EXHIBIT 1
SETTLEMENT AGREEMENT
This Settlement Agreement (the "Settlement Agreement") is entered into
as of December 21, 2001, by and among Rawlings Sporting Goods Company, Inc., a
Delaware corporation ("Rawlings"), Bull Run Corporation, a Georgia corporation
("Bull Run"), Host Communications, Inc., a Kentucky corporation ("HCI"), Xxxxxx
X. Xxxxxxx, Xx., ("Xxxxxxx"), and X. Xxxxx Host ("Host").
WITNESSETH:
WHEREAS, Rawlings and Bull Run are parties to an Investment Purchase
Agreement (the "Purchase Agreement"), a Common Stock Purchase Warrant (the
"Warrant") and a Standstill Agreement (the "Standstill Agreement"), each dated
as of November 21, 1997; and
WHEREAS, Rawlings and HCI are parties to a Strategic Marketing
Agreement, dated as of November 21, 1997 (the "Marketing Agreement");
WHEREAS, Rawlings, Bull Run and Xxxxxxx are parties to an Agreement,
dated as of November 21, 1997 (the "Xxxxxxx Agreement");
WHEREAS, Rawlings, Bull Run and Host are parties to an Agreement, dated
as of April 28, 2000 (the "Host Agreement")( the Purchase Agreement, Warrant,
Standstill Agreement, Marketing Agreement, Xxxxxxx Agreement and Host Agreement
are collectively referred to herein as the "Agreements");
WHEREAS, Bull Run beneficially and of record owns 806,500 shares of
Rawlings stock as evidenced by stock certificates set forth on Exhibit A,
attached hereto (the "Bull Run Securities"); and
WHEREAS, the execution and delivery of this Settlement Agreement has
been duly authorized by the Boards of Directors of Rawlings, Bull Run and HCI.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Mutual Releases.
1.1 Bull Run, Xxxxxxx, Host and HCI do hereby release and
forever discharge Rawlings and each of its subsidiaries, employees, officers,
directors, shareholders, insurers and attorneys from any and all manner of
actions and causes of action, suits, debts, judgments, claims and demands
whatsoever, in law or in equity (collectively, "Claims"), (a) arising from or
related to any acts, omissions or facts existing as of the date hereof with
respect to the Agreements (including without limitation any breach of any such
Agreements), whether known or unknown, and whether or not heretofore asserted,
or any other claims and causes of action that have been or could have been
asserted based upon the Agreements or that are related to the facts at issue in
the Agreements, and (b) any Claims that any of them may have in their capacity
as shareholders of Rawlings, including without limitation, actions for breach of
duty, shareholder derivative actions or other similar Claims.
1.2 Rawlings does hereby release and forever discharge
Bull Run, Xxxxxxx, Host, Xxxxxxx Xxxxxx and HCI and each of their respective
subsidiaries, employees, officers, directors, shareholders, insurers and
attorneys from any and all manner of Claims whatsoever, in law or in equity, (a)
arising from or related to any acts, omissions or facts existing as of the date
hereof with respect to the Agreements (including, without limitation, any breach
of any such Agreements), whether known or unknown, and whether or not heretofore
asserted, or any other claims and causes of action that have been or could have
been asserted based upon the Agreements or that are related to the facts at
issue in the Agreements, and (b) any Claims that Rawlings may have against any
of them in their capacities as directors or shareholders of Rawlings, including
without limitation, actions for breach of duty or other similar Claims.
1.3 The parties agree that no provision of this
Settlement Agreement shall be construed to release any party from liability for
breach of this Settlement Agreement or any of the terms herein or any breach of
the Standstill Agreement by Bull Run occurring after the date hereof. The
parties further agree that no provision of this Settlement Agreement shall
operate as a release of Bull Run for its payment obligations under the
Investment Agreement which obligations are modified pursuant to Section 5 of
this Settlement Agreement.
2. Continuation of Standstill Agreement; Directors. The parties
agree and acknowledge that under the Standstill Agreement, Host Agreement and
Xxxxxxx Agreement, Bull Run, HCI, Xxxxxxx and Host no longer have a right or
obligation to appoint or nominate individuals to be directors of Rawlings. The
parties agree and acknowledge that the Standstill Agreement shall remain in full
force and effect after the execution of this Settlement Agreement in accordance
with the terms of the Standstill Agreement.
3. Warrant. The parties agree and acknowledge that the Warrant
has expired and has not been exercised by Bull Run.
4. Review of SEC Filings.
4.1 Form 8-K. The parties agree that Bull Run will be
given the opportunity to review and comment on the Form 8-K to be filed by
Rawlings with the Securities and Exchange Commission relating to this Settlement
Agreement prior to the filing thereof.
4.2 Schedule 13D. The parties agree that Rawlings will be
given the opportunity to review and comment on the Amended Schedule 13D to be
filed by Bull Run with the Securities and Exchange Commission relating to this
Settlement Agreement prior to the filing thereof.
5. Bull Run Payment Terms.
5.1 The parties acknowledge and agree that, as of
November 21, 2001, Bull Run was obligated to pay to Rawlings, pursuant to
Section 1.03 of the Investment Agreement, the sum of One Million Eight Hundred
Nineteen Thousand Nineteen and 70/100 Dollars ($1,819,019.70), which includes
interest accrued through November 21, 2001, and Bull Run agrees to pay such
amount plus interest as provided hereunder to Rawlings as follows:
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5.1.1 All interest due as of November 21, 2001 in
the amount of Three Hundred Ninety-seven Thousand Nine Hundred Ten and
56/100 Dollars ($397,910.56) shall be payable on January 31, 2002; and
5.1.2 Principal and interest accruing from
November 21, 2001 at the rate of six-tenths of one percent (0.6%) per
month shall be payable in six equal payments of Two Hundred Ten
Thousand and No/100 Dollars ($210,000.00) on the last day of each month
commencing February 28, 2002 and ending July 31, 2002, and one final
payment of Two Hundred Fifteen Thousand Thirty and 09/100 Dollars
($215,030.09) payable on August 30, 2002.
5.2 If any installment of the payment obligations stated
in Section 5 becomes due and payable on a Saturday, Sunday or business holiday
in the State of Missouri, payment shall be made on the next successive business
day.
5.3 Bull Run reserves the right to prepay all or any
portion of this payment obligation contained in Section 5 at any time and from
time to time without penalty. Prepayment shall be applied first to all accrued
unpaid interest, and then to principal, and does not require the payment of
interest which has not accrued as of the date of the prepayment.
5.4 If (i) there should be a default in the payment of
interest or principal due under this Settlement Agreement and such default shall
continue for five (5) days after written notice has been sent by telecopy or
overnight delivery of such default by Rawlings to Bull Run at Bull Run's last
known address, or (ii) Bull Run should make an assignment for the benefit of
creditors, or (iii) attachment or garnishment proceedings are commenced against
Bull Run or any other person liable hereon, or (iv) a receiver, trustee or
liquidator is appointed over or execution levied upon any property of Bull Run,
or (v) proceedings are instituted by or against Bull Run or any other person
liable hereon under any bankruptcy, insolvency, reorganization, receivership or
other law relating to the relief of debtors from time to time in effect,
including without limitation the United States Bankruptcy Code, as amended, or
(vi) Bull Run liquidates or dissolves, or (vii) there is a breach or default by
Bull Run of the Standstill Agreement and such breach or default shall continue
for five (5) days after written notice has been sent by telecopy or overnight
delivery of such breach or default by Rawlings to Bull Run at Bull Run's last
known address, then, and in each such event, Rawlings may, at its option,
without notice or demand, declare the remaining unpaid principal balance of this
Settlement Agreement and all accrued interest thereon immediately due and
payable in full.
5.5 All payments made hereunder shall be made in lawful
currency of the United States of America in immediately available funds by wire
transfer pursuant to the instructions attached hereto as Exhibit B, or at such
other place as Rawlings may designate in writing. All payments made hereunder,
whether a scheduled installment, prepayment, or payment as a result of
acceleration, shall be allocated first to accrued but unpaid interest and then
to installments of principal remaining outstanding hereunder first to principal
amounts overdue then to principal amounts currently due and then to installments
of principal due in the future in the inverse order of their maturity.
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5.6 Bull Run agrees to pay all reasonable costs of
collection, including reasonable attorneys' fees, paid or incurred by Rawlings
in enforcing the obligations contained in this Section 5 or the rights and
remedies herein provided.
5.7 Bull Run hereby waives demand of payment, presentment
for payment, protest, notice of nonpayment or dishonor and any and all other
notices and demands whatsoever, and any and all delays or lack of diligence in
the collection hereof.
5.8 Rawlings may sell, assign, pledge or otherwise
transfer all or any portion of its interest in the obligations contained in this
Section 5 at any time or from time to time without prior notice to or consent of
and without releasing any party liable or becoming liable hereon.
6. Restriction on Transfer.
6.1 The parties agree that Bull Run shall not, as set
forth in this Settlement Agreement, have the right or power to sell or assign
any shares of Rawlings securities now or hereafter held by Bull Run, including
the Bull Run Securities, until the payments required under Section 5 hereof have
been paid in full. The parties hereto agree that the Bull Run Securities are
unique, that failure to perform the obligations provided by this Settlement
Agreement shall result in irreparable damage, and that specific performance of
these obligations may be obtained by suit in equity. Nothing in this Section 6.1
shall in any way impair or impede the ability of any bank or financial
institution having a security interest in the Bull Run Securities from
exercising its rights to such collateral, including without limitation, selling
the Bull Run Securities in a private or public foreclosure sale.
6.2 The parties agree that any sale, exchange, delivery
or assignment, disposition, bequeath or gift, pledge, mortgage, hypothecation or
transfer of any shares of Rawlings securities now owned or hereafter acquired by
Bull Run, including the Bull Run Securities, which is made in violation of this
Settlement Agreement shall be void and of no force and effect.
6.3 The parties agree that in order to enforce the
covenant stated in Section 6.1 above, Rawlings may impose stop-transfer
instructions with respect to the Bull Run Securities held by Bull Run until the
payments required under Section 5 hereof have been paid in full.
7. Termination of Marketing Agreement. Effective as of the date
hereof, Rawlings and HCI agree that the Marketing Agreement shall be terminated
and of no further force and effect.
8. Miscellaneous.
8.1 The parties hereto and their respective heirs,
executors, administrators, successors, transferees, trustees, personal
representatives and assigns will execute all required or necessary instruments
in writing and will take all other actions necessary or appropriate to carry out
the purposes and intentions of the parties as expressed in this Settlement
Agreement.
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8.2 The parties agree and acknowledge that this
Settlement Agreement and the provisions hereof are contractual in nature and not
mere recitals.
8.3 Strict compliance shall be required with each and
every provision of this Settlement Agreement.
8.4 The Parties acknowledge that they have been
represented by legal counsel of their own choice in this matter through all
phases of this Settlement Agreement and negotiations which preceded the
execution of this Settlement Agreement, and agree to pay all of their own legal
fees, expenses, and costs in connection with this Settlement Agreement.
8.5 This Settlement Agreement constitutes the entire
agreement and understanding between the parties.
8.6 This Settlement Agreement shall become effective only
upon execution of each and all of the parties. This Settlement Agreement may be
executed in one or more counterparts, and any agreement bearing the original,
whether on one or more pages, shall be considered an original.
8.7 This Settlement Agreement is executed under the laws
of Missouri and shall be governed under the laws of Missouri.
8.8 Each person executing this Settlement Agreement on
behalf of Rawlings, Bull Run, or HCI represents and warrants that he or she is a
duly authorized officer or representative of the party on whose behalf he or she
is executing this Settlement Agreement, that he or she has the authority to bind
such party to the terms of this Settlement Agreement, and that he or she has
been authorized to execute this Settlement Agreement.
8.9 Section headings in this Settlement Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Settlement Agreement for any other purpose.
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IN WITNESS WHEREOF, the parties EXPRESSLY INTENDING TO BE LEGALLY BOUND
HEREBY, have executed this Settlement Agreement and Mutual Release as of the day
and year first above written.
RAWLINGS SPORTING GOODS COMPANY, INC.
By: /s/ Xxxxxxx X. X'Xxxx
--------------------------------------
Name: Xxxxxxx X. X'Xxxx
Title: Chairman and CEO
BULL RUN CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
--------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President and CEO
HOST COMMUNICATIONS, INC.
By: /s/ X. Xxxxx Host
--------------------------------------
Name: X. Xxxxx Host
Title:
/s/ Xxxxxx X. Xxxxxxx, Xx.
-------------------------------------------
Xxxxxx X. Xxxxxxx, Xx.
/s/ X. Xxxxx Host
-------------------------------------------
X. Xxxxx Host
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EXHIBIT A
BULL RUN SECURITIES
RAWLINGS RAWLINGS
STOCK STOCK
CERTIFICATE CERTIFICATE NUMBER
NUMBER DATE OF SHARES
----------- ---------- ---------
17585 12/04/97 40,000
17586 12/04/97 40,000
17602 12/16/97 10,000
17603 12/16/97 10,000
17604 12/16/97 10,000
17605 12/16/01 10,000
17606 12/16/97 15,000
17607 12/16/97 20,000
17608 12/16/97 20,000
17613 12/18/97 10,000
17622 12/23/97 10,000
17623 12/23/97 10,000
17625 12/26/97 10,000
17629 12/29/97 5,000
17630 12/29/97 5,000
17631 12/29/97 5,000
17632 12/29/97 10,000
17634 12/30/97 5,000
17636 12/31/97 5,000
17645 01/07/98 5,000
17646 01/07/98 15,000
17648 01/08/98 5,000
17652 01/09/98 5,000
17653 01/09/98 10,000
17657 01/12/98 5,000
17658 01/12/98 10,000
17659 01/12/98 10,000
17661 01/13/98 5,000
17664 01/14/98 5,000
17665 01/14/98 5,000
17666 01/14/98 10,000
17668 01/15/98 5,000
17675 01/20/98 5,000
17676 01/20/98 15,000
17681 01/26/98 10,000
17682 01/26/98 5,000
17684 01/26/98 5,000
17685 01/26/98 10,000
17686 01/26/98 20,000
17691 01/27/98 5,000
17692 01/27/98 5,000
17693 01/27/98 5,000
17694 01/27/98 5,000
17695 01/27/98 15,000
17763 04/01/98 38,000
17784 05/07/98 42,500
17791 05/19/98 276,000
---------
806,500
=========
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EXHIBIT B
WIRE TRANSFER INSTRUCTIONS
LaSalle Bank, N.A.
Chicago, IL
ABA 000000000
Account Name: Rawlings Sporting Goods Company, Inc.
Account Number: 5800184656
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