EXHIBIT 99.3
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.
"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.
"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.
(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 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.
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 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.
(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.
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
(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 the Company's consent, to (i) J. Xxxx Xxxxxxxx, Xxxxxx X. Xxxxxxx, Xx.,
Xxxxxxx X. Xxxxxx, Xxxxx Host, Xxxx 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.
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxx X. Xxxxxx
Telecopier No: (000) 000-0000
with a copy (which shall not constitute notice) to:
XXXXXXX, MAG & FIZZELL
0000 Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxx, Esquire
Telecopier No.: (000) 000-0000
(ii) if to the Holder hereof, to:
BULL RUN CORPORATION
0000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxxx, Xx.
Telecopier No.: (000) 000-0000
with a copy (which shall not constitute notice) to:
XXXXXX & BIRD LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxx, Esquire
Telecopier No.: (000) 000-0000
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]
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
under seal by its duly authorized officers as of this 21st day of
November, 1997.
RAWLINGS SPORTING GOODS COMPANY, INC.
By: /s/ XXXX X. XXXXXX
--------------------------------
Name: Xxxx X. Xxxxxx
Title: Chief Financial Officer
ATTEST:
By: /s/ XXXXXX X. XXXXX
______________________________
Secretary
[CORPORATE SEAL]
BULL RUN CORPORATION
By: /s/ XXXXXX X. XXXXXXX, XX.
------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President
ATTEST:
By: ______________________________
Secretary
[CORPORATE SEAL]
EXHIBIT A
TO COMMON STOCK PURCHASE WARRANT
Notice of Exercise
[Date]
RAWLINGS SPORTING GOODS COMPANY, INC.
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Mr. Xxxx Xxxxxx
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 "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:
AGREED TO AND ACCEPTED:
RAWLINGS SPORTING GOODS COMPANY, INC.
By:
Title:
Number of Shares
Exercised:
Number of Shares
Remaining: Date:
