EXHIBIT 99.1
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"), Robert
S. Prather, Jr., ("Prather"), and W. James 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 Prather are parties to an Agreement,
dated as of November 21, 1997 (the "Prather 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, Prather 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, Prather, 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, Prather, Host, Charles Jarvie 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 Prather
Agreement, Bull Run, HCI, Prather 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
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($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:
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/ Stephen M. O'Hara
---------------------------------------
Name: Stephen M. O'Hara
Title: Chairman of the Board and
Chief Executive Officer
BULL RUN CORPORATION
By: /s/ Robert S. Prather, Jr.
---------------------------------------
Name: Robert S. Prather, Jr.
Title: President
HOST COMMUNICATIONS, INC.
By: /s/ W. James Host
---------------------------------------
Name: W. James Host
Title: Chief Executive Officer
/s/ Robert S. Prather, Jr.
--------------------------------------------
Robert S. Prather, Jr.
/s/ W. James Host
--------------------------------------------
W. James 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 071000505
Account Name: Rawlings Sporting Goods Company, Inc.
Account Number: 5800184656
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