NEITHER THIS BRIDGE NOTE NOR THE SHARES ISSUABLE IN RELATION TO
THIS BRIDGE NOTE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR QUALIFIED UNDER ANY STATE SECURITIES LAW. THIS BRIDGE NOTE
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.
SWING-N-SLIDE CORP.
BRIDGE NOTE
$2,500,000 March 13, 1997
FOR VALUE RECEIVED, the undersigned ("Maker") hereby promises to
pay to the order of GreenGrass Holdings ("Payee"), without setoff or
counterclaim, the principal sum of Two Million Five Hundred Thousand
Dollars ($2,500,000), payable on December 31, 1997 or such earlier time as
Maker shall have received the proceeds of the Right Shares and Payee shall
have purchased the Remaining Rights Shares pursuant to Section 1.7 of that
certain Investment Agreement dated even date herewith between Maker and
Payee (the "Investment Agreement").
The unpaid principal balance hereof shall bear interest at a
fixed rate equal to Thirteen and One Half percent (13-1/2%) per annum.
Interest shall be payable at maturity and, upon a Default (as defined
herein), on the first day of each month thereafter. Interest shall be
paid by the issuance to Payee of a number of shares of common stock, par
value $.01 per share, of Maker equal to the quotient of the amount of
unpaid interest accrued as of each such interest payment date divided by
the Final Calculated Price (as defined in that certain Warrant, dated the
date hereof, for 50,000 shares of Common Stock granted to Payee pursuant
to the Investment Agreement), except that if Maker is not legally
permitted to issue its common stock, interest shall be payable in lawful
money of the United States of America. Interest shall be calculated for
the actual number of days elapsed, using a daily rate determined by
dividing the annual rate by 360. All principal, interest and other
amounts unpaid after Default shall bear interest, payable on demand,
computed at a rate equal to 4% per annum plus the rate otherwise payable
hereunder. All amounts of principal payable on this Note shall be payable
in lawful money of the United States of America and shall ONLY be payable
from the proceeds of the Rights Offering and/or the proceeds of the
purchase by Payee of the Remaining Rights Shares pursuant to the
Investment Agreement and Maker shall not make principal payments to Payee
from any other source.
Without affecting the liability of any maker, indorser, surety
or guarantor, the holder may, from time to time and without notice, renew
or extend the time for payment, accept partial payments.
Maker covenants and agrees that the shares of Maker common stock
issuable to Payee under this Note shall be, upon issuance, duly
authorized, validly issued, fully paid and non-assessable and free from
all taxes, liens and charges. Maker further covenants and agrees that
until this Note is paid in full, Maker will at all times have authorized,
and reserved for the purpose of issue hereunder, a sufficient number of
shares of its common stock to provide for the interest payments hereunder.
All shares of Maker common stock issued under this Note shall be entitled
to the benefits of the Amended and Restated Registration Rights Agreement
dated the date hereof between Maker and Payee.
Maker covenants and agrees that it will list the shares of its
common stock issuable hereunder on the American Stock Exchange in
accordance with and to the extent permitted by the Securities Act of 1933,
as amended, any applicable state securities laws and the rules and
regulations of the American Stock Exchange.
Xxxxx agrees that the shares issued hereunder shall be deemed to
be issued to the Payee as the record owner of such shares as of the close
of business on the interest payment day on which such shares are issued.
Subject to Maker's Certificate of Incorporation, certificates for the
shares of common stock so issued hereunder shall be delivered to Payee
within a reasonable time, not exceeding ten (10) days after such shares
have been issued hereunder. The issuance hereunder of certificates for
shares of common stock of Maker shall be made without charge to the Payee
for any issuance tax in respect thereof.
If any payment is not made when due (a "Designated Default"),
the unpaid balance of this Note shall, at the option of the holder and
without notice or demand, mature and become immediately payable. The
unpaid balance shall automatically mature and become immediately payable
in the event Maker, any surety, indorser or guarantor becomes the subject
of bankruptcy or other insolvency proceeding (a "Bankruptcy Default" and,
together with a Designated Default, a "Default"). Xxxxx's receipt of any
payment after the occurrence of a Default shall not constitute a waiver of
such Default or of any of Payee's rights and remedies.
The Maker and any indorsers, sureties or guarantors waive
presentment, demand, notice of dishonor and protest, and agree to pay all
costs of collection, before and after judgment, including reasonable
attorneys' fees and legal expenses.
This Note constitutes the Bridge Note issued under the
Investment Agreement to which reference is made above and is subject in
all respects to the terms and conditions set forth therein. All
capitalized terms not defined herein shall have the meaning assigned to
them in the Investment Agreement.
This Note is governed by the internal laws of the State of
Delaware, except to the extent superseded by federal law.
SWING-N-SLIDE CORP.
By: /s/ Xxxxxxx X. Xxxxxxx, President
Xxxxxxx X. Xxxxxxx, President
[CORPORATE SEAL]
Attest:
Title:
