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Exhibit 7
[BULL RUN CORPORATION LETTERHEAD]
October 25, 1999
Rawlings Sporting Goods Company, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Ladies and Gentlemen:
The purpose of this letter is to express our mutual agreement to
negotiate in good faith on an exclusive basis regarding the proposed tender
offer for the common stock of Rawlings Sporting Goods Company, Inc. ("Rawlings")
by, and the merger of Rawlings with, a corporation to be formed by Bull Run
Corporation ("Bull Run") (the "Proposed Transaction").
(a) Except for negotiations with Bull Run, from the date hereof until
5:00 p.m. on the fifteenth day after the date on which Bull Run and its
potential financing sources have received all or substantially all the due
diligence materials pertaining to Rawlings that they have requested in
connection with their due diligence investigation of Rawlings (such period
hereinafter called the "Exclusivity Period"), Rawlings shall not, and shall
direct each of its subsidiaries, affiliates, officers, employees,
representatives or agents not to, directly or indirectly, encourage, solicit,
initiate or engage in discussions or negotiations with, or provide any
non-public information to, any person concerning any merger, sale of substantial
assets, sales of shares of capital stock or similar transactions involving
Rawlings or any subsidiary thereof or enter into any agreement with respect
thereto. Rawlings will promptly communicate to Bull Run the terms of any
proposal that it may receive in respect of all such transactions prohibited by
the foregoing. Bull Run will acknowledge in writing when the Exclusivity Period
begins and ends in accordance with the foregoing.
(b) Rawlings and Bull Run agree that notwithstanding any provisions to
the contrary contained in any of (i) the Standstill Agreement, dated as of
November 21, 1997, and as amended on April 23, 1999, between Rawlings and Bull
Run (the "Bull Run Standstill Agreement"), (ii) the Standstill Agreement dated
as of April 23, 1999 between Rawlings and [__________________](1)
("[__________________]")(1), [__________________](1) ("[__________________]")(1)
and [__________________](1) ("[__________________]")(1) (the
"[__________________](1) Standstill Agreement") or (iii) the Confidentiality
Agreement dated August 6, 1999 between Rawlings and Bull Run (the
"Confidentiality Agreement"), Bull Run will be permitted to communicate with
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(1) The parties to the Standstill Agreement have been redacted to maintain the
confidentiality of the parties to whom Bull Run may communicate.
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Rawlings Sporting Goods Company, Inc.
October 25, 1999
Page 2
[__________________](2), [__________________](2), [__________________](2)
("[__________________](2)"), or [__________________](2)
("[__________________]")(2) regarding the Proposed Transaction, including,
without limitation, retaining equity in Rawlings or providing financing. Bull
Run agrees that it will inform each of [__________________](2),
[__________________](2), [__________________](2), [__________________](2) and
[__________________](2) of the confidential nature of the Proposed Transaction
and the restrictions on disclosure of, and trading on the basis of, information
pertaining to the Proposed Transaction contained in the Confidentiality
Agreement and under the federal securities laws. Each of
[__________________](2), [__________________](2) and [__________________](2) may
rely on the first sentence of this Paragraph (b).
(c) Rawlings acknowledges and agrees that any agreement, arrangement or
understanding by and among Bull Run, on the one hand, and
[__________________](2), [__________________](2), [__________________](2),
[__________________](2), and [__________________](2), or any one of them, on the
other hand, with respect to the Proposed Transaction, will not be deemed to make
(i) Bull Run the beneficial owner of the shares of common stock of Rawlings
owned by any or all of [__________________](2), [__________________](2),
[__________________](2), [__________________](2), or [__________________](2) or
(ii) any or all of [__________________](2), [__________________](2),
[__________________](2), [__________________](2) or [__________________](2) a
beneficial owner of the shares of common stock of Rawlings owned by Bull Run for
purposes of Section 203 of the General Corporation Law of the State of Delaware
or the Rights Agreement dated as of July 1, 1994 between Rawlings and Boatmen's
Trust Agent, as Rights Agent, as amended November 21, 1997, April 19, 1999 and
April 23, 1999.
(d) Rawlings and Bull Run agree that in conjunction with Bull Run's
completion of its due diligence investigation of Rawlings during the Exclusivity
Period, Bull Run will be afforded reasonable access to senior management
employees of Rawlings. All requests for such access will be made through either
Xxxxxxx X'Xxxx or BancBoston Xxxxxxxxx Xxxxxxxx, Inc.
(e) It is the intention of the parties that the existence of this
letter and the negotiations leading to a formal merger agreement remain
confidential. If it becomes necessary, in the sole discretion of either party,
to make a public announcement disclosing the existence of the negotiations
leading to this letter or the continuing negotiations leading toward a formal
merger agreement, such party will give the other party as much advance notice as
reasonably possible of such announcement. In such event, either party, in its
sole discretion, after reasonable notice to the other party, may terminate the
Exclusivity Period and the negotiations between the parties and, in that event,
neither party nor their directors, officers, stockholders, representatives or
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(2) The parties to whom Bull Run may communicate have been redacted to maintain
their confidentiality.
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Rawlings Sporting Goods Company, Inc.
October 25, 1999
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agents shall have any liability for acts that take place after such termination
in respect of Paragraph (a) of this letter.
(f) Rawlings and Bull Run agree that the covenants and agreements
contained in this letter are reasonable and necessary to protect and preserve
the interests of Rawlings and Bull Run; that irreparable loss and damage will be
suffered by Rawlings and Bull Run should the other party breach any of such
covenants and agreements; that each of such covenants and agreements is
separate, distinct and severable from the other of such covenants and
agreements; that the unenforceability of any such covenant or agreement shall
not affect the validity or enforceability of any other such covenant or
agreement shall not affect the validity or enforceability of any other such
covenant or agreement; and that, in addition to other remedies available to
them, Rawlings and Bull Run shall be entitled to specific performance of the
covenants and agreements contained in this letter and to both temporary and
permanent injunctions to prevent a breach or contemplated breach by the other
party of any of such covenants or agreements.
Please indicate Rawlings' agreement to the terms hereof by signing in
the space provided below and returning a copy to Xx. Xxxxxxx X. Xxxxx, Xxxxxx &
Bird LLP, One Atlantic Center, 0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx,
00000 (Fax No. 000-000-0000).
Sincerely yours,
BULL RUN CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
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Xxxxxx X. Xxxxxxx, Xx.
President
Accepted and Agreed to
this 26th day of October, 1999
RAWLINGS SPORTING GOODS COMPANY, INC.
By: /s/ Xxxxxxx X. X'Xxxx
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Xxxxxxx X. X'Xxxx, Chairman and Chief Executive Officer
cc: Xx. Xxxxxx X. Xxxxxxxxxx
Xx. Xxxxxxx X. Xxxxxx
Xx. Xxxxxxx X. Xxxxxx
Xx. Xxxxxxx X. Xxxxx
