EXHIBIT 99.7
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of
November 21, 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 Companys 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.
"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.
"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).
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) 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 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
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
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 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; 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 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.
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 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 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.
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 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 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.
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
with a copy to: Xxxxxxx, Mag & Fizzell, P.C.
1201 Walnut, Suite 2800
P.O. Box 419251
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
Bull Run: Bull Run Corporation
0000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxxx, Xx.
Telecopy No.: (000) 000-0000
with a copy to: Xxxxxx & Bird LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xx.
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
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.
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: /s/ XXXXXX X. XXXXX
-------------------------
Name: Xxxxxx X. Xxxxx
Title: President
BULL RUN CORPORATION
By: /s/ XXXXXX X. XXXXXXX, XX.
---------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President
