standstill Agreement, the Board of
--------------------
Directors of the Company caused the number of members to be elected to the Board
of Directors to be increased to six (6). The Company agreed to nominate,
subject to certain conditions, as a Bull Run nominee, Robert S. Prather, Jr.,
the President and Chief Executive Officer of Bull Run and a member of the Board
of Directors of Bull Run, for election to such additional director position at
the annual meeting of stockholders scheduled to be held on January 15, 1998 for
a term which will expire at the first annual meeting of stockholders following
the end of the Company's fiscal year ending August 31, 2000. The Company's
Board of Directors will recommend the election of Mr. Prather to the Company's
stockholders and the Company will solicit proxies for the election of Mr.
Prather pursuant to its proxy statement for such meeting to the same extent and
in the manner that it customarily solicits such proxies for other nominees of
the Company's Board of Directors.
Within thirty (30) days after the first date upon which the shares of Common
Stock beneficially owned (within the meaning of Rule 13d-3 of the Exchange Act)
in the aggregate by Bull Run and its affiliates and associates represents in
excess of 5% of the outstanding shares of Common Stock at such time, but in any
case, not on or prior to January 15, 1998, the Board of Directors of the Company
will cause the number of members to be elected to the Board of Directors to be
increased by one (1) and will appoint, subject to certain conditions, a second
Bull Run nominee as a director of the Company in the position created by such
increase.
In the case of any vacancy occurring among the Bull Run nominees serving on
the Company's Board of Directors, Bull Run shall have the right to designate
another Bull Run nominee for appointment as a successor to hold office for the
unexpired term of the Bull Run nominee whose place shall be vacant. Prior to
the annual meeting of stockholders of the Company at which any term of a Bull
Run nominee as director of the Company is scheduled to expire, (i) the Board of
Directors will nominate a Bull Run nominee designated by Bull Run to be elected
or re-elected to such director position; (ii) the Board of Directors will
recommend the election of such Bull Run nominee to the Company's stockholders,
and (iii) the Company will select proxies for the election of such Bull Run
nominee pursuant to its proxy statement for such meeting to the same extent and
in the same manner that it customarily solicits such proxies for other nominees
of the Company's Board of Directors.
Registration Rights Agreement. The Warrant and the Additional Warrant, if
-----------------------------
any, will not be registered under the Securities Act of 1933, as amended (the
"Securities Act"). The Company entered into a Registration Rights Agreement
with Bull Run on the Closing Date pursuant to which, the Company granted Bull
Run demand and incidental registration rights with respect to the shares of
Common Stock issuable upon exercise of the Warrant and the Additional Warrant
("Registrable Securities"). The Company has agreed to effect up to two (2)
registrations requested by the holders of more than 386,250 shares of Common
Stock and also has agreed to give the holders of Registrable Securities the
opportunity to sell their Registrable Securities pursuant to certain other
registration statements that may be filed by the Company under the Securities
Act.
Page 6 of 12 Pages
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The foregoing response to this Item 4 is qualified in its entirety by
reference to the Common Stock Purchase Warrant, the Strategic Marketing
Agreement, the Purchase Agreement, the Standstill Agreement and the Registration
Rights Agreement, the full text of which is incorporated by reference to
Exhibits 4.1, 99.1, 99.2, 99.3 and 99.4, respectively, of the Current Report on
Form 8-K, dated November 21, 1997, filed by the Company on November 26, 1997
(Commission File No. 0-24450) (the "8-K").
The shares of Common Stock beneficially owned by Bull Run were acquired for,
and are being held for, investment purposes.
Except for Bull Run's right to make the Open Market Purchases and to acquire
the Additional Warrant and except as set forth in this Item 4, Bull Run does not
have any plans or proposals which relate to or would result in: (a) the
acquisition by any person of additional securities of the Company, or the
disposition of securities of the Company; (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Company or any of its subsidiaries; (c) a sale or transfer of a material amount
of assets of the Company or any of its subsidiaries; (d) any change in the
present Board of Directors or management of the Company, including any plans or
proposals to change the number or term of directors or to fill any existing
vacancies on the Board; (e) any material change in the present capitalization or
dividend policy of the Company; (f) any other material change in the Company's
business or corporate structure; (g) changes in the Company's charter, By-Laws
or instruments corresponding thereto or other actions which may impede the
acquisition of control of the Company by any person; (h) causing a class of
securities of the Company to be delisted from a national securities exchange or
to cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association; (i) a class of equity securities of
the Company becoming eligible for termination of registration pursuant to
Section 12(g) (4) of the Exchange Act; or (j) any action similar to any of those
enumerated above.
Bull Run, however, may communicate ideas to management from time to time,
which are intended to further Rawlings' business development and enhance
shareholder value. Bull Run reserves the right to purchase additional shares of
Common Stock or dispose of shares of Common Stock in the open market and
consistent with the terms of the Purchase Agreement and the Standstill Agreement
or in any other lawful manner in the future.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) As of the date hereof, Bull Run is the beneficial owner of a warrant to
purchase 925,804 shares of Common Stock, subject to adjustment, representing
approximately 10.0% of the Company's total issued and outstanding Common Stock
as of November 21, 1997. Bull Run also has purchased 80,000 shares of Common
Stock in the open market on November 26, 1997. Bull Run beneficially owns
(within the meaning of Rule 13d-3 of the Exchange Act) an aggregate of 11.6% of
the outstanding shares of Common Stock based on the Company's representation in
the Purchase Agreement that 7,731,646 were outstanding as of November 21, 1997.
(b) Bull Run maintains sole investment, voting and dispositive power over all
of such shares of Common Stock set forth in paragraph (a) above.
Page 7 of 12 Pages
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(c) Bull Run purchased 80,000 shares of Common Stock on November 26, 1997 in
the open market through a broker, 40,000 shares were purchased at 11 1/8 for a
purchase price exclusive of a transaction fee of $445,000 and 40,000 shares were
purchased at 11 7/16 for a purchase price exclusive of a transaction fee of
$457,500.
(d) None.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
The information set forth in Item 4 is incorporated herein by reference.
Except as described herein and by reference to Item 4, there are no contracts,
arrangements or understandings among or between the persons named in Item 2 and
any other person with respect to any securities of the Company.
Page 8 of 12 Pages
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ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
1. Schedule A which sets forth the Executive Officers and Directors of
----------
Bull Run.
2. Sixth Modification of Loan Agreement, made as of November 21, 1997, by
and between Bull Run and NationsBank, N.A.
3. Loan Agreement between Bull Run and Bank South, N.A., dated March 29,
1995, which is hereby incorporated by reference to Bull Run's Current Report on
Form 8-K, dated March 29, 1995 ("Bull Run's 1995 8-K").
4. First Modification of Loan Agreement between Bull Run and Bank South,
N.A. dated January 3, 1996, which is hereby incorporated by reference to Bull
Run's Current Report on Form 8-K, dated January 3, 1996 ("Bull Run's 1996 8-K").
5. Second Modification of Loan Agreement between Bull Run and NationsBank,
N.A. (South), dated September 24, 1996, which is hereby incorporated by
reference to Bull Run's Quarterly Report on Form 10-QSB for the period ended
September 30, 1996.
6. Third Modification of Loan Agreement between Bull Run and NationsBank,
N.A. (South), dated January 27, 1997, which is hereby incorporated by reference
to Bull Run's Annual Report on Form 10-KSB for the year ended December 31, 1996
("Bull Run's 1996 10-KSB").
7. First Term Note dated January 3, 1996, which is hereby incorporated by
reference to Bull Run's 1996 8-K.
8. Second Term Note dated January 3, 1996, which is hereby incorporated by
reference to Bull Run's 1996 8-K.
9. Third Term Loan Note dated September 24, 1996, which is hereby
incorporated by reference to Bull Run's 1996 10-KSB.
10. Revolving Credit Note dated January 27, 1997, which is hereby
incorporated by reference to Bull Run's 1996 10-KSB.
11. Common Stock Purchase Warrant, dated November 21, 1997, issued by the
Company to Bull Run, which is hereby incorporated by reference to Exhibit 4.1 of
the 8-K.
12. Strategic Marketing Agreement, dated November 21, 1997, between the
Company and Host Communications, Inc., which is hereby incorporated by reference
to Exhibit 99.1 of the 8-K.
13 Investment Purchase Agreement, dated November 21, 1997, between the
Company and Bull Run, which is hereby incorporated by reference to Exhibit 99.2
of the 8-K.
Page 9 of 12 Pages
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14. Standstill Agreement, dated November 21, 1997, between the Company and
Bull Run, which is hereby incorporated by reference to Exhibit 99.3 of the 8-K.
15. Registration Rights Agreement, dated November 21, 1997, between the
Company and Bull Run, which is hereby incorporated by reference to Exhibit 99.4
of the 8-K.
Page 10 of 12 Pages
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SIGNATURE
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the information set forth in this statement is true, complete and
correct.
Dated: November __, 1997
BULL RUN CORPORATION
/s/ Robert S. Prather, Jr.
----------------------------------------
Name: Robert S. Prather, Jr.
Title: President
Page 11 of 12 Pages
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SCHEDULE A
----------
Set forth below is the name and principal occupation of each of the directors
and executive officers of Bull Run Corporation ("Bull Run") as of November 26,
1997. Unless otherwise noted below, the business address of each of such
persons is 4370 Peachtree Road, N.E., Atlanta, Georgia 30319, and each of such
persons is a citizen of the United States of America.
DIRECTORS OF BULL RUN
---------------------
NAME PRINCIPAL OCCUPATION
---- --------------------
J. Mack Robinson Chairman of the Board and Secretary of Bull Run;
Chairman and President of Delta Life Insurance
Company, an insurance company whose address is 4370
Peachtree Road, N.E., Atlanta, Georgia 30319; Chairman
of Atlantic American Corporation, an insurance holding
company whose address is 4370 Peachtree Road, N.E.,
Atlanta, Georgia 30319; and interim President and CEO
of Gray Communications Systems, Inc., a television
station and newspaper owner and operator whose address
is 126 N. Washington Street, Albany, Georgia 31701.
Gerald N. Agranoff General counsel to and a partner of Plaza Securities
Company and Edelman Securities Company, L.P.,
investment firms located at 717 5th Avenue, New York,
New York 10022.
James W. Busby Retired, whose residence address is 19 East Atlanta
Street, Wrightsville Beach, North Carolina 28480.
Hilton H. Howell, Jr. Vice President and Secretary of Bull Run; President of
Atlantic American Corporation, an insurance holding
company whose address is 4370 Peachtree Road, N.E.,
Atlanta, Georgia 30319; and Executive Vice President
and General Counsel of Delta Life and Delta Fire &
Casualty Insurance Companies, insurance companies
whose address is 4370 Peachtree Road, N.E., Atlanta,
Georgia 30319.
Robert S. Prather, Jr. President and Chief Executive Officer of Bull Run and
interim Executive Vice President -- Acquisitions of
Gray Communications Systems, Inc., a television
station and newspaper owner and operator whose address
is 126 N. Washington Street, Albany, Georgia 31701.
EXECUTIVE OFFICERS OF BULL RUN
------------------------------
NAME OFFICE
---- ------
Robert S. Prather, Jr. President and Chief Executive Officer of Bull Run.
Hilton H. Howell, Jr. Vice President and Secretary of Bull Run.
Frederick J. Erickson Vice President of Finance, Treasurer and Chief
Financial Officer of Bull Run.
Page 12 of 12 Pages
<PAGE>
SIXTH MODIFICATION OF LOAN AGREEMENT
THIS MODIFICATION is made as of this 21st day of November, 1997, by and
between BULL RUN CORPORATION, a Georgia corporation ("Borrower"), and
--------
NATIONSBANK, N.A. ("Lender").
------
STATEMENT OF FACTS
------------------
Lender and Borrower are parties to that certain Loan Agreement, dated as of
March 29, 1995, as amended by the First Modification of Loan Agreement, dated as
of January 3, 1996, the Second Modification of Loan Agreement, dated as of
September 24, 1996, the Third Modification of Loan Agreement, dated as of
January 27, 1997, the Fourth Modification of Loan Agreement, dated as of March
27, 1997 and the Fifth Modification of Loan Agreement, dated as of August 15,
1997 (the "Loan Agreement"), pursuant to which Lender has agreed to make one or
--------------
more loans from time to time to the Borrower in accordance with the terms and
conditions thereof. Lender and Borrower desire to modify the Loan Agreement in
order to provide for a new $1,400,000 term loan, and in certain other respects
in accordance with the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises, the covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Borrower and Lender do
hereby agree that all capitalized terms used herein shall have the meanings
ascribed thereto in the Loan Agreement as amended hereby (except as otherwise
expressly defined or limited herein) and do hereby further agree as follows:
STATEMENT OF TERMS
------------------
1. AMENDMENTS OF LOAN AGREEMENT. Subject to the fulfillment of the
----------------------------
conditions precedent to the effectiveness of this Modification which are set
forth below, the Loan Agreement shall be amended as follows:
(a) Section 1.01 of the Loan Agreement is hereby amended by adding to
Section 1.01 the following new definitions:
"Fourth Term Loan" shall mean any and all advances made by Lender to
----------------
Borrower under the Fourth Term Loan Facility.
"Fourth Term Loan Facility" shall mean the term loan facility
-------------------------
provided by Lender to Borrower under Section 3.02B hereof.
"Fourth Term Loan Facility Expiration Date" shall mean November 24,
-----------------------------------------
1997 (as such date may be extended, accelerated or amended from time to
time pursuant to this Agreement).
"Fourth Term Loan Maximum Availability" shall mean $1,400,000.
-------------------------------------
<PAGE>
"Fourth Loan Note" shall mean the Fourth Term Loan Note, dated as of
----------------
the date of the Sixth Modification of Loan Agreement, executed by the
Borrower and payable to the order of the Lender as evidence of the Fourth
Term Loan and any extension, renewal, modification or replacement thereof
or therefor.
"Fourth Term Loan Obligations" shall mean, collectively, any and all
----------------------------
Obligations of Borrower to pay Lender the principal of, interest or fees
on, collection costs for, or any other sums owing in respect of the Fourth
Term Loan or the Fourth Term Loan Note.
"Rawlings" shall mean Rawlings Sporting Goods Company, Inc.
--------
"Rawlings Warrant" shall mean the warrant to purchase 925,804 shares
----------------
of the common stock of Rawlings issued on November 21, 1997, by Rawlings in
favor of Borrower, as more fully described in the Common Stock Purchase
Warrant, a true and correct copy of which is attached to the Sixth
Modification as Annex 1 thereto, and any extension, modification,
supplement or replacement thereof or therefor.
"Sixth Modification" shall mean that certain Sixth Modification
------------------
of Loan Agreement, dated as of November 21, 1997, by and between Borrower
and Lender.
(b) Section 1.01 of the Loan Agreement is hereby further amended by
deleting from Section 1.01 the terms "Collateral," "Term Loan Facilities," "Term
---------- -------------------- ----
Loan Notes," and "Term Loans" and by substituting in lieu thereof the following
- ---------- ----------
new definitions of such terms:
"Collateral" shall mean (i) the Pledged Shares, (ii) the Warrants,
----------
(iii) the Rawlings Warrant, (iv) any and all other property which may be
hereafter pledged or collaterally assigned to Lender or in which Lender may
be otherwise granted a Lien to secure the Obligations pursuant to any and
all of the Credit Documents and (v) any and all cash and non-cash proceeds
of the foregoing.
"Term Loan Facilities" shall mean, collectively, the First Term
--------------------
Loan Facility, the Second Term Loan Facility, the Third Term Loan Facility,
and the Fourth Term Loan Facility.
"Term Loan Notes" shall mean, collectively, the First Term Loan Note,
---------------
the Second Term Loan Note, the Third Term Loan Note, and the Fourth Term
Note.
"Term Loans" shall mean, collectively, the First Term Loan, the Second
----------
Term Loan, the Third Term Loan, and the Fourth Term Loan.
(c) The Loan Agreement is hereby further amended by adding the following
Section 3.02B after the existing Section 3.02A and before the existing Section
3.03:
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<PAGE>
SECTION 3.02B. FOURTH TERM LOAN FACILITY.
-------------------------
(a) Subject to the terms and conditions of this Agreement, the Lender
agrees to advance to the Borrower, from time to time on or prior to the
Fourth Term Loan Facility Expiration Date and upon the Borrower's request
therefor, a Fourth Term Loan in the principal amount of up to the Fourth
Term Loan Maximum Availability.
(b) The proceeds of the Fourth Term Loan shall be used to purchase the
Rawlings Warrant.
(d) The Loan Agreement is hereby further amended by adding to Section 3.04
the following subsection (e) after subsection (d) thereof:
(e) The Borrower's obligation to pay to the Lender the principal
of and interest on the Fourth Term Loan shall be evidenced by the
records of the Lender (subject to Section 4.05 hereof) and by the
Fourth Term Loan Note. The principal balance of the Fourth Term Loan
shall be payable in one (1) installment which shall be due on July 1,
1998 in an amount equal to the entire remaining unpaid principal
balance of the Fourth Term Loan.
(e) The Loan Agreement is hereby further amended by deleting Section
4.04(b) and Section 4.04(c) in their entireties and by substituting in lieu
thereof the following new Section 4.04(b) and Section 4.04(c):
(b) The Obligations shall be secured by (i) the Borrower's
first-priority and perfected pledge to the Lender of (1) one hundred
percent of the outstanding capital stock of Guarantor, (2) 51.5 shares
of common stock of Capital Sports Properties, Inc. and (3) 41,049
shares of common stock of Host Communications, Inc., all pursuant to
the Borrower Pledge Agreement, (ii) the Guarantor's first priority and
perfected pledge to the Lender of 305,296 shares of Class A Common
Stock of Gray pursuant to the First Guarantor Pledge Agreement, and
(iii) the Partnership's first priority and perfected pledge to the
Lender of 1,284,000 shares of common stock of the Borrower pursuant to
the Partnership Pledge Agreement.
(c) The Second Term Loan Obligations, the Third Term Loan
Obligations and the Fourth Term Loan Obligations shall be secured by
the Guarantor's first-priority and perfected pledge to the Lender of
906,294 shares of Class A Common Stock of Gray pursuant to the Second
Guarantor Pledge Agreement and shall be further secured by the
Borrower's first-priority and perfected pledge to the Lender of 1,000
shares of Series A Preferred Stock of Gray, 500 shares of Series B
Preferred Stock of Gray, the Warrants and the Rawlings Warrant,
pursuant to the Second Borrower Pledge Agreement.
2. NO OTHER AMENDMENTS. Except for the amendments expressly set forth and
-------------------
referred to in Section 1 above, the Loan Agreement shall remain unchanged and in
full force and effect. Nothing in this Modification or any of the other
Supplemental Credit Documents
3
<PAGE>
(as defined below) is intended, or shall be construed, to constitute a novation
or an accord and satisfaction of any of the Obligations or to modify, affect or
impair the perfection or continuity of Lender's security interests in, security
titles to or other Liens on any Collateral for the Obligations.
3. REPRESENTATIONS AND WARRANTIES. To induce Lender to enter into this
------------------------------
Modification, the Borrower does hereby warrant, represent and covenant to Lender
that: (a) each representation or warranty of the Borrower set forth in the Loan
Agreement is hereby restated and reaffirmed as true and correct on and as of the
date hereof as if such representation or warranty were made on and as of the
date hereof (except to the extent that any such representation or warranty
expressly relates to a prior specific date or period), and no Default or Event
of Default has occurred and is continuing as of this date under the Loan
Agreement as amended by this Modification; and (b) each of the Borrower, the
Guarantor and the Partnership has the power and is duly authorized to enter
into, deliver and perform the Supplemental Credit Documents to which it is a
party, and each of the Supplemental Credit Documents is the legal, valid and
binding obligation of each Credit Party enforceable against such Credit Party in
accordance with its terms.
4. REIMBURSEMENT OF COSTS AND EXPENSES. The Borrower hereby agrees to
-----------------------------------
reimburse Lender on demand for all costs (including reasonable attorneys' fees)
incurred by Lender in negotiating, documenting and consummating this
Modification, the other documents referred to herein, and the transactions
contemplated hereby and thereby.
5. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS MODIFICATION. The
----------------------------------------------------------
effectiveness of this Modification and the amendments provided in Section 1
above are subject to the truth and accuracy in all material respects of the
representations and warranties of the Borrower contained in Section 3 above and
to the fulfillment of the following additional conditions precedent (all
documents described below shall be in form and substance satisfactory to Lender,
and are herein collectively called the "Supplemental Credit Documents"):
-----------------------------
(a) Lender shall have received one or more duly executed counterparts of
this Modification, the Fourth Term Loan Note, the Third Modification of Second
Borrower Pledge Agreement, and the Third Modification of Amended and Restated
Second Guarantor Pledge Agreement;
(b) Lender shall have received a duly executed Guarantor Reaffirmation and
Consent to Sixth Modification of Loan Agreement from the Guarantor and a duly
executed Partnership Reaffirmation and Consent to Sixth Modification of Loan
Agreement from the Partnership; and
(c) Lender shall have received a duly executed and completed Federal
Reserve Form U-1 relating to the Second Term Loan, the Third Term Loan and the
Fourth Term Loan.
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<PAGE>
6. CONDITIONS PRECEDENT TO FUNDING OF THE FOURTH TERM LOAN. The following
-------------------------------------------------------
condition, together with the conditions set forth in Section 5 hereof, are
conditions precedent to the funding of the Fourth Term Loan:
All conditions precedent to the issuance of the Rawlings Warrant shall
have been fulfilled (other than the disbursement of the Fourth Term Loan
proceeds as contemplated hereby), and the Rawlings Warrant shall be issued
on terms and conditions acceptable to Lender in all respects.
7. REFERENCE TO AND EFFECT ON THE CREDIT DOCUMENTS. Upon the
-----------------------------------------------
effectiveness of this Modification, each reference in the Loan Agreement to
"this Agreement," "hereunder," "hereof" or words of like import referring to the
Loan Agreement, and each reference in the other Credit Documents to "the Loan
Agreement," "thereunder," "thereof" or words of like import referring to the
Loan Agreement, shall mean and be a reference to the Loan Agreement as amended
hereby.
8. COUNTERPARTS. This Modification may be executed in multiple
------------
counterparts, each of which shall be deemed to be an original and all of which
when taken together shall constitute one and the same instrument.
9. GOVERNING LAW. This Modification shall be governed by, and construed
-------------
in accordance with, the internal laws of the State of Georgia applicable to
contracts made and performed in such state.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Modification to be
duly executed and delivered as of the day and year specified at the beginning
hereof.
BORROWER:
BULL RUN CORPORATION
By: /s/ Robert S. Prather, Jr.
---------------------------------------------
Robert S. Prather, Jr., President
LENDER:
NATIONSBANK, N.A.
By: /s/ Melinda M. Bergbom
---------------------------------------------
Senior Vice President
<PAGE>
ANNEX 1
The Rawlings Warrant
<PAGE>
FOURTH TERM LOAN NOTE
51,400,000 November 21, 1997
FOR VALUE RECEIVED, the undersigned, BULL RUN CORPORATION, a Georgia
corporation (the "Borrower"), hereby promises to pay to the order of
NATIONSBANK, N.A., (herein, together with any subsequent holder hereof, called
the "Lender"), the principal sum of ONE MILLION FOUR HUNDRED THOUSANDS AND
NO/100 DOLLARS ($1,400,000), or the outstanding principal amount of the Fourth
Term Loan made to the Borrower by the Lender pursuant to the Loan Agreement
referred to below, which principal sum shall be payable (i) in installments on
the due dates and in the amounts set forth in the Loan Agreement or (ii) on any
earlier date on which all amounts outstanding under this Fourth Term Loan Note
(the "Note") have become due and payable pursuant to the provisions of Section
9.02 of the Loan Agreement. The Borrower likewise promises to pay interest on
the outstanding principal balance of the Fourth Term Loan made by the Lender to
the Borrower, at such interest rates, payable at such times, and computed in
such manner, as are specified in the Loan Agreement in strict accordance with
the terms thereof.
This Note is issued pursuant to, and is the Fourth Term Loan Note
referred to in the Loan Agreement, dated as of March 29, 1995, between the
Borrower and the Lender, as amended by the First Modification of Loan Agreement,
dated as of January 3, 1996, the Second Modification of Loan Agreement, dated as
of September 24, 1996, the Third Modification of Loan Agreement, dated as of
January 27, 1997, the Fourth Modification of Loan Agreement, dated as of March
27, 1997, the Fifth Modification of Loan Agreement, dated as of August 15, 1997,
and the Sixth Modification of Loan Agreement, dated as of the date hereof (as
the same may be further amended or supplemented from time to time, the "Loan
Agreement"), and the Lender is and shall be entitled to all benefits thereof and
of all the other Credit Documents executed and delivered to the Lender in
connection therewith. Terms defined in the Loan Agreement are used herein with
the same meaning. The Loan Agreement, among other things, contains provisions
for acceleration of the maturity hereof upon the happening of certain Events of
Default, provisions relating to prepayments on account of principal hereof prior
to the maturity hereof, and provisions for post-default interest rates.
The Borrower agrees to make payments of principal and interest hereon on
the dates and in the amounts specified in the Loan Agreement in strict
accordance with the terms thereof.
In case an Event of Default shall occur and be continuing, the principal
and all accrued interest of this Note may automatically become, or may be
declared, immediately due and payable in the manner and with the effect provided
in the Loan Agreement. The Borrower agrees to pay, and save the Lender harmless
against any liability for the payment of, all costs and expenses, including
actual and reasonable attorneys' fees, arising in connection with the
enforcement by the Lender of any of its rights or remedies under this Note or
the Loan Agreement.
<PAGE>
This Note has been delivered in Atlanta, Georgia, and the rights and
obligations of the Lender and the Borrower hereunder shall be construed in
accordance with and governed by the laws of the State of Georgia (without giving
effect to its conflicts of laws rules).
The Borrower expressly waives any presentment, demand, protest or notice
in connection with this Note, whether now or hereafter required by applicable
law. This Note is intended to be an instrument under seal.
[Remainder of page intentionally left blank]
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<PAGE>
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed,
sealed and delivered by its duly authorized officer as of the date first above
written.
BULL RUN CORPORATION
(CORPORATE SEAL)
By:
---------------------------
Robert S. Prather, Jr.
President
