SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
Date of Report (Date of earliest event reported)
November 21, 1997
RAWLINGS SPORTING GOODS COMPANY, INC.
(Exact name of Registrant as specified in its charter)
Missouri 0-24450 43-1674348
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
Incorporation)
1859 Intertech Drive, Fenton, Missouri 63026
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 349-5000
(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS.
On November 21, 1997, Rawlings Sporting Goods Company, Inc.,
a Delaware corporation (the "Company"), announced that it entered
into a Strategic Marketing Agreement with Host Communications,
Inc. In connection therewith the Company also entered into an
Investment Purchase Agreement with Bull Run Corporation, a
Georgia corporation ("Bull Run"), under which Bull Run purchased
925,804 warrants for $3.07 per warrant. These warrants have a
four year term and enable Bull Run to purchase 925,804 shares of
the Company's common stock at an exercise price of $12.00 per
share but are exercisable only if the Company's common stock
closes at a price per share at or above $16.50 for 20 consecutive
trading days during the four year term.
In addition, Bull Run may purchase up to 10.1 percent of the
outstanding shares of the Company's common stock in the open
market over the next six months, with extensions allowed under
certain circumstances defined in the Investment Purchase
Agreement. After completing the open market purchases, if Bull
Run has not acquired 10.1 percent of the outstanding shares of
common stock, Bull Run may acquire additional warrants
exercisable into a number of shares of common stock sufficient to
cause the total shares acquired upon exercise of all warrants
purchased by Bull Run plus the shares acquired through open
market purchase to equal 20.1 percent, provided that in no event
shall Bull Run be entitled to purchase additional warrants
exercisable into more than 5 percent of the outstanding common
stock.
For a period of five and one-half years after the completion
of the open market purchases, Bull Run shall be subject to a
Standstill Agreement. The Company has also granted Bull Run
certain registration rights pursuant to a Registration Rights
Agreement.
In connection with this transaction, the Company, Boatmen's
Trust Company and ChaseMellon Shareholder Services, Inc. entered
into an Amendment to Rights Agreement which increased the
percentage ownership, which if exceeded would result in a person
being deemed an "Acquiring Person" (as defined in the Rights
Agreement dated July 1, 1994, between the Company and Boatmen's
Trust Company), from 20 percent to 23.1 percent. Such Amendment
also caused the appointment of ChaseMellon Shareholder Services,
Inc. as successor Rights Agent under such Rights Agreement.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(a) and (b) Financial Statements and Pro Forma Financial
Information. None
(c) Exhibits.
4.1 Common Stock Purchase Warrant dated November
21, 1997 issued by the Company to Bull Run
Corporation.
<PAGE>
4.2 Amendment of Rights Agreement, dated November
21, 1997, among the Company, Boatmen's Trust
Company and ChaseMellon Shareholder Services,
Inc.
99.1 Strategic Marketing Agreement, dated November
21, 1997, between the Company and Host
Communications, Inc.
99.2 Investment Purchase Agreement, dated November
21, 1997, between the Company and Bull Run
Corporation.
99.3 Standstill Agreement, dated November 21,
1997, between the Company and Bull Run
Corporation.
99.4 Registration Rights Agreement, dated November
21, 1997, between the Company and Bull Run
Corporation.
99.5 Press Release issued November 21, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, hereunto duly authorized.
RAWLINGS SPORTING GOODS
COMPANY, INC.
Date: November 24, 1997 By: /s/ Paul E. Martin
Paul E. Martin,
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description Page
4.1 Common Stock Purchase Warrant dated November 21,
1997 issued by the Company to Bull Run Corporation.
4.2 Amendment of Rights Agreement dated November 21,
1997 among the Company, Boatmen's Trust Company
and ChaseMellon Shareholder Services, Inc.
99.1 Strategic Marketing Agreement, dated November 21, 1997,
between the Company and Host Communications, Inc.
99.2 Investment Purchase Agreement dated November 21, 1997,
between the Company and Bull Run Corporation.
99.3 Standstill Agreement dated November 21, 1997 between
the Company and Bull Run Corporation.
99.4 Registration Rights Agreement dated November 21, 1997
between the Company and Bull Run Corporation.
99.5 Press Release issued November 21, 1997.
<PAGE>
Exhibit 4.1
NEITHER THIS COMMON STOCK PURCHASE WARRANT, NOR THE SHARES
OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF, HAVE BEEN
REGISTERED FOR OFFER OR SALE UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, THE SECURITIES LAWS OF ANY OTHER STATE, OR ANY OTHER
APPLICABLE SECURITIES LAWS. THIS WARRANT HAS BEEN ISSUED OR
SOLD, AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
HEREOF WILL BE ISSUED OR SOLD, IF AT ALL, IN RELIANCE UPON
EXEMPTIONS CONTAINED IN SUCH LAWS FOR TRANSACTIONS NOT INVOLVING
ANY PUBLIC OFFERING. THIS WARRANT HAS BEEN ACQUIRED, AND THE
SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF WILL BE
ACQUIRED, IF AT ALL, FOR INVESTMENT AND MAY NOT BE SOLD,
TRANSFERRED, HYPOTHECATED, PLEDGED OR DISPOSED OF IN ANY MANNER
EXCEPT IN A TRANSACTION THAT IS EXEMPT FROM REGISTRATION UNDER
SUCH LAWS OR PURSUANT TO AN EFFECTIVE REGISTRATION UNDER SUCH
LAWS.
THESE SECURITIES HAVE BEEN ISSUED OR SOLD IN RELIANCE ON
PARAGRAPH (13) OF CODE SECTION 10-5-9 OF THE "GEORGIA SECURITIES
ACT OF 1973," AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN A
TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT TO AN
EFFECTIVE REGISTRATION UNDER SUCH ACT.
THESE SECURITIES ARE SUBJECT TO A STANDSTILL AGREEMENT DATED
AS OF NOVEMBER 21, 1997, WHICH CONTAINS RESTRICTIONS ON THE
RIGHTS OF THE HOLDER THEREOF. COPIES OF THE STANDSTILL AGREEMENT
ARE ON FILE WITH THE SECRETARY OF THE COMPANY AND WILL BE MAILED
TO A HOLDER WITHOUT CHARGE WITHIN FIVE (5) DAYS AFTER RECEIPT BY
THE COMPANY OF A WRITTEN REQUEST THEREFOR FROM SUCH HOLDER.
RAWLINGS SPORTING GOODS COMPANY, INC.
COMMON STOCK PURCHASE WARRANT
RAWLINGS SPORTING GOODS COMPANY, INC., a Delaware
corporation (the "Company"), hereby certifies that, for value
received, BULL RUN CORPORATION, a Georgia corporation (together
with its successors and permitted assigns, the "Holder"), is
entitled, subject to the terms hereof, to purchase from the
Company upon surrender of this Common Stock Purchase Warrant
(this "Warrant") at any time during the period described in
Section 2 hereof, a number of shares (the "Warrant Shares") equal
to 925,804 (as adjusted from time to time as provided in this
Warrant), at the Warrant Exercise Price (as defined below) per
share.
DEFINITIONS
Section 1. Definitions. The following words and terms
as used in this Warrant shall have the following meanings:
"Affiliate" shall have the meaning set forth in Rule
12b-2 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended.
<PAGE>
"Barrier" means the price of the last reported trade of
the Company's Common Stock on the NASDAQ Stock Market shall be
equal to or greater than $16.50 for twenty (20) consecutive
trading days.
"Business Day" means a day other than a Saturday, a
Sunday, a day on which banking institutions in the State of
Georgia or the State of Missouri are authorized or obligated by
law or required by executive order to be closed, or a day on
which the New York Stock Exchange is closed.
"Close of Business" means the close of business on any
day other than a Saturday, a Sunday, a day on which banking
institutions in the State of Georgia or the State of Missouri are
authorized or obligated by law or required by executive order to
be closed, or a day on which the New York Stock Exchange is
closed.
"Closing Date" means November 21, 1997.
"Common Stock" means the Company's $.01 par value per
share common stock and stock of any other class of the equity of
the Company into which such shares may hereafter have been
changed.
"Company" means Rawlings Sporting Goods Company, Inc.,
a Delaware corporation.
"Conversion Price" means the price per share for which
Common Stock is issuable upon the conversion or exchange of
Convertible Securities, determined by dividing (i) the total
amount, if any, received or receivable by the Company as
consideration for the issuance of such Convertible Securities,
plus the minimum aggregate amount of additional consideration
payable to the Company upon the conversion or exchange of such
Convertible Securities, by (ii)_the total maximum number of
shares of Common Stock issuable upon the conversion or exchange
of all such Convertible Securities.
"Convertible Securities" mean any securities issued by
the Company or an Affiliate of the Company which are convertible
into or exchangeable for, directly or indirectly, shares of
Common Stock.
"Expiration Date" means the fourth anniversary of the
Closing Date.
"Holder" means Bull Run Corporation, a Georgia
corporation, together with its successors and permitted assigns.
"Market Price" of a share of Common Stock on any day
means the average closing price of a share of Common Stock for
the twenty (20) consecutive trading days preceding such day on
the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if not listed
or admitted to trading on any national securities exchange, the
average of the reported bid and asked prices during such twenty
(20) trading day period in the over-the-counter market as
furnished by the National Association of Securities Dealers
automated quotation system, or, if such firm is not then engaged
in the business of reporting such prices, as furnished by any
similar firm then engaged in such business selected by the
Company, or, if there is no such firm, as furnished by any member
of the National Association of Securities Dealers, Inc. selected
by the Company or, if the shares of Common Stock are not publicly
traded, the Market Price for such day shall be the book value of
a share of Common Stock of the Company as disclosed in the last
balance sheet of the Company regularly prepared by the Company.
<PAGE>
"Material Adverse Effect" means a material and adverse
effect (i) on the condition (financial or otherwise), results of
operations, business or properties of the Company and its
Affiliates, taken as a whole, or (ii) on the Company's and its
Affiliates' ability, taken as a whole, to perform their
respective obligations under any of the Company's or its
Affiliates' material agreements or under any other document or
agreement issued in connection herewith to which the Company or
any of its Affiliates is a party or (iii) upon the binding
nature, validity or enforceability of any material agreements.
"NASDAQ" means the electronic inter-dealer quotation
system (the National Association of Securities Dealers Automated
Quotations Systems) operated by NASDAQ,_ Inc.
"Person" means an individual, corporation, limited
liability company, partnership, trust, incorporated or
unincorporated association, joint venture, joint stock company,
government (or any agency or political subdivision thereof) or
other entity of any kind.
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Standstill Agreement" means that certain Standstill
Agreement, dated as of the Closing date, by and between the
Company and the Holder.
"Strike Price" means the price per share for which
Common Stock is issuable upon the exercise of any rights, options
or warrants for the purchase of Common Stock, determined by
dividing (i)_the total amount, if any, received or receivable by
the Company as consideration for the grant of such rights,
options or warrants, plus the minimum aggregate amount of
additional consideration payable to the Company upon the exercise
of such rights, options or warrants, by (ii)_the total maximum
number of shares of Common Stock issuable upon the exercise of
such rights, options or warrants.
"Vote" shall mean, as to any entity, the ability to
cast a vote at a stockholders' or comparable meeting of such
entity with respect to the election of directors or other members
of such entity's governing body.
"Voting Power" means the aggregate number of Votes
represented by all Voting Securities which as of such date Bull
Run or any of its Affiliates has the right to acquire from the
Company pursuant to the Warrants.
"Voting Securities" shall mean the Common Stock and any
other securities of the Company having the right to Vote.
"Warrant Exercise Price" means the consideration
payable by the Holder for each Warrant Share upon exercise of
this Warrant, which initially shall be $12.00 per share.
"Warrant Shares" means the shares of Common Stock
acquired or acquirable upon exercise of this Warrant, any shares
of Common Stock issued as (or issuable upon the conversion or
exercise of any warrant, right or other security that is issued
as) a dividend or other distribution with respect to, or in
exchange for, or in replacement of, such shares of Common Stock,
or any other interest in the Company that has been or may be
acquired upon exercise of this Warrant.
<PAGE>
(b) Other Definitional Provisions.
(i) Except as otherwise specified herein, all
references herein (A) to any Person, including the Company, shall
be deemed to include such Person's successors and assigns and
(B)_to any applicable law defined or referred to herein shall be
deemed references to such applicable law as the same may have
been or may be amended or supplemented from time to time.
(ii) When used in this Agreement, the words
"herein," "hereof" and "hereunder," and words of similar import,
shall refer to this Agreement as a whole and not to any provision
of this Agreement, and the words "Section" and "Exhibit" shall
refer to Sections of and Exhibits to this Agreement,
respectively, unless otherwise specified.
(iii) Whenever the context so requires, the
neuter gender includes the masculine or feminine, and the
singular number includes the plural, and vice versa.
Section 2. Exercise, Exchange and Limitations of
Warrant.
(a) Exercise of Warrant. Subject to the terms and
conditions hereof, this Warrant may be exercised, in whole or in
part, at any time or from time to time during normal business
hours after (i) the Barrier has been met and (ii) the Holder and
its Affiliates beneficially own at least five percent (5%) of the
outstanding Common Stock, and prior to the close of business on
the Expiration Date. The rights represented by this Warrant may
be exercised by the Holder, in whole or from time to time in part
(except that this Warrant shall not be exercisable as to a
fractional share) by (i) delivery of a written notice of such
Holder's election to exercise this Warrant to the Company's
office located at the address set forth in Section 19 hereof,
which notice shall specify the number of Warrant Shares to be
purchased, (ii) payment to the Company of an amount equal to the
Warrant Exercise Price multiplied by the number of Warrant Shares
as to which the Warrant is being exercised, such payment to be
made by wire transfer or by certified or official bank check,
(iii)_surrender of this Warrant, properly endorsed, at the
principal office of the Company (or at such other agency or
office of the Company as the Company may designate by written
notice to the Holder), and (iv) if the Warrant Shares issuable
upon the exercise of the rights represented by this Warrant have
not been registered under the Securities Act, delivery to the
Company by the Holder of a letter in the form of Exhibit A
hereto; provided, however, that if such Warrant Shares are to be
issued in any name other than that of the registered holder of
this Warrant, such issuance shall be deemed a transfer subject to
the provisions and restrictions of Section 18 hereof. In the
event of any exercise of the rights represented by this Warrant,
a certificate or certificates for the Warrant Shares so
purchased, registered in the name of, or as directed by, the
Holder, shall be delivered to, or as directed by, such Holder
within three (3) Business Days after such rights shall have been
so exercised. Unless the rights represented by this Warrant
shall have expired or have been fully exercised, the Company
shall issue a new Warrant identical in all respects to the
Warrant exercised except that it shall represent rights to
purchase the number of Warrant Shares purchasable immediately
prior to such exercise under the Warrant exercised, less the
number of Warrant Shares with respect to which such Warrant was
exercised. The Person in whose name any certificate for Warrant
Shares is issued upon the exercise of this Warrant shall for all
purposes be deemed to have become the holder of record of such
Warrant Shares immediately prior to the close of business on
the date on which the Warrant was surrendered and payment of the
amount due in respect of <PAGE> such exercise and any applicable taxes
was made, irrespective of the date of delivery of such share
certificate, except that, if the date of such surrender and
payment is a date when the stock transfer books of the Company
are properly closed, such person shall be deemed to have become
the holder of such Warrant Shares at the opening of business on
the next succeeding date on which the stock transfer books are
open. If this Warrant is not exercised on or prior to the Close
of Business on the Expiration Date, this Warrant shall become
void and all rights of the Holder hereunder shall cease.
(b) Exceptions to Exercise of Warrant.
Notwithstanding the provisions of Section 2(a) hereof to the
contrary, this Warrant may be exercised, in whole or in part, at
any time or from time to time during normal business hours on or
after the date hereof and prior to the close of business on the
Expiration Date upon the occurrence of any of the following:
(i) and any acquisition of more than fifty percent (50%) of
the Voting Power of the Company by any Person and such
Person's Affiliates, however acquired, including
without limitation, by acquisition of securities,
merger, consolidation, recapitalization or
reorganization of the Company;
(ii) any partial or complete liquidation of the Company;
(iii) any sale or disposition of fifty percent (50%) or more
of the assets of the Company;
(iv) any tender offer for more than twenty percent (20%) of
the Voting Power of any outstanding class of Voting
Securities issued by the Company which has been
approved by a majority of the Company's Board of
Directors or in connection with which the Board of
Directors has redeemed rights under, or amended, the
Company's 1994 Rights Agreement (or any successor
agreement); or
(v) any issuance by the Company of capital stock of the
Company constituting (on a cumulative basis) more than
fifty percent (50%) of the Voting Power of the Company.
(c) Exchange of Warrant. At the option of the Holder,
this Warrant is exchangeable upon the surrender hereof by the
Holder at the principal office or agency of the Company, for new
warrants of like tenor representing in the aggregate the right to
purchase the number of Warrant Shares that may be purchased
hereunder from time to time after giving effect to all the
provisions hereof, each of such new warrants to represent the
right to purchase such number of Warrant Shares as shall be
designated by said Holder at the time of such surrender. This
Warrant so surrendered for exchange shall be canceled by the
Company.
(d) Lost, Stolen, Mutilated or Destroyed Warrant. If
this Warrant is lost, stolen, mutilated or destroyed, on receipt
of an affidavit of Holder containing representations and
indemnities reasonably satisfactory to the Company, the Company
shall issue a new warrant of like denomination and tenor as this
Warrant so lost, stolen, mutilated or destroyed.
(e) Date. The date of this Warrant is the Closing
Date. This Warrant, in all events, shall be wholly void and of
no effect after the close of business on the Expiration Date.
<PAGE>
Section 3. Covenants.
(a) The Company covenants and agrees that all
securities which may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance, be validly
issued, fully paid and nonassessable, free and clear of all
taxes, liens, claims and security interests (other than liens and
security interests created by the Holder). The Company further
covenants and agrees that (i) during the period within which the
rights represented by this Warrant may be exercised, the Company
will at all times have authorized and reserved a sufficient
number of shares of Common Stock to provide for the exercise of
the rights then represented by this Warrant and (ii) it will, at
its expense, use its best efforts to cause such shares to be
listed (subject to issuance or notice of issuance) on NASDAQ
Stock Market or any stock exchanges, if any, on which the Common
Stock may become listed during such period.
Section 4. Adjustment of Warrant Exercise Price Upon
Stock Splits, Dividends, Distributions and Combinations. In case
the Company shall at any time subdivide its outstanding shares of
Common Stock into a greater number of shares or issue a stock
dividend or make a distribution with respect to outstanding
shares of Common Stock or Convertible Securities payable in
Common Stock or in Convertible Securities which are convertible
with no additional consideration into shares of Common Stock, the
Warrant Exercise Price in effect immediately prior to such
subdivision or stock dividend or distribution shall be
proportionately reduced (treating for such purpose any such
shares of Convertible Securities outstanding or payable as being
the number of shares of Common Stock issuable upon their
conversion); and conversely, in case the shares of Common Stock
of the Company shall be combined into a smaller number of shares,
the Warrant Exercise Price in effect immediately prior to such
combination shall be proportionately increased.
Section 5. Reorganization or Reclassification. In
case of any capital reorganization, or of any reclassification of
the capital stock, of the Company (other than a change in par
value or from par value to no par value or from no par value to
par value), or any consolidation or merger of the Company with
another corporation or other entity, or the sale of all or
substantially all of the assets of the Company shall be effected
in a manner by which the holders of Common Stock shall be
entitled (either directly or upon subsequent liquidation) to
securities or assets with respect to or in exchange for Common
Stock, then this Warrant shall, after such capital
reorganization, reclassification of capital stock, merger or sale
of assets, entitle the Holder hereof to purchase the kind and
number of shares of stock or other securities or property of the
Company, or of the corporation resulting from such consolidation
to which the Holder hereof would have been entitled if it had
held the Common Stock issuable upon the exercise hereof
immediately prior to such capital reorganization,
reclassification of capital stock, consolidation, merger or sale
of assets. The Company shall not effect any such capital
reorganization, reclassification of capital stock, consolidation,
merger or sale of assets unless prior to the consummation thereof
the successor corporation (if other than the Company) resulting
therefrom or the corporation purchasing such assets shall, by
written instrument executed and mailed to the Holder hereof at
the last address of such Holder appearing on the books of the
Company, (i)_assume the obligation to deliver to such Holder such
shares of stock, securities or assets as, in accordance with the
foregoing provisions, such Holder may be entitled to purchase,
and (ii)_agree to be bound by all the terms of this Warrant.
Section 6. Anti-Dilution Adjustments.
(a) Issuance of Additional Shares. In case at any
time the Company shall issue or sell any shares of its Common
Stock (excluding <PAGE> shares issued upon the exercise of this Warrant
and excluding shares issued in a public offering) for a
consideration per share less than the Market Price on the date of
such issue or sale, the Warrant Exercise Price shall be reduced
to the price determined by multiplying the Warrant Exercise Price
in effect immediately prior to the time of such issue or sale by
a fraction, the numerator of which shall be the sum of (i)_the
number of shares of Common Stock outstanding immediately prior to
such issue or sale multiplied by the Market Price immediately
prior to such issue or sale plus (ii)_the aggregate consideration
received by the Company upon such issue or sale, and the
denominator of which shall be the product of (iii)_the total
number of shares of Common Stock outstanding immediately after
such issue or sale, multiplied by (iv)_the Market Price
immediately prior to such issue or sale.
(b) Issuance of Rights, Options or Warrants. In case
at any time the Company shall grant (whether directly or by
assumption in a merger or otherwise) any rights (other than the
rights represented by this Warrant), options or warrants to
subscribe for or to purchase shares of Common Stock, whether or
not such rights, options or warrants are immediately exercisable,
and the Strike Price is less than the Market Price as of the date
such rights, options or warrants are granted, then, for purposes
of the adjustment required by Section 6(a), the total maximum
number of shares of Common Stock issuable upon the exercise of
such rights, options or warrants shall be deemed to have been
issued at the Strike Price. Except as otherwise provided in
Section 6(d) below, no adjustments of the Warrant Exercise Price
shall be made upon the actual issuance of the shares of Common
Stock underlying such rights, options or warrants.
(c) Issuance of Convertible Securities. In case at
any time the Company shall issue any Convertible Securities,
whether or not the right to convert or exchange any such
Convertible Securities are immediately exercisable, and the
Conversion Price is less than the Market Price as of the date
such Convertible Securities are issued, then, for purposes of the
adjustment required by Section 6(a), the total maximum number of
shares of Common Stock issuable upon the conversion or exchange
of such Convertible Securities shall be deemed to have been
issued at the Conversion Price. Except as otherwise provided in
Section 6(d) below, no adjustments of the Warrant Exercise Price
shall be made upon the actual issuance of the shares of Common
Stock underlying such Convertible Securities.
(d) Change in Strike Price, Conversion Price or
Conversion Rate. If (i) the Strike Price for any right, option
or warrant for the purchase of Common Stock, (ii) the Conversion
Price of any Convertible Security or (iii) the rate at which any
Convertible Securities are convertible into or exchangeable for
Common Stock changes at any time (other than by reason of
provisions designed to protect against dilution), the Warrant
Exercise Price in effect at the time such event occurs shall be
readjusted to the Warrant Exercise Price which would have been in
effect at such time had such rights, options, warrants or
Convertible Securities still outstanding provided for such
changed Strike Price, Conversion Price or conversion rate, as the
case may be, at the time such rights, options or warrants were
initially granted or such Convertible Securities were initially
issued. Upon the expiration of any such right, option or warrant
or the termination of any such right to convert or exchange such
Convertible Securities, the Warrant Exercise Price then in effect
shall be increased to the Warrant Exercise Price which would have
been in effect at the time of such expiration or termination had
such right, option, warrant or Convertible Security, to the
extent outstanding immediately prior to such expiration or
termination, never been granted or issued, and the Common Stock
issuable thereunder shall no longer be deemed to be outstanding.
<PAGE>
(e) Consideration for Stock. In case any shares of
Common Stock or Convertible Securities or any rights, options or
warrants to purchase Common Stock or Convertible Securities shall
be issued or sold for cash, the consideration received therefor
shall be deemed to be the amount received by the Company
therefor, without deducting any expenses incurred or any
underwriting commissions or concessions paid or allowed by the
Company in connection therewith. In case any shares of Common
Stock or Convertible Securities or any rights, options or
warrants to purchase Common Stock or Convertible Securities shall
be issued or sold in whole or in part for consideration other
than cash, the amount of such consideration shall be deemed to be
the fair value thereof as determined by the Board of Directors of
the Company, without deducting any expenses incurred or any
underwriting commissions or concessions paid or allowed by the
Company in connection therewith. In the event of any
consolidation or merger of the Company in which the Company is
not the surviving corporation or in the event of any sale of all
or substantially all of the assets of the Company for stock or
other securities of any corporation, the Company shall be deemed
to have issued a number of shares of its Common Stock for stock
or securities of the other corporation computed on the basis of
the actual exchange ratio on which the transaction was predicated
and for consideration equal to the fair market value on the date
of such transaction of such stock or securities of the other
corporation as determined by the Board of Directors of the
Company, and if any such calculation results in adjustment of the
Warrant Exercise Price, the determination of the number of shares
of Common Stock issuable upon exercise of this Warrant
immediately prior to such merger, conversion or sale, for
purposes of Section 5 shall be made after giving effect to such
adjustment of the Warrant Exercise Price.
(f) Exceptions. Notwithstanding anything in this
Section 6 to the contrary, the Company shall not be required to
make any adjustment of the Warrant Exercise Price in connection
with the grant of stock options to employees or directors of the
Company or the issuance of shares of Common Stock upon exercise
of stock options pursuant to a stock option plan.
Section 7. Record Date. In case the Company shall
take a record of the holders of its Common Stock for the purpose
of entitling them (i)_to receive a dividend or other distribution
payable in Common Stock or in Convertible Securities, or (ii)_to
subscribe for or purchase Common Stock or Convertible Securities,
then such record date shall be deemed to be the date of the issue
or sale of the shares of Common Stock deemed to have been issued
or sold upon the declaration of such dividend or the making of
such other distribution or the date of the granting of such right
of subscription or purchase, as the case may be.
Section 8. Treasury Shares. The number of shares of
Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company, and
the sale or other disposition of any such shares shall be deemed
an issuance thereof for the purposes of Section 6.
Section 9. Certain Events. If any event occurs
(including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with
equity features) as to which, in the opinion of the majority of
the Board of Directors of the Company, the provisions of
Sections_4, 5 or 6 are not strictly applicable or, if strictly
applicable, would not fairly protect the purchase rights of the
Holder of this Warrant in accordance with the essential intent
and principles of such provisions, then the Board of Directors of
the Company shall make an equitable adjustment in the application
of such provisions, in accordance with such essential intent and
principles, so as to protect such purchase rights.
<PAGE>
Section 10. Notice of Adjustment of Warrant Exercise
Price. Upon any adjustment of the Warrant Exercise Price or in
the occurrence of any event which should result in an adjustment
to the Warrant Exercise Price, the Company shall promptly give
written notice thereof to the Holder of this Warrant, which
notice shall state the Warrant Exercise Price resulting from such
adjustment and the increase or decrease, if any, in the number of
shares purchasable at such price upon the exercise of this
Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
Section 11. Adjustments.
(a) Computation of Adjustments. Upon each computation
of an adjustment in the Warrant Exercise Price, the Warrant
Exercise Price shall be computed to the nearest cent (i.e.,
fractions of .5 of a cent, or greater, shall be rounded to the
highest cent) and the shares which may be purchased upon exercise
of this Warrant shall be calculated to the nearest whole share
(i.e., fractions of one half of a share, or greater, shall be
treated as being a whole share). No such adjustment shall be
made, however, if the change in the Warrant Exercise Price would
be less than $.01 per share, but any such lesser adjustment shall
be made at the time and together with the next subsequent
adjustment which, together with any adjustments carried forward,
shall amount to $.01 per share or more.
(b) Adjustment of Number of Shares. Upon each
adjustment of the Warrant Exercise Price as provided above, the
registered holder of this Warrant shall thereafter be entitled to
purchase, at the Warrant Exercise Price resulting from such
adjustment, the number of shares (calculated to the nearest tenth
of a share) obtained by multiplying the Warrant Exercise Price in
effect immediately prior to such adjustment by the number of
shares purchasable pursuant hereto immediately prior to such
adjustment and dividing the product thereof by the Warrant
Exercise Price after such adjustment.
(c) Certain Prohibited Adjustments. Notwithstanding
anything herein to the contrary, the Company agrees not to enter
into any transaction which would cause an adjustment of the
Warrant Exercise Price to less than the par value of the Common
Stock.
Section 12. Fractional Shares. The Company shall not
be required to issue fractional Warrant Shares upon the exercise
of this Warrant. If the Holder would be entitled upon the
exercise of any rights evidenced hereby to receive a fractional
interest in a Warrant Share, the Company shall, upon such
exercise, pay in lieu of such fractional interest an amount in
cash equal to the value of such fractional interest, calculated
based upon the Market Price as of the date this Warrant is
exercised.
Section 13. Notice of Certain Events. In case at any
time:
(a) the Company shall pay any dividend upon, or make
any distribution in respect of, its Common Stock;
(b) the Company shall offer for subscription pro rata
to the holders of its Common Stock any additional shares of stock
of any class or other rights;
(c) there shall be any capital reorganization, or
reclassification of the capital stock, of the Company, or
consolidation or merger of the Company with, or sale of all or
substantially all of its assets to another corporation or other
entity; or
<PAGE>
(d) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company;
then, in any one or more said cases, the Company shall give
notice to the Holder of the date on which (i) the books of the
Company shall close or a record shall be taken for such dividend,
distribution or subscription rights or (ii) such reorganization,
reclassification, consolidation, merger, sale of assets,
dissolution, liquidation or winding up shall take place, as the
case may be. Such notice shall be given not less than ten (10)
days prior to the record date or the date on which the transfer
books of the Company are to be closed in respect thereto in the
case of an action specified in clause (i) and at least thirty
(30) days prior to the action in question in the case of an
action specified in clause (ii). Notices of regular dividends
provided by the Company in accordance with the requirements of
the NASDAQ Stock Market shall constitute notice to the Holder of
such dividends in accordance with this Section 13.
Section 14. No Change in Warrant Terms on Adjustment.
Irrespective of any adjustment in the Warrant Exercise Price or
the number of shares of Common Stock issuable upon exercise
hereof, this Warrant, whether theretofore or thereafter issued or
reissued, may continue to express the same Warrant Exercise Price
and number of shares as are stated herein and the Warrant
Exercise Price and such number of shares specified herein shall
be deemed to have been so adjusted.
Section 15. Taxes. The Company shall pay any tax or
taxes attributable to the issuance of securities issuable upon
the exercise of this Warrant, unless the certificates for such
securities are to be issued in a name other than that of the
Holder hereof. The Company shall not be required to pay any tax
or taxes levied or assessed with respect to any transfer of this
Warrant or any Warrant Shares.
Section 16. Warrant Holder Not Deemed a Shareholder.
No Holder, as such, of the Warrant shall be entitled to vote or
receive dividends or be deemed a shareholder of the Company for
any purpose, nor shall anything contained in this Warrant be
construed to confer upon the holder hereof, as such, any of the
rights of a shareholder of the Company or any right to vote, give
or withhold consent to any corporate action (whether any
reorganization, issue of stock, reclassification of stock,
consolidation, merger, conveyance or otherwise), receive notice
of meetings, receive dividends or subscription rights, or
otherwise, prior to the issuance of record to the Holder of this
Warrant of the securities which it is then entitled to receive
upon the due exercise of this Warrant.
Section 17. No Limitation on Corporate Action. Except
as otherwise specifically set forth herein, no provisions of this
Warrant and no right or option granted or conferred hereunder
shall in any way limit, affect or abridge the exercise by the
Company of any of its corporate rights or powers to recapitalize,
amend its Certificate of Incorporation, reorganize, consolidate
or merge with or into another corporation, or transfer all or any
part of its property or assets, or the exercise of any other of
its corporate rights and powers.
Section 18. Transfer; Restrictive Legends.
(a) Subject to the provisions of the Standstill
Agreement, this Warrant may not be transferred or assigned to any
Person without the prior written consent of the Company, which
consent shall not be unreasonably withheld, except that Holder
may transfer this Warrant, in whole or in part, without <PAGE> the
Company's consent, to (i) J. Mack Robinson, Robert S. Prather,
Jr., Charles L. Jarvie, James Host, Gray Communications Systems,
Inc., Host Communications, Inc. and Universal Sports America,
Inc. (the "Permitted Assigns") provided that the Permitted
Assigns shall agree to be bound to the Standstill Agreement until
the termination of the Standstill Period (as defined therein) and
(ii) any of its lenders as collateral security. In addition to
the foregoing, the Holder may pledge this Warrant to a commercial
bank that is FDIC insured.
(b) This Warrant is subject to the condition that if
at any time the Board of Directors of the Company determines, in
its reasonable discretion based upon the advice of its securities
counsel, that the registration or qualification of the Warrant
Shares is necessary under any state or federal law as a condition
of or in connection with the issuance and delivery of such
securities, the issuance and delivery of such securities may be
withheld unless and until such registration or qualification
shall have been effected. Upon the request of Holder, the
Company shall promptly supply to such Holder all information
regarding the Company required to be delivered in connection with
a transfer of the Warrant, in whole or in part, and/or any of the
Warrant Shares pursuant to Rule 144 or Rule 144A of the
Securities and Exchange Commission. If a registration statement
is not in effect under the Securities Act or any applicable state
securities laws with respect to the securities, the Board of
Directors may require, as a condition of exercise and as a
condition to the issuance and delivery of any such securities,
that the Holder deliver to the Company a letter in the form of
Exhibit A hereto, with any supplemental changes reasonably
required by the Board of Directors to comply with federal and
state securities laws. The Company may endorse on certificates
representing such securities such legends referring to the
representations and restrictions contained herein and in such
letter, in addition to any other applicable restrictions on
resale as the Company, as it in its reasonable discretion shall
deem appropriate.
Section 19. Notice. All notices, demands and other
communications under the Warrant shall be in writing (which shall
include communications by telex and telecopy) and shall be
delivered (a) in person or by courier or overnight service, (b)
mailed by first class registered or certified mail, postage
prepaid, return receipt requested, by prepaid telex or
telecopier, or by hand, courier or overnight service, and (c) be
given at the following respective addresses and telecopier
numbers and to the attention of the following Persons:
(i) if to the Company, to:
RAWLINGS SPORTING GOODS COMPANY, INC.
1859 Intertech Drive
Fenton, Missouri 63026
Attn: Mr. Paul E. Martin
Telecopier No: (314) 349-3598
with a copy (which shall not constitute notice) to:
STINSON, MAG & FIZZELL
1201 Walnut, Suite 2800
Kansas City, Missouri 64106
Attn: Craig L. Evans, Esquire
Telecopier No.: (816) 691-3495
<PAGE>
(ii) if to the Holder hereof, to:
BULL RUN CORPORATION
4370 Peachtree Road
Atlanta, Georgia 30319
Attn: Mr. Robert S. Prather, Jr.
Telecopier No.: (404) 261-9607
with a copy (which shall not constitute notice) to:
ALSTON & BIRD LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Attn: Stephen A. Opler, Esquire
Telecopier No.: (404) 881-4777
or at such other address or telecopier number or to the attention
of such other person as the party to whom such information
pertains may hereafter specify for the purpose in a notice to the
other specifically captioned "Notice of Change of Address", and
(d) be effective or deemed delivered or furnished (i) if given by
mail, on the third Business Day after such communication is
deposited in the mail, addressed as above provided, (ii) if given
by telecopier, when such communication is transmitted to the
appropriate number determined as above provided in this Section
19 and the appropriate answer back is received or receipt is
otherwise acknowledged, and (iii) if given by hand delivery or
overnight delivery service when left at the address of the
addressee addressed as above provided, except that notices of a
change of address or telecopier number, shall not be deemed
furnished until received.
Section 20. Miscellaneous. This Warrant and any term
hereof may be changed, waived, discharged, or terminated only by
an instrument in writing signed by the party or holder hereof
against whom enforcement of such change, waiver, discharge or
termination is sought. The headings in this Warrant are for
purposes of reference only and shall not limit or otherwise
affect the meaning hereof.
Section 21. Remedies. The Company stipulates that the
remedies at law of the Holder in the event of any default or
threatened default by the Company in the performance of or
compliance with any of the terms of this Warrant are not and will
not be adequate, and that such terms may be specifically enforced
by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any
of the terms hereof or otherwise.
Section 22. Governing Law. This Warrant shall be
governed by the laws of the State of Georgia, without regard to
conflict or choice of laws principles.
[SIGNATURES ON FOLLOWING PAGE]
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to
be executed under seal by its duly authorized officers as of this
_____ day of _______________, 1997.
RAWLINGS SPORTING GOODS COMPANY,
INC.
By:
Name:
Title:
ATTEST:
By: _____________________
Secretary
[CORPORATE SEAL]
BULL RUN CORPORATION
By:
Name:
Title:
ATTEST:
By:________________________
Secretary
[CORPORATE SEAL]
<PAGE>
EXHIBIT A
TO COMMON STOCK PURCHASE WARRANT
Notice of Exercise
[Date]
RAWLINGS SPORTING GOODS COMPANY, INC.
1859 Intertech Drive
Fenton, Missouri 63026
Attn: Mr. Paul Martin
Re: Exercise of Warrant
Pursuant to the provisions of that certain Common Stock
Purchase Warrant (the "Warrant") of RAWLINGS SPORTING GOODS
COMPANY, INC., a Delaware corporation (the "Company"), dated
[________________], BULL RUN CORPORATION, a Georgia corporation
("Bull Run"), hereby represents, warrants, covenants, and agrees
with the Company as follows:
The shares of common stock of the Company being
acquired by Bull Run pursuant to this exercise of the
Warrant (the "Warrant Shares") will be acquired for its own
account without the participation of any other person, with
the intent of holding the Warrant Shares for investment and
without the intent of participating, directly or indirectly,
in a distribution of the Warrant Shares and not with a view
to, or for resale in connection with, any distribution of
the Warrant Shares, nor is Bull Run aware of the existence
of any distribution of the Warrant Shares;
The Warrant Shares were not offered to Bull Run by
means of any form of general or public solicitations or
advertisements, including, but not limited to the following:
(i) Publicly disseminated advertisements or sales
literature, through the mails or otherwise;
(ii) Any advertisement, article, notice, or other
communication published in any newspaper, magazine, or
other similar media, or broadcast over television or
radio; or
(iii) Any seminar or meeting whose attendees have been
invited by any general solicitation or general
advertising;
Bull Run is able to bear the economic risks of the
investment in the Warrant Shares, including the risk of a
complete loss of Bull Run's investment therein;
Bull Run understands and agrees that the Warrant Shares
will be issued and sold to Bull Run in reliance upon an
exemption from, but without registration under any state law
relating to the registration of securities for sale, and
will be issued and sold in reliance on the exemptions from
registration under the Securities Act of 1933, as amended
(the <PAGE> "1933 Act"), provided by Sections 3(b) and/or 4(2)
thereof and the rules and regulations promulgated
thereunder;
The Warrant and the Warrant Shares cannot be offered
for sale, sold or transferred by Bull Run other than
pursuant to: (A) an effective registration under the 1933
Act or in a transaction otherwise in compliance with the
1933 Act and (B) evidence reasonably satisfactory to the
Company of compliance with the applicable securities laws of
other jurisdictions. The Company shall be entitled to rely
upon an opinion of counsel reasonably satisfactory to it
with respect to compliance with the above laws;
Bull Run has such knowledge and experience in financial
and business matters that it is capable of evaluating the
merits and risks of the purchase of the Warrant Shares
hereunder and it is able to bear the economic risk of such
purchase; and
The agreements, representations, warranties, and
covenants made by Bull Run herein extends to and applies to
all of the Warrant Shares. Acceptance by Bull Run of the
certificate representing such Warrant Shares shall
constitute a confirmation by Bull Run that all such
agreements, representations, warranties, and covenants made
herein are true and correct at that time.
Bull Run understands that the certificates representing the
Warrant Shares shall bear a legend referring to the foregoing
covenants, representations and warranties and restrictions on
transfer, and agrees that a legend to that effect may be placed
on any certificate which may be issued to Bull Run as a
substitute for the certificates representing the Warrant Shares.
Very truly yours,
BULL RUN CORPORATION
By:
Its:
<PAGE>
AGREED TO AND ACCEPTED:
RAWLINGS SPORTING GOODS COMPANY, INC.
By:
Title:
Number of Shares
Exercised:
Number of Shares
Remaining: Date:
<PAGE>
Exhibit 4.2
AMENDMENT TO RIGHTS AGREEMENT
This Amendment to Rights Agreement (the "Amendment") is
entered into as of November 21, 1997, by and between Rawlings
Sporting Goods Company, Inc., a Delaware corporation (the
"Company"), ChaseMellon Shareholder Services (the "Successor
Rights Agent"), and Boatmen's Trust Company, a Missouri trust
company (the "Boatmen's").
WITNESSETH:
WHEREAS, the Company and the Boatmen's entered into
that certain Rights Agreement dated July 1, 1994 (the
"Agreement"); and
WHEREAS, the Successor Rights Agent as succeeded to
certain of the operations of Boatmen's; and
WHEREAS, the Company desires to amend the Agreement on
the terms and conditions herein set forth and the Company is
hereby directing Boatmen's and the Successor Rights Agent to
enter into this Amendment in accordance with Section 26 of the
Agreement.
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 The definition of "Rights Agent" in the
introductory paragraph is deleted and a new Section 1(s) is
added, which shall read as follow:
"(s) "Rights Agent" shall mean ChaseMellon Shareholder
Services."
2.1 Section 1(a) is amended by deleting the
reference to "20%" in the third line thereof and replacing
it with "23.1%."
2.2 Section 3(a) is amended by deleting reference
to "20%" in the ninth line thereof and replacing it with
"23.1%."
2.3 Section 11(a)(ii)(B) is amended by deleting
the references to "20%" in the seventh and eighth lines
thereof and replacing them with "23.1%."
3. Appointment of Successor Rights Agent as Rights
Agent. The Company hereby appoints the Successor Rights Agent to
be and act as the Rights Agent in accordance with the <PAGE> terms and
conditions of the Agreement, and Successor Rights Agent hereby
accepts such appointment.
4. Reference to and Effect on the Agreement.
4.1 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.
4.2 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.
5. 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.
6. 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 purposes.
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: /s/ Howard B. Keene
Howard B. Keene, President
BOATMEN'S TRUST COMPANY
By:___________________________
Name:____________________
Title:___________________
<PAGE>
CHASEMELLON SHAREHOLDER
SERVICES
By:___________________________
Name:____________________
Title:___________________
<PAGE>
Exhibit 99.1
STRATEGIC MARKETING AGREEMENT
THIS STRATEGIC MARKETING AGREEMENT (the "Agreement"), dated
as of November 21, 1997, is by and between Rawlings Sporting
Goods Company, Inc., a Delaware corporation ("Rawlings"), and
Host Communications, Inc., a ______________ corporation ("HCI").
W I T N E S S E T H:
WHEREAS, Rawlings is a leading manufacturer and supplier of
branded team sports equipment and apparel, particularly in
baseball, softball, basketball, hockey and football; and
WHEREAS, HCI is a sports marketing company providing
marketing services for the NCAA and numerous universities and has
a majority investment in Universal Sports America, Inc., the
worlds leading "grass roots" sports event company; and
WHEREAS, Rawlings and HCI desire to jointly market and sell
Rawlings' products primarily through alternative channels of
distribution, including corporate promotions, "grass root" events
and international programs;
NOW, THEREFORE, in consideration of the foregoing premises
and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Engagement. Rawlings engages HCI, and HCI agrees to
use its commercially reasonable best efforts, to seek, negotiate
and conclude agreements, both domestically and internationally,
on a nonexclusive basis, regarding corporate marketing,
promotional and/or premium programs of and relating to Rawlings'
products, including, programs involving speciality sporting
events or other activities during the term hereof (as hereinafter
developed by HCI and approved by Rawlings, the "Project(s)").
HCI shall prepare and deliver to Rawlings a written plan of each
proposed Project, setting forth a description of proposed
program, event or activity, estimated costs thereof and the party
responsible therefore, and HCI's proposal as to the process for
selling Rawlings' products (i.e., billing processes, whether HCI
will be reselling or receiving commissions for sales by Rawlings,
and any return policy for inventory purchased by HCI). HCI will
not conclude any such agreement for a Project without first
securing the prior written approval of Rawlings, which approval
shall be in the sole discretion of Rawlings.
2. Responsibilities of the Parties.
(a) Marketing. HCI shall be responsible for
marketing, managing and administering all Projects undertaken
under this Agreement and approved by Rawlings pursuant to Section
1. HCI agrees to assign one (1) or more of its personnel to
coordinate all Projects marketed, sold and/or undertaken by HCI
hereunder, such personnel to be reasonably sufficient to
accomplish HCI's requirements under such Projects. The number
and selection of HCI personnel assigned by HCI with respect to
such Projects will be determined by HCI in its discretion.
<PAGE>
(b) Projects and Other Activities. In connection with
HCI's efforts for any Projects, both HCI and Rawlings pledge
their commercially reasonable best efforts to: (i) meet and
confer with sufficient regularity to permit the development and
execution of all Projects in process; and (ii) fully cooperate in
the parties' efforts to market, promote, sell and fulfill
Projects. Each party acknowledges that the other party and its
affiliated companies do and may provide similar services to
athletic conferences, colleges, universities and other entities
and may engage in other related businesses and ventures without
limitation, which shall not constitute a violation of either
party's obligations hereunder.
3. Use of Rawlings' Brands and Trademarks. It is
anticipated that, from time to time, Rawlings will permit HCI to
use one or more of the Brands on products sold by Rawlings to HCI
in connection with the Projects. HCI shall have no right under
this Agreement, implied or otherwise, to use the Brands, and
shall only be entitled to use the Brands if such use is
authorized in writing by Rawlings and HCI use of the Brands shall
be limited to the purposes set forth in such writing. Rawlings
may, from time to time, provide HCI with written guidelines
regarding the use of the Brands, and HCI hereby agrees to comply
in all respects to such guidelines upon HCI's receipt thereof.
HCI agrees that unless otherwise agreed in writing by the
parties, HCI will submit to Rawlings for approval, which approval
shall be in the sole discretion of Rawlings, all promotional
materials, advertising, print copy, supplies or other materials
or information used by HCI in connection with the Projects which
depict the Brands thereon or therein. In no event shall any
implied license to use or reproduce the Brands be created by this
Agreement, any approval of a Project by Rawlings or by any course
of dealings between Rawlings and HCI. For purposes of this
Agreement, the term "Brands" shall mean all registered or
unregistered trademarks or service marks, trade names, fictional
business names, logos and designs.
4. Payments and Terms of Product Sales. The terms of the
sales of Rawlings' products pursuant to the Projects shall be
subject to the agreement of the parties. If HCI shall purchase
for resale Rawlings' products, HCI shall be responsible for all
collections and billing risk related to such sales, and HCI's
ability to return any unsold inventory of Rawlings' products
shall be subject to a return policy for the applicable Project,
which policy shall be agreed to by the parties.
5. Term. This Agreement shall be effective from the date
hereof and continue for a period of five years thereafter, or
such longer period as may be agreed to by the parties in writing,
subject to earlier termination pursuant to Section 6 of this
Agreement.
6. Events of Termination. The term of this Agreement is
subject to early termination upon the occurrence of any of the
following events: (i) the written agreement of the parties hereto
to terminate this Agreement; (ii) by notice of termination by one
party to the other party after the filing by or against such
other party in any forum or jurisdiction of any petition,
voluntary or involuntary, for relief in bankruptcy for either
adjudication of bankruptcy or for a reorganization or
rearrangement under the bankruptcy laws, or an action for
receivership of any nature or for an <PAGE> assignment for the benefit
of such other party's creditors; or (iii) by notice of
termination by one party to the other party after the dissolution
of such other party for any reason, where such other party shall
not continue, without interrupting, its business affairs; or (iv)
the occurrence of any material default by either party which
shall remain uncured for more than thirty (30) days after written
notice of such default has been provided to the defaulting party
by the non-defaulting party. Notwithstanding any such
termination event, each party reserves all other rights and
remedies hereunder or otherwise permitted by law that have
accrued at or prior to the date of termination.
7. Indemnification. Each of the parties hereby agrees to
indemnify and hold the other party (and its respective officers,
directors, employees, agents, members, and affiliates) harmless
from and against any and all costs, damages, claims, and expenses
(including, without limitation, all attorneys' fees and expenses)
incurred by the indemnitee as a result of or relating to a breach
of any provision of this Agreement or any negligent act, willful
misconduct or omission by the indemnitor in the performance of
its obligations or services pursuant to this Agreement or any
Project. The obligations to provide indemnification under this
Section 7 shall survive the expiration of the term of this
Agreement or the earlier termination of this Agreement.
8. Relationship of Parties. This Agreement does not
create a partnership or joint venture between the parties.
Subject to the terms and conditions of this Agreement, HCI shall
perform its obligations hereunder as an independent contractor
and all employees of HCI shall remain employees of HCI and are at
all times under HCI's control and direction. Employees of
Rawlings shall remain at all times employees of Rawlings and
under Rawlings' control and direction.
9. Remedies. Each of the parties hereto recognizes the
uniqueness of this Agreement. Accordingly, if any of the parties
hereto breach the terms and conditions hereof, then the other
party or parties shall be entitled to institute equitable
proceedings in any court of competent jurisdiction to preserve
the status quo and to prevent irreparable harm.
10. Binding Effect and Assignability. All covenants and
agreements contained in this Agreement by or on behalf of the
parties hereto, shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed or not;
provided, however, that this Agreement or any rights granted
hereunder may not be assigned, voluntarily or involuntarily, by
either party without the prior written consent of the other
party.
11. Partial Enforceability. If any provision of this
Agreement or the application of any such provision to any person
or circumstance shall be held invalid, the remainder of this
Agreement or the application of such provision to persons or
circumstances, other than those to which it is held invalid,
shall not be effected thereby.
12. Interpretation. Provisions of this Agreement shall be
construed in accordance with the laws of the State of Missouri.
No provision of this Agreement shall be construed against or
<PAGE>
interpreted to the disadvantage of any party by any court or
governmental or judicial authority by reason of any party having
or been deemed to have drafted, structured or dictated such
provision.
13. Notice. All notices, claims, requests, demands or
other communications hereunder shall be in writing (which shall
include communications by telex and telecopy) and shall be
delivered (a) in person or by courier or overnight service, (b)
mailed by first class registered or certified mail, postage
prepaid, return receipt requested, by prepaid telex or
telecopier, or by hand, courier or overnight service, and (c) be
given at the following respective addresses and telecopier
numbers and to the attention of the following persons:
If to Rawlings, to:
RAWLINGS SPORTING GOODS COMPANY, INC.
1859 Intertech Drive
Fenton, Missouri 63026
Attn: Mr. Paul E. Martin
Telecopier No.: (314) 349-3598
with a copy (which shall not constitute notice) to:
STINSON, MAG & FIZZELL, P.C.
1201 Walnut Street, Suite 2800
Kansas City, Missouri 64106
Attn: Craig L. Evans, Esq.
Telecopier No.: (816) 691-3495
If to HCI, to:
HOST COMMUNICATIONS, INC.
546 East Main Street
P.O. Box 3071
Lexington, Kentucky 40596-3071
Telecopier No.: (606) 226-4299
<PAGE>
with a copy (which shall not constitute notice) to:
_______________________________
_______________________________
_______________________________
Attn:__________________________
Telecopier No.: (____)_________
or at such other address or telecopier number or to the attention
of such other person as the party to whom such information
pertains may hereafter specify for the purpose in a notice to the
other specifically captioned "Notice of Change of Address," and
be effective or deemed delivered or furnished (i) if given by
mail, on the third day after such communication is deposited in
the mail, addressed as above provided, (ii) if given by
telecopier, when such communication is transmitted to the
appropriate number determined as above provided in this Section
13 and the appropriate answer back is received or receipt is
otherwise acknowledged, and (iii) if given by hand delivery or
overnight delivery service when left at the address of the
addressee addressed as above provided, except that notices of
change of address or telecopier number, shall not be deemed
furnished until received.
14. Entire Agreement; Modification. This Agreement
constitutes the entire agreement of the parties with respect to
the subject matter hereof. No amendment or modification of this
Agreement shall be valid unless in writing signed by the parties
hereto. Though encompassing distinct elements, this Agreement is
intended to operate as a single contract.
15. Confidential Information. No party hereto may use any
confidential information received by it pursuant to this
Agreement or in connection with any Project except to the extent
reasonably related to the exercise of such party's rights and
obligations under this Agreement or such Project, unless (i) such
information has been made available to the public generally
(other than by such recipient in violation of this Section 15),
or (ii) such recipient is required to disclose such information
by a governmental body or regulatory agency or by law in
connection with a transaction that is not otherwise prohibited
hereby and the other party is given a reasonable opportunity to
obtain injunctive relief or a protective order to maintain the
confidentiality of such information.
16. Waiver, Amendment, etc. This Agreement may not be
amended or supplemented, and no waivers of or consents to
departures from the provisions hereof shall be effective, unless
set forth in a writing signed by, and delivered to, all the
parties hereto. No failure or delay of any party hereto in
exercising any power or right under this Agreement will operate
as a waiver thereof, nor will any single or partial exercise of
any right or power, or any abandonment or discontinuance of steps
to enforce such right or power, preclude any other or further
exercise thereof or the exercise of any other right or power.
<PAGE>
17. Counterparts. This Agreement 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 on
and the same Agreement.
IN WITNESS WHEREOF, Rawlings and HCI have caused their
respective duly authorized officers to execute this Agreement as
of the day and year first above written.
RAWLINGS SPORTING GOODS
COMPANY, INC.
By:_________________________
Name:
Title:
HOST COMMUNICATIONS, INC.
By:___________________________
Name:
Title:
<PAGE>
Exhibit 99.2
INVESTMENT PURCHASE AGREEMENT
By And Between
RAWLINGS SPORTING GOODS COMPANY, INC.
And
BULL RUN CORPORATION
Dated As of November 21, 1997
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I PURCHASE OF COMMON STOCK AND WARRANTS. . . . . . . . .1
Section 1.01 Purchases of Common Stock in the Open Market1
Section 1.02 Tolling of Open Market Purchase Period . . .2
Section 1.03 Purchase of First Tranche Warrant. . . . . .2
Section 1.04 Purchase of Additional Warrant . . . . . . .2
ARTICLE II CLOSING; PAYMENT OF PURCHASE PRICE . . . . . . . . . 3
Section 2.01 Closing. . . . . . . . . . . . . . . . . . .3
Section 2.02 Payment of Purchase Price. . . . . . . . . .3
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . 3
Section 3.01 Existence; Power . . . . . . . . . . . . . .3
Section 3.02 Authority. . . . . . . . . . . . . . . . . .3
Section 3.03 Capitalization . . . . . . . . . . . . . . .4
Section 3.04 No Conflict. . . . . . . . . . . . . . . . .4
Section 3.05 Valid Issue. . . . . . . . . . . . . . . . .4
Section 3.06 Reports and Financial Statements . . . . . .4
Section 3.07 Absence of Certain Changes or Events . . . .5
Section 3.08 Offering of Shares . . . . . . . . . . . . .5
Section 3.09 DGCL Section 203 . . . . . . . . . . . . . .5
Section 3.10 Governmental and Other Consents. . . . . . .5
Section 3.11 Truth and Accuracy of Information. . . . . .5
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. . . 6
Section 4.01 Existence; Power . . . . . . . . . . . . . .6
Section 4.02 Authority. . . . . . . . . . . . . . . . . .6
Section 4.03 No Conflict. . . . . . . . . . . . . . . . .6
Section 4.04 Reports and Financial Statements . . . . . .6
Section 4.05 Absence of Certain Changes or Events . . . .7
Section 4.06 Governmental and Other Consents. . . . . . .7
Section 4.07 Investment . . . . . . . . . . . . . . . . .7
Section 4.08 Accredited Investor. . . . . . . . . . . . .7
Section 4.09 Registration of Warrants and Warrant Shares.7
Section 4.10 Truth and Accuracy of Information. . . . . .7
<PAGE>
ARTICLE V
COVENANTS OF THE COMPANY AND THE PURCHASER . . . . . . . .7
Section 5.01 Standstill Agreement . . . . . . . . . . . .8
Section 5.02 Registration Rights Agreement. . . . . . . .8
Section 5.03 1994 Rights Agreement. . . . . . . . . . . .8
Section 5.04 Reservation of Shares. . . . . . . . . . . .8
Section 5.05 Satisfaction of Closing Conditions . . . . .8
Section 5.06 Further Assurances . . . . . . . . . . . . .8
Section 5.07 Cooperation. . . . . . . . . . . . . . . . .8
Section 5.08 Antitrust Filings. . . . . . . . . . . . . .8
Section 5.09 Confidentiality. . . . . . . . . . . . . . .9
Section 5.10 Public Announcements . . . . . . . . . . . .9
Section 5.11 Covenants Regarding Stock. . . . . . . . . .9
ARTICLE VI CONDITIONS TO THE PURCHASER'S OBLIGATIONS . . . . . 10
Section 6.01 Representations and Warranties . . . . . . 10
Section 6.02 Agreements, Covenants and Conditions . . . 10
Section 6.03 Governmental Approvals and Injunctions . . 10
Section 6.04 Due Diligence Review . . . . . . . . . . . 10
Section 6.05 Purchase of Shares Not Enjoined. . . . . . 10
ARTICLE VII CONDITIONS TO THE COMPANY'S OBLIGATIONS . . . . . 11
Section 7.01 Representations and Warranties . . . . . . 11
Section 7.02 Agreements, Covenants and Conditions . . . 11
Section 7.03 Governmental Approvals and Injunctions . . 11
Section 7.04 Due Diligence Review . . . . . . . . . . . 11
Section 7.05 Sale of Shares Not Enjoined. . . . . . . . 11
Section 7.06 Host Marketing Agreement . . . . . . . . . 11
ARTICLE VIII TERMINATION. . . . . . . . . . . . . . . . . . . 11
Section 8.01 Termination. . . . . . . . . . . . . . . . 11
Section 8.02 Notice of Termination. . . . . . . . . . . 12
Section 8.03 Effect of Termination. . . . . . . . . . . 12
ARTICLE IX DEFINITIONS. . . . . . . . . . . . . . . . . . . . 12
<PAGE>
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 16
Section 10.01 Brokers and Finders. . . . . . . . . . . . 16
Section 10.02 Notice . . . . . . . . . . . . . . . . . . 16
Section 10.03 Modifications, Amendments and Waivers. . . 17
Section 10.04 Captions and References. . . . . . . . . . 17
Section 10.05 Pronouns . . . . . . . . . . . . . . . . . 17
Section 10.06 Gender . . . . . . . . . . . . . . . . . . 18
Section 10.07 Remedies . . . . . . . . . . . . . . . . . 18
Section 10.08 Governing Law. . . . . . . . . . . . . . . 18
Section 10.09 Time of The Essence. . . . . . . . . . . . 18
Section 10.10 Entire Agreement . . . . . . . . . . . . . 18
Section 10.11 Successors and Assigns . . . . . . . . . . 18
Section 10.12 Severability . . . . . . . . . . . . . . . 18
Section 10.13 Counterparts . . . . . . . . . . . . . . . 19
Section 10.14 Interpretations. . . . . . . . . . . . . . 19
<PAGE>
SCHEDULE INDEX
Schedule 3.07 -- Certain Changes and Events
Schedule 3.10 -- Governmental and Other Consents
<PAGE>
EXHIBIT INDEX
Exhibit 1.03 -- Form of Common Stock Purchase Warrant
Exhibit 5.01 -- Form of Standstill Agreement
Exhibit 5.02 -- Form of Registration Rights Agreement
Exhibit 5.12 -- Form of Press Release
<PAGE>
INVESTMENT PURCHASE AGREEMENT
This INVESTMENT PURCHASE AGREEMENT (this "Agreement") is
entered into as of this 21st day of November 1997, by and between
RAWLINGS SPORTING GOODS COMPANY,_INC., a Delaware corporation
(the "Company") and BULL RUN CORPORATION, a Georgia corporation
(the "Purchaser").
BACKGROUND:
The Company and Bull Run desire for Bull Run to make a
substantial investment in the Company. Accordingly, pursuant to
this Agreement and subject to the terms and conditions set forth
in this Agreement, (i) during the six months beginning on the
Closing Date (as herein defined), Bull Run will acquire up to
10.1% of the outstanding shares of the Company's Common Stock (as
herein defined) through open market purchases; (ii)_the Company
will sell to Bull Run warrants exercisable into a number of
shares equal to 10.0% of the Common Stock of the Company
outstanding on the Closing Date; (iii) the Company will sell to
Bull Run additional warrants to purchase up to the lesser of (A)
five percent (5%) of the outstanding shares of the Company's
Common Stock and (B) the difference between 10% of the
outstanding shares of the Company's Common Stock and the
percentage of outstanding shares of the Company's Common Stock
owned by Bull Run on the Acquisition Completion Date (as herein
defined); (iv) the Company and Bull Run will enter into a
standstill agreement, and (v) the Company and Bull Run will enter
into a registration rights agreement. Certain capitalized terms
used in this Agreement are defined in Article IX.
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 Company and the Purchaser hereby agree as
follows:
ARTICLE I
PURCHASE OF COMMON STOCK AND WARRANTS
Section 1.01 Purchases of Common Stock in the Open Market.
During the six (6) month period beginning on the Closing Date (or
such longer period as provided in Section 1.02), the Purchaser
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"). The Company will take no
action to oppose the Open Market Purchases, provided that nothing
herein 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.
<PAGE>
Section 1.02 Tolling of Open Market Purchase Period. The
six (6) month period during which the Purchaser may make the Open
Market Purchases as provided in Section 1.01 shall be suspended
and tolled during such times as and for as long as:
(a) (i) any Purchaser Nominee or any Affiliate or
Associate of Purchaser 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 Purchaser Nominee or any Affiliate or
Associate of Purchaser 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 of the Company at the direction
of the Company's Board of Directors or legal advisors; or
(c) the Purchaser has informed the Company that the
Purchaser believes that it may have knowledge of material
non-public information relating to the Company and the
Purchaser has received neither (i) reasonably satisfactory
written confirmation from the Company that the information
in question is not material non-public information or (ii)
written confirmation from the Company that such information
has been publicly disclosed in a manner and on terms
reasonably satisfactory to the Purchaser.
Any time that the six (6) month period for the Open Market
Purchases provided in Section 1.01 is suspended and tolled
pursuant to this Section 1.02, the Company shall provide the
Purchaser with written notice of the date of the new Acquisition
Completion Date. Purchaser shall promptly notify the Company of
any disagreement with the calculation of the new Acquisition
Completion Date.
Section 1.03 Purchase of First Tranche Warrant. On the
Closing Date, the Company shall sell and issue to the Purchaser a
Common Stock Purchase Warrant, substantially in the form of
Exhibit 1.03, entitling it to purchase a number of shares of
Common Stock representing ten percent (10%) of the shares of
Common Stock outstanding on the Closing Date, on a fully-diluted
basis as of the Closing Date for a purchase price based on the
Black-Scholes Option Pricing Model. The purchase price for the
First Tranche Warrant shall be paid fifty percent (50%) on the
Closing Date and fifty percent (50%), plus interest from the
Closing Date at the rate of seven percent (7%) per annum, at the
earlier of the date of exercise or the date of expiration of the
First Tranche Warrant. In the event that the First Tranche
Warrant is exercised in part, at the date of each exercise, a
percentage of the remaining portion of the purchase price shall
be paid in an amount equal to (A)(i) the percentage of the First
Tranche Warrant being exercised multiplied by (ii) fifty percent
(50%) of the purchase price plus (B) interest from the Closing
Date at the rate of seven percent (7%) per annum.
Section 1.04 Purchase of Additional Warrant. On the
Acquisition Completion Date or within ten (10) Business Days
thereafter, the Purchaser shall have the option to purchase an
additional warrant (having the same terms as the First Tranche
Warrant) exercisable into a number of Warrant <PAGE> Shares 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 the
Purchaser on the Acquisition Completion Date (which percentage
shall not include any shares which may be acquired or were
acquired upon exercise of the First Tranche Warrant). Purchaser
shall provide the Company with written notice in accordance with
Section 10.02 of its exercise of the option to purchase the
Additional Warrant pursuant to this Section 1.04, which notice
shall be given or mailed no later than the tenth (10th) Business
Day after the Acquisition Completion Date. The purchase price
for the Additional Warrant shall be based on the Black-Scholes
Option Pricing Model.
ARTICLE II
CLOSING; PAYMENT OF PURCHASE PRICE
Section 2.01 Closing. The Closing and, if applicable, the
Second Closing, shall occur on the Closing Date and the Second
Closing Date, respectively, at the offices of Stinson, Mag &
Fizzell; 100 South Fourth Street; St. Louis, Missouri 63102.
Section 2.02 Payment of Purchase Price. The purchase
price for the First Tranche Warrant and, if applicable, the
purchase price for the Additional Warrant shall be made in cash
in immediately available funds by wire transfer to an account
designated in writing by the Company to the Purchaser at least
two (2) Business Days prior to the Closing Date and the Second
Closing Date, respectively.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser
as follows:
Section 3.01 Existence; Power. The Company is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Company has all
requisite corporate power and authority to conduct its Business
as presently conducted by it and to enter into and perform this
Agreement.
Section 3.02 Authority. This Agreement and all other
instruments or documents executed and delivered pursuant hereto,
including without limitation, the Registration Rights Agreement,
the Warrant and the Standstill Agreement, have been duly
authorized by all necessary corporate action on the part of the
Company, including without limitation, all necessary approvals of
the Company's Board of Directors and stockholders, and duly
executed and delivered by the Company and constitute legal, valid
and binding agreements of the Company, enforceable against it in
accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, arrangement, reorganization,
moratorium and other similar laws relating to or affecting
creditors generally, by <PAGE> general equity principles (regardless of
whether such enforceability is considered in a proceeding in
equity or at law) or by an implied covenant of good faith and
fair dealing.
Section 3.03 Capitalization. As of November 10, 1997 the
authorized capital stock of the Company consists of (a)
50,000,000 shares of Common Stock, $0.01 par value per share, of
which 7,731,646 shares were outstanding and (b) 10,000,000 shares
of preferred stock, par value $0.01 per share, none of which
shares of the Preferred Stock are outstanding. All outstanding
shares of capital stock are duly authorized, validly issued,
fully paid and nonassessable, and no class of capital stock is
entitled to preemptive rights. There were outstanding as of
November 10, 1997 no options, warrants or other rights to acquire
capital stock from the Company other than (x) options
representing in the aggregate the right to purchase 600,589
shares of Common Stock, (y) rights under the Company's Employee
Stock Purchase Plan and the Non-Employee Director Plan permitting
the purchase of up to an aggregate of 675,000 shares of Common
Stock and (z) no shares of Preferred Stock convertible into
shares of Common Stock.
Section 3.04 No Conflict. Neither the execution and
delivery nor the performance of this Agreement and all other
instruments or documents executed and delivered pursuant hereto:
(i) conflicts with the Charter Documents of the Company,
(ii)_violates any provision of any law, rule, regulation or
ordinance, or any order, judgment, decree or ruling of any court
or Governmental Authority or any determination of an arbitrator,
or (iii)_results in a breach or violation of any term of, or
constitutes a default (or an event which with the passage of time
or giving of notice or both, would constitute a default) under,
or cause or permit the acceleration of the maturity of or give
rise to any right of termination, cancellation, imposition of
fees or penalties under, any contract, obligation, debt, note,
bond, lease, mortgage, license, indenture or any other agreement
or instrument to which the Company or any of its subsidiaries or
Affiliates is a party or by which the Company, any of its
subsidiaries or Affiliates or any of their respective properties
or assets are or may be bound and that either individually or in
the aggregate are material to the operations, condition
(financial or otherwise), results of operations, Business, or
properties or prospects of the Company and its subsidiaries,
taken as a whole.
Section 3.05 Valid Issue. The issuance of all of the
Warrant Shares has been duly authorized by all necessary
corporate action on the part of the Company (including, without
limitation, all necessary action by the Company's Board of
Directors and stockholders) and, upon issuance and delivery in
accordance with the provisions of this Agreement and the Warrants
and payment therefor as provided herein and therein, shall be
validly issued, fully paid and nonassessable and free from all
taxes, liens, charges and security interests (other than liens
and security interests created by the Purchaser thereof).
Section 3.06 Reports and Financial Statements. The
Company has filed all reports required to be filed with the SEC
since August 31, 1996 (collectively, including all exhibits
thereto, the "SEC Reports"). None of such SEC Reports, as of
their respective dates, contained any untrue statement of a
material fact or omitted to state 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. <PAGE> Each of the financial statements (including the
related notes) included in the SEC Reports presents fairly, in
all material respects, the consolidated financial position and
consolidated results of operations and cash flows of the Company
and its subsidiaries as of the respective dates or for the
respective periods set forth therein, all in conformity with
generally accepted accounting principles consistently applied
during the periods involved, except as otherwise noted therein,
and subject, in the case of the unaudited interim financial
statements, to normal year-end adjustments and any other
adjustments described therein. All of such SEC Reports, as of
their respective dates, complied in all material respects with
the requirements of the Exchange Act.
Section 3.07 Absence of Certain Changes or Events. Except
as disclosed in Schedule 3.07, during the period since August 31,
1997 (the date of the Company's last audited consolidated
financial statements), there has not been any event or
circumstances causing or resulting in, or reasonably likely to
cause or result in, a Material Adverse Effect with respect to the
Company.
Section 3.08 Offering of Shares. Neither the Company,
directly or indirectly, nor any agent on its behalf has offered
or will offer the Warrants or the Warrant Shares or any similar
securities or has solicited or will solicit an offer to acquire
the Warrants or the Warrant Shares or any similar securities from
any Person so as to require registration of the issuance and sale
of the Warrants or the Warrant Shares to be sold to the Purchaser
under the circumstances contemplated by this Agreement under the
provisions of Section 5 of the Securities Act.
Section 3.09 DGCL Section 203. Prior to the Closing Date,
the Board of Directors of the Company approved the Open Market
Purchases, the issuance of the Warrants and the exercise of the
Warrants which transaction may result in the Purchaser becoming
an "interested stockholder" (as defined in Section 203 of the
General Corporation Law of the State of Delaware ("DGCL")).
Section 3.10 Governmental and Other Consents. Except as
disclosed on Schedule 3.10 and except for applicable requirements
under the H-S-R Act, no governmental or other consents,
approvals, authorizations of, or filings, registrations,
qualifications, declarations or designations with, any
Governmental Authority are required on the part of the Company as
a condition to the valid execution, delivery and performance of
this Agreement and the other instruments and documents executed
and delivered in connection herewith by the Company, including
without limitation, the valid issuance and sale of the Warrants
and the Warrant Shares.
Section 3.11 Truth and Accuracy of Information. None of
the documents, instruments and other information furnished to the
Purchaser by the Company contains any untrue statement of a
material fact or omits to state any material fact necessary in
order to make any statements made therein not misleading. No
representation, warranty or statement made by the Company in this
Agreement or any of the instruments or documents executed and
delivered in connection herewith contains or will contain any
untrue statement of a material fact, or omits or will omit to
state a material fact necessary to make any statements made
therein not misleading.
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents, warrants and acknowledges to the
Company as follows:
Section 4.01 Existence; Power. The Purchaser is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Georgia. The Purchaser has all
requisite corporate power and authority to conduct its Business
as presently conducted by it and to enter into and perform this
Agreement.
Section 4.02 Authority. This Agreement and all other
instruments or documents executed and delivered by the Purchaser
pursuant hereto, including without limitation, the Registration
Rights Agreement and the Standstill Agreement, have been duly
authorized by all necessary corporate action on the part of the
Purchaser, including without limitation, all necessary approvals
of the Purchaser's Board of Directors and shareholders, and duly
executed and delivered by the Purchaser and constitute legal,
valid and binding agreements of the Purchaser, enforceable
against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
arrangement, reorganization, moratorium and other similar laws
relating to or affecting creditors generally, by general equity
principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) or by an implied
covenant of good faith and fair dealing.
Section 4.03 No Conflict. Neither the execution and
delivery nor the performance of this Agreement and all other
instruments or documents executed and delivered by the Purchaser
pursuant hereto: (i)_conflicts with the Charter Documents of the
Purchaser, (ii)_violates any provision of any law, rule,
regulation or ordinance, or any order, judgment, decree or ruling
of any court or Governmental Authority or any determination of an
arbitrator, or (iii)_results in a breach or violation of any term
of, or constitutes a default (or an event which with the passage
of time or giving of notice or both, would constitute a default)
under, or cause or permit the acceleration of the maturity of or
give rise to any right of termination, cancellation, imposition
of fees or penalties under, any contract, obligation, debt, note,
bond, lease, mortgage, license, indenture or any other agreement
or instrument to which the Purchaser or any of its subsidiaries
or Affiliates is a party or by which the Purchaser, any of its
subsidiaries or Affiliates or any of their respective properties
or assets are or may be bound.
Section 4.04 Reports and Financial Statements. The
Purchaser has filed all reports required to be filed with the SEC
since December 31, 1995 (collectively, including all exhibits
thereto, the "Purchaser SEC Reports"). None of such Purchaser
SEC Reports, as of their respective dates, contained any untrue
statement of a material fact or omitted to state 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. Each of the financial statements
(including the related notes) included in the Purchaser SEC
Reports presents fairly, in all material respects, the
consolidated financial position and consolidated results of
operations and cash flows of the Purchaser and its subsidiaries
as of the respective dates or for the respective periods set
forth therein, all in conformity with generally accepted
accounting principles consistently applied during the periods
involved, except as <PAGE> otherwise noted therein, and subject, in the
case of the unaudited interim financial statements, to normal
year-end adjustments and any other adjustments described therein.
All of such Purchaser SEC Reports, as of their respective dates,
complied in all material respects with the requirements of the
Exchange Act.
Section 4.05 Absence of Certain Changes or Events. During
the period since December 31, 1996 (the date of the Purchaser's
last audited consolidated financial statements), there has not
been any event or circumstances causing or resulting in, or
reasonably likely to cause or result in, a Material Adverse
Effect with respect to the Purchaser.
Section 4.06 Governmental and Other Consents. Except for
applicable requirements under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, no governmental or other
consents, approvals, authorizations of, or filings,
registrations, qualifications, declarations or designations with,
any Governmental Authority are required on the part of the
Purchaser as a condition to the valid execution, delivery and
performance of this Agreement and the other instruments and
documents executed and delivered in connection herewith by the
Purchaser, including without limitation, the valid issuance and
sale of the Warrants and the Warrant Shares.
Section 4.07 Investment. The Warrants issued to the
Purchaser, and the Warrant Shares to be issued to the Purchaser
upon exercise of the Warrants, are being acquired by the
Purchaser for its own account without the participation of any
other Person, with the intent of holding the Warrants and the
Warrant Shares, as the case may be, for investment and without a
view to, or for resale in connection with, any distribution of
either the Warrants or the Warrant Shares, nor is the Purchaser
aware of the existence of any distribution of the Warrants or the
Warrant Shares. The Purchaser has not been contacted concerning
the acquisition of the Warrants or Warrant Shares by means of any
general or public solicitations or advertisements.
Section 4.08 Accredited Investor. The Purchaser is an
Accredited Investor.
Section 4.09 Registration of Warrants and Warrant Shares.
The Purchaser understands that the Warrants and the Warrant
Shares may not be sold or transferred unless such shares are
subsequently registered under the Securities Act and/or
applicable state securities or blue sky laws or an exemption from
such registration is available.
Section 4.10 Truth and Accuracy of Information. None of
the documents, instruments and other information furnished to the
Company by the Purchaser contains any untrue statement of a
material fact or omits to state any material fact necessary in
order to make any statements made therein not misleading. No
representation, warranty or statement made by the Purchaser in
this Agreement or any of the instruments or documents executed
and delivered in connection herewith contains or will contain any
untrue statement of a material fact, or omits or will omit to
state a material fact necessary to make any statements made
therein not misleading.
<PAGE>
ARTICLE V
COVENANTS OF THE COMPANY AND THE PURCHASER
Section 5.01 Standstill Agreement. Simultaneously with
the execution and delivery of this Agreement, the Purchaser and
the Company shall enter into a standstill agreement with the
Company substantially in the form set forth in Exhibit 5.01 (the
"Standstill Agreement").
Section 5.02 Registration Rights Agreement.
Simultaneously with the execution and delivery of this Agreement,
the Purchaser and the Company shall enter into a registration
rights agreement with the Company substantially in the form set
forth in Exhibit 5.02 (the "Registration Rights Agreement").
Section 5.03 1994 Rights Agreement. Simultaneously with
the execution and delivery of this Agreement, the Purchaser shall
enter into an amendment to the 1994 Rights Agreement
substantially in the form set forth in Exhibit 5.03. The Company
shall not amend or waive the 1994 Rights Agreement for any Person
other than the Purchaser without Purchaser's prior written
consent which consent shall not be unreasonably withheld.
Section 5.04 Reservation of Shares. During the period
within which the Warrants may be exercised, the Company shall
have authorized and reserved a sufficient number of Warrant
Shares to provide for the complete exercise of the Warrants.
Section 5.05 Satisfaction of Closing Conditions. Subject
to the terms and conditions provided herein, the Company and the
Purchaser each agree to use its commercially reasonable best
efforts to satisfy the closing conditions set forth in Article VI
and Article VII of this Agreement.
Section 5.06 Further Assurances. The Company and the
Purchaser each shall execute and deliver such additional
instruments and other documents and shall take such further
actions as may be necessary or appropriate to effectuate, carry
out and comply with all of the terms of this Agreement and the
transactions contemplated hereby, including, without limitation,
making application as soon as practicable hereafter for all
consents and approvals required in connection with this Agreement
and the transactions contemplated hereby and diligently pursuing
the receipt of such consents and approvals in good faith
thereafter.
Section 5.07 Cooperation. The Company and the Purchaser
each agree to cooperate with the other in the preparation and
filing of all forms, notifications, reports and information, if
any, required or reasonably deemed advisable pursuant to any
Requirement of Law or the rules of the NASDAQ Stock Market in
connection with the transactions contemplated herein and, subject
to the provisions of Section 5.09, to use their respective good
faith efforts jointly to agree on a method to overcome any
objections by and Governmental Authority to any such
transactions.
Section 5.08 Antitrust Filings. The Company and the
Purchaser each agree to make all necessary filings in connection
with this Agreement and the transactions contemplated hereby
under <PAGE> the H-S-R Act, as promptly as practicable after the
Purchaser determines such filing is advisable, and to use their
commercially reasonable best efforts to furnish or cause to be
furnished, as promptly as practicable, all information and
documents requested under the HSR Act and shall otherwise
cooperate with the applicable Governmental Authority in order to
obtain any required regulatory approvals in as expeditious a
manner as possible. The Company and the Purchaser shall each pay
one-half of all filing fees payable with respect to all filings
required by the H-S-R Act.
Section 5.09 Confidentiality. For a period of three (3)
years from and after the date hereof, without the prior written
consent of the Purchaser, the Company agrees that it will not,
and will use reasonable efforts to ensure that none of its
representatives or Affiliates will, use in the conduct of its
business (except as contemplated by this Agreement), or disclose
to or file with any other Person (other than a permitted assignee
of some or all of the Purchaser's rights or obligations hereunder
and other than employees of the Company, financing sources,
financial advisors, accountants and attorneys for the foregoing),
any non-public financial information regarding the Purchaser or
its Affiliates or Associates.
Section 5.10 Public Announcements. On the date hereof or
another mutually agreed date, the Company and the Purchaser shall
jointly issue an initial press release relating to execution of
this Agreement and the transactions contemplated hereby
substantially in the form of Exhibit 5.12. Other than such
initial press release and the related conversations with analysts
and investors, neither the Company nor the Purchaser, nor any of
their respective representatives, shall make any public
announcement with respect to this Agreement or the transactions
contemplated hereby, without the prior written consent of the
other party hereto unless required to do so by applicable
Requirement of Law or the rules of the NASDAQ Stock Market, in
which case notification shall be given to the other party hereto
prior to such disclosure. Each party shall consult with and
provide reasonable cooperation to the other in connection with
the issuance of any press releases after the initial press
release or any other public documents or announcements describing
this Agreement and the transactions contemplated hereby.
Section 5.11 Covenants Regarding Stock. Until the earlier
of the expiration of the Standstill Period (as defined in the
Standstill Agreement) or the date on which the Warrants have
terminated without exercise in full, the Company covenants and
agrees to the following:
(a) The Company will not issue Preferred Stock or
other securities having voting powers greater than those of
the Common Stock, other than the rights and the underlying
Preferred Stock issuable under the 1994 Rights Agreement, or
any amendment, replacement or restatement thereof.
(b) If the Company determines to issue for cash or
cash equivalents Common Stock, Preferred Stock or other
securities having the right to vote in the election of
directors, the Purchaser shall have the right to purchase an
amount of such securities, on the same terms and conditions
as those being paid by the third party offerees, necessary
to maintain after the <PAGE> completion of such offer the
percentage of outstanding voting securities held by the
Purchaser prior to such offer.
(c) The Company shall furnish timely such information
and assistance as may be reasonably required by the
Purchaser to utilize the equity method of accounting for the
Purchaser's ownership interests in the Company, provided
that the Purchaser will reimburse the Company for any
additional third party expenses which may be incurred in
connection with such assistance.
ARTICLE VI
CONDITIONS TO THE PURCHASER'S OBLIGATIONS
The obligation of the Purchaser to effect the transactions
contemplated by this Agreement are subject to satisfaction on or
before the Closing Date of the following conditions:
Section 6.01 Representations and Warranties. The
representations and warranties of the Company set forth in
Article III hereof shall be true and correct in all material
respects when made and shall be true and correct in all material
respects at and as of the Closing Date, as if made on and as of
such date, taking into account any date specified therein. The
Company shall execute and deliver to the Purchaser a certificate
dated as of the Closing Date certifying the fulfillment of the
conditions of this Section 6.01.
Section 6.02 Agreements, Covenants and Conditions. The
Company shall have performed and complied in all material
respects with all agreements, covenants and conditions contained
herein that are required to be performed or complied with by it
on or before the Closing Date. The Company shall execute and
deliver to the Purchaser a certificate dated as of the Closing
Date certifying the fulfillment of the conditions of this Section
6.02.
Section 6.03 Governmental Approvals and Injunctions. All
regulatory consents and approvals shall have been received,
including the expiration or termination of the HSR Act waiting
period, if necessary pursuant to any Requirement of Law. No
injunctions or restraints prohibiting the transactions
contemplated by this Agreement shall be pending or threatened.
Section 6.04 Due Diligence Review. The Purchaser shall
have completed its due diligence review of the Company (the
results of which shall be reasonably satisfactory to the
Purchaser).
Section 6.05 Purchase of Shares Not Enjoined. The
purchase of the Warrants or the Warrant Shares by the Purchaser
shall not have been enjoined (temporarily or permanently) as of
the Closing Date.
<PAGE>
ARTICLE VII
CONDITIONS TO THE COMPANY'S OBLIGATIONS
The obligation of the Company to effect the transactions
contemplated by this Agreement are subject to satisfaction on or
before the Closing Date of the following conditions:
Section 7.01 Representations and Warranties. The
representations and warranties of the Purchaser contained in
Article IV hereof shall be true and correct in all material
respects when made and shall be true and correct in all material
respects at and as of the Closing Date, as if made on and as of
such date. The Purchaser shall execute and deliver to the
Company a certificate dated as of the Closing Date certifying the
fulfillment of the conditions of this Section 7.01.
Section 7.02 Agreements, Covenants and Conditions. The
Purchaser shall have performed and complied in all material
respects with all agreements, covenants and conditions contained
herein that are required to be performed or complied with by it
on or before the Closing Date. The Purchaser shall execute and
deliver to the Company a certificate dated as of the Closing Date
certifying the fulfillment of the conditions of this Section
7.02.
Section 7.03 Governmental Approvals and Injunctions. All
regulatory consents and approvals shall have been received,
including the expiration or termination of the HSR waiting
period, if necessary pursuant to any Requirement of Law. No
injunctions or restraints prohibiting the transactions
contemplated by this Agreement shall be pending or threatened.
Section 7.04 Due Diligence Review. The Company shall have
completed its due diligence review of the Purchaser (the results
of which shall be reasonably satisfactory to the Company).
Section 7.05 Sale of Shares Not Enjoined. The sale of the
Warrant and the Warrant Shares by the Company shall not have been
enjoined (temporarily or permanently) as of the Closing Date.
Section 7.06 Host Marketing Agreement. The Company and
Host Communications, Inc. shall have entered into a Strategic
Marketing Agreement in a form acceptable to such parties.
ARTICLE VIII
TERMINATION
Section 8.01 Termination. This Agreement and the
transactions contemplated hereby may be terminated at any time
prior to the Closing Date:
(a) Mutual Consent. By mutual consent of the Company
and the Purchaser;
(b) Expiration Date. By the Company or the Purchaser
by written notice to the other party at any time after the
Closing Date if the Closing has not occurred; provided that
<PAGE>
this Agreement may not be terminated by any party whose
breach of this Agreement (including without limitation,
failure to use its commercially reasonable best efforts to
cause any of the conditions in Articles VI and VII of this
Agreement to be satisfied) has caused or materially
contributed to the failure of the Closing on or before the
Closing Date;
(c) Permanent Injunction. By the Company or the
Purchaser if consummation of the transactions contemplated
by this Agreement shall violate any final non-appealable
order, decree or judgment of any court or governmental body
having competent jurisdiction;
(d) Lack of Governmental Approval. By the Company or
the Purchaser if any governmental approval or consent
required for this Agreement and the transactions
contemplated by this Agreement pursuant to any Requirement
of Law shall be permanently and unconditionally denied; or
(e) Failure to Honor Agreements. By the Company or
the Purchaser if the other party shall have failed to
perform or comply in any material respect with any agreement
or covenant contained herein that is required to be
performed by or complied with it on or before the Closing
Date after having been provided by the other party written
notice of, and a reasonable opportunity to cure, such
failure.
Section 8.02 Notice of Termination. Notice of termination
of this Agreement as provided for in this Article VIII shall be
given by the party terminating to the other parties hereto in
accordance with the provisions of Section 10.02.
Section 8.03 Effect of Termination. If this Agreement is
terminated pursuant to this Article VIII, this Agreement shall
forthwith become wholly void and of no further force and effect
and all further obligations of the Company and the Purchaser or
their respective officers or directors with respect to any
obligations under this Agreement shall terminate without further
liability; provided, however, that if the non-occurrence of
Closing is the direct or indirect result of the breach of this
Agreement by any party, such defaulting party shall be fully
liable to the other party for any such breach.
ARTICLE IX
DEFINITIONS
The following words and terms as used in this Agreement
shall have the following meanings:
"Accredited Investor" shall have the meaning set forth in
Section 501(a)(3) of Regulation D promulgated under the
Securities Act.
"Acquisition Completion Date" means the earlier of (i) the
date that the Purchaser first acquires 10.1% of the outstanding
Common Stock through the Open Market Purchases or (ii) the <PAGE> first
Business Day that is six (6) months (or such longer period
provided by Section 1.02) after the Closing Date.
"Additional Warrant" means the additional warrant purchased
by the Purchaser on the Acquisition Completion Date pursuant to
Section 1.04.
"Affiliate" shall have the meaning set forth in Rule 12b-2
of the General Rules and Regulations under the Exchange Act.
"Barrier" means the price of the last reported trade of the
Company's Common Stock on the NASDAQ Stock Market shall be equal
to or greater than $16.50 for twenty (20) consecutive trading
days.
"Black-Scholes Option Pricing Model" means that option
pricing model developed in 1973 by Fisher Black and Myron Scholes
and used herein to determine the purchase price for the Warrant
based on assumptions for Volatility, Warrant Exercise Price,
Barrier, Expiration, Spot Price, Option Style, Risk-Free
Borrowing Rate, Liquidity Discount and Payment Term for Warrants,
as follows:
Volatility: Historical annualized volatility
from the initial public offering of
the Common Stock (July 8, 1994) to
the close of business on the
trading day prior to the Closing
Date or the Second Closing Date, as
applicable
Exercise Price: $12.00
Barrier: The price of the last reported
trade of the Common Stock on The
NASDAQ Stock Market shall be equal
to or greater than $16.50 for
twenty consecutive trading days
Expiration: Four years from the Closing Date
Spot Price: Based on the average of the price
of the last reported trade of the
Common Stock on The NASDAQ Stock
Market for the twenty consecutive
trading days prior to the Closing
Date or the Second Closing Date, as
applicable
Option Style: American
Risk Free
Borrowing Rate: Four year swap rate at the close of
business on the trading day prior
to the Closing Date or the Second
Closing Date, as appropriate
<PAGE>
Liquidity Discount: 33% of the value derived using the
Black-Scholes option pricing model
and the assumptions set forth
herein
Payment Term
for Warrants: 50% at closing and 50% (plus
interest from the Closing Date at
the rate of 7% compounded annually)
at time of exercise or expiration
"Business" means the business of the Company and its
Affiliated Company as presently conducted.
"Business Day" means a day other than a Saturday, a Sunday,
a day on which banking institutions in the State of Georgia and
the State of Missouri are authorized or obligated by law or
required by executive order to be closed, or a day on which the
New York Stock Exchange is closed.
"Charter Documents" of a Person means the Certificate of
Incorporation, the By-Laws and any other charter documents of
such Person, including without limitation any certificate of
designation, as amended or restated and as in effect as of the
Closing Date.
"Closing" means the consummation of the purchase and sale of
the First Tranche Warrants pursuant to the terms of this
Agreement.
"Closing Date" means November 21, 1997, or such later date
as the parties may agree.
"Common Stock" means the Company's $.01 par value per share
common stock and stock of any other class of the common equity of
the Company into which such shares may hereafter have been
changed and other rights or securities convertible into shares of
common stock of the Company.
"Confidentiality Agreement" means that agreement, dated as
of March 6, 1997, by and among the Company, the Purchaser and
Host Communications, Inc.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"First Tranche Warrant" means those Warrants purchased by
the Purchaser on the Closing Date pursuant to Section 1.03.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity
exercising executive legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"H-S-R Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and
regulations promulgated thereunder.
<PAGE>
"Material Adverse Effect" means a material and adverse
effect (i) on the condition (financial or otherwise), results of
operations, business or properties of a Person and its
subsidiaries and Affiliates, taken as a whole, or (ii) on a
Person's and its subsidiaries' and Affiliates' ability, taken as
a whole, to perform their respective obligations under any of the
material contracts or agreements to which such Person or its
subsidiaries or Affiliates is a party or this Agreement or any of
the other documents and agreements issued in connection herewith
or (iii) upon the binding nature, validity or enforceability of
any of the material contracts or agreements to which a Person or
its subsidiaries or Affiliates is a party or this Agreement or
any of the other documents and agreements issued in connection
herewith.
"NASDAQ" means the electronic inter-dealer quotation system
operated by NASDAQ, Inc.
"Open Market Purchases" means the Purchaser's acquisition of
the Common Stock as provided in Section 1.01.
"Person" means an individual or corporation, partnership,
trust, incorporated or unincorporated association, joint venture,
joint stock company, government (or any agency or political
subdivision thereof) or other entity of any kind.
"Preferred Stock" means the Company's $0.01 par value per
share preferred stock and stock of any other class of the equity
of the Company into which such shares may hereafter have been
changed and other rights or securities convertible into shares of
preferred stock of the Company.
"Purchaser Nominee" means any Person designated by the
Purchaser to act as a director or an advisory director of the
Company pursuant to Section 5.03.
"Requirement of Law" means as to any Person, any law,
treaty, rule or regulation of any Governmental Authority
applicable to such Person or any of its property or to which such
Person or any of its property is subject.
"1994 Rights Agreement" means that certain Rights Agreement,
dated as of January 1, 1994, as amended, by and between the
Company and ChaseMellon Shareholder Services, as rights agent.
"SEC" means the United States Securities And Exchange
Commission.
"Second Closing" means the consummation of the purchase and
sale of the Additional Warrants pursuant to the terms of this
Agreement.
"Second Closing Date" means that certain date specified by
Purchaser that shall be on the Acquisition Completion Date or
within ten (10) Business Days thereafter.
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
<PAGE>
"Warrants" means collectively the First Tranche Warrant and
the Additional Warrant.
"Warrant Shares" means the shares of Common Stock acquired
or acquirable upon exercise of the First Tranche Warrant or the
Additional Warrant, any shares of Common Stock issued as (or
issuable upon the conversion or exercise of any warrant, right or
other security that is issued as) a dividend or other
distribution with respect to, or in exchange for, or in
replacement of, such shares of Common Stock, or any other
interest in the Company that has been or may be acquired upon
exercise of the First Tranche Warrant or the Additional Warrant.
ARTICLE X
MISCELLANEOUS
Section 10.01 Brokers and Finders. Each party shall be
solely responsible for any fee or commission payable to any
investment banker, broker, or finder it retains for services in
connection with the transactions contemplated by this Agreement.
Section 10.02 Notice. All notices, demands and other
communications under the Warrant shall be in writing (which shall
include communications by telex and telecopy) and shall be
delivered (a) in person or by courier or overnight service, (b)
mailed by first class registered or certified mail, postage
prepaid, return receipt requested, by prepaid telex or
telecopier, or by hand, courier or overnight service, and (c) be
given at the following respective addresses and telecopier
numbers and to the attention of the following Persons:
(i) if to the Company, to:
RAWLINGS SPORTING GOODS COMPANY, INC.
1859 Intertech Drive
Fenton, Missouri 63026
Attn: Mr. Paul E. Martin
Telecopier No.: (314) 349-3598
with a copy (which shall not constitute notice) to:
STINSON, MAG & FIZZELL
1201 Walnut Street, Suite 2800
Kansas City, Missouri 64106
Attn: Craig L. Evans, Esq.
Telecopier No.: (816) 691-3495
<PAGE>
(ii) if to the Purchaser hereof, to:
BULL RUN CORPORATION
4370 Peachtree Road
Atlanta, Georgia 30319
Attn: Mr. Robert S. Prather, Jr.
Telecopier No.: (404) 261-9607
with a copy (which shall not constitute notice) to:
ALSTON & BIRD LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Attn: Stephen A. Opler, Esq.
Telecopier No.: (404) 881-4777
or at such other address or telecopier number or to the attention
of such other person as the party to whom such information
pertains may hereafter specify for the purpose in a notice to the
other specifically captioned "Notice of Change of Address", and
(d) be effective or deemed delivered or furnished (i) if given by
mail, on the third Business Day after such communication is
deposited in the mail, addressed as above provided, (ii) if given
by telecopier, when such communication is transmitted to the
appropriate number determined as above provided in this Section
10.02 and the appropriate answer back is received or receipt is
otherwise acknowledged, and (iii) if given by hand delivery or
overnight delivery service when left at the address of the
addressee addressed as above provided, except that notices of a
change of address or telecopier number, shall not be deemed
furnished until received.
Section 10.03 Modifications, Amendments and Waivers. This
Agreement and any term hereof may be changed, waived, discharged,
or terminated only by an instrument in writing signed by the
party hereof against whom enforcement of such change, waiver,
discharge or termination is sought.
Section 10.04 Captions and References. The captions and
headings in this Agreement are for purposes of reference only and
shall not limit or otherwise affect the meaning hereof. When
used in this Agreement, the words "herein," "hereof" and
"hereunder," and words of similar import, shall refer to this
Agreement as a whole and not to any provision of this Agreement,
and the words "Section" and "Exhibit" shall refer to Sections of
and Exhibits to this Agreement unless otherwise specified.
Section 10.05 Pronouns. Except as otherwise specified
herein, all references herein (A) to any Person other than the
Company shall be deemed to include such Person's successors and
assigns, (B) to the Company shall be deemed to include the
Company's successors and assigns, and (C) to any <PAGE> applicable law
defined or referred to herein shall be deemed references to such
applicable law as the same may have been or may be amended or
supplemented from time to time.
Section 10.06 Gender. Whenever the context so requires,
the neuter gender includes the masculine or feminine, and the
singular number includes the plural, and vice versa.
Section 10.07 Remedies. The Company stipulates that the
remedies at law of the Purchaser in the event of any default or
threatened default by the Company in the performance of or
compliance with any of the terms of this Agreement are not and
will not be adequate, and that such terms may be specifically
enforced by a decree for the specific performance of any
agreement contained herein or by an injunction against a
violation of any of the terms hereof or otherwise.
Section 10.08 Governing Law. This Agreement shall be
governed by the laws of the State of Georgia, without regard to
conflict or choice of laws principles.
Section 10.09 Time of The Essence. Time is of the essence
in the performance and satisfaction of this Agreement and each of
the conditions specified in Articles VI and VII of this Agreement
are material for purposes of this Agreement.
Section 10.10 Entire Agreement. This Agreement, the
Schedules and the Exhibits constitute the entire agreement
between the parties relating to the subject matter hereof and
supersede all prior oral and written, and all contemporaneous
oral, negotiations, discussions, writings and agreements relating
to the subject matter of this Agreement (other than the
agreements and other documents executed simultaneously with this
Agreement or contemplated herein), including, without limitation,
the Confidentiality Agreement.
Section 10.11 Successors and Assigns. This Agreement shall
be binding upon and shall inure to the benefit of and be
enforceable by the parties hereto, and their respective
successors and permitted assigns. This Agreement cannot be
assigned by any party without the prior written consent of the
other parties hereto, except that Purchaser, without the consent
of the Company, may assign this Agreement and its rights
hereunder, in whole or in part, to (i) any of its lenders as
collateral security and (ii) J. Mack Robinson, Robert S. Prather,
Jr., Charles L. Jarvie, James Host, Gray Communications Systems,
Inc., Host Communications, Inc. and Universal Sports America,
Inc.
Section 10.12 Severability. Should any one or more of the
provisions of this Agreement be determined to be invalid, illegal
or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions hereof shall not in
any way be affected or impaired thereby. To the extent such
determination is reasonably likely to give rise to a Material
Adverse Effect, the parties shall endeavor in good faith to
replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as
practicable to that of the invalid, illegal or unenforceable
provisions.
<PAGE>
Section 10.13 Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be an
original; but all of such counterparts together shall constitute
one and the same instrument.
Section 10.14 Interpretations. Neither this Agreement nor
any uncertainty or ambiguity shall be construed or resolved
against the Purchaser or the Company, whether under any rule of
construction or otherwise. No party to this Agreement shall be
considered the draftsman. On the contrary, this Agreement has
been reviewed, negotiated and accepted by all parties and their
attorneys and shall be construed and interpreted according to the
ordinary meaning of the words used so as fairly to accomplish the
purposes and intentions of all parties hereto.
[Signatures On Following Page]
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this
Agreement to be executed under seal by its duly authorized
officers as of the date first above written.
RAWLINGS SPORTING GOODS
COMPANY, INC.
By:___________________________
Name:
Title:
ATTEST:
By:________________________
Secretary
[CORPORATE SEAL]
BULL RUN CORPORATION
By:___________________________
Name:
Title:
ATTEST:
By:_________________________
Secretary
[CORPORATE SEAL]
<PAGE>
Exhibit 99.3
STANDSTILL AGREEMENT
THIS STANDSTILL AGREEMENT (the "Agreement") dated as of
November 21, 1997 by and between Rawlings Sporting Goods Company,
Inc., a Delaware corporation (the "Company"), and Bull Run
Corporation, a Georgia corporation ("Bull Run").
W I T N E S S E T H:
WHEREAS, the Company and Bull Run have entered into that
certain Investment Purchase Agreement dated as of the date hereof
(the "Investment Agreement") pursuant to which Bull Run has
agreed to purchase shares of Common Stock, par value $.01 per
share ("Common Stock") of the Company and Warrants to purchase
shares of Common Stock; and
WHEREAS, as a condition to its entering into the Investment
Agreement, the Company has required that Bull Run enter into this
Agreement, which contains certain restrictions on purchases of
the Company's capital stock by Bull Run and their respective
Affiliates and Associates and certain other limitations on Bull
Run and their respective Affiliates and Associates.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained
herein and in the Investment Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, each of the Company and Bull Run (each a
"Party"), intending to be legally bound, hereby agrees as
follows:
ARTICLE 1.
DEFINITIONS AND CONSTRUCTION
Section 1.1. Certain Definitions. As used in this
Agreement, the following terms shall have the meanings specified
below:
"Acquisition Completion Date" shall mean the earlier of
(a) the first date upon which Bull Run obtains Beneficial
Ownership of shares of Common Stock aggregating at least 10.1% of
the outstanding shares of Common Stock (the computation of such
percentage shall not include any shares of Common Stock issuable
upon exercise of the Warrants), or (b) the first Business Day
that is six (6) months (or such longer period provided by Section
1.02 of the Investment Agreement) after the Closing Date.
"Affiliate" shall have the meaning set forth in Rule 12b-2
of the General Rules and Regulations under the Exchange Act,
provided that in the case of Bull Run, its Affiliates shall be
all persons controlled by Bull Run, including without limitation
Gray Communications Systems, <PAGE> Inc., Host Communications, Inc. and
Universal Sports America, Inc., and the following Persons and
their Affiliates: J. Mack Robinson, Robert S. Prather, Jr.,
Charles L. Jarvie and James Host.
"Applicable Law" shall mean all applicable provisions of all
(a) constitutions, treaties, statutes, laws (including common
law), rules, regulations, ordinances or codes of any Governmental
Authority, and (b) orders, decisions, injunctions, judgments,
awards and decrees of any Governmental Authority.
"Associate" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations of the Exchange
Act, provided that when used to indicate a relationship with Bull
Run, the term "Associate" shall only mean the following Persons
and their Associates: J. Mack Robinson, Robert S. Prather, Jr.,
Charles L. Jarvie, James Host, Gray Communications Systems, Inc.,
Host Communications, Inc. and Universal Sports America, Inc.
"Beneficial Owner" (including, with its correlative
meanings, "Beneficially Own" and "Beneficial Ownership"), with
respect to any securities, shall mean any Person which has, or
any of whose Affiliates or Associates has, directly or
indirectly, "beneficial ownership" of (as determined pursuant to
Rule 13d-3 of the General Rules and Regulations of the Exchange
Act as in effect on the date hereof) such securities, including
pursuant to any agreement, arrangement or understanding (whether
or not in writing).
"Bull Run Nominee" shall mean Robert S. Prather, Jr., with
respect to the Bull Run Nominee designated in Section 3.7(a) and
Charles L. Jarvie, with respect to the Bull Run Nominee
designated in Section 3.7(b), and the successors of such
individuals as set forth in Section 3.7(c), provided that no
Person who has not received the approval of a majority of the
Disinterested Directors shall be deemed a Bull Run Nominee if
such Person (a) is, or is an Affiliate, Associate, officer,
director, member or employee of, a Person (other than the
Company, Bull Run and their respective Affiliates and
Associates), a substantial amount of the business of which is the
manufacture or sale of sports equipment, supplies and apparel,
(b) is, or is an Affiliate, Associate, officer, director, member
or employee of a Person (other than the Company, Bull Run and
their respective Affiliates and Associates), which Person has
taken any actions which, if such Person were Bull Run, would
violate Section 3.1, (c) is, or is an Affiliate, Associate,
officer, director, member or employee of, a Person (other than
the Company, Bull Run and their respective Affiliates and
Associates), described in Rule 262 of Regulation A of the
Securities Act, or (d) has been convicted by a court of competent
jurisdiction of a misdemeanor involving moral turpitude or a
felony.
"Business Day" shall mean a day other than a Saturday, a
Sunday, a day on which banking institutions in the States of
Georgia or Missouri are authorized or obligated by law or
required by executive order to be closed, or a day on which the
New York Stock Exchange is closed.
"Certificate" shall mean the Certificate of Incorporation of
the Company, as amended, restated or supplemented from time to
time.
<PAGE>
"Closing Date" shall mean November 21, 1997.
"Common Stock" shall have the meaning set forth in the
Recitals.
"Control Event" shall mean (a) a Control Transaction, (b) at
any time during a period of two consecutive years, individuals
who at the beginning of such period constituted the Board of
Directors of the Company shall cease for any reason to constitute
at least a majority thereof, unless the election or the
nomination for election by the Company's stockholders of each new
director during such two-year period was approved by a vote of at
least two-thirds of the directors then still in office who were
directors at the beginning of such period, or (c) any Beneficial
Owner of Voting Securities of the Company acquiring the legal or
practical ability to elect a majority of the Company's Board of
Directors.
"Control Transaction" shall mean an agreement by the Company
to be a party to (a) any consolidation or merger of the Company
in which the Company is not the continuing or surviving
corporation or pursuant to which shares of the Company's Common
Stock would be converted into cash, securities or other property,
other than a merger of the Company in which the holders of the
Company's Common Stock immediately prior to the merger have the
same proportionate ownership of common stock of the surviving
corporation immediately after the merger or (b) any sale, lease,
exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, the assets of
the Company.
"Disinterested Directors" shall mean those members of the
Board of Directors of the Company that (a) are unaffiliated with
Bull Run, (b) are not Bull Run Directors, and (c) are not
"interested directors" within the meaning of Applicable Law,
including Section 144 of the Delaware General Corporation Law.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder.
"Governmental Authority" shall mean any federal, state,
local or political subdivision, governmental or administrative
body, instrumentality, department or agency or any court,
administrative hearing body, arbitration tribunal, commission or
other similar dispute resolution panel or body, and any other
entity exercising executive, legislative, judicial, regulatory or
administrative functions of a government.
"Group" shall mean any group within the meaning of Section
13(d)(3) of the Exchange Act as in effect on the date hereof.
"Investment Agreement" shall have the meaning set forth in
the Recitals.
"Percentage Limitation" shall mean the lesser of (a) 10.1%,
or (b) the percentage of outstanding shares of Common Stock
Beneficially Owned by Bull Run and its Affiliates and <PAGE> Associates
on the Acquisition Completion Date (the computation of such
percentage shall not include any shares of Common Stock issuable
or issued upon the exercise of the Warrants).
"Person" shall mean an individual, a partnership, an
association, a joint venture, a corporation, a business, a trust,
any entity organized under Applicable Law, an unincorporated
organization or any Governmental Authority.
"Rights Plan" shall mean the Rights Agreement dated as of
July 1, 1994, as amended, between the Company and ChaseMellon
Shareholder Services, as rights agent.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall man the Securities Act of 1933, as
amended, and the rules and regulations thereunder.
"The Company" shall have the meaning set forth in the
introductory paragraph of this Agreement.
"Vote" shall mean, as to any entity, the ability to cast a
vote at a stockholders' or comparable meeting of such entity with
respect to the election of directors or other members of such
entity's governing body.
"Voting Power" shall mean the aggregate number of Votes of
the Company outstanding as at such date.
"Voting Securities" shall mean the Common Stock and any
other securities of the Company having the right to Vote.
"Warrants" shall have the meaning set forth in the
Investment Agreement.
Section 1.2. Interpretation and Construction of this
Agreement. The definitions in Section 1.1 shall apply equally to
both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words
"include," "includes" and "including" shall be deemed to be
followed by the phrase "without limitation." All references
herein to Articles, Sections and Schedules shall be deemed to be
references to Articles and Sections of, and Schedules to, this
Agreement unless the context shall otherwise require. The
headings of the Articles and Sections are inserted for
convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.
Unless the context shall otherwise require or provide, any
reference to any agreement or other instrument or statute or
regulation is to such agreement, instrument, statute or
regulation as amended and supplemented from time to time (and, in
the case of a statute or regulation, to any successor provision).
<PAGE>
ARTICLE 2.
RESTRICTIONS ON ACQUISITION OF VOTING SECURITIES
BY BULL RUN AND ITS AFFILIATES AND ASSOCIATES
Section 2.1. Acquisition Restrictions. Subject to
Sections 2.2, and 2.3, Bull Run agrees 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 of any
shares of Common Stock on and following the Acquisition
Completion Date, if as a result the shares of Common Stock
Beneficially Owned in the aggregate by Bull Run and its
Affiliates and Associates would represent more than the
Percentage Limitation 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 Warrants). Bull Run and its Affiliates and
Associates may, from time to time after the Acquisition
Completion Date, acquire, by purchase or otherwise, Beneficial
Ownership of shares of Common Stock in an amount which would not
cause the aggregate shares of Common Stock Beneficially Owned by
Bull Run and its Affiliates and Associates to exceed the
Percentage Limitation 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 Warrants).
Section 2.2. Effect of Action by the Company.
(a) Subject to Section 2.2(b), Bull Run shall not be deemed
in violation of this Article 2 if the Beneficial Ownership of
shares of Common Stock by Bull Run and its Affiliates and
Associates exceeds the Percentage Limitation (i) solely as a
result of an acquisition of shares of Common Stock by the Company
that, by reducing the number of outstanding shares of Common
Stock, increases the proportionate number of shares of Common
Stock Beneficially Owned by Bull Run and its Affiliates and
Associates, or (ii) because Bull Run and its Affiliates and
Associates purchase shares in excess of the applicable Percentage
Limitation in reliance on written information regarding the
number of outstanding shares of the Company provided directly to
any of Bull Run and its respective Affiliates and Associates by
the Company in response to a request for such information by any
of Bull Run and its respective Affiliates and Associates
immediately prior to such purchase.
(b) Notwithstanding Section 2.2(a), the Percentage
Limitation shall be deemed exceeded if (i) in the case of Section
2.2(a)(i), Bull Run or any of its Affiliates or Associates
acquires Beneficial Ownership of any additional shares of Common
Stock after it has been notified of an acquisition of shares of
Common Stock by the Company, or (ii) in the case of Section
2.2(a)(ii), Bull Run or any of its Affiliates or Associates
acquires Beneficial Ownership of additional shares of Common
Stock after it has been notified that the information regarding
the number of outstanding shares previously provided to it was
incorrect and it has been provided by the Company with correct
information, unless in the case of clause (i) or (ii) upon the
acquisition of Beneficial Ownership of such additional shares of
Common Stock, Bull Run and its Affiliates <PAGE> and Associates do not
Beneficially Own in the aggregate more than the applicable
Percentage Limitation.
(c) If the Percentage Limitation shall be deemed exceeded,
Bull Run and its Affiliates and Associates shall sell or
otherwise dispose of an amount of shares of Common Stock
necessary to cause Bull Run and its Affiliates and Associates to
be in compliance with Section 2.1 within six (6) months after (i)
in the case of Section 2.2(a)(i), the first date upon which it
has been notified of an acquisition of shares of Common Stock by
the Company, or (ii) in the case of Section 2.2(a)(ii), the first
date upon which it has been notified that the information
regarding the number of outstanding shares previously provided to
it was incorrect and it has been provided by the Company with
correct information. The six (6) month period during which Bull
Run and its Affiliates and Associates may be required to sell or
otherwise dispose of shares of Common Stock pursuant to this
Section 2.2(c) shall be suspended and tolled during such times as
and for as long as:
(i) (A) any Bull Run Nominee 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 (B) any
officers or directors of the Company are prohibited from
trading in the Common Stock pursuant to any policies or
procedures of the Company;
(ii) (A) any Bull Run Nominee 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 (B) any
officers or directors of the Company are prohibited from
trading in the Common Stock of the Company at the direction
of the Company's Board of Directors or legal advisors;
(iii) 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 (A) reasonably satisfactory written
confirmation from the Company that the information in
question is not material non-public information or
(B) written confirmation from the Company that such
information has been publicly disclosed in a manner and on
terms reasonably satisfactory to Bull Run; or
(iv) Any profit realized by Bull Run, its Affiliates or
Associates from such required sale or disposition would
inure to the benefit of the Company pursuant to paragraph
(b) of Section 16 of the Exchange Act.
Any time that such six (6) month period is suspended and tolled
pursuant to this Section 2.2(c), the Company shall provide Bull
Run with written notice of the revised date as to which such
period shall expire. Bull Run shall promptly notify the Company
of any disagreement with the calculation of such new expiration
date.
Section 2.3. The Company's Rights Plan. Notwithstanding
the provisions of Section 2.1, Bull Run agrees that it will not,
and will cause each of its Affiliates not to, directly or
<PAGE>
indirectly, acquire, offer to acquire, or agree to acquire, by
purchase or otherwise, Beneficial Ownership of any shares of
Common Stock if such acquisition would result in Bull Run or any
of its respective Affiliates being deemed an Acquiring Person (as
such term is defined in the Rights Plan) or result in the
occurrence of a Stock Acquisition Date, Distribution Date,
Section 11(a)(ii) Event or Section 13 Event (as such terms are
defined in the Rights Plan), as amended in accordance with the
terms of the Investment Agreement.
ARTICLE 3.
OTHER STANDSTILL PROVISIONS; QUORUM; DIRECTORS
Section 3.1. Standstill Covenants. Except as set forth in
Section 3.2, Bull Run agrees that it will not, and it will cause
each of its respective Affiliates and Associates not to, directly
or indirectly, alone or in concert with others, unless
specifically requested in writing by the Chairman of the Company
or by a resolution of a majority of the Disinterested Directors,
take any of the actions set forth below:
(a) effect, seek, offer, propose (whether publicly or
otherwise) or cause or participate in, or assist any other
Person to effect, seek, offer or propose (whether publicly
or otherwise) or participate in:
(i) any acquisition of Beneficial Ownership of
Common Stock or other equity interests in the Company
which would result in a breach of Article 2 of this
Agreement;
(ii) any tender or exchange offer, merger,
consolidation, share exchange or business combination
involving the Company or any material portion of its
business or any purchase of all or any substantial part
of the assets of the Company;
(iii) any recapitalization, restructuring,
liquidation, dissolution or other extraordinary
transaction with respect to the Company or any material
portion of its business; or
(iv) other than solely in connection with the
nomination or election of no more than two Bull Run
Directors to the Company's Board of Directors, any
"solicitation" of "proxies" (as such terms are used in
the proxy rules of the SEC) with respect to the Company
or any action resulting in such Person becoming a
"participant" in any "election contest" (as such terms
are used in the proxy rules of the SEC) with respect to
the Company;
<PAGE>
(b) other than solely in connection with the
nomination or election of no more than two Bull Run
Directors to the Company's Board of Directors, propose any
matter for submission to a vote of stockholders of the
Company; provided that nothing in this Section 3.1(b) shall
restrict the manner in which the Bull Run Directors may
(i) vote on any matter submitted to the Company's Board of
Directors, or (ii) participate in deliberations or
discussions of the Company's Board of Directors (including
making suggestions and raising issues to the Board) in their
capacity as members of the Company's Board of Directors and
in no other capacity;
(c) form, join or participate in a Group with respect
to any Voting Securities (other than any Group whose members
consist solely of Bull Run and any of its Affiliates and
Associates);
(d) grant any proxy with respect to any Voting
Securities to any Person not designated by the Company;
(e) deposit any Voting Securities in a voting trust or
subject any Voting Securities to any arrangement or
agreement with respect to the Voting of such Voting
Securities or other agreement having similar effect;
(f) execute any written stockholder consent with
respect to the Company;
(g) take any other action to seek to affect the
control of the management or Board of Directors of the
Company; provided that nothing in this Section 3.1(g) shall
restrict the manner in which the Bull Run Directors may
(i) vote on any matter submitted to such Board, or
(ii) participate in deliberations or discussions of such
Board (including making suggestions and raising issues to
the Board) in their capacity as members of the Company's
Board of Directors and in no other capacity; or
(h) enter into any discussions, negotiations,
arrangements or understandings with any Person other than
the Company, Bull Run, and their respective Affiliates,
Associates, directors, officers, employees, agents or
advisors with respect to any of the foregoing, or advise,
assist, encourage or seek to persuade others to take any
action with respect to any of the foregoing.
Section 3.2 Exceptions to Standstill Covenants.
Notwithstanding any other provision of this Agreement to the
contrary, including the foregoing Section 3.1:
(a) if any party other than the Company, Bull Run or
their respective Affiliates or Associates commences or
otherwise undertakes any tender or exchange offer which is
approved by a majority of the Disinterested Directors, Bull
Run may commence a competing tender or exchange offer having
terms at least as favorable as those terms offered by such
third party; and
<PAGE>
(b) if a Control Event occurs or if the majority of
the Disinterested Directors approves a Control Transaction
or directs the officers, advisors or agents of the Company
to find or negotiate with a third party regarding a Control
Transaction, then the provisions of this Agreement shall not
be applicable until such time as the majority of the
Disinterested Directors shall have abandoned such actions.
Section 3.3. Press Releases, Etc. by Bull Run.
(a) Subject to Section 3.3(b) and Sections 5.09 and 5.10 of
the Investment Agreement, Bull Run may issue such press releases
and make such other public communications to the financial
community and to its stockholders and such other public
statements made in the ordinary course relating to its investment
in the Company, in each case as it reasonably deems appropriate
and customary. Prior to making any such press release or other
communication, Bull Run will use reasonable efforts to consult
with the Company in good faith regarding the form and content of
any such communication, and Bull Run will use reasonable efforts
to coordinate any such communication with any decisions reached
by the Company with respect to disclosures relating to such
matters.
(b) Notwithstanding the provisions of Section 3.3(a),
unless required by Applicable Law or other than solely in
connection with the nomination or election of not more than two
Bull Run Directors to the Company's Board of Directors, neither
Bull Run nor any of its Affiliates or Associates, may make any
press release, public announcement or other communication with
respect to any of the matters described in Sections 3.1(a),
3.1(b), 3.1(c), 3.1(g) or 3.1(h) without the prior written
consent of the Chairman of the Company or by a resolution of a
majority of the directors of the Company. Nothing in this
Section 3.3 shall permit Bull Run to take any action which would
otherwise violate any provision contained in Section 3.1 or in
Sections 5.09 or 5.10 of the Investment Agreement.
Section 3.4. Voting of the Company's Voting Securities.
Bull Run shall vote its shares of Common Stock (a) for the Bull
Run Directors, and (b) other than as may be inconsistent with the
foregoing clause (a), for any item of business raised at a
meeting of the stockholders of the Company that has received (or
will be received, as determined by the Company upon the review of
proxies of the stockholders received by the Company immediately
prior to such meeting) the affirmative vote of a majority of the
stockholders of the Company in attendance at such meeting of the
stockholders, whether in person or by proxy, other than Bull Run
or any of its Affiliates or Associates, except (i) the waiver or
repeal of any takeover defenses of the Company or the redemption
of the rights issued pursuant to the Rights Agreement unless
replaced with rights having at least the same takeover deterrent
effect of the current rights, (ii) any changes in the
capitalization having a material adverse effect on Bull Run,
(iii) the merger or consolidation of the Company with or into
another corporation or entity other than a wholly owned
subsidiary of the Company, (iv) the liquidation or dissolution of
the Company, and (v) the sale of all or substantially all of the
assets of the Company.
<PAGE>
Section 3.5. Quorum. Bull Run shall use reasonable
efforts to ensure that it shall be present, and shall use
reasonable efforts to cause its Affiliates and Associates owning
Voting Securities to be present, in each case, in person or by
proxy, at all meetings of stockholders of the Company so that all
Voting Securities Beneficially Owned by Bull Run and its
Affiliates and Associates shall be counted for purposes of
determining the presence of a quorum at such meeting.
Section 3.6. Notice of Proposals Regarding Acquisition
Transactions. Bull Run agrees that it will notify the Company
promptly if any inquiries or proposals which Bull Run reasonably
believes are of substance are received by, any information is
exchanged with respect to, or any negotiations or substantive
discussions are initiated or continued with, Bull Run or, to Bull
Run's knowledge, with any of its Affiliates or Associates
regarding any proposal involving (a) a sale of all or
substantially all of the assets of the Company, (b) a third-party
tender offer, exchange offer or other purchase offer for Voting
Securities with a number of Votes in excess of five percent (5%)
of the Voting Power of the Company, (c) a merger, consolidation
or other business combination involving the Company, or (d) a
Control Event.
Section 3.7. Bull Run Directors.
(a) On or before the Closing Date, the Board of Directors
of the Company will cause the number of members to be elected to
the Board of Directors to be increased to six (6) and will
nominate a Bull Run Nominee 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 such Bull Run
Nominee to the Company's stockholders and the Company will
solicit 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.
(b) Within thirty (30) days after the first date upon which
the shares of Common Stock Beneficial Owned 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 a second Bull Run Nominee as a director of the
Company in the position created by such increase.
(c) 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 a 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 <PAGE> 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.
(d) The Company's obligation to solicit proxies for the
election and reelection of Bull Run Nominees pursuant to this
Section 3.7 is subject to Bull Run providing all information
requested by the Company and reasonable necessary for the Company
to prepare the proxy statement in accordance with the SEC's proxy
rules in a timely and complete manner.
(e) Notwithstanding anything in this Section 3.7 to the
contrary, the Company shall have no obligation to nominate,
appoint, recommend or solicit proxies for any Bull Run Nominee
unless such Bull Run Nominee has entered into an Agreement with
Bull Run and the Company in the form attached hereto as Exhibit
A.
Section 3.8 Right of First Refusal. Bull Run will not,
and Bull Run will cause its Affiliates and Associates not to,
seek, offer, propose or cause or participate in, or assist any
other Person to effect, seek, offer or propose or participate in
the sale of the Warrants or shares of Common Stock Beneficially
Owned by Bull Run or its Affiliates and Associates without first
offering such shares to the Company at the price and upon the
terms of such proposed transfer or sale. The Company shall have
thirty (30) days during which it may accept the offer and sixty
(60) days thereafter during which to close the purchase of such
shares if it accepts the offer. If the Company elects not to
accept the offer, Bull Run may transfer or sell the shares to a
third party within sixty (60) days following the expiration of
the Company's option at a price and upon terms no more favorable
to the acquirer of such shares as that offered to the Company,
provided that prior to the sale or transfer of such shares, the
transferee shall agree to be bound by the terms and conditions of
this Agreement during its term and until its termination pursuant
to Article 4. This Section 3.8 shall not apply to any sales by
Bull Run (a) made in accordance with Rule 144(b) under the 1933
Act, (b) to a third party pursuant to a tender or exchange offer
which has been approved by the majority of the Disinterested
Directors, or (c) pursuant to the registration of such shares of
Common Stock pursuant to the Securities Act in a bona fide public
offering.
ARTICLE 4.
TERM AND TERMINATION
Section 4.1. Termination. The provisions of this
Agreement shall terminate on the date sixty-six (66) months after
the Acquisition Completion Date. The provisions of this
Agreement also shall terminate in the event of a material breach
by the Company of any of the terms of this Agreement, the
Investment Agreement, the Registration Rights Agreement referred
to in the Investment Agreement or the Warrants if the Company
fails to cure such breach within forty-five <PAGE> (45) days after its
receipt of notice of such breach from Bull Run. Any termination
of this Agreement as provided herein shall be without prejudice
to the rights of any Party arising out of the breach by any other
Party of any provision of this Agreement.
ARTICLE 5.
MISCELLANEOUS
Section 5.1. Notices. All notices and other
communications required or permitted by this Agreement shall be
made in writing and shall be deemed delivered when delivered in
person, transmitted by telecopier, or three days after it has
been sent by mail, as follows:
The Company: Rawlings Sporting Goods Company, Inc.
1859 Intertech Drive
Fenton, Missouri 63026
Attn: Mr. Paul E. Martin
Telecopy No.: (314) 349-3598
with a copy to: Stinson, Mag & Fizzell, P.C.
1201 Walnut, Suite 2800
P.O. Box 419251
Kansas City, Missouri 64141-6251
Attn: Craig L. Evans, Esq.
Telecopy No.: (816) 691-3495
Bull Run: Bull Run Corporation
4370 Peachtree Road
Atlanta, Georgia 30319
Attn: Mr. Robert S. Prather, Jr.
Telecopy No.: (404) 261-9607
with a copy to: Alston & Bird LLP
One Atlantic Center
1201 West Peachtree St.
Atlanta, Georgia 30309
Attn: Stephen A. Opler, Esq.
Telecopy No.: (404) 881-4777
The Parties shall promptly notify each other in the manner
provided in this Section 5.1 of any change in their respective
addresses. A notice of change of address shall not be deemed to
have been given until received by the addressee. Communications
by telecopier also shall be sent concurrently by mail, but shall
in any event be effective as stated above.
<PAGE>
Section. 5.2. Assignment. No Party will assign this
Agreement or any rights, interests or obligations hereunder, or
delegate performance of any of its obligations hereunder, without
the prior written consent of each other Party.
Section 5.3. Entire Agreement. This Agreement, including
the Exhibits attached hereto, embodies the entire agreement and
understanding of the Parties in respect of the subject matter
contained herein, provided that this provision shall not abrogate
any other written agreement between the Parties executed
simultaneously with this Agreement. This Agreement supersedes
all prior agreements and understandings between the Parties with
respect to such subject matter.
Section 5.4. Waiver, Amendment, etc. This Agreement may
not be amended or supplemented, and no waivers of or consents to
departures from the provisions hereof shall be effective, unless
set forth in a writing signed by, and delivered to, all the
Parties. No failure or delay of any Party in exercising any
power or right under this Agreement will operate as a waiver
thereof, nor will any single or partial exercise of any right or
power, or any abandonment or discontinuance of steps to enforce
such right or power, preclude any other or further exercise
thereof or the exercise of any other right or power.
Section 5.5. Binding Agreement; No Third Party
Beneficiaries. This Agreement will be binding upon and inure to
the benefit of the Parties and their successors and permitted
assigns. Nothing expressed or implied herein is intended or will
be construed to confer upon or to give to any third party any
rights or remedies by virtue hereof.
Section 5.6. Governing Law. This Agreement shall be
governed by the laws of the State of Georgia, without regard to
conflict or choice of laws principles.
Section 5.7. Severability. The invalidity or
unenforceability of any provision hereof in any jurisdiction will
not affect the validity or enforceability of the remainder hereof
in that jurisdiction or the validity or enforceability of this
Agreement, including that provision, in any other jurisdiction.
To the extent permitted by Applicable Law, each Party 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.
Section 5.8. Counterparts. This Agreement 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 Agreement.
Section 5.9. Remedies. In addition to any other remedies
which may be available to the Company (including any remedies
which the Company may have at law or in equity): Bull Run agrees
that the Company shall have no obligation to honor transfers of
Voting Securities or other equity interests in the Company to
Bull Run or any of its Affiliates or Associates which would cause
any of Bull Run and Affiliates or Associates to Beneficially Own
Voting Securities or other <PAGE> equity interests in the Company in
violation of this Agreement, any such transfers shall be void and
of no effect, and the Company shall be entitled to instruct any
transfer agent or agents for the equity interests in the Company
to refuse to honor such transfers.
IN WITNESS WHEREOF, the Company and Bull Run have caused
their respective duly authorized officers to execute this
Agreement as of the day and year first above written.
RAWLINGS SPORTING GOODS
COMPANY, INC.
By:________________________
Name:
Title:
BULL RUN CORPORATION
By:________________________
Name:
Title:
<PAGE>
EXHIBIT A
AGREEMENT
THIS AGREEMENT (the "Agreement") dated as of ________, 199__
by and among Rawlings Sporting Goods Company, Inc., a Delaware
corporation (the "Company"), Bull Run Corporation, a Georgia
corporation ("Bull Run"), and _____________________________, an
individual residing at __________________________________ ("Bull
Run Nominee").
W I T N E S S E T H:
WHEREAS, the Company and Bull Run have entered into that
certain Standstill Agreement dated as of November 21, 1997 (the
"Standstill Agreement") pursuant to which the Company has agreed
to appoint or nominate certain individuals designated by Bull Run
to be directors of the Company; and
WHEREAS, as a condition to its entering into the Standstill
Agreement, and as a condition to the Board of Directors of the
Company nominating or appointing such designee to the Board of
Directors, the Company requires that each individual designated
by Bull Run enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained
herein and in the Investment Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, each of the Company, Bull Run and the Bull
Run Nominee (each a "Party"), intending to be legally bound,
hereby agrees as follows:
1. The Bull Run Nominee agrees to serve as a member of the
Board of Directors until the earlier of his or her resignation or
upon the expiration of the term thereof. The Bull Run Nominee
further agrees to immediately resign all positions as a director
and officer of the Company and any subsidiary of the Company upon
any of the following events: (i) upon the written request by Bull
Run delivered to the Bull Run Nominee requesting the Bull Run
Nominee to resign as a director of the Company; and (ii) upon the
termination of the Warrants (as defined in the Standstill
Agreement) if the Warrants are not exercised in full prior to
their termination.
2. Clause (ii) of Section 1 of this Agreement and Section
3 of this Agreement shall terminate on the earlier of (i) the
date sixty-six (66) months after the Acquisition Completion Date,
or (ii) in the event of a material breach by the Company of any
of the terms of this Agreement, the Standstill Agreement, the
Investment Agreement, or the Registration Rights Agreement
referred to in the Investment Agreement or the Warrants if the
Company fails to cure such breach within forty-five (45) days
after its receipt of notice of such breach from Bull Run. The
remainder of this Agreement shall not terminate until the Bull
Run Nominee is no longer a director of the Company.
<PAGE>
3. The Bull Run Nominee acknowledges, and agrees to be
bound by, the terms of the Standstill Agreement as fully as if
the Bull Run Nominee was a party thereto.
IN WITNESS WHEREOF, the Company, Bull Run and the Bull Run
Nominee have caused their respective duly authorized officers to
execute this Agreement as of the day and year first above
written.
RAWLINGS SPORTING GOODS
COMPANY, INC.
By:__________________________
Name:
Title:
BULL RUN CORPORATION
By:__________________________
Name:
Title:
"Bull Run Nominee"
_____________________________
Name:
<PAGE>
Exhibit 99.4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated
as of November ______, 1997 (the "Effective Date"), is by and
between Rawlings Sporting Goods Company, Inc., a Delaware
corporation (the "Company") and Bull Run Corporation, a Georgia
corporation ("Bull Run").
W I T N E S S E T H:
WHEREAS, on the Closing Date (as defined in the Investment
Agreement), Bull Run will be the beneficial owner of Warrants
(as defined below) to purchase shares of the Company's Common
Stock pursuant to the Investment Agreement of even date herewith
(the "Investment Agreement");
WHEREAS, Bull Run shall have the option to purchase
Additional Warrants (as defined in the Investment Agreement) to
purchase shares of the Company's Common Stock pursuant to the
Investment Agreement;
WHEREAS, Bull Run may desire, from time to time, to sell to
the public shares of such Common Stock which may be issued upon
exercise by Bull Run of the Warrants;
WHEREAS, the Company and Bull Run therefore deem it to be in
their respective best interests to set forth the rights of Bull
Run in connection with public offerings and sales of Warrant
Common Shares (as defined below);
NOW, THEREFORE, in consideration of the foregoing premises
and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1.
DEFINITIONS AND CONSTRUCTION
Section 1.1. Certain Definitions. As used in this
Agreement, the following terms shall have the meanings specified
below:
"Common Stock" means the Company's Common Stock, par value
$.01 per share, and the stock of any other class of common equity
of the Company into which such shares may hereafter have been
changed, exchanged or converted.
"Effective Date" shall have the meaning ascribed to that
term in the introductory paragraph of this Agreement.
<PAGE>
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder as
in effect at the time.
"Holder" means Bull Run, so long as it holds any Registrable
Securities, and any person owning Registrable Securities who is a
permitted transferee or assignee of rights under Article 10 of
this Agreement and acquired such Registrable Securities subject
to any applicable restrictions on transfer set forth in the
Investment Agreement, the Standstill Agreement and/or the
Warrants.
"Investment Agreement" means the Investment Purchase
Agreement, of even date herewith, between the Company and Bull
Run.
The terms "register," "registered," and "registration" refer
to a registration effected by the preparation and filing of a
Registration Statement in compliance with the Securities Act, and
the declaration or ordering of effectiveness of such Registration
Statement by the SEC.
"Registrable Securities" means at any time: (i) the Warrant
Common Shares then owned or held by the Holders, and (ii) the
Warrant Common Shares then issuable upon exercise of any and all
unexercised Warrants then owned or held by the Holders, and, in
each case, all shares of Common Stock issued as (or issuable upon
the conversion or exercise of any warrant, right or other
security which is issued as) a dividend, stock split or other
distribution with respect to, in exchange for, or in replacement
of such Warrant Common Shares then owned or held by such Holder
or Holders or Warrant Common Shares then issuable upon exercise
of any and all unexercised Warrants then owned or held by the
Holders, as the case may be. The term "Registrable Securities"
excludes, however, any security (i) the sale of which has been
effectively registered under the Securities Act and which has
been disposed of in accordance with a Registration Statement,
(ii) that has been sold by a Holder in a transaction exempt from
the registration and prospectus delivery requirements of the
Securities Act under Section 4(l) thereof (including, without
limitation, transactions pursuant to Rules 144 and 144A) such
that the further disposition of such securities by the transferee
or assignee is not restricted under the Securities Act,
(iii) that has been sold by a Holder in a transaction in which
such Holder's rights under this Agreement are not, or cannot be,
assigned, (iv) for which the registration rights provided under
this Agreement have expired pursuant to Article 14 of this
Agreement, or (v) that has ceased to be outstanding.
"Registration Expenses" means: (i) registration,
qualification and filing fees; (ii) fees and expenses of
compliance with securities or blue sky laws (including reasonable
fees and disbursements of counsel in connection with blue sky
qualifications of any Registrable Securities being registered);
(iii) printing expenses; (iv) fees and disbursements of counsel
for the Company and customary fees and expenses for independent
certified public accountants retained by the Company (including
the expenses of any comfort letters or costs associated with the
delivery by independent certified public accountants of comfort
letters customarily requested by underwriters); and (v) fees and
expenses of listing any Registrable Securities on any securities
exchange on which the Common Stock is then listed, but in all
events excluding the compensation of regular employees of the
Company and excluding underwriter's fees, discounts and
commissions.
<PAGE>
"Registration Statement" means any registration statement or
similar document under the Securities Act or any successor
thereto that covers any of the Registrable Securities pursuant to
the provisions of this Agreement, including the prospectus or
preliminary prospectus included therein, all amendments and
supplements to such Registration Statement, including post-
effective amendments, all exhibits to such Registration Statement
and all material incorporated by reference in such Registration
Statement.
"Rule 144" means Rule 144 promulgated under the Securities
Act or any successor rule thereto.
"Rule 144A" mean Rule 144A promulgated under the Securities
Act or any successor rule thereto.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder as
in effect at the time.
"Standstill Agreement" means the Standstill Agreement, of
even date herewith, between the Company and Bull Run.
"Warrants" means, collectively, the First Tranche Warrants
(as defined in the Investment Agreement) of even date herewith to
purchase shares of Common Stock and the Additional Warrants (as
defined in the Investment Agreement) to purchase shares of Common
Stock.
"Warrant Common Shares" shall mean all shares of Common
Stock issued to Bull Run or any permitted assignee or transferee
of the Warrants upon exercise of the Warrants.
Section 1.2. Construction. The definitions in Section 1.1
shall apply equally to both the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter
forms. The words "include," "includes" and "including" shall be
deemed to be followed by the phrase "without limitation." All
references herein to Articles and Sections shall be deemed to be
references to Articles and Sections of this Agreement unless the
context shall otherwise require. The headings of the Articles
and Sections are inserted for convenience of reference only and
are not intended to be a part of or to affect the meaning or
interpretation of this Agreement. Unless the context shall
otherwise require or provide, any reference to any agreement or
other instrument or statute or regulation is to such agreement,
instrument, statute or regulation as amended and supplemented
from time to time (and, in the case of a statute or regulation,
to any successor provision).
<PAGE>
ARTICLE 2.
DEMAND REGISTRATION
Section 2.1. If the Company shall receive a written request
in the manner provided in Section 14.2 hereof, from one or more
Holders (collectively, the "Initiating Holders") that the Company
file a Registration Statement under the Securities Act covering
the registration of any or all of such Holder's Registrable
Securities, then the Company shall (i) within 10 days of the
receipt thereof, give written notice, in the manner provided in
Section 14.2 hereof and to any additional addressees provided to
the Company by any transferee of any Holder, of such request to
all Holders of outstanding Registrable Securities known to the
Company, and (ii) subject to the limitations contained in this
Article 2, as soon as practicable and in any event within 45 days
of the receipt of such request, file the Registration Statement
to effect registration under the Securities Act covering all
Registrable Securities for which the Company receives a request
from the Holders thereof in the manner provided in Section 14.2
hereof, within 30 days of the delivery of such notice by the
Company. The Company, however, shall not be required to file a
Registration Statement pursuant to this Article 2 unless the
aggregate number of Registrable Securities requested to be
registered is greater than 386,250.
Section 2.2. If an Initiating Holder intends to distribute
the Registrable Securities covered by its request by means of an
underwriting, it shall so advise the Company as a part of its
request made pursuant to Section 2.1 hereof and the Company shall
include such information in the written notice to the Holders
referred to in Section 2.1. In such event, the right of any
Holder to include its Registrable Securities in such
registration shall be conditioned upon such Holder's
participation in the underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent
provided herein. All Holders proposing to sell Registrable
Securities through such underwriting (together with the Company
as provided in Section 4.1(vii) of this Agreement and any other
holder of shares of Common Stock permitted to participate in such
registration pursuant to this Section 2.2) shall enter into an
underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Initiating
Holder(s) (provided the same are underwriters of recognized
national standing reasonably acceptable to the Company) upon the
terms and conditions agreed upon among the Company, the
Initiating Holder(s) and such underwriter(s). Notwithstanding
any other provision of this Article 2, if the underwriter(s)
advise the Initiating Holder(s) in writing that marketing or
other factors require a limitation of the number of Registrable
Securities to be underwritten, then the Company shall so advise
all Holders of Registrable Securities that would otherwise be
underwritten pursuant hereto, and the number of Registrable
Securities that may be included in the underwriting shall be
allocated among all Holders thereof, including the Initiating
Holder(s), in proportion (as nearly as practicable) to the number
of Registrable Securities which each Holder requested to be
included in such registration; provided, that there shall be no
reduction in the number of shares included in the registration by
Bull Run until all shares of Holders other than Bull Run have
been excluded from such registration. If the number of
Registrable Securities to be underwritten has not been so
limited, the Company may include shares of Common Stock for its
own account (or for the account of other shareholders) in such
registration if the underwriter(s) <PAGE> so agree and to the extent
that, in the opinion of such underwriter(s), the inclusion of
such additional shares will not adversely affect the offering and
successful marketing of the Registrable Securities included in
such registration and if the number of Registrable Securities
that would otherwise have been included in such registration and
underwriting will not thereby be limited.
Section 2.3. The Company shall not be obligated to effect
a total of more than two (2) registrations and shall not be
obligated to effect more than one registration in any six-month
period pursuant to this Article 2.
ARTICLE 3.
INCIDENTAL REGISTRATION
If at any time (but without any obligation to do so) the
Company proposes to register (including a registration effected
by the Company for shareholders other than the Holders) any
shares of Common Stock under the Securities Act in connection
with the public offering of such shares solely for cash on any
form of Registration Statement in which the inclusion of
Registrable Securities is appropriate (other than a registration
(i) relating solely to the sale of securities to participants in
a Company employee or non-employee director stock plan,
(ii) pursuant to a Registration Statement on Form S-4 or Form S-8
(or any successor forms) or any form that does not include
substantially the same information, other than information
relating to the selling shareholders or their plan of
distribution, as would be required to be included in a
registration statement covering the sale of Registrable
Securities, (iii) in connection with any dividend reinvestment or
similar plan, or (iv) for the sole purpose of offering securities
to another entity or its securityholders in connection with the
acquisition of assets or securities of such entity or any similar
transaction), the Company shall promptly give each Holder written
notice of such registration in the manner provided in Section
14.2 hereof at least 30 days before the anticipated filing date
of any such Registration Statement. If the registration of which
the Company gives notice is for a registered public offering
involving an underwriting, the Company shall so advise each of
the Holders as a part of the written notice given pursuant to
this Article. Upon the written request of any Holder given in
the manner provided in Section 14.2 within 20 days after the
delivery of such notice by the Company, the Company shall cause
to be registered under the Securities Act all of the Registrable
Securities that such Holder has so requested to be registered.
The Company may decline to file a Registration Statement after
giving notice to the Holders as herein provided, or withdraw a
Registration Statement after filing and after such notice, but
prior to the effectiveness thereof, provided that the Company
shall promptly notify each Holder of Registrable Securities in
writing of any such action and provided further that the Company
shall bear all expenses incurred by each Holder or otherwise in
connection with such declined or withdrawn Registration
Statement. Further, any such declining or withdrawal shall be
without prejudice to the rights (if any) of the Holders
immediately to request that such registration be effected as a
registration under Article 2 hereof. The right of any Holder to
have Registrable Securities included in such Registration
Statement shall be conditioned upon participation in any
underwriting to the extent provided herein. The Company shall
not be required to include any <PAGE> Registrable Securities in such
underwriting unless the Holders thereof agree to enter into an
underwriting agreement in customary form, and upon terms and
conditions agreed upon among such Holders, the Company and the
underwriter(s), with the underwriter(s) selected by the Company.
In the event that the underwriter(s) shall advise the Company
that marketing or other factors require a limitation of the
number of shares to be underwritten, then the Company shall so
advise all Holders of Registrable Securities that would otherwise
be underwritten pursuant hereto. The underwriter(s) may exclude
some or all of the Registrable Securities from such underwriting
and the number of Registrable Securities, if any, that may be
included in the underwriting shall be allocated among all Holders
thereof in proportion (as nearly as practicable) to the number of
Registrable Securities which each Holder requested be included in
such registration; provided, however, that all of the Registrable
Securities of the Company held by Bull Run or its successor that
Bull Run or its successor shall have requested to be included in
such registration shall be included before the securities of any
other Holder are included in such registration and underwriting.
Nothing in this Article 3 is intended to diminish the number of
Registrable Securities to be included by the Company in such
underwriting. The Company and the underwriter(s) selected by the
Company shall make all determinations with respect to the timing,
pricing and other matters related to the offering.
ARTICLE 4.
REGISTRATION PROCEDURE
Section 4.1 Whenever required under this Agreement to
effect the registration of any Registrable Securities, the
Company shall, as expeditiously as reasonably practicable:
(i) Prepare and file with the SEC as soon as
practicable a new Registration Statement with respect to
such Registrable Securities and use its reasonable best
efforts to cause such Registration Statement to become
effective, and keep such Registration Statement continuously
effective for up to 135 days or such shorter period as shall
be required to sell all of the Registrable Securities
covered by such Registration Statement; provided, however,
that no Registration Statement need remain in effect after
all Registrable Securities covered thereby have been sold.
In no event shall the Company be required to undertake or
cause a shelf registration.
(ii) Furnish to each Holder, and to any underwriter
before filing with the SEC, copies of any Registration
Statement (including all exhibits) and any prospectus
forming a part thereof and any amendments and supplements
thereto (including all documents incorporated or deemed
incorporated by reference therein prior to the effectiveness
of such Registration Statement and including each
preliminary prospectus, any summary prospectus or any term
sheet (as such term is used in Rule 434 under the Securities
Act)) and any other prospectus filed under Rule 424 under
the Securities Act, which documents, other than documents
incorporated or deemed incorporated by reference, will be
subject to the review of the Holders and any such
underwriter for a period of at least five business days, and
the <PAGE> Company shall not file any such Registration Statement
or such prospectus or any amendment or supplement to such
Registration Statement or prospectus to which any Holder or
any such underwriter shall reasonably object within five
business days after the receipt thereof; a Holder or such
underwriters, if any, shall be deemed to have reasonably
objected to such filing only if the Registration Statement,
amendment, prospectus or supplement, as applicable, as
proposed to be filed, contains a material misstatement or
omission.
(iii) Prepare and file with the SEC such amendments
and supplements to such Registration Statement and the
prospectus used in connection with such Registration
Statement as may be necessary to comply with the provisions
of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement.
(iv) Furnish to the Holders of Registrable Securities
to be registered and to any underwriter, without charge,
such number of copies of a prospectus, including each
preliminary prospectus, summary prospectus or term sheet,
and any amendment or supplement thereto as they may, from
time to time, reasonably request and a reasonable number of
copies of the then-effective Registration Statement and any
post-effective amendment thereto, including financial
statements and schedules, all documents incorporated therein
by reference and all exhibits (including those incorporated
by reference).
(v) To the extent practicable, promptly prior to the
filing of any document that is to be incorporated by
reference into any Registration Statement or prospectus
forming a part thereof subsequent to the effectiveness
thereof, and in any event no later than the date such
document is filed with the SEC, provide copies of such
document to the Holders of Registrable Securities covered
thereby and any underwriter and make representatives of the
Company available for discussion of such document and other
customary due diligence matters, and include in such
document prior to the filing thereof such information as any
Holder or any such underwriter may reasonably request.
(vi) Use its reasonable best efforts (x) to register
and qualify the securities covered by such Registration
Statement under such other securities or blue sky laws of
such jurisdictions as shall be reasonably requested by the
Holders, (y) to keep such registration or qualification in
effect for so long as the applicable Registration Statement
remains in effect, and (z) to take any other action which
may be reasonably necessary or advisable to enable such
Holders to consummate the disposition in such jurisdictions
of the securities to be sold by such Holders; provided,
however, that the Company shall not be required to qualify
to do business or to file a general consent to service of
process in any such states or jurisdictions where it would
not otherwise be required to so qualify to do business or
consent to service of process or subject itself to taxation
in any such jurisdiction.
(vii) Use its reasonable best efforts to cause all
Registrable Securities covered by such Registration
Statement to be registered with or approved by such other
federal or state governmental agencies or authorities as may
be necessary in the opinion of counsel to the <PAGE> Company and
counsel to the Holders of Registrable Securities to enable
the Holders thereof to consummate the disposition of such
Registrable Securities;
(viii) Cooperate with the Holders of Registrable
Securities and each underwriter participating in the
disposition of such Registrable Securities and their
respective counsel in connection with any filings required
to be made with the National Association of Securities
Dealers, Inc.
(ix) In the event of any underwritten public
offering, enter into and perform its obligations under an
underwriting agreement, in usual and customary form, with
the underwriter(s) of such offering, with such terms and
conditions as the Company, the Holders and the
underwriter(s) may agree. Each Holder participating in such
underwriting shall also enter into and perform its
obligations under such an agreement.
(x) Promptly notify each Holder of Registrable
Securities covered by a Registration Statement (A) upon
discovery that, or upon the happening of any event as a
result of which, the prospectus forming a part of such
Registration Statement, as then in effect, includes an
untrue statement of a material fact or omits to state any
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, (B) of the
issuance by the SEC of any stop order suspending the
effectiveness of such Registration Statement or the
initiation of proceedings for that purpose, (C) of any
request by the SEC for (1) amendments to such Registration
Statement or any document incorporated or deemed to be
incorporated by reference in any such Registration
Statement, (2) supplements to the prospectus forming a part
of such Registration Statement or (3) additional
information, or (D) of the receipt by the Company of any
notification with respect to the suspension of the
qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the
initiation of any proceeding for such purpose, and at the
request of any such Holder promptly prepare and furnish to
it a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities,
such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to
be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading;
(xi) Use its reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of any
such registration, or the lifting of any suspension of the
qualification (or exemption from qualification) of any of
the Registrable Securities for sale in any jurisdiction;
(xii) If requested by any Initiating Holder, or any
underwriter, promptly incorporate in such Registration
Statement or prospectus, pursuant to a supplement or post-
effective amendment if necessary, such information as the
Initiating Holder and any underwriter may reasonably request
to have included therein, including, without limitation,
information relating <PAGE> to the "plan of distribution" of the
Registrable Securities, information with respect to the
principal amount or number of shares of Registrable
Securities being sold to such underwriter, the purchase
price being paid therefor and any other terms of the
offering of the Registrable Securities to be sold in such
offering and make all required filings of any such
prospectus supplement or post-effective amendment as soon as
practicable after the Company is notified of the matters to
be incorporated in such prospectus supplement or post-
effective amendment;
(xiii) Otherwise use its reasonable best efforts to
comply with all applicable rules and regulations of the SEC,
and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the
period of at least 12 months, but not more than 18 months,
beginning after the effective date of such Registration
Statement, which earnings statement shall satisfy the
provision of Section 11(a) of the Securities Act and Rule
158 promulgated thereunder;
(xiv) Provide promptly to the Holders upon request
any document filed by the Company with the SEC pursuant to
the requirements of Section 13 and Section 15 of the
Exchange Act;
(xv) Cause all Registrable Securities covered by the
Registration Statement to be listed on each securities
exchange or automated quotation system on which shares of
the Common Stock is then listed. If any of such shares are
not so listed, the Company shall cause such shares to be
listed on the securities exchange or automated quotation
system as may be reasonably requested by the Holders of a
majority of the Registrable Securities being registered.
(xvi) Furnish to the Holders, at the request of any
Holder requesting registration pursuant to this Agreement,
(A) an opinion of counsel representing the Company for the
purposes of such registration addressed to such Holder and
dated the date of the closing under the underwriting
agreement, if any, or the date of effectiveness of the
Registration Statement if such registration is not an
underwritten offering, and (B) a "comfort" letter from
independent certified public accountants of the Company who
have certified the Company's financial statements included
in such registration with respect to events included in and
subsequent to the date of such financial statements, in each
case to be dated such date and to be in form and substance
as is customarily given by counsel or independent certified
public accountants, as the case may be, to underwriters in
an underwritten public offering, addressed to the
underwriters.
(xvii) Permit a representative of any Holder of
Registrable Securities, any underwriter participating in any
disposition pursuant to such registration, and any attorney
or accountant retained by such Holder or underwriter, to
participate, at each person's own expense, in the
preparation of the Registration Statement, and cause the
Company's officers, directors and employees to supply all
information reasonably requested by any such representative,
underwriter, attorney or accountant in connection with such
registration; <PAGE> provided, however, that such representatives,
underwriters, attorneys or accountants enter into a
confidentiality agreement, in form and substance reasonably
satisfactory to the Company, prior to the release or
disclosure of any such information.
(xviii) To the extent practicable, promptly prior to
the filing of any document that is to be incorporated by
reference into any Registration Statement or prospectus
forming a part thereof subsequent to the effectiveness
thereof, and in any event no later than the date such
document is filed with the SEC, provide copies of such
document to the Holders, if requested, and to any
underwriter and make representatives of the Company
available for discussion of such document and other
customary due diligence matters, and include in such
document prior to the filing thereof such information as any
Holder or any such underwriter reasonably may request.
Notwithstanding the foregoing, the Company may delay, suspend or
withdraw any registration or qualification of Registrable
Securities required pursuant to this Agreement for a period not
exceeding 90 days if the Company shall in good faith determine
that any such registration would adversely affect an offering or
contemplated offering of any securities of the Company or any
other contemplated material corporate event; provided that (i)
the duration of any such discontinuance together with any delay,
suspension or withdrawal effected pursuant to Article 5 hereof
may not exceed 90 days in the aggregate in any period of 12
consecutive months and (ii) the Company may not impose such a
suspension or a postponement pursuant to this Article 4 following
the printing and distribution of a preliminary prospectus in any
underwritten public offering of Registrable Securities (except
such suspension, not to exceed fifteen days, which results from
an event that is not within the reasonable control of the
Company). In addition, the Company shall not be required to
register Registrable Securities within six months after the
effective date of a Registration Statement referred to in Article
3 pursuant to which the Holders were afforded the opportunity to
register the disposition of all of the Registrable Securities
sought to be registered thereby.
ARTICLE 5.
HOLDER'S OBLIGATION TO FURNISH INFORMATION
It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Agreement with
respect to any Registrable Securities that the Holder of such
securities furnish to the Company such information regarding
itself, the Registrable Securities held by it, and the intended
method of disposition of such securities as shall be required to
effect the registration of such Holder's Registrable Securities.
Each Holder agrees that, upon receipt of any notice from the
Company, such Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the then current prospectus
until (i) such Holder is advised in writing by the Company that a
new Registration Statement covering the reoffer of Registrable
Securities has become effective under the Securities Act,
(ii) such Holder <PAGE> receives copies of a supplemented or amended
prospectus contemplated by Article 4 hereof which addresses any
additional information, including material nonpublic information,
required to be disclosed therein, or until such Holder is advised
in writing by the Company that the use of the prospectus may be
resumed, or (iii) a period of 60 days has elapsed, whichever is
sooner. The Company shall use its reasonable best efforts to
limit the duration of any discontinuance of disposition of
Registrable Securities pursuant to this paragraph.
ARTICLE 6.
REGISTRATION EXPENSES
In the case of the first demand registration pursuant to
Article 2, the Company shall pay all Registration Expenses. In
the case of the second demand registration pursuant to Article 2,
the requesting Holders shall pay all Registration Expenses. In
the case of any incidental registration pursuant to Article 3,
the requesting Holders shall bear any incremental Registration
Expenses, in each case, including, without limitation, (i)
incremental registration and qualification fees and expenses,
(ii) the pro rata share of the underwriter's fees, discounts and
commissions incurred in such registration, and (iii) any
incremental costs and disbursements (including legal fees and
expenses) that result from the inclusion of the Registrable
Securities included in such registration, with such incremental
expenses being borne by the requesting Holders on a pro rata
basis. Notwithstanding the foregoing, if, as a result of the
withdrawal of a request for registration pursuant to Article 2 by
any of the Holders, as applicable, the Registration Statement
does not become effective, the Holders and the other stockholders
requesting registration may elect to bear the Registration
Expenses (pro rata on the basis of the number of their shares
included in the registration request, or on such other basis as
such Holders and other stockholders may agree), in which case
such registration shall not be counted as a registration
requested under Article 2.
ARTICLE 7.
EFFECTIVENESS OF REGISTRATION
A registration requested pursuant to Article 2 will not be
deemed to have been effected if (i) the registration statement
has not been kept effective for the period required under
Section 4.1(i) of this Agreement, (ii) the offering of
Registrable Securities pursuant to such registration is
interfered with by any stop order, injunction or other order or
requirement of the SEC or other governmental agency or court,
(iii) the conditions to the closing of any such registration that
is underwritten are not satisfied, unless such conditions have
not been satisfied by the Holders participating in the
underwriting, or (iv) the Company has not complied with the terms
of this Agreement, including Article 4.
<PAGE>
ARTICLE 8.
INDEMNIFICATION AND CONTRIBUTION
Section 8.1. In the event any Registrable Securities are
included in a Registration Statement pursuant to this Agreement,
the Company will indemnify and hold harmless each Holder, its
directors, officers and employees and each person, if any, who
"controls" such Holder (within the meaning of the Securities Act)
against all losses, claims, damages, or liabilities, joint or
several, or actions in respect thereof to which such Holder or
other person entitled to indemnification hereunder may become
subject under the Securities Act, or otherwise, insofar as such
losses, claims, damages, liabilities or actions in respect
thereof arise out of, or are based upon, any untrue statement or
alleged untrue statement of any material fact contained in such
Registration Statement, any related preliminary prospectus, or
any related prospectus or any amendment or supplement thereto,
offering circular or other document (including any related
notification or the like) incident to any such registration,
qualification or compliance, or arise out of, or are based upon,
any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of the
Securities Act or the Exchange Act or any rule or regulation
thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such
registration, qualification or compliance, and the Company will
reimburse each such Holder or other person entitled to
indemnification hereunder for any legal or other expenses
reasonably incurred by it in connection with investigating or
defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be so liable to the
extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, an untrue statement or alleged
untrue statement of a material fact or an omission or alleged
omission to state a material fact in such Registration Statement,
such preliminary prospectus, or such prospectus, or any such
amendment or supplement thereto, offering circular or other
document (including any related notification or the like)
incident to any registration, qualification or compliance, in
reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of Holder or an
underwriter specifically for use therein; and provided, further,
that the Company will not be liable, and this indemnification
agreement shall not apply, in any such case to the extent that
any such loss, claim, damage, liability or action is solely
attributable to the failure of such Holder (or underwriter or
agent acting on its behalf) to deliver a final prospectus (or
amendment or supplement thereto) that corrects a material
misstatement or omission contained in the preliminary prospectus
(or final prospectus). The Company will also indemnify
underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the
distribution, their officers and directors and each person who
"controls" such persons (within the meaning of the Securities
Act) to the same extent as provided above with respect to the
indemnification of the Holders, if so requested, except with
respect to information furnished in writing specifically for use
in any prospectus or Registration Statement by any selling
Holders or any such underwriters.
Section 8.2. With respect to written information furnished
to the Company by or on behalf of a Holder specifically for use
in a Registration Statement, any related preliminary prospectus,
or any <PAGE> related prospectus or any supplement or amendment thereto,
offering circular or other document (including any related
notification or the like) incident to any registration,
qualification or compliance, if Registrable Securities held by it
are included in the securities as to which such registration,
qualification or compliance is being effected, such Holder will
severally indemnify and hold harmless the Company, and its
directors, officers and employees and each person, if any, who
"controls" the Company (within the meaning of the Securities Act)
and any other Holder against any losses, claims, damages or
liabilities, joint or several, or actions in respect thereof, to
which the Company or such other person entitled to
indemnification hereunder may become subject under the Securities
Act, or otherwise, insofar as such losses, claims, damages,
liabilities or actions in respect thereof arise out of, or are
based upon, any untrue statement or alleged untrue statement of
any material fact contained in such Registration Statement, such
preliminary prospectus, or such prospectus, or any such amendment
or supplement thereto, offering circular or other document
(including any related notification or the like) incident to any
registration, qualification or compliance, or arise out of, or
are based upon, the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to
make the statements therein not misleading; and such Holder will
reimburse the Company and such other persons for any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage,
liability or action, in each case to the extent, but only to the
extent, that the same arises out of, or is based upon, an untrue
statement or alleged untrue statement of material fact or an
omission or alleged omission to state a material fact in such
Registration Statement, such preliminary prospectus, or such
prospectus or any such amendment or supplement thereto in
reliance upon, and in conformity with, such written information;
provided, however, that the obligations of each of the Holders
hereunder shall be limited to an amount equal to the net proceeds
to such Holder of Registrable Securities sold as contemplated
herein. The Company shall be entitled to receive indemnities
from underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the
distribution, to the same extent as provided above with respect
to the information so furnished in writing by such persons
specifically for inclusion in any prospectus or Registration
Statement. The Holder will also indemnify underwriters, selling
brokers, dealer managers and similar securities industry
professionals participating in the distribution, their officers
and directors and each person who "controls" such persons (within
the meaning of the Securities Act) to the same extent as provided
herein with respect to the indemnification of the Company, if so
requested.
Section 8.3. Promptly after receipt by an indemnified
party of notice of any claim or the commencement of any action,
the indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party, notify the indemnifying
party in writing of the claim or the commencement of that action;
provided, however, that the failure to notify the indemnifying
party will not relieve it from any liability that it may have to
the indemnified party except to the extent it was actually
damaged or suffered any loss or incurred any additional expense
as a result thereof. If any such claim or action is brought
against an indemnified party, and it notifies the indemnifying
party thereof, the indemnifying party will be entitled to assume
the defense thereof with counsel selected by the indemnifying
party and reasonably satisfactory to the indemnified party.
After notice from the indemnifying party to the indemnified party
of its election to assume the defense of such claim or action,
(i) the indemnifying party will not be liable to the indemnified
party for any legal or other <PAGE> expense subsequently incurred by the
indemnified party in connection with the defense thereof,
(ii) the indemnifying party will not be liable for the costs and
expenses of any settlement of such claim or action unless such
settlement was effected with the written consent of the
indemnifying party or the indemnified party waived any rights to
indemnification hereunder in writing, in which case the
indemnified party may effect a settlement without such consent,
and (iii) the indemnified party will be obligated to cooperate
with the indemnifying party in the investigation of such claim or
action; provided, however, that the Holders and their respective
controlling persons who may be subject to liability arising out
of any claim in respect of which indemnity may be sought by such
Holders against the Company may employ their own counsel if they
have been advised by counsel in writing that, in the reasonable
judgment of such counsel, it is advisable for such Holders and
their controlling persons to be represented by separate counsel
due to the presence of conflicts of interest, and in that event
the fees and expenses of such separate counsel will also be paid
by the Company; provided that the Company shall not be liable for
the reasonable fees and expenses of more than one separate
counsel at any time for all such indemnified parties. An
indemnifying party shall not, without the prior written consent
of the indemnified parties, settle, compromise or consent to the
entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to
such claim or action) unless such settlement, compromise or
consent includes a release of such indemnified party reasonably
acceptable to such indemnified party from all liability arising
out of such claim, action, suit or proceeding and unless the
indemnifying party shall confirm in a written agreement
reasonably acceptable to such indemnified party, that
notwithstanding any federal, state or common law, such
settlement, compromise or consent shall not adversely affect the
right of any indemnified party to indemnification or contribution
as provided in this Agreement.
Section 8.4. If for any reason the indemnification
provided for in Sections 8.1 or 8.2 is unavailable to an
indemnified party or is insufficient to hold it harmless as
contemplated therein, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party
as a result of such loss, claim , damage or liability in such
proportion as is appropriate to reflect not only the relative
benefits received by the indemnifying party and the indemnified
party, but also the relative fault of the indemnifying party and
the indemnified party, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and
of the indemnified party shall be determined by reference to,
among other things, whether the untrue (or alleged untrue)
statement of a material fact or the omission (or alleged
omission) to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party
and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement
or omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
Section 8.5. The obligations under this Article 8 shall
survive the completion of any offering of Registrable Securities
in a Registration Statement pursuant to this Agreement, and
otherwise.
<PAGE>
Section 8.6 Notwithstanding the foregoing provision of
this Article 8, to the extent that the provisions regarding
indemnification and contribution contained in the underwriting
agreement entered into in connection with any underwritten public
offering contemplated by this Agreement are in conflict with the
foregoing provisions, the provisions in such underwriting
agreement shall be controlling.
ARTICLE 9.
REPORTS UNDER EXCHANGE ACT
With a view to making available to the Holders the benefits
of Rule 144 and any other rule or regulation of the SEC that may
at any time permit a Holder to sell securities of the Company to
the public without registration, the Company agrees that so long
as the Company is subject to the reporting requirements of the
Exchange Act, to:
(i) Make and keep public information available, as
those terms are understood and defined in Rule 144;
(ii) File with the SEC in a timely manner all reports
and other documents required of the Company under the
Securities Act and the Exchange Act; and
(iii) Furnish to any Holder, so long as the Holder
owns any Registrable Securities, upon request (a) a written
statement by the Company as to its compliance with the
reporting requirements of Rule 144 (at any time after 90
days after the Effective Date), the Securities Act and the
Exchange Act, (b) a copy of the most recent annual or
quarterly report of the Company and such other reports and
documents so filed by the Company, and (c) such other
information as may be reasonably requested in availing any
Holder of any rule or regulation of the SEC which permits
the selling of any such securities without registration or
pursuant to such form.
ARTICLE 10.
ASSIGNMENT OF REGISTRATION RIGHTS
The rights to cause the Company to register Registrable
Securities pursuant to this Agreement may not be assigned or
transferred by Bull Run without the consent of the Company;
provided, however, that any transfer or assignment of the
Warrants or the Warrant Common Shares permitted pursuant to the
Investment Agreement, the Standstill Agreement and/or the
Warrants shall also cause a permitted transfer or assignment of
the rights to cause the Company to register Registrable
Securities without the consent of the Company. Such an
assignment or transfer shall be in accordance <PAGE> with all applicable
securities laws, and the assignee or transferee shall execute and
agree to be bound by this Agreement, an executed counterpart of
which shall be furnished to the Company.
ARTICLE 11.
AMENDMENT OF REGISTRATION RIGHTS
Any provision of this Agreement may be amended or the
observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively),
only with the written consent of the Company and the Holders of a
majority of Registrable Securities then outstanding. Any
amendment or waiver effected in accordance with this Section
shall be binding upon each Holder of any Registrable Securities,
each future Holder of such Registrable Securities and the
Company.
ARTICLE 12.
STAND-OFF AGREEMENT
Any Holder, if requested by the Company or an underwriter of
an underwritten public offering, agrees not to sell, make any
short sale of, loan, grant any option for the purchase of, or
otherwise transfer or dispose of any Common Stock held by such
Holder (other than Registrable Securities included in the
registration) without the prior written consent of the Company or
such underwriter(s), as the case may be, during a period of up to
five days prior to the pricing of such public offering and 180
days following the effective date of any underwritten
registration of the Company's securities effected pursuant to
Articles 2 or 3 hereof. Such agreement shall be in writing in
form satisfactory to the Company and such underwriter, and may be
included in the underwriting agreement. The Company may impose
stop-transfer instructions with respect to the securities subject
to the foregoing restriction until the end of the required stand-off period.
ARTICLE 13.
TERMINATION OF REGISTRATION RIGHTS
If the number of shares of Registrable Securities owned by a
Holder represents less than one percent (1%) of the total number
of shares of Common Stock then outstanding, then such Holder's
registration rights under this Agreement relating to such
Registrable Securities shall terminate on the date such Holder is
able to dispose of all of its shares of Registrable Securities in
any 90-day period pursuant to Rule 144. All registration rights
(except for rights previously exercised in connection with an
underwritten public offering pursuant to Article 3) of a Holder
under this Agreement shall <PAGE> terminate on the date on which all of
such Holder's shares of Registrable Securities can be sold
pursuant to Rule 144(k).
ARTICLE 14.
MISCELLANEOUS
Section 14.1. Confidential Information. No Holder may use
any confidential information received by it pursuant to this
Agreement in violation of the Exchange Act or reproduce,
disclose, or disseminate such information to any other person
(other than its employees or agents having a need to know the
contents of such information and its accountants and attorneys),
except to the extent reasonably related to the exercise of rights
under this Agreement, unless (i) such information has been made
available to the public generally (other than by such recipient
in violation of this Section 14.1), or (ii) such recipient is
required to disclose such information by a governmental body,
regulatory agency or subpoena or by law in connection with a
transaction that is not otherwise prohibited hereby and the
Company is given a reasonable opportunity to obtain injunctive
relief or a protective order to maintain the confidentiality of
such information.
Section 14.2. Notices. All notices and other
communications required or permitted by this Agreement shall be
made in writing and shall be deemed delivered when delivered in
person, transmitted by telecopier, or three days after it has
been sent by mail, as follows:
The Company: Rawlings Sporting Goods Company, Inc.
1859 Intertech Drive
Fenton, Missouri 63026
Attn: Mr. Paul E. Martin
Telecopy No.: (314) 349-3598
with a copy to: Stinson, Mag & Fizzell, P.C.
1201 Walnut, Suite 2800
P.O. Box 419251
Kansas City, Missouri 64141-6251
Attn: Craig L. Evans, Esq.
Telecopy No.: (816) 691-3495
Bull Run: Bull Run Corporation
4370 Peachtree Road
Atlanta, Georgia 30319
Attn: Mr. Robert S. Prather, Jr.
Telecopy No.: (404) 261-9607
<PAGE>
with a copy to: Alston & Bird LLP
One Atlantic Center
1201 West Peachtree St.
Atlanta, Georgia 30309
Attn: Stephen A. Opler, Esq.
Telecopy No.: (404) 881-4777
The Parties shall promptly notify each other in the manner
provided in this Section 14.2 of any change in their respective
addresses. A notice of change of address shall not be deemed to
have been given until received by the addressee. Communications
by telecopier also shall be sent concurrently by mail, but shall
in any event be effective as stated above.
Section. 14.3. Entire Agreement. This Agreement embodies
the entire agreement and understanding of the Parties in respect
of the subject matter contained herein, provided that this
provision shall not abrogate any other written agreement between
the Parties executed simultaneously with this Agreement. This
Agreement supersedes all prior agreements and understandings
between the Parties with respect to such subject matter.
Section 14.4. Waiver, Amendment, etc. Except as otherwise
permitted in this Agreement, this Agreement may not be amended or
supplemented, and no waivers of or consents to departures from
the provisions hereof shall be effective, unless set forth in a
writing signed by, and delivered to, all the Parties. Except as
otherwise permitted in this Agreement, no failure or delay of any
Party in exercising any power or right under this Agreement will
operate as a waiver thereof, nor will any single or partial
exercise of any right or power, or any abandonment or
discontinuance of steps to enforce such right or power, preclude
any other or further exercise thereof or the exercise of any
other right or power.
Section 14.5. Binding Agreement; No Third Party
Beneficiaries. This Agreement will be binding upon and inure to
the benefit of the Parties and their successors and permitted
assigns. Nothing expressed or implied herein is intended or will
be construed to confer upon or to give to any third party any
rights or remedies by virtue hereof.
Section 14.6. Governing Law. This Agreement shall be
governed by the laws of the State of Georgia, without regard to
conflict of laws principles.
Section 14.7. Severability. The invalidity or
unenforceability of any provision hereof in any jurisdiction will
not affect the validity or enforceability of the remainder hereof
in that jurisdiction or the validity or enforceability of this
Agreement, including that provision, in any other jurisdiction.
To the extent permitted by Applicable Law, each Party 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.
<PAGE>
Section 14.8. Counterparts. This Agreement 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 on and the same Agreement.
Section 14.9 No Inconsistent Agreements. The Company will
not hereafter enter into any agreement with respect to its
securities which is inconsistent with the rights granted to the
Holders of Registrable Securities in this Agreement.
Section 14.10 Remedies. Each Holder of Registrable
Securities, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled
to specific performance of its rights under this Agreement. The
Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of
the provisions of this Agreement and hereby agrees to waive the
defense in any action for specific performance that a remedy at
law would be adequate.
IN WITNESS WHEREOF, the Company and Bull Run have caused
their respective duly authorized officers to execute this
Agreement as of the day and year first above written.
RAWLINGS SPORTING GOODS
COMPANY, INC.
By:________________________
Name:
Title:
BULL RUN CORPORATION
By:_________________________
Name:
Title:
<PAGE>
Exhibit 99.5
FOR IMMEDIATE RELEASE
CONTACT: Paul E. Martin
Chief Financial Officer
(314) 349-3506
RAWLINGS ANNOUNCES STRATEGIC
MARKETING ALLIANCE WITH HOST COMMUNICATIONS AND
INVESTMENT AGREEMENT WITH BULL RUN
ST. LOUIS, MO, November 21, 1997 ... Rawlings Sporting
Goods Company, Inc. (NASDAQ: RAWL) (Rawlings) announced today it
has entered into a five year strategic marketing alliance with
Host Communications, Inc. (HCI), a sports marketing company,
under which HCI and Rawlings will jointly market and sell
Rawlings' products primarily through corporate promotions, grass
roots events and international programs. HCI provides marketing
services for the NCAA and numerous universities and has a
majority investment in Universal Sports America, Inc. (USAI), the
worlds' leading grass roots sports event company whcih sponsors,
among other things, domestic and international three on three
basketball tournaments. HCI has also established relationships
with many Fortune 500 companies who perform promotions related to
the above-described events.
In connection with this marketing alliance, Rawlings
also announced today that it has entered into an investment
agreement with Bull Run Corporation (NASDAQ: BULL) (Bull Run)
which indirectly owns approximately 29.7 percent of HCI, under
which Bull Run has purchased approximately 926,000 warrants for
$3.07 per warrant. These warrants have a four year term and
enable Bull Run to purchase approximately 926,000 shares of
Rawlings' common stock at an exercise price of $12.00 per share
but are exercisable only if Rawlings' common stock closes at or
above $16.50 for twenty consecutive trading days during the four
year term. In addition, under the terms of the agreement, Bull
Run may purchase up to 10.1 percent of the outstanding shares of
Rawlings' common stock in the open market over the next six
months, with extensions allowed under certain circumstances
defined in the investment agreement. After completing the open
market share purchases, if Bull Run exercises the warrants, it
could have as much as a 20.1 percent ownership interest in
Rawlings and for five and one-half years thereafter, Bull Run is
subject to a standstill agreement which, except for specific
circumstances, precludes Bull Run from acquiring additional
shares without Board approval.
Mr. Robert S. Prather, Jr., President of Bull Run, has
been nominated for election as a director of Rawlings, which
election will take place at the Company's annual meeting of
<PAGE>
stockholders scheduled for January 15, 1998. Mr. Prather also
serves as a director of HCI, USAI and Gray Communications
Systems, Inc., an operator of television stations and newspapers
in the southeast.
Mr. Andrew N. Baur, Acting Chairman of the Board,
commented, "The agreement with Bull Run demonstrates their belief
that Rawlings' stock is undervalued. The HCI strategic marketing
alliance will enhance our ability to maximize the potential
growth opportunities related to corporate promotions, grass roots
events and international programs with a partner with a proven
record of success."
Mr. Baur commented further, "Management continues to
look for ways to increase revenues and net income. This
agreement with HCI, coupled with the acquisition of the
Victoriaville hockey business and new product development, should
give Rawlings excellent prospects for improving its market
position in the years ahead."
Certain information discussed in the news release
includes forward looking statements that involve risks and
uncertainties, including quarterly fluctuations in results,
ongoing customer changes in buying patterns, retail sell rates
for the Company's products which may result in more or less
orders than those anticipated and the impact of competitive
products and pricing. In addition, other risks and uncertainties
are detailed from time to time in the Company's SEC reports,
including the report on Form 10-K for the year ended August 31,
1996.
Rawlings is a leading manufacturer and supplier of
branded team sports equipment and apparel, particularly in
baseball, softball, basketball, hockey and football.
###
<PAGE>
