NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR QUALIFIED UNDER ANY STATE SECURITIES LAW. THIS WARRANT AND
ANY INTEREST HEREIN MAY BE OFFERED, TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF ONLY IF REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR IF AN EXEMPTION FROM REGISTRATION IS AVAILABLE, AND ONLY IN
STRICT COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS AND REGULATIONS.
WARRANT
FOR THE PURCHASE OF
COMMON STOCK
OF
SWING-N-SLIDE CORP.
Warrant Number 1
THIS CERTIFIES THAT, FOR VALUE RECEIVED, GreenGrass Holdings, a
Delaware general partnership (the "Holder"), is entitled to subscribe for
and purchase from Swing-N-Slide Corp., a Delaware corporation (the
"Company"), 50,000 shares of Common Stock, $.01 par value per share, of
the Company at a purchase price equal to the Final Calculated Price (as
defined herein) per share, subject to adjustment as provided in Section 5
of this Warrant.
This Warrant is issued pursuant to and is subject in all
respects to the terms and conditions set forth in the Investment Agreement
between Holder and Company dated March 13, 1997.
1. Definitions. When used in this Warrant, the following
terms shall have the meanings specified:
(a) "Affiliate" means any Person directly or indirectly
controlling, controlled by or under direct or indirect common control with
another Person. A Person shall be deemed to control a corporation if such
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such corporation, whether
through the ownership of voting securities, by contract or otherwise.
(b) "Amex"" means the American Stock Exchange.
(c) "Announcement Date" means the day that the Company
publicly announces its acquisition of the shares of common stock of
GameTime, Inc., a Delaware corporation.
(d) "Business Day" means a day other than Saturday,
Sunday, or a legal holiday on which federally chartered banks are
generally closed for business.
(e) "Common Stock" means the Common Stock, $.01 par value
per share, of the Company.
(f) "Expiration Date" means the day 10 years after the
Initial Date.
(g) "Final Calculated Price" means a price (the "Price")
equal to the average of the daily closing bid price per share of Common
Stock for the Trading Days (weighted for volume on each such Trading Day)
included in the 150 consecutive calendar days beginning the first Trading
Day after the Announcement Date; provided, however, that the Price shall
not be less than $4.00 nor greater than $4.5918.
(h) "Initial Date" means the day 10 calendar days after
the determination of the Final Calculated Price.
(i) "Person" means and includes an individual,
partnership, corporation, trust, joint venture, incorporated organization
and a government or any department or agency thereof.
(j) "Trading Day" means a day on which the principal
national securities exchange on which the Common Stock is listed or
admitted to trading is open for the transaction of business.
2. Exercise: Issuance of Certificates; Payment for Shares.
This Warrant may be exercised by the Holder, in whole or in part, at any
time after the Initial Date, by the surrender of this Warrant (properly
endorsed if required) and payment by Holder of the Final Calculated Price
per share, subject to adjustment as provided in Section 4 hereof, of
Common Stock purchased by Holder with respect to such exercise. Upon such
payment and surrender, the Holder shall be entitled to receive a
certificate or certificates representing the shares of Common Stock
purchased through the exercise of this Warrant. At the option of the
Holder, the exercise price or any part of the exercise price may be paid
by the cancellation of indebtedness of the Company to the Holder, other
than the indebtedness represented by the Bridge Note (as defined in the
Investment Agreement), on a dollar-for-dollar basis. All cash payments
hereunder shall be made by wire transfer in immediately available funds.
The Company agrees that the shares so purchased shall be deemed to be
issued to the Holder as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been surrendered.
Subject to the Company's Certificate of Incorporation, certificates for
the shares of Common Stock so purchased shall be delivered to the Holder
within a reasonable time, not exceeding 10 days, after the rights
represented by this Warrant shall have been so exercised. If the rights
of the Holder of this Warrant are exercised in part, the number of shares
of Common Stock shall be reduced accordingly and the Company shall reissue
a Warrant or Warrants of like tenor representing in the aggregate the
right to purchase the number of shares of Stock as so reduced.
3. Affirmative Covenants. The Company covenants and agrees
that the shares of Common Stock issuable upon exercise of the rights
represented by this Warrant will, upon such exercise and issuance in
accordance herewith, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges with respect to
the issue. The Company further covenants and agrees that until the
Expiration Date, the Company will at all times have authorized, and
reserved for the purpose of issue upon total or partial exercise of the
rights represented by this Warrant, a sufficient number of shares of its
Common Stock to provide for the exercise of the rights represented by this
Warrant.
4. Listing. The Company covenants and agrees that it will
list the shares of Common Stock issuable upon exercise of the rights
represented by this Warrant on AMEX, in accordance with and to the extent
permitted by the Securities Act of 1933, as amended, any applicable state
securities laws and the rules or regulations of AMEX.
5. Adjustments. If the Company shall, while this Warrant
remains outstanding, change as a whole, by subdivision or consolidation in
any manner (including, but not limited to, a stock-split or reverse stock-
split) other than a stock dividend on the Common Stock, the number of
shares of Common Stock then outstanding into a different number of shares
of Common Stock, with or without par value, then thereafter the number of
shares of Common Stock which the Holder shall be entitled to purchase
hereunder shall be automatically (and without notice or further action)
increased or decreased, as the case may be, in direct proportion to the
increase or decrease in the number of shares of Common Stock by reason of
such change, and the per share exercise price of this Warrant (as set
forth on the front cover and Section 2 hereof) after such change shall in
case of an increase in the number of shares be proportionately decreased,
and in case of a decrease in the number of shares be proportionately
increased so that the aggregate exercise price of this Warrant shall be
unchanged by such change. Notwithstanding anything to the contrary
contained herein, no adjustment shall be made to the number of shares of
Common Stock issuable pursuant hereto on account of (a) the issue of the
Warrants (as defined in the Securities Purchase Agreements referred to
below), (b) the issue of any Warrant Shares (as so defined) upon the
exercise of any Warrant and/or (c) any adjustment to the number of Warrant
Shares issuable upon exercise of the Warrants by operation of the "anti-
dilution provisions" contained in the Warrants, unless the event requiring
such adjustment would also require adjustment to this Warrant as provided
for herein. Capitalized terms used in this paragraph have the meanings
ascribed to them in the Securities Purchase Agreements dated March 13,
1997 among the Company, Newco, Inc. and the institutional investors named
therein (as amended, modified and supplemented from time to time, the
"Securities Purchase Agreements"). The Holder hereby consents to the
terms of the Securities Purchase Agreements and each of the other
Operative Documents (as defined in the Securities Purchase Agreements).
6. Dividends on Common Stock. The Company covenants and
agrees that, prior to the Expiration Date, it shall not declare or effect
a dividend or other distribution upon the Common Stock payable otherwise
than in Common Stock, unless the Company shall deliver to the Holder
written notice of such dividend or distribution at least 10 days prior to
the record date for such distribution, or, if there is no record date, the
date as of which the holders of Common Stock of record entitled to such
distribution are to be determined.
7. Reorganization. Reclassification. Share Exchange or Merger.
(a) If at any time prior to the Expiration Date the
Company is a party to any agreement providing for (i) any capital
reorganization or reclassification of the capital stock of the Company or
(ii) any share exchange or merger of the Company with another corporation,
in such a way that holders of Common Stock shall be entitled to receive
cash, shares of stock or securities or assets with respect to or in
exchange for Common Stock, then, as a condition to such reorganization,
reclassification, share exchange or merger, the Holder shall be given the
opportunity to elect to receive such cash, shares of stock or securities
or assets as may be issued or payable with respect to or in exchange for
the number of shares of Common Stock then issuable upon the exercise of
the rights represented by this Warrant.
(b) If the Holder elects to receive such cash, shares of
stock or securities or assets pursuant to the provisions of Section 7(a)
hereof, upon the Holder's receipt of such cash, shares of stock or
securities or assets in accordance with the provisions of Section 6(a)
hereof, as the case may be, the Holder shall pay to the Company (i) the
per share exercise price of this Warrant (as set forth on the front cover
and Section 2 hereof and as adjusted, if any such adjustment has been
made, pursuant to Section 5 hereof) multiplied by (ii) the number of
shares of Common Stock then issuable upon the exercise of the rights
represented by this Warrant, and thereafter the parties shall have no
further rights or obligations hereunder.
(c) If the Holder does not elect to receive such cash,
shares of stock or securities or assets pursuant to the provisions this
Section 7, the rights and obligations of the Holder and the Company
(including any successor company) under this Warrant shall remain in full
force and effect pursuant to the terms and conditions of this Warrant. In
any such case, the Company shall not effect any such reclassification,
reorganization, share exchange or merger, unless prior to the consummation
thereof the successor corporation (if other than the Company) resulting
from such share exchange or merger shall assume by written instrument the
Company's obligations under this Warrant.
8. Notification of Holder. Upon each adjustment pursuant to
Section 5 hereof, the Company shall give written notice thereof to the
Holder within ten (10) days after the date of such adjustment, which
notice shall set forth the calculation of the number of shares of Common
Stock issuable upon exercise of the rights represented by this Warrant
before and after such adjustment and the facts upon which such
calculations are based. If at any time:
(a) 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;
(b) the Board of Directors (or any committee thereof)
shall authorize or approve any capital reorganization, or
reclassification of the capital stock of the Company, or share
exchange or merger of the Company with, or sale, disposition or
other conveyance of all or substantially all of its assets to,
any Person;
(c) the Company (or any other party) shall institute
any proceeding seeking an order for relief under the Federal
bankruptcy laws or seeking to adjudicate the Company as bankrupt
or insolvent, or seeking dissolution, liquidation or winding up
of the Company or seeking reorganization under any law relating
to bankruptcy or insolvency;
then, within 10 days of the date of any such occurrence, the Company shall
give the Holder written notice describing in reasonable detail such
occurrence.
9. Certain Events. If any event occurs as to which the
provisions of this Warrant are not strictly applicable or, if strictly
applicable would not fairly protect the rights of the Holder in accordance
with the essential intent and principles of such provisions, then the
Board of Directors of the Company shall make an adjustment in the
application of such provisions, in accordance with such essential intent
and principles, so as to protect the Holder's rights as aforesaid.
10. Term of Warrant. This Warrant shall remain outstanding and
exercisable until the Expiration Date. To the extent not previously
exercised, the rights represented by this Warrant shall thereupon
terminate.
11. Issue Tax. The issuance of certificates for shares of
Common Stock upon the total or partial exercise of this Warrant shall be
made without charge to the Holder for any issuance tax in respect thereof.
12. Closing of Books. The Company will at no time close its
transfer books against the transfer of this Warrant or in any manner which
interferes with the timely exercise of the rights represented by this
Warrant.
13. Transfer of Warrant. Subject to any registration or
qualification requirements under the Securities Act and applicable state
securities laws, this Warrant and all rights hereunder are transferable,
in whole or in part, without charge to the Holder, by the Holder in person
or by duly authorized attorney, upon surrender of this Warrant to the
Company properly endorsed. If this Warrant is transferred in part in
accordance with the terms hereof, the Company shall reissue a Warrant or
Warrants of like tenor representing in the aggregate the right to purchase
the number of shares of Common Stock represented by this Warrant
immediately prior to such transfer.
14. No Voting Rights. This Warrant shall not entitle the
Holder to any voting rights as a shareholder of the Company.
15. Descriptive Headings. The descriptive headings of the
several sections of this Warrant are inserted for convenience only and do
not constitute a part of this Warrant.
16. Notices. Any notice or other communication pursuant to
this Warrant shall be in writing and shall be deemed sufficiently given
upon receipt, if personally delivered or telecopied (with receipt
acknowledged), or if mailed, upon deposit with the United States Postal
Service by first class, certified or registered mail, postage prepaid,
return receipt requested, addressed as follows:
(a) If to the Company, to Swing-N-Slide Corp., 0000
Xxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000, Attention: President, or
such other address as the Company has designated in writing to
the Holder.
(b) If to the Holder, to GreenGrass Holdings, c/o
Glencoe Investment Corporation, 000 Xxxxx Xxxxxx Xxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx X. Xxxxx.
17. Replacement of Warrant. Upon receipt of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation
of this Warrant, and upon receipt of written indemnification of the
Company by the Holder in form and substance reasonably satisfactory to the
Company, the Company shall execute and deliver to the Holder a new Warrant
of like date, tenor and denomination.
18. Last Day for Performance Other Than a Business Day. In the
event that the last day for performance of an act or the exercise of a
right hereunder falls on a day other than a Business Day, then the last
day for such performance shall be the First Business Day immediately
following the otherwise last day for such performance or such exercise.
19. Governing Law. This Warrant shall be construed and
interpreted in accordance with the internal laws of the State of Delaware.
20. Successors and Assigns. The provisions of this Warrant
shall be binding upon and inure to the benefit of the parties hereto and
their respective successors, assigns and transferees.
21. Further Assurances. The Company agrees that it will
execute and record such documents as the Holder shall reasonably request
to secure for the Holder any of the rights represented by this Warrant.
22. Amendment and Modifications. This Warrant may be amended,
modified or supplemented only by written agreement of the Company and the
Holder.
[Signature On Following Page]
IN WITNESS WHEREOF, Swing-N-Slide Corp. has caused this Warrant
to be signed by its duly authorized officers and this Warrant to be dated
as of March 13, 1997.
SWING-N-SLIDE CORP.
By: /s/ Xxxxxxx X. Xxxxxxx, President
Xxxxxxx X. Xxxxxxx, President
Attest:
