<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. 3)1
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) 266-8333
--------------------------------------------------------
(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 Street, N.W.
Atlanta, Georgia 30309-3424
(404) 881-7693
April 23, 1999
-------------------------------------------------------
(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 that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box. |_|
Note: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for
other parties to whom copies are to be sent.
1 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 5 Pages
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SCHEDULE 13D
- ---------------------------- -------------------------
CUSIP No. 754459105 Page 2 of 5 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
BULL RUN CORPORATION
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) 91-1117599
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
BK
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e) |_|
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Georgia
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER 836,500
OF
SHARES -------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 0
REPORTING
PERSON -------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
836,500
-------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
836,500
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|X| (See Item 5)
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.7%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
Page 2 of 5 Pages
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This Amendment No. 3 to the Statement on Schedule 13D amends and
supplements the Statement on Schedule 13D, as amended by Amendment No. 1 and
Amendment No. 2 thereto (collectively, the "Schedule 13D") filed by Bull Run
Corporation ("Bull Run") relating to the common stock (the "Common Stock") of
Rawlings Sporting Goods Company, Inc. (the "Company"). The address of the
Company is 1859 Intertech Drive, Fenton, MO 63026. Capitalized terms used herein
and not defined herein shall have the meanings assigned thereto in the Schedule
13D.
Item 3. Source and Amount of Funds or Other Consideration
Since the filing of the Schedule 13D, Bull Run purchased 30,000 shares
of Common Stock in a privately negotiated transaction at an aggregate cost of
$352,500. The funds for the purchases of the shares of Common Stock came from a
loan to Bull Run from NationsBank, N.A., pursuant to the Second Amendment of
Amended and Restated Loan Agreement made as of March 22, 1999 by and between
Bull Run and NationsBank, N.A. (attached hereto as Exhibit 1) and the Fourth
Term Loan Note in the original principal amount of $675,754 made as of March 22,
1999 by Bull Run (attached hereto as Exhibit 2).
Item 4. Purpose of Transaction
On April 9, 1999, Samuel R. Shapiro ("Shapiro"), Shapiro Capital
Management Company, Inc., a Georgia corporation ("Shapiro Capital") and The
Kaleidoscope Fund, L.P. ("Kaleidoscope," and together with Shapiro and Shapiro
Capital, collectively, the "Shapiro Parties") filed a Schedule 13G/A with the
Securities and Exchange Commission reflecting purchases of additional shares of
the Company's Common Stock and disclosing that the Shapiro Parties were the
beneficial owners of a total of 16.4% of the outstanding shares of Common Stock.
The Company informed Bull Run that it believes Bull Run is an Associate (as
defined in the Rights Agreement, dated July 1, 1994, between the Company and
ChaseMellon Shareholder Services, L.L.C., as amended (the "Rights Plan")) of
Shapiro and that, unless the Company had taken action to amend the Rights Plan,
based on the number of shares of Common Stock beneficially owned by Bull Run and
the Shapiro Parties, collectively, that the Shapiro Parties would have become
Acquiring Persons under the Rights Plan and a Stock Acquisition Date (as defined
in the Rights Plan) would have occurred. In connection with amending the Rights
Plan to prevent the Rights Plan from being triggered on April 23, 1999, Bull Run
and the Company entered into Amendment Number One to Standstill Agreement
(attached hereto as Exhibit 3) (the "Amendment"). Pursuant to the Amendment,
Bull Run (together with its affiliates and associates) will not beneficially own
more than 10.7% of the outstanding Common Stock or such lesser percentage as
Bull Run may own from time to time (but in no event less than 10.1%), the
computation of which percentage shall not include any shares of Common Stock
issuable or issued upon exercise of the Warrants or issuable upon conversion or
exercise of any other outstanding convertible or exchangeable securities. In
this regard, Bull Run agreed in the Amendment to sell in the open market on or
before July 1, 1999 30,000 shares of Common Stock, such number being equal to
the number of shares of Common Stock acquired by Bull Run since the filing of
Amendment No. 2 to the Schedule 13D. In addition, the Amendment requires that
Bull Run vote its Common Stock for the slate of directors nominated by the
Company's Board of Directors at the Annual Meeting of Stockholders to be held in
January 2000 or at any adjournment or postponement thereof. The Amendment also
affords Bull Run the right to participate on the same basis as any other person
in any Board of Directors initiated process to explore strategic alternatives
that could reasonably be expected to lead to a change in control of the Company
or if the Board should determine to enter into any agreement with any other
person regarding a change in control of the Company. Bull Run also has agreed
that in certain circumstances it will vote all of its Common Stock in favor of
certain transactions that will result in a change in control of the Company and
that it will sell all of its Common Stock in such transaction.
Page 3 of 5 Pages
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Item 5. Interest in Securities of the Issuer
Item 5 is amended as follows:
In addition to the 836,500 shares of Common Stock noted above, Bull Run
owns the Warrant to purchase 925,804 shares of Common Stock, subject to
adjustment. Bull Run disclaims beneficial ownership of the shares of Common
Stock issuable upon exercise of the Warrant because the Warrant is not
exercisable until the price of the last reported trade of Common Stock on the
NASDAQ Stock Market is at least $16.50 for twenty (20) consecutive trading days.
Item 7. Material to be Filed as Exhibits
1. Second Amendment Of Amended and Restated Loan Agreement made
as of March 22, 1999 by and between Bull Run and NationsBank,
N.A.
2. Fourth Term Loan Note of March 22, 1999 made by Bull Run in
the original principal amount of $675,754.
3. Amendment Number One to Standstill Agreement, dated April 23,
1999, between the Company and Bull Run.
Page 4 of 5 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 3, 1999
BULL RUN CORPORATION
/s/ Frederick J. Erickson
-------------------------------------
Name: Frederick J. Erickson
Title: Vice President - Finance
Page 5 of 5 Pages
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SECOND AMENDMENT OF AMENDED AND RESTATED LOAN AGREEMENT
THIS AMENDMENT is made as of this 22nd day of March, 1999, by and
between BULL RUN CORPORATION, a Georgia corporation ("Borrower"), and
NATIONSBANK, N.A. ("Lender").
RECITALS
WHEREAS, Lender and Borrower are parties to that certain Amended and
Restated Loan Agreement, dated as of March 20, 1998 (as amended, supplemented or
otherwise modified from time to time, 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; and
WHEREAS, Borrower has requested and Lender has agreed to provide an
additional term loan (the "Fourth Term Loan") to finance the acquisition of
additional shares of common stock of Rawlings, a Delaware corporation
("Rawlings"), and Lender and Borrower desire to modify the Loan Agreement in
order to provide for the Fourth 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:
1. Amendments of Loan Agreement. Subject to the fulfillment of the
conditions precedent to the effectiveness of this Amendment which are set forth
below, the Loan Agreement shall be amended as follows:
(a) Section 1.1 of the Loan Agreement is hereby amended by
adding to Section 1.1 the following new definitions in the appropriate
alphabetical order:
"Borrower Guaranty" shall mean any guaranty of any
obligation of Datasouth or any other Subsidiary of Borrower
executed by Borrower in favor of Lender.
"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 3.2B
hereof.
"Fourth Term Loan Facility Expiration Date" shall
mean April 30, 1999 (as such date may be extended,
accelerated or amended from time to time pursuant to this
Agreement).
"Fourth Term Loan Maturity Date" shall mean August
23, 1999.
<PAGE> 2
"Fourth Term Loan Maximum Availability" shall mean
$675,754.
"Fourth Term Loan Note" shall mean the Fourth Term
Loan Note 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 Loans or the Fourth Term Loan Notes.
"Second Amendment" shall mean that certain Second
Amendment of Loan Agreement dated as of March 22, 1999, by
and between Borrower and Lender.
(b) Section 1.1 of the Loan Agreement is hereby further
amended by deleting from Section 1.1 the terms "Obligations," "Term
Loan Facilities," "Term Loan Notes," "Term Loans" and "Third Term Loan
Facility Expiration Date" and by substituting in lieu thereof the
following new definitions of such terms:
"Obligations" shall mean, collectively, all amounts
now or hereafter owing to Lender by Borrower pursuant to the
terms of or as a result of this Agreement, any other Credit
Document or any Borrower Guaranty, including without
limitation, the unpaid principal balance of any and all Loans
and all interest, fees, expenses and other charges relating
thereto or accruing thereon, as well as any and all other
indebtedness, liabilities, and obligations of Borrower,
whether direct or indirect, absolute or contingent, or
liquidated or unliquidated, which may be now existing or may
hereafter arise under or as a result of any Borrower Guaranty
or any of the Credit Documents (including, without
limitation, obligations of Borrower under Interest Rate
Contracts with Lender), and together with any and all
renewals, extensions, modifications or refinancings of any 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 Loan Note.
"Term Loans" shall mean, collectively, the First
Term Loan, the Second Term Loan, the Third Term Loan and the
Fourth Term Loan.
"Third Term Loan Facility Expiration Date" shall mean
March 23, 1999.
2
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(c) The Loan Agreement is hereby further amended by adding
the following new Section 3.2B after the existing Section 3.2A and
before the existing Section 3.3:
"Section 3.2B. Fourth Term Loan Facility.
(a) Subject to the terms and conditions of this
Agreement, including, without limitation, the conditions
precedent set forth in Section 5.3 hereof, 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 the Fourth Term Loan Maximum
Availability. The Fourth Term Loan Facility may be disbursed
in one or more advances but the Lender's commitment under the
Fourth Term Loan Facility shall be reduced by each advance
thereunder and any sums advanced under the Fourth Term Loan
Facility may not be repaid and then re-borrowed thereunder.
(b) The proceeds of the Fourth Term Loan shall be
used to purchase shares of common stock of Rawlings."
(d) The Loan Agreement is hereby further amended by adding a
new Section 3.4(b-2) immediately following the existing Section
3.4(b-1):
"(b-2) The Borrower's obligation to pay the Lender
the principal of and interest on the Fourth Term
Loan shall be evidenced by the records of the Lender
(subject to Section 4.5 hereof) and by the Fourth
Term Loan Note. The principal balance of the Fourth
Term Loan shall be payable on the Fourth Term Loan
Maturity Date in an amount equal to the entire
remaining unpaid balance of the Fourth Term Loan."
(e) The Loan Agreement is hereby further amended by deleting
Section 3.3(a) in its entirety and by substituting in lieu thereof,
the following new Section 3.3(a):
"(a) The unpaid principal balance of each of the
Term Loans shall bear interest from time to time at a rate
per annum equal to the Prime Rate plus the Applicable Term
Loan Margin therefor as then in effect; provided, however,
that Borrower may, by written notice (or by telephonic notice
promptly confirmed in writing) delivered to the Lender not
later than 10:00 a.m. (Atlanta time) on the second Business
day prior to any Interest Period designated by the Borrower
in such notice, direct that interest accrue on the unpaid
principal balance of any Term Loan other than the Third Term
Loan and the Fourth Term Loan (or any portion of any Term
Loan (other than the Third Term Loan and the Fourth Term
Loan) which when added to all other LIBOR Advances then
outstanding under any of the Loans and which have the same
Interest Period totals an amount of not less than $100,000 or
any greater integral multiple thereof) outstanding from time
to time during such Interest Period at a rate per annum equal
to the sum of the Adjusted LIBOR for such Interest Period
plus the Applicable Term Loan Margin therefor as
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then in effect; provided, further, however, that (i) upon the
occurrence and during the continuation of any Event of
Default under Section 9.1(i), (ii) or (iii) hereof, the
Lender may, upon notice to the Borrower, suspend Borrower's
right to use the aforesaid Adjusted LIBOR option, (ii)
Borrower may not have more than six (6) Adjusted LIBOR-based
interest rates in effect under this Section at any one time,
and (iii) the interest rate applicable to the Term Loans
shall be subject to adjustment as provided in paragraph (b)
below."
(f) The Loan Agreement is hereby further amended by deleting
Sections 4.4(a) and 4.4(b) in their entireties and by substituting in
lieu thereof the following new Sections 4.4(a) and 4.4(b):
"(a) The Obligations shall be secured by (i) the
Borrower's first priority and perfected pledge to
the Lender of (A) one hundred percent of the
outstanding shares of capital stock of Datasouth,
(B) 51.5 shares of common stock of Capital Sports
Properties, Inc., (C) the Host Shares (other than
4,682 shares of common stock of Host Communications
which secure the Second Term Loan Obligations and
the Fourth Term Loan Obligations), and (D) the Total
Sports Shares (other than 351,815 shares of Series C
Convertible Preferred Stock of Total Sports which
secure the Second Term Loan Obligations and the
Fourth Term Loan Obligations), all pursuant to the
Borrower Pledge Agreement, and (ii) 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. The Obligations (other than the Third
Term Loan Obligations) shall also be secured by
Datasouth's first priority and perfected pledge to
the Lender of 457,944 shares of Class A Common Stock
of Gray pursuant to the Subsidiary Pledge Agreement.
(b) The Second Term Loan Obligations and the Fourth
Term Loan Obligations shall be secured by (i)
Datasouth's first-priority and perfected pledge to
the Lender 1,366,941 shares of Class A Common Stock
of Gray and 11,750 shares of Class B Common Stock of
Gray pursuant to the Purpose Credit Subsidiary
Pledge Agreement and (ii) the Borrower's
first-priority and perfected pledge to the Lender of
1,000 shares of Series A Preferred Stock of Gray,
175 shares of Series B Preferred Stock of Gray, the
Warrants, the Rawlings Warrant, the Rawlings Shares,
4,682 shares of common stock of Host Communications
and 351,815 shares of Series C Convertible Preferred
Stock of Total Sports, all pursuant to the Purpose
Credit 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 Amendment or any of the other
Supplemental Credit Documents (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
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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
Amendment, 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 Amendment; and (b) each of the Borrower, Datasouth,
the Partnership and the Purchaser 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 Amendment,
the other documents referred to herein, and the transactions contemplated hereby
and thereby.
5. Conditions Precedent to Effectiveness of this Amendment. The
effectiveness of this Amendment 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 Amendment, a Fourth Term Loan Note, the Second
Amendment of Borrower Pledge Agreement, the First Amendment of Purpose
Credit Borrower Stock Pledge Agreement, the Second Amendment of
Subsidiary Stock Pledge Agreement, and the Second Amendment of Purpose
Credit Subsidiary Stock Pledge Agreement;
(b) Lender shall have received stock certificates evidencing
all Rawlings Shares purchased with the proceeds of the Fourth Term
Loan, together with undated blank stock transfer powers for the same
duly executed by the appropriate Credit Parties;
(c) Lender shall have received a duly executed Datasouth
Reaffirmation and Consent to Second Amendment of Loan Agreement from
Datasouth and a duly executed Partnership Reaffirmation and Consent to
Second Amendment of Loan Agreement from the Partnership; and
(d) Lender shall have received a duly executed and completed
Federal Reserve Form U-1 relating to the Second Term Loan and Fourth
Term Loan.
6. Reference to and Effect on the Credit Documents. Upon the
effectiveness of this Amendment, each reference in the Loan Agreement to "this
Agreement," "hereunder,"
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"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.
7. Counterparts. This Amendment 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.
8. Governing Law. This Amendment 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.
6
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year specified at the beginning
hereof.
BORROWER:
BULL RUN CORPORATION
By: /s/ FREDERICK J. ERICKSON
----------------------------------
Name: Frederick J. Erickson
Title: VP-Finance
LENDER:
NATIONSBANK, N.A.
By: /s/ DAVID B. JACKSON
----------------------------------
Name: David B. Jackson
Title: Senior Vice President
<PAGE> 1
FOURTH TERM LOAN NOTE
$675,754 March 22, 1999
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 SIX HUNDRED SEVENTY-FIVE THOUSAND SEVEN
HUNDRED FIFTY-FOUR AND NO/100 DOLLARS ($675,754), 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 (this "Note") have become due and payable pursuant to
the provisions of Section 9.2 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 Amended and Restated Loan Agreement dated as of March 20,
1998, between the Borrower and the Lender (as the same may be 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.
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 law 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.
<PAGE> 2
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: /s/ FREDERICK J. ERICKSON
------------------------------
Name: Frederick J. Erickson
Title: VP-Finance
<PAGE> 1
AMENDMENT NUMBER ONE
TO
STANDSTILL AGREEMENT
THIS AMENDMENT NUMBER ONE TO STANDSTILL AGREEMENT (this "Amendment")
is made and entered into as of April 23, 1999 by and between Rawlings Sporting
Goods Company, Inc., a Delaware corporation (the "Company"), and Bull Run
Corporation, a Georgia corporation ("Bull Run").
BACKGROUND:
The Company and Bull Run are parties to a certain Standstill Agreement
dated as of November 21, 1997 (the "Standstill Agreement"). On April 9, 1999,
Samuel R. Shapiro, Shapiro Capital Management Company, Inc. and The
Kaleidoscope Fund, L.P. (collectively, "Shapiro") filed a Schedule 13G/A with
the Securities and Exchange Commission (the "SEC") reflecting purchases (the
"Additional Shapiro Purchases") of additional shares of the Company's Common
Stock, par value $.01 per share (the "Common Stock"), and disclosing that
Shapiro was the Beneficial Owner of a total of 1,277,400 shares of the Common
Stock, or 16.4% of the outstanding shares of the Common Stock. Based upon
information publicly available to the Company, including reports filed by Bull
Run and Shapiro with the SEC under the federal securities laws, the Company
believes that Bull Run is an Associate of Shapiro, and that, unless the Company
takes action to amend the Rights Agreement, based on the number of shares of
Common Stock Beneficially Owned by Bull Run and Shapiro collectively, that
Shapiro has or will become an Acquiring Person under the Rights Plan and that a
Stock Acquisition Date (as defined in the Rights Plan) has occurred or will
occur.
Both the Company and Bull Run desire to amend the Standstill Agreement
and the Rights Plan to reflect their mutual agreements and understandings with
respect thereto as set forth herein.
AGREEMENT:
IN CONSIDERATION OF the foregoing, the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Definitions. Unless otherwise defined in this Amendment,
capitalized terms shall have the respective meanings ascribed to such terms in
the Standstill Agreement.
2. Amendment of Definition of "Percentage Limitation". The definition
of "Percentage Limitation" contained in Section 1.1 of the Standstill Agreement
is hereby amended by the deletion thereof in its entirety and the substitution
of the following in lieu thereof:
" `Percentage Limitation' shall mean 10.7% of the total
number of shares of the Common Stock outstanding from time to
time, or such lesser percentage as Bull Run may own from time
to time, but in no event less than 10.1% (the computation of
the Percentage Limitation shall not include any shares of the
Common Stock issuable or issued upon the exercise of the
Warrants or issuable upon conversion or exercise of any other
outstanding convertible or exchangeable securities)."
<PAGE> 2
3. Amendment of Section 3.4. Section 3.4 of the Standstill Agreement
is hereby amended by adding the following new clause (c) at the end thereof:
"and (c) for the slate of directors nominated by the Board of
Directors of the Company at the Annual Meeting of
Stockholders to be held in January 2000 or at any adjournment
or postponement thereof"
4. New Article 3A. The Standstill Agreement is hereby amended by
adding the following new Article 3A, which will follow Article 3 and precede
Article 4 of the Standstill Agreement:
ARTICLE 3A
CERTAIN CONTROL TRANSACTIONS
Section 3A.1 Bull Run Participation. In the event
that the Board of Directors of the Company (or any committee
of the Board of Directors of the Company) shall determine (i)
to initiate any process to explore strategic alternatives
available to the Company that could reasonably be expected to
lead to a Control Transaction, including without limitation
by directing the officers, advisors or agents of the Company
(including an investment banking firm) to find or negotiate
with a third party regarding a Control Transaction or (ii) to
enter into an agreement with any Person other than Bull Run
with regard to a Control Transaction, the Company shall
afford Bull Run the opportunity to participate in such
process on the same basis as any other Person.
Section 3A.2 Bull Run Tender. In the event that (i)
the Board of Directors of the Company (or any committee of
the Board of Directors of the Company) shall determine to
engage in, and recommends, a Control Transaction within one
year following the date of this Amendment, (ii) the
provisions of Section 3A.1 have been complied with in respect
of such Control Transaction and (iii) Bull Run has not
indicated a willingness to make a proposal, within a
reasonable time after the Board determination or
recommendation referred to in clause (i) above, that would
result in a higher value to the stockholders of the Company
than the Board recommended Control Transaction, then Bull Run
shall (a) vote all of its shares of Common Stock in favor of
such Control Transaction and (b) sell all of its shares of
Common Stock in such Control Transaction. Nothing in this
Article 3A is intended to or shall provide Bull Run with any
contractual rights of "first refusal" or "last look."
5. Bull Run Willingness to Make Proposal. The Company acknowledges and
agrees that if Bull Run indicates to the Board of Directors of the Company (or
a committee thereof) its willingness to make a proposal to acquire the Company,
the indication of such interest by Bull Run shall not be deemed to be a
violation of the Standstill Agreement, as hereby amended.
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6. Amendment of Rights Plan. Simultaneously with the execution and
delivery of this Amendment, the Company shall enter into an amendment to the
Rights Plan substantially in the form set forth in Exhibit A.
7. Expenses. Bull Run will reimburse the Company for up to $25,000 of
all documented reasonable legal fees and expenses incurred by the Company
solely in connection with the preparation and negotiation of this Amendment and
the actions taken to prevent the Rights (as defined in the Rights Plan) from
being triggered as a result of the Additional Shapiro Purchases, including
without limitation the amendments of the Rights Plan for such purpose.
8. Paul Martin Shares. Bull Run agrees that it will not purchase any
additional shares of Common Stock that Bull Run had a right to acquire from
Paul E. Martin ("Martin"). Bull Run further agrees that on or before July 1,
1999, Bull Run will sell, in the open market, 30,000 shares of the Common
Stock, such number being equal to the number of shares acquired by Bull Run
from Martin.
9. Bull Run Representations. Bull Run hereby represents to the Company
that as of the date of this Amendment, (i) Bull Run Beneficially Owns an
aggregate of 836,500 shares of the Common Stock, which number includes 30,000
shares of the Common Stock purchased from Martin pursuant to the Martin
Agreement and (ii) Robert S. Prather, Jr. Beneficially Owns 3,200 shares of the
Common Stock, which number does not include any of the 836,500 shares of the
Common Stock owned directly by Bull Run and of which he may be deemed to have
indirect Beneficial Ownership by virtue of his relationship with Bull Run and
of which he disclaims Beneficial Ownership.
10. Miscellaneous. This Amendment shall be governed by the laws of the
State of Georgia, without regard to conflict or choice of laws principles. The
invalidity or unenforceability of any provision of this Amendment in any
jurisdiction will not affect the validity or enforceability of the remainder
hereof in that jurisdiction or the validity or enforceability of this
Amendment, including that provision, in any other jurisdiction. To the extent
permitted by Applicable Law, each Party hereby waives any provision of
Applicable Law that renders any provision hereof prohibited or unenforceable in
any respect. If any provision of this Agreement is held to be unenforceable for
any reason, it shall be adjusted rather than voided, if possible, in order to
achieve the intent of the Parties to the extent possible. This Amendment may be
executed in one or more counterparts, each of which when so executed and
delivered will be deemed an original but all of which will constitute one and
the same Amendment. Except as amended hereby, all of the terms and provisions
of the Standstill Agreement shall remain in full force and effect.
[Signatures On Following Page]
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IN WITNESS WHEREOF, the Company and Bull Run have caused their
respective duly authorized officers to execute this Amendment as of the day and
year first above written.
RAWLINGS SPORTING GOODS COMPANY, INC.
By: /s/ Stephen M. O'Hara
-------------------------------------------------
Name: Stephen M. O'Hara
Title: Chairman of the Board and
Chief Executive Officer
BULL RUN CORPORATION
By: /s/ Robert S. Prather, Jr.
-------------------------------------------------
Name: Robert S. Prather, Jr.
Title: President and Chief Executive Officer
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EXHIBIT A
AMENDMENT TO RIGHTS AGREEMENT
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THIRD AMENDMENT TO RIGHTS AGREEMENT
This Third Amendment to Rights Agreement (the "Amendment") is entered
into as of April 23, 1999, by and between Rawlings Sporting Goods Company,
Inc., a Delaware corporation (the "Company"), and ChaseMellon Shareholder
Services, L.L.C. (the "Rights Agent").
WITNESSETH:
WHEREAS, the Company and the Rights Agent are parties to that certain
Rights Agreement dated July 1, 1994, as amended on November 21, 1997, and April
19, 1999 (the "Agreement");
WHEREAS, the Company desires to amend the Agreement on the terms and
conditions herein set forth and the Company is hereby directing the Rights
Agent to enter into this Amendment in accordance with Section 26 of the
Agreement; and
WHEREAS, the execution and delivery of this Amendment has been duly
authorized by the Board of Directors of the Company.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:
1. Defined Terms. Capitalized terms used herein and not otherwise
defined herein shall have the meanings attributed to such terms in the
Agreement, as amended hereby.
2. Amendments to Agreement.
2.1 Section 1 is amended by adding thereto a new subsection
(s) which shall read as follows:
"Bull Run" shall mean Bull Run Corporation, a
Georgia corporation.
2.2 Section 1 is amended by adding thereto a new subsection
(t) which shall read as follows:
"Shapiro" shall mean Shapiro Capital Management
Company, Inc., Samuel R. Shapiro and The Kaleidoscope Fund,
L.P., individually and collectively.
2.2 A new Section 34 shall be added to the Rights Agreement
which shall read as follows:
Section 34. Exception. Notwithstanding any provision
of this Agreement to the contrary, neither a Distribution
Date, Triggering Event nor a Stock Acquisition Date shall be
deemed to have occurred, neither Bull Run nor Shapiro nor any
of their Affiliates or Associates shall be deemed to have
become an Acquiring Person, and no holder of any Rights shall
be entitled to exercise such Rights under, or be entitled to
any rights pursuant to, any of Sections 3(a), 7(a), 11(a) or
13 of this Agreement, as a result of the purchases of Common
Shares disclosed in the Schedule 13G/A, dated April 9, 1999,
filed by Shapiro with the Securities and Exchange Commission,
but only if and for so long as Bull
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Run has not breached in any material respect, as determined
in good faith by the Board of Directors of the Company, the
terms of its Standstill Agreement with the Company (as the
same may be amended from time to time). Unless and until the
Rights Agent shall have received written notice to the
contrary from the Company, the Rights Agent shall be fully
protected and incur no liability in always assuming that
neither Bull Run nor Shapiro nor any of their Affiliates or
Associates are Acquiring Persons.
3. Reference to and Effect on the Agreement.
3.1 Upon the effectiveness of this Amendment, each reference
in the Agreement to "this Agreement," "hereunder," "hereof," and
"herein" shall mean and be a reference to the Agreement as amended
hereby.
3.2 Except as specifically amended above, all of the terms,
conditions and covenants of the Agreement shall remain unaltered and
in full force and effect and shall be binding upon the parties thereto
in all respects and are hereby ratified and confirmed.
4. Choice of Law. This Amendment shall be construed in accordance with
the internal laws (and not the law of conflicts) of the State of Delaware, but
giving effect to applicable federal laws.
5. Headings. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
6. Counterparts. This Amendment may be executed in one or more
counterparts each of which when so executed and delivered will be deemed an
original but all of which will constitute one and the same Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed as of the day and year first above written.
RAWLINGS SPORTING GOODS
COMPANY, INC.
By:
---------------------------
Name:
Title:
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By:
---------------------------
Name:
Title:
