SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-2
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
___________________
SWING-N-SLIDE CORP.
(Exact name of registrant as specified in its charter)
Delaware 36-3808989
(State of incorporation) (I.R.S. Employer
Identification No.)
1212 Barberry Drive
Janesville, WI 53545
(608) 755-4777
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Richard G. Mueller
Chairman, President and Chief Executive Officer
SWING-N-SLIDE CORP.
1212 Barberry Drive
Janesville, WI 54545
(608) 755-4777
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With a copy to:
Joseph P. Hildebrandt, Esq.
Foley & Lardner
150 East Gilman Street
Madison, Wisconsin
53703
(608) 258-4232
____________________________
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the effective date of this Registration
Statement.
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [X]
If the registrant elects to deliver its latest annual report to
security holders or a complete and legible facsimile thereof, pursuant to
Item 11(a)(1) of this Form, check the following box. [_]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check
the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same
offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [_]
____________________________
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Each Offering Maximum
Class of Price Aggregate Amount of
Securities to Amount to be Per Security Offering Registration
be Registered Registered Price Fee(1)
Common Stock,
$.01 par [625,000]
value Shares [$4.00] $2,500,000 $758
(1) The registration fee is based upon the proposed maximum
aggregate offering price of $2,500,000. The offering price per
security shall be computed pursuant to a formula based upon
fluctuating market prices, but such price per share shall not be
less than $4.00 (in which case 625,000 shares will be offered)
nor more than $4.5981 (in which case 543,702 shares will be
offered). The number of shares to be registered and the
offering price per share shall be fixed prior to the effective
date of this registration statement.
______________________
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
<PAGE>
SUBJECT TO COMPLETION
PROSPECTUS
[INSERT DATE], 1997
[625,000] Shares
SWING-N-SLIDE
Common Stock, $.01 Par Value Per Share
The Company is the leading designer, manufacturer and marketer
of do-it-yourself wooden playground equipment. The Company's swing-sets,
climbing units, slides and accessories are sold nationwide through more
than 8,000 home center, building supply and hardware stores and in Mexico,
South America and Europe. The Company also offers the Tuff Kids line of
commercial playground systems targeted at churches, daycare centers, park
districts, campgrounds and housing developments. The Company recently
completed the acquisition of GameTime, Inc., a leading manufacturer of
modular and custom commercial outdoor playground equipment for schools,
parks and municipalities. As used herein, "Swing-N-Slide" refers to
Swing-N-Slide Corp., "Newco" refers to Swing-N-Slide's wholly-owned
subsidiary, Newco, Inc., and the "Company" refers to Swing-N-Slide and
Newco together.
Swing-N-Slide is hereby offering [625,000] shares (the "Maximum
Offering Number") of its Common Stock, $.01 par value per share ("Common
Stock"). During the 60-day subscription period commencing on the date
hereof, the shares will be offered exclusively to record holders of Swing-
N-Slide Common Stock as of __________, 1997 (the "Record Date"), other than
GreenGrass Holdings (the "Other Stockholders"), on a pro rata basis.
Following the conclusion of such subscription period, any shares which are
not purchased by the Other Stockholders will be purchased by GreenGrass
Holdings, which is contractually obligated to purchase all such shares.
Each Other Stockholder is entitled to purchase his, her or its pro rata
portion of the Maximum Offering Number, determined by multiplying the
Maximum Offering Number by a percentage equal to the number of shares of
Common Stock owned by such Other Stockholder as of the Record Date,
divided by the total number of shares of Common Stock owned by all Other
Stockholders as of the Record Date; provided, that Swing-N-Slide will not
offer fractional shares, and the number of shares that each Other
Stockholder is entitled to purchase will be rounded down to the nearest
whole number. As of the Record Date, an aggregate of 2,427,694 shares of
Common Stock were owned by all Other Stockholders. Again, any shares
which are not purchased by Other Stockholders during the 60-day
subscription period, will be purchased by GreenGrass Holdings and will not
be re-offered to the Other Stockholders. See "Background of Offering"
and "Plan of Distribution."
Pursuant to a separate registration statement filed with
Securities and Exchange Commission, Swing-N-Slide is presently making an
independent offering of $3,333,333 aggregate principal amount of its 10%
Convertible Debentures Due 2004 (the "Second Series Debentures"). See
"Risk Factors -- Controlling Interest in the Company."
See "Risk Factors" on page 8 for a discussion of certain matters
that should be considered by prospective purchasers of the Common Stock
offered hereby.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Price Estimated Proceeds to
to Expenses (1) Swing-N-
Public Slide (1)
Per Share........ [$4.00] [$.13] [$3.87]
Total................ $2,500,000 $80,000 $2,420,000
(1) Expenses payable by Swing-N-Slide include registration, printing,
postage, legal and accounting fees and miscellaneous expenses. The
shares of Common Stock are being offered and sold directly by Swing-
N-Slide, and no commissions or other remuneration will be paid to any
person for soliciting purchases of the shares of Common Stock. The
expenses incurred in connection with this offering will be borne by
Swing-N-Slide, and 100% of the proceeds from the sale of shares of
Common Stock offered hereby, in the amount of $2,500,000, will be
used to prepay in full the principal outstanding under the Bridge
Note. See "Background of Offering."
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE
ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
This Prospectus is dated [INSERT DATE], 1997.
<PAGE>
AVAILABLE INFORMATION
Swing-N-Slide is subject to the informational requirements of
the Securities Exchange Act of 1934 (the "Exchange Act") and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by Swing-N-Slide can be inspected
and copied at the public reference facilities maintained by the Commission
at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Commission's Regional Offices located at Suite 1400,
Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois
60601-2511, and 13th Floor, 7 World Trade Center, New York, New York,
10048. Copies of such material can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C., at
prescribed rates. The Commission maintains a web site
(http://www.sec.gov) that contains reports, proxy and information
statements and other information regarding registrants that file
electronically with the Commission.
Swing-N-Slide's Common Stock is listed on the AMEX, and reports,
proxy statements and other information concerning Swing-N-Slide can be
inspected at the AMEX, 86 Trinity Place, New York, New York 10006.
Swing-N-Slide has filed with the Commission a Registration
Statement on Form S-2 ("Registration Statement") under the Securities Act
of 1933, as amended ("Securities Act"), with respect to the securities
offered hereby. This Prospectus does not contain all of the information
set forth in the Registration Statement and the exhibits and schedules
thereto. For further information with respect to Swing-N-Slide and such
securities, reference is hereby made to such Registration Statement,
exhibits and schedules. Statements contained in this Prospectus
concerning the provisions of any document are not necessarily complete,
and, in each instance, reference is made to the copy of such document
filed as an exhibit to the Registration Statement or otherwise filed with
the Commission. Each such statement is qualified in its entirety by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of Swing-N-Slide that have been filed
with the Commission pursuant to the Exchange Act are hereby incorporated
by reference in this Prospectus: (a) Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997; (b) Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997 (the "Recent Form 10-Q"); (c) Annual Report on
Form 10-K for the fiscal year ended December 31, 1996 (the "Form 10-K");
and (d) Current Report on Form 8-K filed March 13, 1997, as amended by
Amendment No. 1 on Form 8-K/A filed May 6, 1997 (as amended, the "Form 8-
K"). Copies of the Recent Form 10-Q, the Form 10-K and the Form 8-K are
being delivered, together with this Prospectus, to each offeree hereunder.
All documents filed by Swing-N-Slide pursuant to Sections 13(a),
13(c), 14, or 15(d) of the Exchange Act subsequent to the date of this
Prospectus are hereby incorporated by reference in this Prospectus and
shall be deemed a part hereof from the date of filing of such documents.
Any statement or information contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed modified or
superseded for the purposes of this Prospectus to the extent that a
statement contained herein or in any subsequently filed document that also
is or is deemed to be incorporated herein by reference modifies or
supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a
part of this Prospectus.
Swing-N-Slide will provide without charge to any person to whom
a Prospectus is delivered, on written or oral request of such person, a
copy of any or all documents incorporated herein by reference (not
including the exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents). Requests
should be directed to: Richard E. Ruegger, Vice President, Swing-N-Slide
Corp., 1212 Barberry Drive, Janesville, Wisconsin 53545, phone number
(608) 755-4777.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more
detailed information and consolidated financial statements (including the
notes thereto) appearing elsewhere in this Prospectus and in the documents
incorporated by reference in this Prospectus. As used in this Prospectus,
"Swing-N-Slide" refers to Swing-N-Slide Corp., "Newco" refers to Swing-N-
Slide's wholly-owned subsidiary, Newco, Inc., and the "Company" refers to
Swing-N-Slide and Newco together.
THE COMPANY
The Company is the leading designer, manufacturer and marketer
of do-it-yourself, wooden home playground equipment. Its core product
group--kits for wooden swing sets and climbing units, plastic slides and
related accessories--is sold nationwide through over 8,000 home center,
building supply and hardware stores and in Mexico, South America and
Europe. The Company also offers the Tuff Kids line of commercial
playground systems targeted at churches, daycare centers, park districts,
campgrounds and housing developments. The Company recently completed the
acquisition of GameTime, Inc., a leading manufacturer of modular and
custom commercial outdoor playground equipment for schools, parks and
municipalities. The mailing address of the Company's principal executive
offices is Swing-N-Slide Corp., 1212 Barberry Drive, Janesville, Wisconsin
53545, and its telephone number is (608) 755-4777.
THE OFFERING
Securities Offered [625,000] shares (the "Maximum Offering Number")
of Swing-N-Slide Common Stock, $.01 par value per
share. Each stockholder of Swing-N-Slide other
than GreenGrass Holdings (the "Other
Stockholders") is entitled to purchase his, her
or its pro rata portion of the Maximum Offering
Number, determined by multiplying the Maximum
Offering Number by a percentage equal to the
number of shares of Common Stock owned by such
Other Stockholder as of ______________, 1997 (the
"Record Date"), divided by the total number of
shares of Common Stock owned by all Other
Stockholders as of the Record Date (rounded down
to the nearest whole number of shares). Any
shares which are not purchased by the Other
Stockholders will be purchased by GreenGrass
Holdings, which is contractually obligated to
purchase all such shares.
Common Stock to be
Outstanding Immediately
After the Offering [7,880,624(1)]
Plan of Distribution The subscription period commences on the date of
this Prospectus and shall remain open until
[October 20, 1997; 60 days after date of
Prospectus] (the "Expiration Date"). Each Other
Stockholder who wishes to purchase shares must
submit to the Subscription Agent, by 5:00 p.m.
Central Time on the Expiration Date, a
Subscription Agreement indicating the number of
shares to be purchased together with payment in
full of the applicable purchase price. Upon the
expiration of the subscription period, any shares
not purchased by the Other Stockholders will be
purchased by GreenGrass.
Use of Proceeds The proceeds from the sale of shares of Common
Stock offered hereby will be used to prepay in
full the principal outstanding under the Bridge
Note. See "Background of Offering."
AMEX Symbol SWG
__________________________
(1) Includes [7,255,624] shares presently outstanding and [625,000]
shares offered hereby. Excludes 3,600,000 shares that are held
by Swing-N-Slide as treasury shares; 50,000 shares underlying a
warrant held by GreenGrass Holdings; excludes up to a maximum of
54,375 shares that GreenGrass Holdings will receive as interest
on the Bridge Note at maturity [assuming a Final Calculated
Price of $4.00 per share, and maturity date of October 31,
1997]; excludes 592,177 shares underlying warrants held by
Massachusetts Mutual Life Insurance Company and affiliates;
excludes $5,000,000 principal amount of First Series Debentures
(defined below) owned by GreenGrass Holdings convertible into
approximately 1,041,667 shares of Common Stock, $587,787.97
principal amount of interest Debentures paid with respect
thereto on April 15, 1996, October 15, 1996, and April 15, 1997
(of which $572,938.37 principal amount is held by GreenGrass
Holdings and $9,899.69 and $4,949.91 are held by two former
members of GreenGrass Management, LLC, one of the general
partners of GreenGrass Holdings), convertible into approximately
122,456 shares, and up to $1,100,381.35 principal amount of
interest Debentures payable thereon with respect to the period
from April 16, 1997 through February 15, 1999, convertible into
approximately 229,247 shares; excludes $3,333,333 principal
amount of Second Series Debentures (defined below) to be offered
to Swing-N-Slide shareholders other than GreenGrass Holdings,
convertible into approximately 709,220 shares, and up to
$481,120.70 principal amount of interest Debentures payable
thereon (with respect to the period from October 1, 1997, an
assumed issuance date, through February 15, 1999), convertible
into approximately 102,367 shares; excludes 448,414 shares
issuable upon the exercise of stock options granted under the
Swing-N-Slide Corp. 1992 Stock Program; excludes 838,000 shares
issuable upon the exercise of stock options granted under the
Swing-N-Slide Corp. 1996 Incentive Stock Plan; excludes 362,000
shares available for future grants of awards and options under
the Swing-N-Slide Corp. 1996 Incentive Stock Plan. See "Risk
Factors -- Possible Dilution of Ownership Interest,"
"Capitalization" and "Background of Offering."
RISK FACTORS
In addition to the other information in this Prospectus, the
following factors should be considered carefully in evaluating an
investment in the shares of Common Stock offered by this Prospectus.
Decreasing Sales
Sales declined during the 1996 fiscal year to $41.9 million from
$45.1 million in 1995. Sales in the first quarter of 1997 increased from
$9.6 million for the three months ended March 31, 1996 to $10.8 million
for the three months ended March 31, 1997. The reason for the increase in
sales for 1997 is the inclusion of the sales of the Company's GameTime
division subsequent to the March 13, 1997 acquisition. Sales for the
Company's Swing-N-Slide division decreased $0.8 million for the three
months ended March 31, 1997 as compared to the same period for the prior
year. [Discuss second quarter results.] Among the factors which
contributed to this decline in sales were changes in timing of customer
orders, including ordering closer to the retail season, and increased
competition among retailers in the backyard playground equipment industry,
resulting in a net loss to the Company of approximately 300 outlets during
1996. Some of these outlet losses resulted purely from a product offering
standpoint, as home center chains sought to differentiate themselves from
rival chains by stocking a competing product. The Company's market share
leadership made it more vulnerable to this type of strategy. In addition,
the slide market remained highly competitive with no short-term
improvement in pricing expected for the more commodity-type models. The
home center industry itself also experienced a difficult year in 1996 and
continues to focus on reducing retail inventories of all products,
including backyard playground equipment. Each year customer programs are
negotiated for the upcoming selling season. Poor weather in the first
part of 1997 also contributed to decreased sales. The Company expects the
market for home playground equipment to remain highly competitive.
Controlling Interest in the Company
GreenGrass Holdings, a Delaware general partnership
("GreenGrass"), which is owned in part by members of the Company's
management, owns approximately 66% (or approximately 71% if GreenGrass
converted all $5,572,938.37 principal amount of its First Series
Debentures, as defined below, into Common Stock) of the outstanding Common
Stock of Swing-N-Slide and is able to elect each member of Swing-N-Slide's
Board of Directors. As a result, GreenGrass is able to control
substantially all decisions made by the Company, with certain exceptions
established by the Transaction Agreement (as defined below).
Under the terms of a Transaction Agreement dated January 4,
1996, as amended February 12, 1996 (the "Transaction Agreement"),
GreenGrass purchased 3,510,000 shares of Common Stock of Swing-N-Slide
tendered under GreenGrass' $6.50 per share cash tender offer which expired
on February 14, 1996. In addition, pursuant to the Transaction Agreement,
GreenGrass purchased on February 16, 1996, $4,300,000 principal amount of
Swing-N-Slide's 10% Convertible Debentures Due 2004, and on April 25,
1996, purchased an additional $700,000 principal amount of debentures
(collectively, the "First Series Debentures"). The debentures are
convertible into shares of Common Stock at a conversion price of $4.80 per
share (subject to customary antidilution adjustments). Pursuant to the
terms of the Transaction Agreement, Swing-N-Slide intends to offer to
stockholders of Swing-N-Slide other than GreenGrass the right to purchase
their pro rata share of $3,333,333 aggregate principal amount of 10%
Convertible Subordinated Debentures Due 2004 (the "Second Series
Debentures"). Pursuant to the terms of an Indenture to be entered into
between the Company and [INSERT NAME] (the "Indenture"), the Second Series
Debentures shall be convertible into shares of Common Stock at a
conversion price of $4.70 per share, and otherwise possess terms which are
substantially similar to those of the First Series Debentures.
Competition
The markets for both home playground equipment and commercial
park and playground equipment are highly competitive. While the Company's
Swing-N-Slide division faces competition from manufacturers of metal
swingsets and pre-cut and custom built wood kits, the Company's GameTime
division faces competition from manufacturers of commercial playground
equipment. With respect to home playground equipment, Hedstrom
Corporation is a major manufacturer and marketer of metal gym sets,
plastic and metal slides and accessories. Hedstrom Corporation also
manufactures and sells a competing line of wooden swingset and climbing
unit kits. Several other manufacturers also market kit products which are
similar to the Company's kits. With respect to commercial park and
playground equipment, the three largest competitors of the Company's
GameTime division are Miracle Recreation Equipment Co., Landscape
Structures Inc. and Little Tikes Commercial Play Systems Inc., a unit of
Rubbermaid, Inc., each of which has nationwide distribution.
The Company's Swing-N-Slide division competes on the basis of
design, a complete merchandising program, quality, timeliness of delivery,
service, price, packaging and brand name recognition. The Company
believes that its design capabilities, complete merchandising program and
reputation for delivery enable it to compete effectively. The Company's
reputation as a pioneer in the market has also been an important element
of its successful operations. Meanwhile, the Company's GameTime division
competes on the basis of product design, price, safety representative
design systems, and unique product characteristics. Although there are no
significant technological or manufacturing barriers to entering into the
home or commercial playground equipment business, factors such as brand
recognition, the Company's established relationship with its home center
and building supply retailers, its quality assurance program and its
GameTime sales representative organization may discourage new competitors
from entering the business. There can be no assurance, however, that the
Company will be able to maintain all of its competitive advantages and
other companies in the industry may succeed in acquiring market share at
the expense of the Company.
Reliance on Certain Customers
Product sales of the Company's Swing-N-Slide division are highly
concentrated. One customer, Lowe's, accounted for 13%, 16% and 22% of the
Company's net sales during 1994, 1995 and 1996, respectively. Sales to
another customer, Menard's, were 9%, 11% and 16% of net sales in 1994,
1995 and 1996, respectively. The Company's top five customers accounted
for 60% of total net sales in 1996. The loss of significant customers in
the Swing-N-Slide division, such as Lowe's or Menard's, or a significant
decline in the amount of business from such customers, could have a
material adverse effect on the Company. Product sales of the Company's
GameTime division are more diverse, with no single customer accounting for
more than 2% of its net sales in 1996.
Seasonality
The Company's sales pattern for home playground equipment is
highly seasonal, and the bulk of the Company's sales take place during the
spring and early summer months, the peak selling season. During fiscal
years 1994, 1995 and 1996, approximately 80%, 74% and 69%, respectively,
of the Company's net sales occurred between January 1 and June 30.
Unseasonably cool or rainy weather during the spring and early summer
months adversely affects the Company's ability to make sales during this
peak selling season. Sales that are not completed during this season are
generally not recovered later in the year. During the first half of 1997,
the Company's sales volume suffered, partially as the result of poor
weather.
In contrast, the sales pattern for commercial park and
playground equipment produced by the Company's GameTime division is
subject to somewhat less seasonality. Revenues generally peak between
June and August and reach lows in January and February. During fiscal
years 1994, 1995 and 1996, approximately 59%, 61% and 61%, respectively,
of GameTime's net sales occurred between April 1 and September 30.
Reliance on Expansion and Acquisitions Beyond Historical Core Product
Group
The Company is attempting to pursue an aggressive growth
strategy, the success of which will depend in part upon its ability to
successfully expand beyond its historical core product group of do-it-
yourself wooden swingset and climbing unit kits for the backyard. The
Company has embarked upon a strategy to become one of the largest
manufacturers and marketers of large scale play equipment for all
environments, including (1) commercial products of indoor and outdoor use
in several venues, (2) consumer playground equipment that includes pre-cut
wood and other materials, (3) new product categories that can be marketed
through existing retailers, and (4) expanding international markets. As
part of its growth strategy, the Company acquired GameTime on March 13,
1997, and intends to pursue acquisitions of other companies as
appropriate.
The Company has incurred and may incur further significant costs
and indebtedness in connection with these initiatives. There can be no
assurance that the Company will achieve its planned expansion goals,
manage its growth effectively, or continue to operate its historical core
business profitably. The failure of the Company to achieve its expansion
goals on a timely basis, manage its growth effectively or continue to
operate its historical core business profitably would have a material
adverse effect on the Company's business, financial condition and results
of operation.
Price Volatility of Lumber and Resin
Since assembly of the Company's do-it-yourself kits requires
lumber, retail prices of the complete kit package with lumber vary with
the price of lumber. Lumber prices have shown volatility over the past
few years. A substantial increase in lumber prices could cause the
Company's products to have less market acceptance or result in significant
price erosion which will have a material adverse effect on the Company's
profitability. In addition, because almost all of the Company's Swing-N-
Slide division sales are made to retailers which appeal to do-it-yourself
consumers, changes in economic activity which impact such retailers may
also have an impact on the Company's sales.
Costs of polyethylene resin, a key component in the sheet
plastic which represents approximately 70% of the cost of producing a
slide, have increased substantially in recent years due to severe resin
industry capacity constraints and increased demand. These increased costs
have adversely affected the Company's margins since the Company has not
been able to pass such price increases on to its customers. While the
Company has responded by improving the efficiency of its processes and by
redesigning its products to reduce its use of resin in its plastic
products, there can be no assurance that market prices of polyethylene
resin and sheet plastic will not continue to have an adverse affect on the
Company's margins. While the risk is heightened by the need for
additional polyethylene resin for the newly acquired GameTime division,
the Company will attempt to use its increased purchasing volume to
negotiate favorable terms where possible.
Backlog
The Company's Swing-N-Slide division does not generally have a
meaningful backlog of orders, and the division's backlog as of any given
date is not a meaningful measure because, even during peak periods, orders
will generally be filled three business days from receipt of the order.
The Company's GameTime division has a normal backlog of four to six weeks
approximating 10-15% of its sales.
Dependence Upon Key Personnel
The Company is highly dependent upon the efforts and abilities
of Richard G. Mueller, Chairman, President and Chief Executive Officer,
and is also dependent on the other members of the Company's senior
management team. The loss of the services of Mr. Mueller, or all or part
of the Company's senior management team, could, if competent replacements
for such individuals were not located, have a material adverse effect on
the Company's business, financial condition or results of operations.
Declining Stock Price
Swing-N-Slide's stock has been traded on the AMEX since August
10, 1995, under the symbol "SWG." From July 6, 1995 to August 9, 1995,
the stock was traded on the over-the-counter market and prior to July 6,
1995, the stock was traded on the NASDAQ National Market System. Set
forth below for the calendar quarters indicated are the high and low
closing prices:
1994 1995 1996 1997
high low high low high low high low
Q1 13 9 1/2 8 7/8 3 3/4 5 9/16 3 1/2 5 1/2 3 1/8
Q2 11 9 1/2 5 1/4 3 1/4 4 1/8 3 7/16 4 3/8 3 9/16
Q3 10 1/4 8 1/4 4 13/16 3 5/8 3 1/2 2 1/2 N/A N/A
Q4 9 1/2 7 3/4 4 15/16 3 1/2 3 3/8 2 5/8 N/A N/A
The per share price of Swing-N-Slide's stock has generally declined since
1994 and there can be no assurance that this general trend will be
significantly reversed at any time in the foreseeable future.
Holding Company Structure
Swing-N-Slide derives substantially all of its revenues from the
operations of its wholly-owned subsidiary, Newco. The ability of Swing-N-
Slide to pay dividends, if any, on the Common Stock will be primarily
dependent on receipt of dividends or other distributions from Newco.
Payment of dividends from Newco to Swing-N-Slide may be subject to
statutory or contractual restrictions and are contingent upon the earnings
of Newco.
In particular, Newco is subject to a number of restrictions
contained in that certain Credit Agreement dated as of March 13, 1997,
between Newco and certain lenders, including Fleet National Bank (the
"Credit Agreement"). Under the terms of the Credit Agreement, Newco
obtained debt financing in the aggregate amount of $69.5 million, of
which $20.0 million comprised a senior secured revolving credit facility,
$45.0 million comprised a senior secured Term Loan A facility, and $4.5
million comprised a senior secured Term Loan B facility. The Credit
Agreement restricts Newco's ability to incur additional indebtedness, pay
cash dividends or make other distributions, issue capital stock, and sell
assets and requires Newco to maintain certain financial ratios. In
addition, the Credit Agreement requires that certain prepayments with
respect to the Term Loan A facility and Term Loan B facility be made
quarterly beginning June 30, 1997. The Credit Agreement also restricts
Swing-N-Slide's activities, and provides that Swing-N-Slide and Newco
shall not substantially engage in any business other than children's
consumer and commercial indoor and outdoor play products, new products
that utilize their metal fabrication or plastic forming core competencies,
or substantially similar products that may be sold through home centers,
mass merchants or commercial and industrial trade classes.
In addition, Newco is subject to a number of restrictions
contained in those certain Securities Purchase Agreements dated as of
March 13, 1997, among Newco, Swing-N-Slide and Massachusetts Mutual Life
Insurance Company ("MassMutual") and certain of its affiliates
(collectively, the "MassMutual Agreements"). Under the terms of the
MassMutual Agreements, Newco obtained $12.5 million of debt financing from
MassMutual and its affiliates by issuing its 12% Senior Subordinated Notes
due 2005 (the "MassMutual Notes"). As part of such debt financing,
MassMutual and its affiliates received warrants to purchase up to an
aggregate of 592,177 shares of Swing-N-Slide's Common Stock (subject to
adjustment) at an exercise price of $.001 per share. The MassMutual
Agreements require Newco to maintain certain financial ratios and to make
certain prepayments of the principal amount of the MassMutual Notes
commencing in September, 2002. Further, the MassMutual Agreements
restrict Newco's ability to incur additional indebtedness, incur liens,
pay cash dividends or make other distributions, issue capital stock, sell
assets, and enter into certain other transactions.
Substantial Indebtedness
The Company has indebtedness that is substantial in relation to
its Stockholders' Equity. See "Capitalization." The Credit Agreement
imposes significant operating and financial restrictions on the Company.
See "Risk Factors--Holding Company Structure." Such restrictions will
affect, and in many respects significantly limit or prohibit, among other
things, the ability of the Company to incur additional indebtedness to pay
dividends. These restrictions, in combination with the leveraged nature
of the Company, could limit the ability of the Company to effect future
financing or otherwise may restrict corporate activities.
The Company's high degree of leverage could have important
consequences to the holders of the Common Stock, including the following:
(1) the Company's ability to obtain additional financing for working
capital, capital expenditures, acquisitions, general corporate and other
purposes may be impaired in the future; (2) a substantial portion of the
Company's cash flow from operations must be dedicated to the payment of
principal and interest on its indebtedness, thereby reducing the funds
available to the Company for other purposes; (3) the Company's substantial
degree of leverage may hinder its ability to adjust rapidly to changing
market conditions; and (4) the Company's indebtedness could make it more
vulnerable in the event of a downturn in general economic conditions or
its business.
Stockholders' Suit
Swing-N-Slide has been named as a defendant in the proceeding
Robert Barbieri v. Swing-N-Slide Corp., Thomas R. Baer, Richard G.
Mueller, Andrew W. Code, James M. Dodson, Peter M. Gotsch, Terence S.
Malone, Henry B. Pearsall and Brian P. Simmons, GreenGrass and GreenGrass
Management, LLC (the "Civil Action"). The complaint alleges that Swing-N-
Slide's tender offer for 3.6 million of outstanding shares of Common
Stock, which was completed in January 1995, was the result of a deceptive
and manipulative plan on the part of the individual defendants to enrich
themselves. The plaintiff also challenges on similar grounds the purchase
by GreenGrass of approximately 3.6 million shares of Common Stock pursuant
to a tender offer in February 1996. The plaintiffs were granted
certification of the two classes of stockholders consisting of all
stockholders other than the defendants at November 14, 1994 or at March
15, 1995. The relief sought includes the imposition of a constructive
trust on all proceeds of the repurchase received by the defendants as well
as various non-monetary forms of relief. The parties have conducted
discovery. While Swing-N-Slide intends to vigorously defend the claims
and believes it has substantial defenses to all the claims, there can be
no assurance that resolution of the claims will not have a material
adverse effect on the financial condition or results of operations of the
Company.
Product Liability Claims
Due to the nature of its business, the Company, at any
particular time, is subject to a number of product liability claims for
personal injuries allegedly related to its products. The Company has to
date been successful in defending or settling such claims. Thus far, no
such claims have resulted in any material payments on account of defending
or settling such claims. The Company's products are designed to meet the
applicable safety guidelines of the American Society for Testing and
Materials ("ASTM Guidelines"). Several of the Company's products are new,
however, and the claims experience with such products cannot be predicted.
Although the Company maintains product liability insurance at coverage
levels which it believes are adequate, there can be no assurance that the
Company will not incur substantial liability for product liability claims
or that insurance will provide adequate coverage against such liability.
Environmental Matters
The Company is subject to the environmental laws and regulations
of the United States, the State of Wisconsin, and the State of Alabama as
well as local ordinances. The Company has established procedures for
maintaining environmental law compliance, including procedures for the
disposal of limited quantities of hazardous waste, with the United States
Environmental Protection Agency ("EPA") licensed haulers and recyclers.
The Company also incurs ongoing costs monitoring compliance with
environmental laws and in connection with disposal of waste materials.
Environmental laws imposed by the EPA and state officials nationwide are
becoming more stringent and may result in higher costs for the Company and
its competitors. While liabilities for environmental compliance and waste
disposal have not been material to the Company in the past, there can be
no assurance that the Company will not incur substantial liability with
respect to environmental law compliance in the future.
No Dividends
There have been no dividends paid to stockholders since the
inception of Swing-N-Slide in January, 1992. The Credit Agreement
restricts the ability of Newco, Swing-N-Slide's operating subsidiary, to
pay dividends to Swing-N-Slide.
Possible Dilution of Ownership Interest
There are presently outstanding [7,255,624] shares of the
Company's Common Stock. In addition to the [625,000] shares offered
hereby, the Company has reserved a substantial number of shares of Common
Stock for future issuances for various purposes, as discussed below.
Pursuant to the terms of the Transaction Agreement, Swing-N-
Slide intends to offer to stockholders of Swing-N-Slide other than
GreenGrass the right to purchase their pro rata share of $3,333,333
aggregate principal amount of Second Series Debentures. The Second Series
Debentures are convertible into shares of Common Stock at a conversion
price of $4.70 per share, and otherwise possess terms which are
substantially similar to those of the First Series Debentures.
Upon the completion of this Offering, GreenGrass is
contractually obligated to purchase shares of Common Stock offered
hereunder which are not purchased by the stockholders of Swing-N-Slide
other than GreenGrass, if any. As a result, stockholders who do not elect
to purchase their pro rata portion of the shares of Common Stock offered
hereunder in full will realize a dilution in their voting rights in Swing-
N-Slide and percentage interests in future net earnings, if any, of the
Company. See "Background of Offering" and "Risk Factors--Controlling
Interest in the Company."
In addition, stockholders may realize a dilution in their voting
rights in Swing-N-Slide and percentage interests in future net earnings,
if any, of the Company as a result of: (i) the issuance to GreenGrass of
50,000 shares underlying a warrant held by GreenGrass; (ii) the issuance
to GreenGrass of up to 54,375 shares as interest on the Bridge Note at
maturity [assuming a Final Calculated Price of $4.00 per share, and
maturity date of October 31, 1997]; (iii) the issuance to MassMutual and
certain of its affiliates of up to 592,177 shares (subject to adjustment)
underlying warrants held by such entities; (iv) the issuance to GreenGrass
of approximately 1,041,667 shares in the event of conversion of its
$5,000,000 principal amount of First Series Debentures; (v) the issuance
to GreenGrass of approximately 119,362 shares in the event of conversion
of its $572,938.37 principal amount of interest Debentures held by it, and
up to approximately 228,637 shares in the event of conversion of up to
$1,097,457.06 principal amount of interest Debentures hereafter payable to
GreenGrass; (vi) the issuance to two former members of GreenGrass
Management, LLC, one of the general partners of GreenGrass Holdings, of an
aggregate of approximately 3,094 shares in the event of conversion of
their $14,849.60 aggregate principal amount of interest Debentures held by
them, and up to approximately 610 shares in the event of conversion of up
to $2,924.29 aggregate principal amount of interest Debentures hereafter
payable to them; (vii) the issuance to holders of Second Series Debentures
of up to 709,220 shares in the event of conversion of $3,333,333 principal
amount of Second Series Debentures, and up to approximately 102,367 shares
in the event of conversion of up to $481,120.70 principal amount of
interest Debentures payable thereon (assuming an October 1, 1997 issuance
of $3,333,333 principal amount of Second Series Debentures); (viii) the
issuance of up to 448,414 shares issuable upon the exercise of stock
options granted under the Swing-N-Slide Corp. 1992 Stock Program; (ix) the
issuance of up to 838,000 shares issuable upon the exercise of stock
options granted under the Swing-N-Slide Corp. 1996 Incentive Stock Plan;
(x) the issuance of up to 362,000 shares available for future grants of
awards and options under the Swing-N-Slide Corp. 1996 Incentive Stock
Plan; and (xi) the issuance of shares as part of any future acquisitions
in connection with the pursuit of the Company's aggressive growth
strategy. See "Capitalization," "Background of Offering" and "Risk
Factors -- Reliance on Expansion and Acquisitions Beyond Historical Core
Product Group."
RECENT DEVELOPMENTS
On March 13, 1997, the Company completed the acquisition of
GameTime, Inc., a leading manufacturer of modular and custom commercial
outdoor playground equipment for schools, parks and municipalities. On
that date, Newco acquired all of the issued and outstanding shares of
GameTime capital stock for $27.0 million and the assumption of GameTime
indebtedness of approximately $13.4 million. Immediately following the
acquisition, GameTime was merged with and into Newco. To provide
financing for this acquisition, to refinance certain indebtedness of
Swing-N-Slide, Newco and GameTime, and to provide funds for working
capital purposes, Swing-N-Slide and Newco entered into certain definitive
agreements, referenced below.
On March 13, 1997, a group of banks led by Fleet National Bank
provided Newco with a $69.5 million senior secured credit facility. The
facility consists of (a) a $20.0 million revolving credit facility (of
which $12.7 million was drawn on March 13, 1997); (b) a $45.0 million Term
Loan A facility; and (c) a $4.5 million Term Loan B facility. The entire
facility is guaranteed by Swing-N-Slide, and secured by a first priority
mortgage or security interest in all of Newco's tangible and intangible
assets, as well as a pledge of 100% of the outstanding shares of Newco
common stock. In addition, Newco is subject to certain restrictive
covenants which include, among other things, restrictions on the payment
of dividends or issuance of capital stock and a limitation on additional
indebtedness.
On March 13, 1997, Swing-N-Slide and Newco entered into
Securities Purchase Agreements with Massachusetts Mutual Life Insurance
Company and certain of its affiliates, pursuant to which Swing-N-Slide
sold warrants (the "MassMutual Warrants") evidencing rights to purchase an
aggregate of 592,177 shares of its Common Stock (subject to adjustment),
and Newco sold its 12% Senior Subordinated Notes due March 13, 2005 (the
"MassMutual Notes"), in the aggregate principal amount of $12,500,000.
The MassMutual Warrants are exercisable at any time during the period
commencing March 13, 1997, and terminating on the later of March 13, 2003,
or the date upon which all of the MassMutual Notes have been paid in full,
at an exercise price of $.001 per share (subject to adjustment).
On March 13, 1997, Swing-N-Slide entered into an Investment
Agreement with GreenGrass Holdings pursuant to which Swing-N-Slide sold to
GreenGrass Holdings 1,087,406 shares (subject to adjustment) of its Common
Stock for an aggregate purchase price of $5,000,000, or a per share
purchase price of $4.5981, and sold its Junior Subordinated Bridge Note in
the principal amount of $2,500,000 (the "Bridge Note"), due not later than
December 31, 1997 (subject to prepayment), bearing interest at a rate of
13.5% per annum, and accompanied by ten-year warrants to purchase 50,000
shares of such stock, at a per share purchase price of $4.5981 (subject to
adjustment). Pursuant to the terms of the Investment Agreement, and based
on fluctuations in the market price of the Company's Common Stock on the
AMEX during the 150-day period following the public announcement of the
GameTime acquisition, effective August 13, 1997, the number of shares
issued to GreenGrass was adjusted and increased from 1,087,406 to
[1,250,000]. As a result of such adjustment, the price per share paid by
GreenGrass for the 1,250,000 shares received was in effect fixed at
[$4.00] per share. Swing-N-Slide will use the proceeds of the sale of
shares of Common Stock in this offering to prepay in full the principal
outstanding under the Bridge Note. [NOTE: amounts in brackets are
subject to adjustment, which adjustment shall have occurred prior to the
effective date of the Registration Statement.]
For further information on the GameTime acquisition, including
copies of GameTime's audited financial statements, see the Form 8-K, a
copy of which accompanies this Prospectus.
USE OF PROCEEDS
The proceeds from the sale of shares of Common Stock offered
hereby will be used to prepay in full the principal outstanding under the
$2,500,000 Junior Subordinated Bridge Note dated March 13, 1997 (the
"Bridge Note"). The Bridge Note bears interest at the rate of 13.5% per
annum, and matures on the earlier of December 31, 1997, or such time as
the Company has received the proceeds from the sale of shares pursuant to
this offering. The proceeds of the Bridge Note comprised a part of the
funds used by the Company to provide financing for the GameTime
acquisition, to refinance certain indebtedness of the Company, and to
provide funds for working capital purposes. See "Background of Offering."
The Company will bear the cost of expenses incurred in
connection with the offering hereby, including registration, printing,
postage, legal and accounting fees and miscellaneous expenses, estimated
to be approximately $80,000.
CAPITALIZATION
The following table sets forth the historical capitalization of
the Company as of [June 30], 1997, and as adjusted to give effect to: (i)
the issuance and sale of [625,000] shares of Common Stock offered by
Swing-N-Slide hereby; and (ii) the issuance and sale of $3,333,333
aggregate principal amount of Second Series Debentures offered by Swing-N-
Slide pursuant to a separate registration statement filed with the
Securities and Exchange Commission, which offering is ongoing.
[June 30], 1997
Actual As Adjusted (1)
(in thousands)
Short-term debt:
Revolving loan [$12,320] [$12,320]
Current portion of long-term debt [4,761] [4,761]
Bridge Note [2,500] 0 (2)
Long-term obligations:
Long-term debt, net of current portion [56,266] [56,266]
10% Convertible Debentures due 2004 [5,588](3) [8,921](4)
Stockholders' equity:
Preferred stock, $.01 par value -
5,000,000 shares authorized, no shares
issued or outstanding ----- -----
Common Stock, $.01 par
value - 25,000,000 shares authorized,
7,091,406 shares outstanding (5) [107] [115](6)
Class B Common Stock, $.01 par value
- 1,750,000 shares authorized, no shares
issued or outstanding ----- -----
Additional paid-in capital [32,185] [34,597](7)
Paid-in capital -- stock warrants [2,723] [2,723]
Excess purchase price over predecessor
basis [(5,627)] [(5,627)]
Retained earnings [22,171] [22,171]
Cost of 3,600,000 shares of common
stock in treasury (8) [(40,348)] (40,348)]
Total stockholders' equity [11,211] [13,631]
_________________________
1 As adjusted for the proceeds from the issuance of [625,000]
shares of Common Stock pursuant to this Offer and the net proceeds from
the proposed issuance of $3,333,333 aggregate principal amount of Second
Series Debentures (see "Risk Factors -- Controlling Interest in Company"),
as of [June 30], 1997.
2 The expenses incurred in connection with this offering will
be borne by Swing-N-Slide, and 100% of the proceeds from the sale of
shares of Common Stock offered hereby, in the amount of $2,500,000, will
be used to prepay in full the principal outstanding under the Bridge Note.
3 This amount represents $4,300,000 and $700,000 in First
Series Debentures issued to GreenGrass on February 16, 1996, and April 25,
1996, respectively, and an aggregate of $322,804 in First Series
Debentures issued to GreenGrass (and to two former members of its general
partner, GreenGrass Management LLC) on April 15, 1996, and October 15,
1996, as interest payments.
4 This amount consists of (a) $5,000,000 aggregate principal
amount of First Series Debentures, (b) $322,804 aggregate principal amount
of First Series Debentures issued as interest on April 15, 1996 and
October 15, 1996, and (c) $3,333,333 aggregate principal amount of Second
Series Debentures proposed to be issued.
5 As of [June 30], 1997, there were 7,091,406 shares of
Common Stock issued and outstanding. This amount excludes 3,600,000
shares that are held by Swing-N-Slide as treasury shares, and excludes up
to approximately 4,549,923 shares underlying various rights to acquire
Common Stock. See "Risk Factors -- Possible Dilution of Ownership
Interest."
6 Includes [625,000] shares offered hereby and [162,595]
additional shares issued to GreenGrass pursuant to the Investment
Agreement as a result of the fact that the Final Calculated Price was
determined to be [$4.00] per share. See "Background of Offering."
7 Net of offering expenses estimated at $80,000.
8 See Note 4 above.
BACKGROUND OF OFFERING
On March 13, 1997, Newco acquired all of the issued and
outstanding shares of GameTime capital stock for $27.0 million and the
assumption of GameTime indebtedness of approximately $13.4 million.
Immediately following the acquisition, GameTime was merged with and into
Newco. To provide financing for this acquisition, to refinance certain
indebtedness of Swing-N-Slide, Newco and GameTime, and to provide funds
for working capital purposes, Swing-N-Slide and Newco entered into certain
definitive agreements, referenced below.
On March 13, 1997, a group of banks led by Fleet National
Bank provided Newco with a $69.5 million senior secured credit facility.
The facility consists of (a) a $20.0 million revolving credit facility (of
which $12.7 million was drawn on March 13, 1997); (b) a $45.0 million Term
Loan A facility; and (c) a $4.5 million Term Loan B facility. The entire
facility is guaranteed by Swing-N-Slide, and secured by a first priority
mortgage or security interest in all of Newco's tangible and intangible
assets, as well as a pledge of 100% of the outstanding shares of Newco
common stock. In addition, Newco is subject to certain restrictive
covenants which include, among other things, restrictions on the payment
of dividends or issuance of capital stock and a limitation on additional
indebtedness.
On March 13, 1997, Swing-N-Slide and Newco entered into
Securities Purchase Agreements with Massachusetts Mutual Life Insurance
Company ("MassMutual") and certain of its affiliates, pursuant to which
Swing-N-Slide sold warrants (the "MassMutual Warrants") evidencing rights
to purchase an aggregate of 592,177 shares of its Common Stock (subject to
adjustment), and Newco sold its 12% Senior Subordinated Notes due March
13, 2005 (the "MassMutual Notes"), in the aggregate principal amount of
$12,500,000. The MassMutual Warrants are exercisable at any time during
the period commencing March 13, 1997, and terminating on the later of
March 13, 2003, or the date upon which all of the MassMutual Notes have
been paid in full, at an exercise price of $.001 per share (subject to
adjustment).
On March 13, 1997, Swing-N-Slide entered into an Investment
Agreement with GreenGrass Holdings pursuant to which Swing-N-Slide sold to
GreenGrass Holdings 1,087,406 shares (subject to adjustment) of its Common
Stock for an aggregate purchase price of $5,000,000, or a per share
purchase price of $4.5981, and sold its Junior Subordinated Bridge Note in
the principal amount of $2,500,000 (the "Bridge Note"), due not later than
December 31, 1997 (subject to prepayment), bearing interest at a rate of
13.5% per annum, and accompanied by ten-year warrants to purchase 50,000
shares of such stock, at a per share purchase price of $4.5981 (subject to
adjustment). Pursuant to the terms of the Investment Agreement, and based
on fluctuations in the market price of the Company's Common Stock on the
AMEX during the 150-day period following the public announcement of the
GameTime acquisition, effective August 13, 1997, the number of shares
issued to GreenGrass was adjusted and increased from 1,087,406 to
[1,250,000]. As a result of such adjustment, the price per share paid by
GreenGrass for the 1,250,000 shares received was in effect fixed at
[$4.00] per share. Swing-N-Slide will use the proceeds of the sale of
shares of Common Stock in this offering to prepay in full the principal
outstanding under the Bridge Note. [NOTE: amounts in brackets are
subject to adjustment, which adjustment shall have occurred prior to the
effective date of the Registration Statement.]
The number of shares of Common Stock to be sold in this
offering (the "Rights Shares"), fixed at [625,000], was determined by
dividing 2,500,000, the original principal amount of the Bridge Note, by
the [$4.00] per share Final Calculated Price (determined in the manner set
forth below). Swing-N-Slide will offer to each stockholder of Swing-N-
Slide other than GreenGrass Holdings the right, on the basis of the number
of shares held as of ___________, 1997, the record date set by the Board of
Directors of Swing-N-Slide (the "Record Date"), to purchase his, her or
its pro rata share of the Rights Shares for cash at a price equal to the
Final Calculated Price. This offering is being made in order to give the
Company's stockholders, other than GreenGrass, the opportunity to mitigate
the dilutive effect of the purchase by GreenGrass of shares of Common
Stock pursuant to the Investment Agreement. Thus, stockholders other than
GreenGrass are hereby granted the opportunity to purchase their pro rata
share of [625,000] shares of Common Stock at the same [$4.00] per share
purchase price, or an aggregate purchase price of $2,500,000, thereby
mitigating the dilutive effect of the recent purchase by GreenGrass of
[1,250,000] shares of Common Stock at [$4.00] per share or an aggregate
purchase price of $5,000,000.
GreenGrass Holdings is obligated to purchase any Rights
Shares not purchased by the other stockholders of Swing-N-Slide under the
Rights Offering (the "Remaining Rights Shares") at a price per share equal
to the Final Calculated Price. The purchase price for the Remaining
Rights Shares will be paid through a reduction of any principal
outstanding under the Bridge Note on a dollar-for-dollar basis. The Final
Calculated Price of [$4.00] per share was determined, in accordance with
the terms of the Investment Agreement and the documents contemplated
thereby, by calculating the amount equal to the average of the daily
closing bid price per share of Common Stock for the trading days on the
AMEX (weighted for volume on each trading day) included in the 150-day
period from March 17, 1997, through August 13, 1997.
PLAN OF DISTRIBUTION
Rights Offering; Subscription Period
Swing-N-Slide is offering the shares of Common Stock to
stockholders of Swing-N-Slide other than GreenGrass (the "Other
Stockholders") on a pro rata basis. The record date for the Offering is
_____________, 1997 (the "Record Date"). The maximum number of shares each
Other Stockholder is entitled to purchase pursuant to the foregoing
sentence is referred to herein as the "Maximum Subscription Number." With
respect to each Other Stockholder, the Maximum Subscription Number is
determined by multiplying the Maximum Offering Number by a percentage
equal to the number of shares of Common Stock owned by such Other
Stockholder as of the Record Date, divided by the total number of shares
of Common Stock owned by all Other Stockholders as of the Record Date;
provided, that Swing-N-Slide will not offer fractional shares, and the
number of shares offered to each Other Stockholder will be rounded down to
the nearest whole number. As of the Record Date, an aggregate of
2,427,694 shares were owned by all Other Stockholders.
The Subscription Period commences on the date of this
Prospectus and shall remain open until [October 20], 1997. Subscriptions
for the purchase of shares of Common Stock, in the form of a Subscription
Agreement, must be received by 5:00 p.m. Central Time on [October 20,
1997], by [INSERT NAME] (the "Subscription Agent"). The [October 20,
1997], expiration date may be extended by Swing-N-Slide from time to time
in its sole discretion by issuing a press release to that effect no later
than 10:00 a.m., Eastern Time, on [October 21], 1997.
Each Other Stockholder who wants to purchase shares must
submit to the Subscription Agent, by 5:00 p.m. Central Time on [October
20,] 1997, a Subscription Agreement indicating the number of shares the
Other Stockholder will purchase. Other Stockholders will be able to
purchase shares in number only up to the Maximum Subscription Number. No
fractional shares will be issued. The right to subscribe to purchase
shares offered hereunder is non-transferable. Each Subscription Agreement
shall be considered a non-revokable offer to purchase shares in number up
to the Maximum Subscription Number, as set forth in the Subscription
Agreement. Once submitted to the Subscription Agent, the Subscription
Agreement and the offer to purchase set forth therein cannot be changed or
revoked.
If the Other Stockholders do not subscribe for their
respective Maximum Subscription Number, the remaining shares will not be
reoffered to Other Stockholders. Under the terms of the Investment
Agreement, GreenGrass is contractually obligated to purchase shares
offered hereunder which are not purchased by the Other Stockholders, if
any. As a result, upon the expiration of the subscription period,
GreenGrass shall purchase any shares not purchased by the Other
Stockholders at a per share purchase price of [$4.00].
Certificates representing the shares purchased in this
Offering will be delivered to the subscribing Other Stockholders as soon
as practicable after the expiration of the subscription period.
Subscription Agreement
Each Other Stockholder who wishes to purchase shares must
submit to [INSERT NAME AND ADDRESS] by 5:00 p.m. Central Time on the
Expiration Date, a properly completed and executed Subscription Agreement,
together with payment in full of the purchase price ("Purchase Price") for
the number of shares (not to exceed the Maximum Subscription Number) to be
purchased by such Other Stockholder. Payment may be made only (a) by
check or bank draft drawn upon a U.S. bank, or postal, telegraphic or
express money order, payable to Swing-N-Slide Corp., or (b) by wire
transfer of funds to the account maintained by the Subscription Agent for
the purpose of accepting subscriptions, or (c) a combination of the
foregoing. The Purchase Price will be deemed to have been received by the
Subscription Agent only upon (i) clearance of any uncertified check, (ii)
receipt by the Subscription Agent of any certified check or bank draft
drawn upon a U.S. bank or any postal, telegraphic or express money order,
or (iii) receipt of collected funds in the Subscription Agent's account
designated above. If paying by uncertified personal check, please note
that the funds paid thereby may take at least five (5) business days to
clear. ACCORDINGLY, OTHER STOCKHOLDERS WHO WISH TO PAY THE PURCHASE PRICE
BY MEANS OF UNCERTIFIED PERSONAL CHECK ARE URGED TO MAKE PAYMENT
SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE TO ENSURE THAT SUCH PAYMENT
IS RECEIVED AND CLEARS BY SUCH TIME AND ARE URGED TO CONSIDER IN THE
ALTERNATIVE PAYMENT BY MEANS OF CERTIFIED OR CASHIER'S CHECK, MONEY ORDER
OR WIRE TRANSFER OF FUNDS.
Because the right to purchase shares hereunder is
nontransferable, if a beneficial owner of Common Stock desires to purchase
shares, he may do so only by having the owner of record act on his behalf.
Beneficial owners of Common Stock held of record by a broker, dealer,
commercial bank, trust company or other nominee, as well as persons
holding certificates for Common Stock personally who would prefer to have
such institutions effect transactions related to this Offering on their
behalf, should contact the appropriate institution or nominee and request
it to effect such transactions for them.
If an Other Stockholder does not indicate in his, her or
its Subscription Agreement the number of shares which the Other
Stockholder is willing to purchase, or does not forward full payment of
the Purchase Price for the number of shares the Other Stockholder
indicates he, she or it is willing to purchase, then such Other
Stockholder will be deemed to have offered to purchase a number of shares
(not to exceed the Maximum Subscription Number) equal to the Purchase
Price received by the Subscription Agent divided by the Final Calculated
Price.
All funds received by the Subscription Agent in payment of
the Purchase Price for shares will be retained by the Subscription Agent
and will not be delivered to the Company until the certificates
representing shares have been issued.
Persons who hold shares of Common Stock for the account of
others, such as brokers, trustees or depositories for securities, should
contact the respective beneficial owners of such shares as soon as
possible to ascertain those beneficial owners' intentions and to obtain
instructions with respect to responding to this Offer. If a beneficial
owner so instructs, the record holder of that beneficial owner's shares of
Common Stock should complete the Subscription Agreement and submit it to
the Subscription Agent with proper payment. In addition, beneficial
owners of Common Stock held through such a nominee holder should contact
the nominee holder and request the nominee holder to effect transactions
in accordance with the beneficial owner's instructions.
THE SUBSCRIPTION AGREEMENT SHOULD BE SENT WITH PAYMENT TO
[INSERT NAME AND ADDRESS].
THE METHOD OF DELIVERY OF THE SUBSCRIPTION AGREEMENT AND
PAYMENT OF THE PURCHASE PRICE TO THE SUBSCRIPTION AGENT ARE AT THE
ELECTION AND RISK OF THE STOCKHOLDER. IF SENT BY MAIL, STOCKHOLDERS ARE
URGED TO SEND THE SUBSCRIPTION AGREEMENT AND PAYMENTS BY REGISTERED MAIL,
PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, AND ARE URGED TO ALLOW A
SUFFICIENT NUMBER OF DAYS TO ENSURE DELIVERY TO THE SUBSCRIPTION AGENT AND
CLEARANCE OF PAYMENT PRIOR TO THE EXPIRATION TIME. BECAUSE UNCERTIFIED
PERSONAL CHECKS MAY TAKE AT LEAST FIVE (5) BUSINESS DAYS TO CLEAR,
STOCKHOLDERS ARE STRONGLY URGED TO PAY, OR ARRANGE FOR PAYMENT, BY MEANS
OF CERTIFIED OR CASHIER'S CHECK, MONEY ORDER OR WIRE TRANSFER OF FUNDS.
All issues concerning timeliness, validity, form and
eligibility regarding this Offer will be resolved by Swing-N-Slide, whose
determinations will be final and binding. Swing-N-Slide, in its sole
discretion, may waive any defect or irregularity, or permit a defect or
irregularity to be corrected within such time as it may determine.
Subscription Agreements will not be deemed to have been received or
accepted until all irregularities have been waived or cured within such
time as Swing-N-Slide determines, in its sole discretion. Swing-N-Slide
will not be under any duty to give notification of any defect or
irregularity in connection with the submission of Subscription Agreements
or incur any liability for failure to give such notification.
Any questions or requests for assistance concerning the
method of purchasing shares or requests for additional copies of this
Prospectus or Subscription Agreements should be directed to [INSERT NAME
AND ADDRESS].
No Revocation; No Transfer of Rights
ONCE AN OTHER STOCKHOLDER HAS SUBMITTED HIS, HER OR ITS
SUBSCRIPTION AGREEMENT IT MAY NOT BE REVOKED OR CHANGED.
This Offer is made only to Other Stockholders, and each
Other Stockholder is entitled to purchase only his pro rata share of the
Common Stock, as described above. An Other Stockholder may not transfer,
in whole or in part, his right to purchase the Common Stock offered
hereby, to any other person, including another Other Stockholder.
State and Foreign Securities Law
Swing-N-Slide will not offer, sell or issue shares of
Common Stock in states or other jurisdictions where it is unlawful to do
so or whose laws, rules, regulations or orders would require Swing-N-Slide
to incur costs, obligations or time delays which Swing-N-Slide determines,
in its sole discretion, are disproportionate to the net proceeds to be
realized by Swing-N-Slide from such offers, sales or issuances. No action
has been taken in any jurisdiction outside the United States to permit
offers and sales of the shares. Consequently, Swing-N-Slide may reject
subscriptions for shares by any Other Stockholder, unless it determines
that it may lawfully accept such subscriptions, even if it could do so by
qualifying the shares for sale or by taking other actions in such
jurisdictions.
Rights of Subscribers
Other Stockholders will have no rights as stockholders
until certificates representing the shares of Common Stock for which they
have subscribed are issued to them. All shares of Common Stock issued
will be issued in the name of the holder of record of the shares of Common
Stock giving rise to the right to purchase Common Stock hereunder. An
Other Stockholder will not have the right to revoke his, her or its
subscriptions after delivery of his, her or its Subscription Agreement to
the Subscription Agent.
DESCRIPTION OF CAPITAL STOCK
Swing-N-Slide has 31,750,000 authorized shares of capital
stock, divided into three classes as follows: 25,000,000 shares, par
value $0.01 per share, of common stock (for purposes of this section,
"Common Stock"), 1,750,000 shares, par value $0.01 per share, of Class B
Common Stock ("Class B Common Stock"), and 5,000,000 shares, par value
$0.01 per share of Preferred Stock. As of _____________, 1997, [7,255,624]
shares of Common Stock were issued and outstanding, and no shares of Class
B Common Stock or Preferred Stock were issued. See "Capitalization." All
outstanding shares of Common Stock are fully paid and nonassessable
(except as otherwise provided by law).
Common Stock
Holders of Common Stock are entitled to one vote per share
on all matters which, pursuant to the Delaware General Corporation Law
(the "DGCL"), require the approval of Swing-N-Slide's stockholders.
Holders of Class B Common Stock have no right to vote on any matters to be
voted on by Swing-N-Slide's stockholders. GreenGrass's ownership of
approximately 66% of the currently issued and outstanding Common Stock
(approximately 71% if GreenGrass converted all $5,572,938.37 principal
amount in First Series Debentures into Common Stock), along with
GreenGrass's potential ownership of at least approximately 63% of the
debentures issued under the Indenture, give it effective control over
Swing-N-Slide. See "Risk Factors--Controlling Interest in the Company."
In the event of a liquidation, dissolution or winding up of
Swing-N-Slide, holders of Common Stock and Class B Common Stock are
entitled to participate ratably in all distributions after payment of
liabilities and satisfaction of any preferential rights of holders of
Preferred Stock, if any. Holders of Common Stock and Class B Common Stock
are not entitled to any preemptive rights. Subject to any preferences
that may be applicable to any outstanding shares of Preferred Stock,
holders of Common Stock and Class B Common Stock are entitled to receive
cash dividends ratably on a per share basis if and when such dividends are
declared by the Board of Directors from funds legally available therefor.
But see "Risk Factors--No Dividends."
Shares of Common Stock can be converted into shares of
Class B Common Stock by "Regulated Stockholders" (defined in the Amended
Certificate of Incorporation to mean stockholders who, among other things,
are subject to Regulation Y of the Board of Governors of the Federal
Reserve System). Currently, there are no Regulated Stockholders. Each
holder of Class B Common Stock can convert it into Common Stock under
certain circumstances described in the Amended Certificate of
Incorporation. Currently, there are no holders of Class B Common Stock.
The rights, preferences and privileges of Common Stock and
Class B Common Stock are subject to, and may be adversely affected by, the
rights of holders of shares of any series of Preferred Stock which Swing-
N-Slide may designate and issue in the future.
Preferred Stock
The Board of Directors of Swing-N-Slide is authorized to
provide for the issuance by Swing-N-Slide of Preferred Stock in one or
more series and to fix the rights, preferences, privileges,
qualifications, limitations and restrictions thereof, including, without
limitation, dividend rights, dividend rates, conversion rights, voting
rights, terms of redemption or repurchase, redemption or repurchase
prices, limitations or restrictions thereon, liquidation preferences and
the number of shares constituting any series or the designation of such
series, without any further vote or action by the stockholders. The
issuance of any series of Preferred Stock may have an adverse effect on
the rights of holders of common stock, and could decrease the amount of
earnings and assets available for distribution to holders of common stock.
In addition, any issuance of Preferred Stock could have the effect of
delaying, deferring or preventing a change in control of Swing-N-Slide.
Swing-N-Slide has no present plans to issue any shares of
Preferred Stock.
Section 203 of the Delaware Law
Generally, Section 203 of the DGCL prohibits certain
Delaware corporations from engaging in a business combination with an
interested stockholder for a period of three years after the date of the
transaction in which the person became an interested stockholder, subject
to certain exceptions. A Delaware corporation may "opt out" from the
application of Section 203 of the DGCL through a provision in its
certificate of incorporation or by-laws. Swing-N-Slide has "opted out"
from the application of Section 203. Swing-N-Slide's election not to be
governed by Section 203 will not, however, apply to any business
combination between Swing-N-Slide and any person who became an interested
stockholder on or prior to June 18, 1992.
Certain Certificate of Incorporation and Bylaw Provisions
The Amended and Restated Certificate of Incorporation
("Amended Certificate of Incorporation") of Swing-N-Slide provides that
the number of directors of Swing-N-Slide shall consist of not less than
one and not more than ten, with the exact number to be determined by a
vote of a majority of the Board. There are currently seven members of the
Board of Directors. Any vacancies on the Board may be filled for the
unexpired portion of the term by a majority vote of the remaining
directors.
Election of directors at all meetings of the stockholders
at which directors are to be elected shall be by ballot, and, except as
may be limited by the rights of Preferred Stockholders, a plurality of
votes cast thereat shall elect. Except as otherwise provided by law or
the Amended Certificate of Incorporation, all matters other than the
election of directors submitted to the stockholders at any meeting shall
be decided by a majority of the votes cast with respect thereto.
The Amended Certificate of Incorporation prohibits
stockholders of Swing-N-Slide from taking action by written consent
without a meeting of stockholders. The Amended Certificate of
Incorporation provides, with certain exceptions, that meetings of
stockholders of the Corporation may be called only by the Chairman of the
Board of Directors or the President of Swing-N-Slide, a majority of the
Board of Directors, or holders of a majority of the shares of Common
Stock. The Amended Certificate of Incorporation and Bylaws further
provide that nominations for the election of directors and advance notice
of other action to be taken at meetings of stockholders of Swing-N-Slide
must be given in the manner provided in the Bylaws, and the Bylaws contain
detailed notice requirements relating to nominations and other action.
Swing-N-Slide may change or repeal any provision contained
in the Amended Certificate of Incorporation (except as provided below) and
any other provision authorized by the laws of the State of Delaware at the
time in force may be added (except as provided below) in the manner
prescribed by law. Notwithstanding the foregoing, the affirmative vote of
the holders of at least a majority of the voting power of the shares of
the then outstanding voting stock of Swing-N-Slide, voting together as a
single class, shall be required to amend or repeal, or adopt any
provisions inconsistent with, Articles FIFTH (election of directors),
EIGHTH (indemnification of directors and officers), NINTH (limiting
liability of directors for money damages), or TENTH (stockholders meeting
requirements).
Limitation of Liability
Swing-N-Slide's Amended Certificate of Incorporation
provides that directors of Swing-N-Slide shall not be personally liable to
Swing-N-Slide or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to Swing-N-Slide or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
DGCL, relating to prohibited dividends or distributions or the repurchase
or redemption of stock, or (iv) for any transaction from which the
director derives an improper personal benefit. Such limitation of
liability does not affect the availability of equitable remedies such as
injunctive relief or rescission.
Transfer Agent and Registrar
The transfer agent and registrar for Swing-N-Slide is First
Chicago Trust Company of New York, P.O. Box 13701, Newark, New Jersey
07188.
LEGAL MATTERS
The validity of the Common Stock registered hereunder will
be passed upon for Swing-N-Slide by Foley & Lardner, Madison and
Milwaukee, Wisconsin.
EXPERTS
The consolidated financial statements and related
consolidated financial statement schedules of Swing-N-Slide appearing in
Swing-N-Slide's Annual Report (Form 10-K) for the year ended December 31,
1996, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements and financial statement
schedules are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
No person has been authorized in connection with the
offering made hereby to give any information or to make any representation
not contained in this Prospectus and, if given or made, such information
or representation must not be relied upon as having been authorized by the
Company or by any other person. This Prospectus does not constitute an
offer to sell or a solicitation of any offer to buy any of the securities
offered hereby to any person or by anyone in any jurisdiction in which it
is unlawful to make such offer or solicitation. Neither the delivery of
this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that the information contained
herein is correct as of any date subsequent to the date hereof.
Table of Contents
Page
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . .
Incorporation of Certain Documents by Reference . . . . . . . . . . . . .
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . .
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Background of Offering . . . . . . . . . . . . . . . . . . . . . . . . .
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . .
Description of Capital Stock . . . . . . . . . . . . . . . . . . . . . .
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses in
connection with the issuance and distribution of the securities being
registered, all of which are being borne by the Registrant:
Securities and Exchange Commission
registration fee . . . . . . . . . . . . . . . . . . $758
AMEX Listing fee . . . . . . . . . . . . . . . . [$12,500]
Legal fees and expenses . . . . . . . . . . . . [$40,000]
Accounting fees and expenses . . . . . . . . . . . [$2,000]
Printing and mailing fees . . . . . . . . . . . [$10,000]
Miscellaneous . . . . . . . . . . . . . . . . . [$14,742]
TOTAL . . . . . . . . . . . . . . . . . . [$80,000]
Item 15. Indemnification of Directors and Officers
Set forth below is a description of certain provisions of
Swing-N-Slide's Amended Certificate of Incorporation and Bylaws and the
DGCL, as such provisions relate to the indemnification of the directors
and officers of Swing-N-Slide. This description is intended only as a
summary and is qualified in its entirety by reference to the Amended
Certificate of Incorporation, Bylaws, and the DGCL.
Swing-N-Slide's Amended Certificate of Incorporation
provides that Swing-N-Slide shall, to the full extent permitted by the
DGCL, as amended from time to time, indemnify its directors, officers and
certain other persons (subject to certain conditions and qualifications)
and eliminates the personal liability of its directors to the full extent
permitted by Section 102(b)(7) of the DGCL, as amended from time to time.
Section 145 of the DGCL permits a corporation to indemnify
its directors and officers against expenses (including attorney's fees),
judgments, fines and amounts paid in settlements actually and reasonably
incurred by them in connection with any action, suit or proceeding brought
by third parties, if such directors or officers acted in good faith and in
a manner they reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe their conduct was unlawful.
In a derivative action, i.e., one by or in the right of the corporation,
indemnification may be made only for expenses actually and reasonably
incurred by directors and officers in connection with the defense or
settlement of an action or suit, and only with respect to a matter as to
which they shall have acted in good faith and in a manner they reasonably
believed to be in or not opposed to the best interests of the corporation,
except that no indemnification shall be made if such person shall have
been adjudged liable for negligence or misconduct in the performance of
his respective duties to the corporation, although the court in which the
action or suit was brought may determine upon application that the
defendant officers or directors are reasonably entitled to indemnification
for such expenses despite such adjudication of liability.
Section 102(b)(7) of the DGCL provides that a corporation
may eliminate or limit the personal liability of a director to the
corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, provided that such provision shall not
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law (iii) under Section 174 of the
DGCL, or (iv) for any transaction from which the director derived an
improper personal benefit. No such provision shall eliminate or limit the
ability of a director for any act or omission occurring prior to the date
which such provision becomes effective.
Swing-N-Slide maintains insurance on behalf of its officers
and directors which, subject to certain exceptions, covers liabilities
under the Securities Act of 1933.
Under the Transaction Agreement, Swing-N-Slide is required
to indemnify and provide insurance to the officers and directors of Swing-
N-Slide and Newco, and to certain other persons ("Indemnified Persons").
These obligations require, among other things, that: (a) for three years
and sixty days after the date on which shares of Common Stock were
purchased in the tender offer ("Purchase Date"), Swing-N-Slide must
(subject to certain terms, conditions and qualifications) provide
officers' and directors' liability insurance covering each present and
former director or officer of Swing-N-Slide or Newco, and fiduciary
liability insurance covering each present and former Fiduciary (as defined
in the Transaction Agreement), with respect to events, actions and
omissions occurring on or prior to the Purchase Date, including any which
relate to the transactions contemplated by the Transaction Agreement; (b)
for not less than six years after the date on which the tender offer
expired, Swing-N-Slide's Certificate of Incorporation and Bylaws shall
provide indemnification to the Indemnified Persons on terms no less
favorable to the Indemnified Persons than those contained in Swing-N-
Slide's Amended Certificate of Incorporation and Bylaws, and Newco's
Articles of Incorporation and Bylaws, as in effect on January 4, 1996; and
(c) proper provision be made so that Swing-N-Slide's successors, assigns
and transferees of all or substantially all Swing-N-Slide's assets assume
the indemnification and insurance obligations set forth in the Transaction
Agreement (without relieving Swing-N-Slide of its obligations thereunder).
Item 16. Exhibits
Exhibit
Number Description
2.(1) Transaction Agreement dated January 4, 1996 between
GreenGrass Holdings and Swing-N-Slide.(1)
2.(2) Amendment No. 1 to Transaction Agreement dated February 12,
1996 between GreenGrass Holdings and Swing-N-Slide.
2.(3) Amended and Restated Registration Rights Agreement dated
March 13, 1997 between GreenGrass Holdings and Swing-N-
Slide.(2)
2.(4) Stipulation and Order dated February 13, 1996 relating to
Barbieri v. Swing-N-Slide Corp., et al., Court of Chancery
of the State of Delaware, New Castle County, Civil Action
No. 14239.(3)
2.(5) Amended and Restated Stock Purchase Agreement, dated as of
March 13, 1997, by and among Newco, Inc., Game Time, Inc.
and Ross D. Siragusa, Jr., John R. Siragusa and Richard D.
Siragusa.(4)
2.(6) Articles of Merger Merging Game Time, Inc. With and Into
Newco, Inc., dated as of March 13, 1997.(5)
4.(1) Amended and Restated Certificate of Incorporation of Swing-
N-Slide.(6)
4.(2) Amended and Restated 10% Convertible Subordinated Debenture
due 2004, dated February 16, 1996, in the original
principal amount of $4,300,000 issued by Swing-N-Slide
Corp. to GreenGrass Holdings.
4.(3) Amended and Restated 10% Convertible Subordinated Debenture
due 2004, dated April 25, 1996, in the original principal
amount of $700,000 issued by Swing-N-Slide Corp. to
GreenGrass Holdings.
4.(4) Swing-N-Slide Corp. Bridge Note, dated as of March 13,
1997, in the principal amount of $2,500,000.(7)
5.(1) Opinion of Foley & Lardner.
10.(1) Credit Agreement, dated as of March 13, 1997, among Swing-
N-Slide Corp., Newco, Inc., the Lenders party thereto and
Fleet National Bank, as lender and agent, together with the
notes related thereto.(8)
10.(2) Securities Purchase Agreement, dated as of March 13, 1997,
among Swing-N-Slide Corp., Newco, Inc. and Massachusetts
Mutual Life Insurance Company, together with the notes and
warrants related thereto.(9)
10.(3) Securities Purchase Agreement, dated as of March 13, 1997,
among Swing-N-Slide Corp., Newco, Inc. and MassMutual
Corporate Investors, together with the note and warrant
related thereto.(10)
10.(4) Securities Purchase Agreement, dated as of March 13, 1997,
among Swing-N-Slide Corp., Newco, Inc. and MassMutual
Participation Investors, together with the note and warrant
related thereto.(11)
10.(5) Securities Purchase Agreement, dated as of March 13, 1997,
among Swing-N-Slide Corp., Newco, Inc. and MassMutual
Corporate Value Partners Limited, together with the note
and warrant related thereto.(12)
10.(6) Warrant No. 1 for the Purchase of Common Stock of Swing-N-
Slide Corp., dated as of March 13, 1997.(13)
10.(7) Investment Agreement, dated as of March 13, 1997, between
Swing-N-Slide Corp. and GreenGrass Holdings.(14)
10.(8) Severance, Change of Control and Noncompetition Agreement
dated as of May 21, 1997, between Swing-N-Slide and Richard
G. Mueller.
10.(9) Severance and Change of Control Agreement dated February
15, 1996 between Swing-N-Slide and Curtis Cole.(15)
10.(10) Severance and Change of Control Agreement dated February
15, 1996 between Swing-N-Slide and Richard Ruegger.(16)
10.(11) Severance and Change of Control Agreement dated February
15, 1996 between Swing-N-Slide and David Hammelman.(17)
10.(12) Severance and Change of Control Agreement dated February
15, 1996 between Swing-N-Slide and Kenneth Jonas.(18)
10.(13) Lease dated October 13, 1995, between Hovde Development,
Inc., lessor, and Swing-N-Slide Corp., lessee.(19)
10.(14) Lease dated November 1, 1993, between HUFCOR, INC., lessor,
and Newco, Inc., lessee, as amended.(20)
10.(15) Swing-N-Slide Corp. 1996 Incentive Stock Plan.(21)
10.(16) Swing-N-Slide Corp. 1992 Stock Program.(22)
10.(17) Management Consulting Agreement dated as of February 16,
1996, by and among Newco, Inc., Swing-N-Slide Corp.,
Glencoe Investment Corporation and Desai Capital Management
Incorporated.(23)
10.(18) Acquisition consulting agreement relating to GameTime
transaction dated as of September 6, 1996, by and among
Swing-N-Slide Corp., Glencoe Investment Corporation and
Desai Capital Management Incorporated.(24)
13.(1) Annual Report of Swing-N-Slide for the year ended December
31, 1996.(25)
13.(2) Quarterly Report of Swing-N-Slide for the quarter ended
March 31, 1997.(26)
13.(3) Quarterly Report of Swing-N-Slide for the quarter ended
June 30, 1997.(27)
13.(4) Current Report of Swing-N-Slide on Form 8-K filed March 13,
1997, as amended by Amendment No. 1 on Form 8-K/A filed May
6, 1997.(28)
23.(i)(1) Consent of Ernst & Young LLP.
23.(i)(2) Consent of Foley & Lardner (included in Exhibit 5).
24. Powers of Attorney.(29)
99. Form of Subscription Agreement.
________________________________________
(1) Incorporated by reference to Swing-N-Slide's Schedule 14D-9
(File No. 0-20450).
(2) Incorporated by reference to Exhibit 4.28 of Swing-N-Slide
Corp.'s Registration Statement on Form S-8 (Registration No. 33-
48735).
(3) Incorporated by reference to Exhibit 2.(5) of Swing-N-Slide
Corp.'s Registration Statement on Form S-2 (Registration No.
333-3907).
(4) Incorporated by reference to Exhibit 2.1 of Swing-N-Slide
Corp.'s Current Report on Form 8-K dated March 13, 1997 (SEC
File Number 0-20450).
(5) Incorporated by reference to Exhibit 2.2 of Swing-N-Slide
Corp.'s Current Report on Form 8-K dated March 13, 1997 (SEC
File Number 0-20450).
(6) Incorporated by reference to Swing-N-Slide Corp.'s Registration
Statement on Form S-8 (Registration No. 33-48735).
(7) Incorporated by reference to Exhibit 4.26 of Swing-N-Slide
Corp.'s Current Report on Form 8-K dated March 13, 1997 (SEC
File Number 0-20450).
(8) Incorporated by reference to Exhibits 4.1 through 4.10 of Swing-
N-Slide Corp.'s Current Report on Form 8-K dated March 13, 1997
(SEC File Number 0-20450).
(9) Incorporated by reference to Exhibits 4.11, 4.15, 4.16, 4.20,
and 4.21 of Swing-N-Slide Corp.'s Current Report on Form 8-K
dated March 13, 1997 (SEC File Number 0-20450).
(10) Incorporated by reference to Exhibits 4.12, 4.17 and 4.22 of
Swing-N-Slide Corp.'s Current Report on Form 8-K dated March 13,
1997 (SEC File Number 0-20450).
(11) Incorporated by reference to Exhibits 4.13, 4.18 and 4.23 of
Swing-N-Slide Corp.'s Current Report on Form 8-K dated March 13,
1997 (SEC File Number 0-20450).
(12) Incorporated by reference to Exhibits 4.14, 4.19 and 4.24 of
Swing-N-Slide Corp.'s Current Report on Form 8-K dated March 13,
1997 (SEC File Number 0-20450).
(13) Incorporated by reference to Exhibit 4.27 of Swing-N-Slide
Corp.'s Current Report on Form 8-K dated March 13, 1997 (SEC
File Number 0-20450).
(14) Incorporated by reference to Exhibit 4.25 of Swing-N-Slide
Corp.'s Current Report on Form 8-K dated March 13, 1997 (SEC
File Number 0-20450).
(15) Incorporated by reference to Exhibit 10.(ii)(A)(4) of Swing-N-
Slide Corp.'s Registration Statement on Form S-2 (Registration
No. 333-3907).
(16) Incorporated by reference to Exhibit 10.(ii)(A)(5) of Swing-N-
Slide Corp.'s Registration Statement on Form S-2 (Registration
No. 333-3907).
(17) Incorporated by reference to Exhibit 10.(ii)(A)(6) of Swing-N-
Slide Corp.'s Registration Statement on Form S-2 (Registration
No. 333-3907).
(18) Incorporated by reference to Exhibit 10.(ii)(A)(7) of Swing-N-
Slide Corp.'s Registration Statement on Form S-2 (Registration
No. 333-3907).
(19) Incorporated by reference to Exhibit 10.2 of Swing-N-Slide
Corp.'s Annual Report on Form 10-K for the year ended December
31, 1996 (SEC File No. 0-20450).
(20) Incorporated by reference to Exhibit 10.3 of Swing-N-Slide
Corp.'s Annual Report on Form 10-K for the year ended December
31, 1996 (SEC File No. 0-20450).
(21) Incorporated by reference to Exhibit 10.(iii)(A)(1) of Swing-N-
Slide Corp.'s Registration Statement on Form S-2 (Registration
No. 333-3907).
(22) Incorporated by reference to Swing-N-Slide's Registration
Statement on Form S-8 (Registration No. 33-48735).
(23) Incorporated by reference to Exhibit 10.5 of Swing-N-Slide
Corp.'s Annual Report on Form 10-K for the year ended December
31, 1996 (SEC File No. 0-20450).
(24) Incorporated by reference to Exhibit 10.6 of Swing-N-Slide
Corp.'s Annual Report on Form 10-K for the year ended December
31, 1996 (SEC File No. 0-20450).
(25) Incorporated by reference to Swing-N-Slide Corp.'s Annual Report
on Form 10-K for the year ended December 31, 1996 (SEC File No.
0-20450).
(26) Incorporated by reference to Swing-N-Slide Corp.'s Quarterly
Report on Form 10-Q for the quarter ended March 31, 1997 (SEC
File No. 0-20450).
(27) Incorporated by reference to Swing-N-Slide Corp.'s Quarterly
Report on Form 10-Q for the quarter ended June 30, 1997 (SEC
File No. 0-20450).
(28) Incorporated by reference to Swing-N-Slide Corp.'s Current
Report on Form 8-K dated March 13, 1997, as amended by Amendment
No. 1 on Form 8-K/A filed May 6, 1997 (SEC File No. 0-20450).
(29) To be filed by amendment at a later date.
<PAGE>
Item 17. Undertakings
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1993,
each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to deliver or
cause to be delivered with the prospectus, to each person to whom the
prospectus is sent or given, the latest annual report to security holders
that is incorporated by reference in the prospectus and furnished pursuant
to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Securities Exchange Act of 1934; and where interim financial information
required to be presented by Article 3 of Regulation S-X are not set forth
in the prospectus, to deliver, or cause to be delivered to each person to
whom the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such
interim financial information.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) (Section 230.424(b) of this chapter)
if, in the aggregate, the changes in volume and price represent not more
than a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-2 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Janesville, State of Wisconsin
on August 7, 1997.
SWING-N-SLIDE CORP.
By: /s/ Richard G. Mueller
Richard G. Mueller, Chairman, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
/s/ Richard G. Mueller
Richard G. Mueller, Chairman of the Board
of Directors, President and Chief Executive
Officer
Date: August 7, 1997
/s/ Richard E. Ruegger
Richard E. Ruegger, Vice President-Finance,
Chief Financial Officer, Secretary and
Treasurer (Principal Financial and
Accounting Officer)
Date: August 7, 1997
/s/ David S. Evans
David S. Evans, Director
Date: August 7, 1997
/s/ George N. Herrera
George N. Herrera, Director
Date: August 7, 1997
/s/ Timothy R. Kelleher
Timothy R. Kelleher, Director
Date: August 7, 1997
/s/ Terence S. Malone
Terence S. Malone, Director
Date: August 7, 1997
/s/ Gary A. Massel
Gary A. Massel, Director
Date: August 7, 1997
/s/ Caroline L. Williams
Caroline L. Williams, Director
Date: August 7, 1997
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
2.(1) Transaction Agreement dated January 4, 1996 between
GreenGrass Holdings and Swing-N-Slide.(1)
2.(2) Amendment No. 1 to Transaction Agreement dated February 12,
1996 between GreenGrass Holdings and Swing-N-Slide.
2.(3) Amended and Restated Registration Rights Agreement dated
March 13, 1997 between GreenGrass Holdings and Swing-N-
Slide.(2)
2.(4) Stipulation and Order dated February 13, 1996 relating to
Barbieri v. Swing-N-Slide Corp., et al., Court of Chancery
of the State of Delaware, New Castle County, Civil Action
No. 14239.(3)
2.(5) Amended and Restated Stock Purchase Agreement, dated as of
March 13, 1997, by and among Newco, Inc., Game Time, Inc.
and Ross D. Siragusa, Jr., John R. Siragusa and Richard D.
Siragusa.(4)
2.(6) Articles of Merger Merging Game Time, Inc. With and Into
Newco, Inc., dated as of March 13, 1997.(5)
4.(1) Amended and Restated Certificate of Incorporation of Swing-
N-Slide.(6)
4.(2) Amended and Restated 10% Convertible Subordinated Debenture
due 2004, dated February 16, 1996, in the original
principal amount of $4,300,000 issued by Swing-N-Slide
Corp. to GreenGrass Holdings.
4.(3) Amended and Restated 10% Convertible Subordinated Debenture
due 2004, dated April 25, 1996, in the original principal
amount of $700,000 issued by Swing-N-Slide Corp. to
GreenGrass Holdings.
4.(4) Swing-N-Slide Corp. Bridge Note, dated as of March 13,
1997, in the principal amount of $2,500,000.(7)
5.(1) Opinion of Foley & Lardner.
10.(1) Credit Agreement, dated as of March 13, 1997, among Swing-
N-Slide Corp., Newco, Inc., the Lenders party thereto and
Fleet National Bank, as lender and agent, together with the
notes related thereto.(8)
10.(2) Securities Purchase Agreement, dated as of March 13, 1997,
among Swing-N-Slide Corp., Newco, Inc. and Massachusetts
Mutual Life Insurance Company, together with the notes and
warrants related thereto.(9)
10.(3) Securities Purchase Agreement, dated as of March 13, 1997,
among Swing-N-Slide Corp., Newco, Inc. and MassMutual
Corporate Investors, together with the note and warrant
related thereto.(10)
10.(4) Securities Purchase Agreement, dated as of March 13, 1997,
among Swing-N-Slide Corp., Newco, Inc. and MassMutual
Participation Investors, together with the note and warrant
related thereto.(11)
10.(5) Securities Purchase Agreement, dated as of March 13, 1997,
among Swing-N-Slide Corp., Newco, Inc. and MassMutual
Corporate Value Partners Limited, together with the note
and warrant related thereto.(12)
10.(6) Warrant No. 1 for the Purchase of Common Stock of Swing-N-
Slide Corp., dated as of March 13, 1997.(13)
10.(7) Investment Agreement, dated as of March 13, 1997, between
Swing-N-Slide Corp. and GreenGrass Holdings.(14)
10.(8) Severance, Change of Control and Noncompetition Agreement
dated as of May 21, 1997, between Swing-N-Slide and Richard
G. Mueller.
10.(9) Severance and Change of Control Agreement dated February
15, 1996 between Swing-N-Slide and Curtis Cole.(15)
10.(10) Severance and Change of Control Agreement dated February
15, 1996 between Swing-N-Slide and Richard Ruegger.(16)
10.(11) Severance and Change of Control Agreement dated February
15, 1996 between Swing-N-Slide and David Hammelman.(17)
10.(12) Severance and Change of Control Agreement dated February
15, 1996 between Swing-N-Slide and Kenneth Jonas.(18)
10.(13) Lease dated October 13, 1995, between Hovde Development,
Inc., lessor, and Swing-N-Slide Corp., lessee.(19)
10.(14) Lease dated November 1, 1993, between HUFCOR, INC., lessor,
and Newco, Inc., lessee, as amended.(20)
10.(15) Swing-N-Slide Corp. 1996 Incentive Stock Plan.(21)
10.(16) Swing-N-Slide Corp. 1992 Stock Program.(22)
10.(17) Management Consulting Agreement dated as of February 16,
1996, by and among Newco, Inc., Swing-N-Slide Corp.,
Glencoe Investment Corporation and Desai Capital Management
Incorporated.(23)
10.(18) Acquisition consulting agreement relating to GameTime
transaction dated as of September 6, 1996, by and among
Swing-N-Slide Corp., Glencoe Investment Corporation and
Desai Capital Management Incorporated.(24)
13.(1) Annual Report of Swing-N-Slide for the year ended December
31, 1996.(25)
13.(2) Quarterly Report of Swing-N-Slide for the quarter ended
March 31, 1997.(26)
13.(3) Quarterly Report of Swing-N-Slide for the quarter ended
June 30, 1997.(27)
13.(4) Current Report of Swing-N-Slide on Form 8-K filed March 13,
1997, as amended by Amendment No. 1 on Form 8-K/A filed May
6, 1997.(28)
23.(i)(1) Consent of Ernst & Young LLP.
23.(i)(2) Consent of Foley & Lardner (included in Exhibit 5).
24. Powers of Attorney.(29)
99. Form of Subscription Agreement.
________________________________________
(1) Incorporated by reference to Swing-N-Slide's Schedule 14D-9
(File No. 0-20450).
(2) Incorporated by reference to Exhibit 4.28 of Swing-N-Slide
Corp.'s Registration Statement on Form S-8 (Registration No. 33-
48735).
(3) Incorporated by reference to Exhibit 2.(5) of Swing-N-Slide
Corp.'s Registration Statement on Form S-2 (Registration No.
333-3907).
(4) Incorporated by reference to Exhibit 2.1 of Swing-N-Slide
Corp.'s Current Report on Form 8-K dated March 13, 1997 (SEC
File Number 0-20450).
(5) Incorporated by reference to Exhibit 2.2 of Swing-N-Slide
Corp.'s Current Report on Form 8-K dated March 13, 1997 (SEC
File Number 0-20450).
(6) Incorporated by reference to Swing-N-Slide Corp.'s Registration
Statement on Form S-8 (Registration No. 33-48735).
(7) Incorporated by reference to Exhibit 4.26 of Swing-N-Slide
Corp.'s Current Report on Form 8-K dated March 13, 1997 (SEC
File Number 0-20450).
(8) Incorporated by reference to Exhibits 4.1 through 4.10 of Swing-
N-Slide Corp.'s Current Report on Form 8-K dated March 13, 1997
(SEC File Number 0-20450).
(9) Incorporated by reference to Exhibits 4.11, 4.15, 4.16, 4.20,
and 4.21 of Swing-N-Slide Corp.'s Current Report on Form 8-K
dated March 13, 1997 (SEC File Number 0-20450).
(10) Incorporated by reference to Exhibits 4.12, 4.17 and 4.22 of
Swing-N-Slide Corp.'s Current Report on Form 8-K dated March 13,
1997 (SEC File Number 0-20450).
(11) Incorporated by reference to Exhibits 4.13, 4.18 and 4.23 of
Swing-N-Slide Corp.'s Current Report on Form 8-K dated March 13,
1997 (SEC File Number 0-20450).
(12) Incorporated by reference to Exhibits 4.14, 4.19 and 4.24 of
Swing-N-Slide Corp.'s Current Report on Form 8-K dated March 13,
1997 (SEC File Number 0-20450).
(13) Incorporated by reference to Exhibit 4.27 of Swing-N-Slide
Corp.'s Current Report on Form 8-K dated March 13, 1997 (SEC
File Number 0-20450).
(14) Incorporated by reference to Exhibit 4.25 of Swing-N-Slide
Corp.'s Current Report on Form 8-K dated March 13, 1997 (SEC
File Number 0-20450).
(15) Incorporated by reference to Exhibit 10.(ii)(A)(4) of Swing-N-
Slide Corp.'s Registration Statement on Form S-2 (Registration
No. 333-3907).
(16) Incorporated by reference to Exhibit 10.(ii)(A)(5) of Swing-N-
Slide Corp.'s Registration Statement on Form S-2 (Registration
No. 333-3907).
(17) Incorporated by reference to Exhibit 10.(ii)(A)(6) of Swing-N-
Slide Corp.'s Registration Statement on Form S-2 (Registration
No. 333-3907).
(18) Incorporated by reference to Exhibit 10.(ii)(A)(7) of Swing-N-
Slide Corp.'s Registration Statement on Form S-2 (Registration
No. 333-3907).
(19) Incorporated by reference to Exhibit 10.2 of Swing-N-Slide
Corp.'s Annual Report on Form 10-K for the year ended December
31, 1996 (SEC File No. 0-20450).
(20) Incorporated by reference to Exhibit 10.3 of Swing-N-Slide
Corp.'s Annual Report on Form 10-K for the year ended December
31, 1996 (SEC File No. 0-20450).
(21) Incorporated by reference to Exhibit 10.(iii)(A)(1) of Swing-N-
Slide Corp.'s Registration Statement on Form S-2 (Registration
No. 333-3907).
(22) Incorporated by reference to Swing-N-Slide's Registration
Statement on Form S-8 (Registration No. 33-48735).
(23) Incorporated by reference to Exhibit 10.5 of Swing-N-Slide
Corp.'s Annual Report on Form 10-K for the year ended December
31, 1996 (SEC File No. 0-20450).
(24) Incorporated by reference to Exhibit 10.6 of Swing-N-Slide
Corp.'s Annual Report on Form 10-K for the year ended December
31, 1996 (SEC File No. 0-20450).
(25) Incorporated by reference to Swing-N-Slide Corp.'s Annual Report
on Form 10-K for the year ended December 31, 1996 (SEC File No.
0-20450).
(26) Incorporated by reference to Swing-N-Slide Corp.'s Quarterly
Report on Form 10-Q for the quarter ended March 31, 1997 (SEC
File No. 0-20450).
(27) Incorporated by reference to Swing-N-Slide Corp.'s Quarterly
Report on Form 10-Q for the quarter ended June 30, 1997 (SEC
File No. 0-20450).
(28) Incorporated by reference to Swing-N-Slide Corp.'s Current
Report on Form 8-K dated March 13, 1997, as amended by Amendment
No. 1 on Form 8-K/A filed May 6, 1997 (SEC File No. 0-20450).
(29) To be filed by amendment at a later date.
AMENDMENT NO. 1 TO TRANSACTION AGREEMENT
This Amendment No. 1 is entered into this 12th day of February,
1996 between GreenGrass Holdings, a Delaware general partnership
("Purchaser"), and Swing-N-Slide Corp., a Delaware corporation (the
"Company").
A. Purchaser and the Company have entered into the Transaction
Agreement dated January 4, 1996 (the "Transaction Agreement") and desire
to amend certain provisions thereof as provided below.
B. Terms not otherwise defined herein shall have the meaning
assigned to such terms in the Transaction Agreement.
1. Purchaser and the Company agree that the Purchaser shall extend
the expiration of the Offer to midnight Eastern Time on Wednesday,
February 14, 1996. Purchaser shall promptly announce such extension by
means of a press release.
2. Section 4.8(c) is amended by adding thereto the following
sentence at the end of paragraph (c):
Purchaser agrees that the Securities Offering will not
commence until at the earliest 90 days after the
Purchase Date and will remain open for a period of at
least 60 days. Purchaser agrees to use its reasonable
efforts to arrange for one or more firms to make a
market in the Debentures, subject to the provisions of
the parenthetical in Section 4(e) of the Stipulation
and Order in the Barbieri litigation entered into on
February 12, 1996.
3. Annex B-2 is amended by adding the following clause to the
second sentence under the caption Conversion:
; provided, however, holders other than Purchaser
shall receive one Share for each $4.70 principal
amount of Debentures delivered to the Company for
conversion.
4. Annex B-2 is amended by deleting the last sentence under the
caption Other and substituting therefor the following:
Debentures to be issued in principal amount of $1.00
and even multiples thereof, except for Debentures
issued in lieu of cash interest, which may be issued
in the principal amount of such interest.
5. The parties agree that the form of Debenture attached hereto as
Annex A shall be final form of Debenture as required by Section 4.8(a) of
the Transaction Agreement and shall be substituted for the form of
Debenture established by the parties on February 1, 1996 and filed with
the Securities and Exchange Commission. Each party shall promptly file
such substituted form in connection with amendments to their respective
Schedule 14D-9 and Schedule 14D-1.
6. Of the fees payable to Purchaser under the last sentence of
Section 4.9 and under Section 4.13, in each case on and subject to the
occurrence of the Purchase Date, $325,000 shall be paid to Desai Capital
Management Inc. and the balance to Glencoe Investment Company.
7. In all other respects the Transaction Agreement shall remain in
full force and effect.
***************
IN WITNESS WHEREOF, the parties have caused this Amendment No. 1
to be executed as of the date first written above.
GREENGRASS HOLDINGS
By: GreenGrass Capital LLC,
a general partner
By: /s/ David S. Evans
Its: Attorney in Fact
SWING-N-SLIDE CORP.
By: /s/ Thomas Baer
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS
OF ANY STATE BY REASON OF SPECIFIC EXEMPTIONS UNDER THE PROVISIONS OF THE
AFOREMENTIONED ACT AND LAWS AND/OR RULES AND REGULATIONS PROMULGATED
THEREUNDER. ACCORDINGLY, THIS INSTRUMENT MAY NOT BE OFFERED FOR SALE,
SOLD, OR OTHERWISE TRANSFERRED EXCEPT UPON AN EFFECTIVE REGISTRATION OF
THE SECURITIES REPRESENTED BY THIS INSTRUMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS, OR UPON
ACCEPTANCE BY THE ISSUER OF AN OPINION OF COUNSEL IN SUCH FORM AND BY SUCH
COUNSEL, OR OTHER DOCUMENTATION, AS SHALL BE SATISFACTORY TO COUNSEL FOR
THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.
SWING-N-SLIDE CORP.
Amended and Restated
10% Convertible Subordinated Debenture due 2004
$4,300,000.00 February 15, 1996
Swing-N-Slide Corp., a corporation duly organized and existing
under the laws of Delaware, and its permitted successors and assigns
(herein called the "Company"), for value received, hereby promises to pay
to the order of GreenGrass Holdings, a Delaware general partnership, and
its successors and assigns (the "Holder"), the principal sum of FOUR
MILLION THREE HUNDRED THOUSAND DOLLARS ($4,300,000.00) on February 15,
2004, and to pay interest thereon commencing April 15, 1996 and on April
15 and October 15, in each year thereafter, at the rate of 10% per annum,
until the principal hereof is paid in full. Payment of the principal of
(and premium, if any) and interest on this Debenture will be made by check
payable in money of the United States of America that at the time of
payment is legal tender for payment of public and private debts, mailed to
the Holder at its principal office in Chicago, Illinois or such other
address as may be designated by the Holder; provided, however, that until
February 15, 1999, at the option of the Company, interest on this
Debenture may be paid by the issuance of an additional debenture, in the
form of this Debenture, in the principal amount of the interest so
payable, dated the interest payment date for such interest payment, with
interest payable as provided herein with a stated maturity of principal
and interest as provided in this Debenture and otherwise identical to this
Debenture. Interest shall be calculated based on a year composed of 365
days.
Section A. Securities Offering. If debentures are issued to
shareholders of the Company as contemplated by Section 4.8(c) of the
Transaction Agreement, dated January 4, 1996, between GreenGrass Holdings
and the Company, then contemporaneously with the closing of such offer
this Debenture may be exchanged, at the option of the Holder, for
debentures issued under the indenture entered into by the Company in
connection with such offer, at par plus any accrued and unpaid interest,
except that any such debentures issued to the Holder will continue to be
convertible at the Conversion Rate (as defined below) specified below.
Section B. Conversion Rights.
1. General. The Holder shall have the right at any time prior
to maturity, at its option, to convert the principal of this
Debenture (or any portion of the principal thereof which is $1.00 or
an integral multiple of $1.00) into fully paid and nonassessable
(except as otherwise provided by law) shares of Common Stock of the
Company at the rate of one share of Common Stock for each $4.80
principal amount of Debentures or, in case an adjustment to the
number of shares of Common Stock issuable for each $4.80 principal
amount of Debentures (the "Conversion Rate" or "rate") has taken
place pursuant to the provisions hereof, then at the rate as so
adjusted. Such right shall be exercised by the surrender of the
Debenture, the principal of which is so to be converted, to the
Company, accompanied by written notice that the Holder elects to
convert the Debenture or any portion thereof and specifying the name
or names (with address) in which a certificate or certificates for
Common Stock are to be issued. For convenience, the conversion of
all or a portion, as the case may be, of the principal of this
Debenture (and any other Debentures (including without limitation any
Debentures issued in lieu of interest in accordance with the first
paragraph of this Debenture)) into the Common Stock of the Company is
hereinafter sometimes referred to as the conversion of this
Debenture. If this Debenture is converted in part only, upon such
conversion the Company shall execute and deliver to the Holder a new
Debenture or Debentures of authorized denominations in an aggregate
principal amount equal to the unconverted portion of such Debenture.
This Debenture shall continue to be convertible, in whole or in
part, (i) even though the Company or the Holder may have given notice
of prepayment or redemption with respect to this Debenture or any
part thereof pursuant to Sections C or E hereof, so long as this
Debenture and the Holder's election to convert shall have been
delivered to the Company pursuant to this Section B prior to the date
fixed for such prepayment or redemption and (ii) whether or not a
mandatory, optional or mandatory optional prepayment or redemption
prior to the date fixed for such prepayment or redemption, is due on
this Debenture on any date following such time.
2. Issuance of Common Stock; Time of Conversion. As promptly
as practicable after the surrender, as herein provided, of this
Debenture for conversion, the Company shall deliver to the Holder a
certificate or certificates representing the number of fully paid and
nonassessable (except as otherwise provided by law) shares of Common
Stock of the Company into which this Debenture (or portion thereof)
may be converted together with payment in lieu of any fraction of a
share. Subject to the following provisions of this Debenture, such
conversion shall be deemed to have been made immediately prior to the
close of business on the date that this Debenture shall have been
surrendered for conversion (except that if such conversion is in
connection with an underwritten public offering of Common Stock, then
such conversion shall be deemed to have been effected upon such
surrender), so that the rights of the Holder as a Holder shall cease
with respect to this Debenture (or the portion thereof) being
converted at such time, and the Person or Persons entitled to receive
the shares of Common Stock deliverable upon conversion of this
Debenture shall be treated for all purposes as having become the
record holder or holders of such shares of Common Stock at such time,
and such conversion shall be at the conversion rate in effect at such
time; provided, however, that no such surrender on any date when the
stock transfer books of the Company shall be closed shall be
effective to constitute the Person or Persons entitled to receive the
shares of Common Stock deliverable upon such conversion as the record
holder or holders of such shares of Common Stock on such date, but
such surrender shall be effective to constitute the Person or Persons
entitled to receive such shares of Common Stock as the record holder
or holders thereof for all purposes immediately prior to the close of
business on the next succeeding day on which such stock transfer
books are open, and such conversion shall be deemed to have been made
at, and shall be made at the conversion rate in effect at, such time
on such next succeeding day.
If the last day for the exercise of the conversion right shall
not be a business day, then such conversion right may be exercised on
the next succeeding business day.
3. Payment of Accrued Interest. Within ten (10) days after
receipt of any Debenture and an election to convert all or a portion
of the principal amount of such Debenture pursuant to this Section B,
the Company will pay to the Holder any unpaid interest, accrued to
the date of conversion of such Debenture, on the principal amount so
converted.
4. Adjustment of Conversion Price. The conversion rate shall
be subject to adjustment as follows:
a. In case the Company shall (i) pay a dividend on Common
Stock in Common Stock, (ii) subdivide its outstanding shares of
Common Stock, or (iii) combine its outstanding shares of Common
Stock into a smaller number of shares, the conversion rate in
effect immediately prior thereto shall be adjusted retroactively
as provided below so that the Holder shall be entitled to
receive the number of shares of Common Stock of the Company
which it would have owned or have been entitled to receive after
the happening of any of the events described above had this
Debenture been converted immediately prior to the happening of
such event. An adjustment made pursuant to this paragraph (a)
shall become effective immediately after the record date in the
case of a dividend and shall become effective immediately after
the effective date in the case of a subdivision or combination.
b. In case the Company shall issue rights or warrants to
all holders of its Common Stock entitling them to subscribe for
or purchase shares of Common Stock at a price per share less
than the current market price per share (determined as provided
in paragraph (e) of this Section) of the Common Stock on the
date fixed for the determination of stockholders entitled to
receive such rights or warrants, the conversion rate in effect
at the opening of business on the day following the day fixed
for such determination shall be increased by multiplying such
conversion rate by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the
number of shares of Common Stock so offered for subscription or
purchase and the denominator shall be the number of shares of
Common Stock outstanding at the close of business on the date
fixed for such determination plus the number of shares of Common
Stock which the aggregate of the offering price of the total
number of shares of Common Stocks offered for subscription or
purchase would purchase at such current market price, such
increase to become effective immediately after the opening of
business on the day following the date fixed for such
determination; provided, however, in the event that all the
shares of Common Stock offered for subscription or purchase are
not delivered upon the exercise of such rights or warrants, upon
the expiration of such rights or warrants the conversion rate
shall be readjusted to the conversion rate which would have been
in effect had the numerator and the denominator of the foregoing
fraction and the resulting adjustment been made based upon the
number of shares of Common Stock actually delivered upon the
exercise of such rights or warrants rather than upon the number
of shares of Common Stock offered for subscription or purchase.
For the purposes of this paragraph (b), the number of shares of
Common Stock at any time outstanding shall not include shares
held in the treasury of the Company.
c. In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of its
capital stock (other than Common Stock), or assets (excluding
cash dividends paid out of the retained earnings of the Company)
or rights or warrants to subscribe or purchase (excluding those
referred to in paragraph (b) above) (hereinafter collectively
referred to as "Distributions on Common Stock"), then in each
such case, the Company shall deliver to the Holder the
Distribution on Common Stock to which the Holder would be
entitled if it had converted the Debentures for Common Stock
immediately prior to the record date for the purpose of
determining stockholders entitled to receive such Distribution
on Common Stock.
d. The reclassification (including any reclassification
upon a merger in which the Company is the continuing
corporation) of Common Stock into securities including other
than Common Stock (other than any reclassification upon a
consolidation or merger to which Subsection B(6) applies) shall
be deemed to involve (i) a distribution of such securities other
than Common Stock to all holders of Common Stock (and the
effective date of such reclassification shall be deemed to be
"the date fixed for the determination of stockholders entitled
to receive such distribution" and "the date fixed for such
determination" within the meaning of paragraph (e) of this
Section), and (ii) a subdivision or combination, as the case may
be, of the number of shares of Common Stock outstanding
immediately prior to such reclassification into the number of
shares of Common Stock outstanding immediately thereafter.
e. For the purpose of any computation under paragraphs
(b) and (c) of this Section, the current market price per share
of Common Stock on any date shall be deemed to be the average of
the daily closing prices for the thirty consecutive business
days selected by the Company commencing with the forty-fifth
business day before the day in question. The closing price for
each day shall be the last reported sales price regular way or,
in case no such reported sale takes place on such day, the
average of the reported closing bid and asked prices regular
way, in either case on the American Stock Exchange or if the
Common Stock is not listed or admitted to trading on such
Exchange, on the principal national securities exchange on which
the Common Stock is listed or admitted to trading or, if not
listed or admitted to trading on any national securities
exchange, on the National Association of Securities Dealers
Automated Quotations National Market System or, if the Common
Stock is not listed or admitted to trading on any national
securities exchange or quoted on such National Market System,
the average of the closing bid and asked prices in the over-the-
counter market as furnished by any New York Stock Exchange or
American Stock Exchange member firm selected from time to time
by the Company for that purpose. If the current market price
per share of Common Stock cannot be determined in accordance
with the above procedures under this paragraph (e), such current
market price shall be determined in good faith by the Board of
Directors of the Company.
f. No adjustment in the conversion rate shall be required
unless such adjustment would require an increase or decrease of
at least 1% of such rate; provided, however, that the Company
may make any such adjustment at its election and provided,
further, that any adjustments which by reason of this paragraph
(f) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All
calculations under this Section B shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may
be. Anything in this Section B notwithstanding, the Company may
make such reductions in the conversion rate, in addition to
those required by this Section, as it considers to be advisable
in order that any event treated for Federal income tax purposes
as a dividend of stock or stock rights shall not be taxable to
the recipients.
g. Whenever the conversion rate is adjusted as herein
provided
(1) the Company shall compute the adjusted
conversion rate in accordance with paragraph (a); and
(2) notice stating that the conversion rate has
been adjusted and setting forth the adjusted
conversion rate shall forthwith be mailed to the
Holder.
h. For the purpose of this Section B(4), the term "Common
Stock" shall include any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable
in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which is not
subject to redemption by the Company. However, shares issuable
on conversion of shares of this Series shall include only shares
of the class designated as Common Stock of the Company as of
January 1, 1996, or shares of any class or classes resulting
from any reclassification or reclassifications thereof and which
have no preference in respect of dividends or of amounts payable
in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which are not
subject to redemption by the Company; provided, however, that if
at any time there shall be more than one such resulting class,
the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares
of such class resulting from all such reclassifications bears to
the total number of shares of all such classes resulting from
all such reclassifications.
5. No Fractional Shares. No fractional shares of Common Stock
shall be issued upon conversion of this Debenture. If more than one
Debenture shall be surrendered for conversion at one time by the
Holder, the number of full shares which shall be issuable upon
conversion thereof shall be computed on the basis of the aggregate
principal amount of the Debentures or specified portions thereof so
surrendered. Instead of any fractional share of Common Stock which
would otherwise be issuable upon conversion of this Debenture or any
Debentures or specified portions thereof, the Company shall pay a
cash adjustment in respect of such fraction in amount equal to the
same fraction of the current market price per share of Common Stock
(as determined in accordance with Section B.4.(e) above) at the close
of business on the day of conversion.
6. Consolidation, Merger or Sale of Assets. In case of any
consolidation of the Company with, or merger of the Company into, any
other Person, (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding
shares of Common Stock of the Company) or any sale or transfer of all
or substantially all of the assets of the Company (whether such
assets are held by the Company directly or indirectly through its
Subsidiaries), the Person formed by such consolidation or resulting
from such merger or which acquires such assets, as the case may be,
shall execute and deliver to the Holder an instrument providing that
the Holder shall have the right thereafter, during the period this
Debenture shall be convertible to convert this Debenture only into
the kind and amount of securities, cash and other property receivable
upon such consolidation, merger, sale or transfer by a holder of the
number of shares of Common Stock of the Company into which this
Debenture might have been converted immediately prior to such
consolidation, merger, sale or transfer assuming such holder of
Common Stock of the Company (i) is not a Person with which the
Company consolidated or into which the Company merged or to which
such sale or transfer was made, as the case may be ("constituent
Person"), or an Affiliate of a constituent Person and (ii) failed to
exercise his rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such
consolidation, merger, sale or transfer (provided that if the kind or
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer is not the same for each
share of Common Stock of the Company held immediately prior to such
consolidation, merger, sale or transfer by other than a constituent
Person or an Affiliate thereof and in respect of which such rights of
election shall not have been exercised ("non-electing share") then
for the purpose of this subsection the kind and amount of securities,
cash and other property receivable upon such consolidation, merger,
sale or transfer by each non-electing share shall be deemed to be the
kind and amount so receivable per share by a plurality of the non-
electing shares). Such instrument shall provide for adjustments
which, for events subsequent to the effective date of such
instrument, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Section. The above provisions
of this subsection shall similarly apply to successive
consolidations, mergers, sales or transfers.
7. Shares to be Reserved. The Company covenants that it will
at all times reserve and keep available out of its authorized Common
Stock, solely for the purpose of issue upon conversion of Debentures
as herein provided, such number of shares of Common Stock as shall
then be issuable upon the conversion of all outstanding Debentures.
The Company covenants that all shares of Common Stock which shall be
so issuable shall, when issued, be duly and validly issued and fully
paid and nonassessable.
8. Registration and Listing of Shares. The Company covenants
that if any shares of Common Stock, required to be reserved for
purposes of conversion of Debentures hereunder, require registration
with or approval of any governmental authority under any Federal or
State law before such shares may be issued upon conversion, the
Company will in good faith and as expeditiously as possible endeavor
to cause such shares to be duly registered or approved, as the case
may be. The Company further covenants that so long as the Common
Stock of the Company is listed on the American Stock Exchange or any
other national securities exchange, the Company will, if permitted by
the rules of such exchange, list and keep listed on such exchange,
upon official notice of issuance, all shares of Common Stock issuable
upon conversion of Debentures.
9. Taxes and Charges. The issuance of certificates for shares
of Common Stock upon the conversion of Debentures shall be made
without charge to the Holder for such certificates or for any tax in
respect of the issuance of such certificates or the securities
represented thereby, and such certificates shall be issued in the
name of, or in such names as may be directed by, the Holder;
provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the
issuance and delivery of any such certificate in a name other than
that of the Holder, and the Company shall not be required to issue or
deliver such certificates unless or until the Person or Persons
requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.
Section C. Optional Redemption.
The Debentures are subject to redemption upon not less than 30
or more than 60 days' notice by mail, at any time, as a whole or in
part, at the election of the Company, at a redemption price equal to
100% of the principal amount, together with accrued interest to the
redemption date, but interest installments whose stated maturity is
on or prior to such redemption date will be payable to the Holder.
In the event of redemption or conversion of this Debenture is in
part only, a new Debenture or Debentures for the unredeemed or
unconverted portion hereof will be issued in the name of the Holder
upon the cancellation hereof.
Section D. Subordination.
1. Debentures Subordinate to Senior Indebtedness. The Company
covenants and agrees, and the Holder by its acceptance hereof
likewise covenants and agrees, that, to the extent and in the manner
hereinafter set forth in this Section, the indebtedness represented
by this Debenture and the payment of the principal of (and premium,
if any) and interest on this Debenture are hereby expressly made
subordinate and subject in right of payment to the prior payment in
full of all Senior Indebtedness.
2. Payment Over of Proceeds Upon Dissolution Etc. Upon any
distribution of assets of the Company in the event of (a) any
insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Company or to its creditors, as
such, or to its assets, or (b) any liquidation, dissolution or other
winding up of the Company, whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy, or (c) any
assignment for the benefit of creditors or any other marshalling of
assets and liabilities of the Company, then and in such event the
holders of Senior Indebtedness shall be entitled to receive payment
in full of all amounts due or to become due on or in respect of all
Senior Indebtedness, or provision shall be made for such payment, in
money or money's worth, before the Holder is entitled to receive any
payment on account of principal of (or premium, if any) or interest
on the Debentures, and to that end the holders of Senior Indebtedness
shall be entitled to receive, for application to the payment thereof,
any payment or distribution of any kind or character, whether in
cash, property or securities, including any such payment or
distribution which may be payable or deliverable by reason of the
payment of any other indebtedness of the Company being subordinated
to the payment of the Debentures, which may be payable or deliverable
in respect of the Debentures in any such case, proceeding,
dissolution, liquidation or other winding up or event.
In the event that, notwithstanding the foregoing provisions of
this Subsection, the Holder shall have received any payment or
distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any such payment
or distribution which may be payable or deliverable by reason of the
payment of any other indebtedness of the Company being subordinated
to the payment of the Debentures, before all Senior Indebtedness is
paid in full or payment thereof provided for, and if such fact shall
then have been made known to the Holder, then and in such event such
payment or distribution shall be paid over or delivered forthwith to
the trustee in bankruptcy, receiver, liquidating trustee, custodian,
assignee, agent or other Person making payment or distribution of
assets of the Company for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay all
Senior Indebtedness in full, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness.
For purposes of this Section only, the words "cash, property or
securities" shall not be deemed to include shares of stock of the
Company as reorganized or readjusted, or securities of the Company or
any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinated at least to the
extent provided in this Subsection with respect to the Debentures to
the payment of all Senior Indebtedness which may at the time be
outstanding: provided, however, that (i) Senior Indebtedness is
assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of
the Senior Indebtedness are not, without the consent of such holders,
altered by such reorganization or readjustment. The consolidation of
the Company with, or the merger of the Company into, another
corporation or the liquidation or dissolution of the Company
following the conveyance or transfer of its properties and assets
substantially as an entirety to another Person upon the terms and
conditions set forth in Section G shall not be deemed a dissolution,
winding up, liquidation, reorganization, assignment for the benefit
of creditors or marshalling of assets and liabilities of the Company
for the purposes of this Section if the corporation formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer such properties and assets
substantially as a entirety, as the case may be, shall, as a part of
such consolidation, merger, conveyance or transfer, comply with the
conditions set forth in Section G.
3. Prior Payment to Senior Indebtedness Upon Acceleration of
Debentures. In the event that any of the Debentures are declared due
and payable before their Stated Maturity, then and in such event the
holders of Senior Indebtedness outstanding at the time such
Debentures so become due and payable shall be entitled to receive
payment in full of all amounts due or to become due on or in respect
of all such Senior Indebtedness, or provision shall be made for such
payment in money or money's worth, before the Holder is entitled to
receive any payment (including any payment which may be payable by
reason of the payment of any other indebtedness of the Company being
subordinated to the payment of the Debentures) by the Company on
account of the principal of (or premium, if any) or interest on the
Debentures or on account of the purchase or other acquisition of
Debentures.
In the event that, notwithstanding the foregoing, the Company
shall make any payment to the Holder prohibited by the foregoing
provisions of this Subsection, and if such facts shall then have been
made known to the Holder, then and in such event such payment shall
be paid over and delivered forthwith to the Company for the benefit
of the holders of Senior Indebtedness.
The provisions of this Section shall not apply to any payment
with respect to which Subsection 2 would be applicable.
4. No Payment When Newco Indebtedness in Default. (a) In the
event and during the continuation of any default in the payment of
principal (or premium, if any) or interest on any Newco Indebtedness
beyond any applicable grace period with respect thereto, or in the
event that any event of default with respect to any Newco
Indebtedness shall have occurred and be continuing permitting the
holders of such Newco Indebtedness (or a trustee on behalf of the
holders thereof) to declare such Newco Indebtedness due and payable
prior to the date on which it would otherwise have become due and
payable, unless and until such event of default shall have been cured
or waived or shall have ceased to exist and such acceleration shall
have been rescinded or annulled, or (b) in the event any judicial
proceeding shall be pending with respect to any such default in
payment or event of default, then no payment (including any payment
which may be payable by reason of the payment of any other
indebtedness of the Company being subordinated to the payment of the
Debentures) shall be made by the Company on account of principal of
(or premium, if any) or interest on the Debentures or on account of
the purchase or other acquisition of Debentures.
In the event that, notwithstanding the foregoing, the Company
shall make any payment to the Holder prohibited by the foregoing
provisions of this Subsection, and if such fact shall then have been
made known to the Holder, then and in such event such payment shall
be paid over and delivered forthwith to the Company for the benefit
of the holders of Newco Indebtedness.
The provisions of this Section shall not apply to any payment
with respect to which Subsection D(2) would be applicable.
5. Payment Permitted if No Default. Nothing contained in this
Section or elsewhere or in any of the Debentures shall prevent (x)
the Company, at any time except during the pendency of any case,
proceeding, dissolution, liquidation or other winding up, assignment
for the benefit of creditors or other marshalling of assets and
liabilities of the Company referred to in Subsection D(2) or under
the conditions described in Subsections D(3) or D(4), from making
payments at any time of principal of (and premium, if any) or
interest on the Debentures, or (y) the retention by the Holder of any
money deposited with it hereunder to the payment of or on account of
the principal of (and premium, if any) or interest on the Debentures
if, at the time of such retention the Holder did not have knowledge
that such payment would have been prohibited by the provisions of
this Section.
6. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the Holder
shall be subrogated to the extent of the payments or distributions
made to the holders of such Senior Indebtedness pursuant to the
provisions of this Section to the rights of the holders of such
Senior Indebtedness to receive payments or distributions of cash,
property or securities applicable to the Senior Indebtedness until
the principal of (and premium, if any) and interest on the Debentures
shall be paid in full. For purposes of such subrogation, no payments
or distributions to the holders of the Senior Indebtedness of any
cash, property or securities to which the Holder would be entitled
except for the provisions of this Section, and no payments over
pursuant to the provisions of this Section to the Company or to the
holders of Senior Indebtedness by the Holder, shall, as between the
Company, its creditors other than holders of Senior Indebtedness and
the Holder, be deemed to be a payment or distribution by the Company
to or on account of the Debentures.
7. Provisions Solely to Define Relative Rights. The
provisions of this Section are and are intended solely for the
purpose of defining the relative rights of the Holder, on the one
hand, and the holders of Senior Indebtedness, on the other hand.
Nothing contained in this Section or elsewhere in this Debenture is
intended to or shall impair, as between the Company, its creditors
other than the holders of Senior Indebtedness and the Holder, the
obligation of the Company, which is absolute and unconditional, to
pay to the Holder the principal of (and premium, if any) and interest
on the Debenture as and when the same shall become due and payable in
accordance with their terms and which, subject to the rights under
this Section of the holders of Senior Indebtedness, is intended to
rank equally with all other general obligations of the Company, or is
intended to or shall affect the relative rights against the Company
of the Holder and creditors of the Company other than the holders of
Senior Indebtedness, nor shall anything herein or therein prevent the
Holder from exercising all remedies otherwise permitted by applicable
law upon default under this Debenture, subject to the rights, if any,
under this Section of the holders of Senior Indebtedness to receive
cash, property or securities otherwise payable or deliverable to the
Holder, and nothing herein shall prevent the conversion of this
Debenture (or any part thereof) in accordance with the terms hereof.
8. No Waiver of Subordination Provisions. No right of any
present or future holder of any Senior Indebtedness to enforce
subordination herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by the Company with the terms,
provisions and covenants of this Debenture, regardless of any
knowledge thereof any such holder may have or be otherwise charged
with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and
from time to time, without the consent of or notice to the Holder,
without incurring responsibility to the Holder and without impairing
or releasing the subordination provided in this Section or the
obligations hereunder of the Holder to the holders of Senior
Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of,
or renew or alter, Senior Indebtedness, or otherwise amend or
supplement in any manner Senior Indebtedness or any instrument
evidencing the same or any agreement under which Senior Indebtedness
is outstanding; (ii) sell, exchange, release otherwise or otherwise
deal with any property pledged, mortgaged or securing Senior
Indebtedness; (iii) release any Person liable in any manner for the
collection of Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
9. Notice to Holder. The Company shall give prompt written
notice to the Holder of any fact known to the Company which would
prohibit the making of any payment to the Holder in respect of the
Debentures. Failure to give such notice shall not affect the
subordination of the Debenture to Senior Indebtedness.
Notwithstanding the provisions of this Section or any other provision
of this Debenture, the Holder shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any
payment to the Holder in respect of the Debenture, unless and until
the Holder shall have received written notice thereof from the
Company or a holder of Senior Indebtedness or from any trustee
therefor.
Section E. Optional Mandatory Repurchase.
1. Obligation to Repurchase.
a. Upon the occurrence of any Contingent Event, the
Holder shall have the right, at such Holder's option, to require
the Company to redeem this Debenture in whole or in part at a
repurchase price equal to the principal amount of this Debenture
so repurchased plus accrued and unpaid interest on the principal
amount of this Debenture so repurchased.
Such option under this Section E shall be exercised by written
notice to the Company under Section E.b. hereof given at any
time from and after the thirtieth (30th) day before such
Contingent Event through the thirtieth (30th) day after such
Contingent Event (or, if later, through the thirtieth (30th) day
after the Holder receives written notice from the Company of
such Contingent Event). Promptly (and in any event within ten
(10) days) after the occurrence of any Contingent Event, and not
more than thirty (30) days before such Contingent Event, the
Company shall given written notice to the Holder notifying such
Holder of the occurrence of such Contingent Event and informing
such Holder of its right to exercise an option to require a
repurchase under this Section E.
b. In order to exercise its rights to require a
repurchase under this Section E, the Holder shall send to the
Company a written notice demanding prepayment under this Section
E and specifying the date of such prepayment (which shall not be
less than fifteen (15) days after receipt of such notice by the
Company, but in no event earlier than such Contingent Event,
except that such date may be the same date as a Contingent Event
if requested by the Holder).
c. This obligation to repurchase is subject to the
restriction that the Company may not buy any Debenture at any
time when the subordination provisions of this Debenture would
not permit the Company to make a payment of principal, premium
or interest on the Debentures.
2. Certain Definitions. As used in this Section:
a. "Contingent Event" means any one or more of the
following events which shall occur subsequent to the date of
this Debenture:
(1) the Company shall convey, transfer or lease all
or substantially all of its assets (whether held directly
or indirectly through Subsidiaries) to any Persons (other
than to a Subsidiary of the Company);
(2) any Person (other than the Company), including a
"group" (within the meaning of Section 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934, as amended) that
includes such Person, shall acquire, directly or
indirectly, beneficial ownership, in the aggregate, of (x)
50 percent or more of the Common Stock, or (y) securities
representing 50 percent or more of the combined voting
power of the Company's voting securities, in either case,
outstanding on the date immediately prior to the date of
the last such acquisition by such Person; or
(3) on any day (a "Calculation Date") (x) (A) the
Company shall distribute cash, securities or other
properties, including cash dividends (other than Common
Stock, or rights or warrants to acquire Common Stock or
preferred stock substantially equivalent to Common Stock)
to holders of Common Stock, whether by means of dividend,
reclassification, recapitalization or otherwise, or (B) the
Company shall acquire, directly or indirectly, beneficial
ownership of Common Stock; and (y) the sum of the
Applicable Percentages (as defined below) of all such
distributions and acquisitions which have occurred on the
Calculation Date and during the 365-day period immediately
preceding the Calculation Date shall exceed 30 percent.
b. "Applicable Percentage" means (x) In the case of each
distribution referred to in clause (3) above, the percentage
determined as of the Calculation Date of each such distribution
by dividing the aggregate fair market value (as determined in
good faith by the Board of Directors), of such distribution, by
the fair market value (based on the then current market price)
of all of the shares of Common Stock outstanding on the day
immediately prior to such Calculation Date; and (y) in the case
of each acquisition referred to in clause (3) above, the
percentage determined as of the Calculation Date of each such
acquisition by dividing all amounts expended by the Company
(such amounts, if other than in cash, as determined in good
faith by the Board of Directors), in connection with the
acquisition of any shares of Common Stock, by the fair market
value (based on the then current market price) of all of the
shares of Common Stock outstanding on the day immediately prior
to such Calculation Date.
Section F. Covenants.
1. Payment of Principal, Premium and Interest. The Company
will duly and punctually pay the principal of (and premium, if any)
and interest on this Debenture in accordance with the terms hereof.
2. Statement as to Compliance. The Company will deliver to
the Holder, within 120 days after the end of each fiscal year, an
Officers' Certificate stating, as to each signer thereof, that
a. a review of the activities of the Company and its
Subsidiaries during such year and of performance under this
Debenture has been made under his supervision, and
b. to the best of his knowledge, based on such review,
the Company has fulfilled all its obligations under this
Debenture throughout such year, or, if there has been a default
in the fulfillment of any such obligation, specifying each such
default known to him and the nature and status thereof.
3. Further Instruments and Acts. From time to time the
Company will, at its own expense and upon request of the Holder,
execute and deliver or cause to be executed and delivered such
further instruments and do such further acts as may reasonably be
necessary or desirable to carry out the purposes of this Debenture.
Section G. Consolidation, Merger, Conveyance, Transfer or Lease.
1. Company May Consolidate, etc. Only on Certain Terms. The
Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as
an entirety (whether such properties and assets are held by the
Company directly or through its Subsidiaries) to any Person, unless:
a. the Person formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance
or transfer, or which leases, the properties and assets of the
Company substantially as a entirety shall be a corporation
organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and shall
expressly assume, by an instrument, executed and delivered to
the Holder, in form satisfactory to the Holder, the due and
punctual payment of the principal of (and premium, if any) and
interest on this Debenture and the performance of every
obligation herein on the part of the Company to be performed or
observed and shall have provided for conversion rights in
accordance with Subsection (B)(6).
b. immediately after giving effect to such transaction,
no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have
happened and be continuing; and
c. the Company has delivered to the Holder an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if an
instrument is required hereunder in connection with such
transaction, such instrument comply with this Section and that
all conditions precedent herein provided for relating to such
transaction have been complied with.
2. Successor Corporation Substituted. Upon any consolidation
or merger by the Company with or into any other Person or any
conveyance, transfer or lease of the properties and assets of the
Company substantially as a entirety (whether such properties and
assets are held by the Company directly or through its Subsidiaries)
to any Person in accordance with Subsection (G)(1), the successor
corporation formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and
power of the Company hereunder with the same effect as if such
successor corporation had been named as the Company herein, and
thereunder, except in the case of a lease to another Person, the
predecessor corporation shall be relieved of all obligations and
covenants under this Debenture.
Section H. Reports by Company. The Company shall mail to
the Holder, within 15 days after the Company is required to file the
same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions
of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to
file with the Commission pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934, as amended; and, if the
Company is not required to file information, documents or reports
pursuant to either of said Sections, then it shall nonetheless mail
the same to the Holder as if it were required to do so by the
Commission.
Section I. Remedies.
1. Events of Default. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason
for such Event of Default and whether it shall be occasioned by the
provisions of Section (B) or be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or
order of any court or any order, rule or regulation or any
administrative or governmental body):
a. default in the payment of any interest upon this
Debenture and any other Debenture issued to the Holder when it
becomes due and payable and continuance of such default for a
period of 10 days; or
b. default in the payment of the principal of (or
premium, if any, on) this Debenture and any other Debenture
issued to the Holder at its Maturity whether or not such payment
is prohibited by the subordination provisions of this Debenture
and continuance of such default for a period of 30 days; or
c. default in the performance, or breach, of any covenant
or warranty of the Company in this Debenture (other than a
covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with),
and continuance of such default or breach for a period of 30
days after there has been given, by registered or certified
mail, to the Company by the Holder a written notice specifying
such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
d. the entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any
applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order
adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company under
any applicable Federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of
its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in effect
for a period of 60 consecutive days; or
e. the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by it to the entry of a decree or order for relief
in respect of the Company in an involuntary case or proceeding
under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against it, or
the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or state
law, or the consent by it to the filing of such petition or to
the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Company or of any substantial part of its
property, or the making by it of an assignment for the benefit
of creditors, or the admission by it in writing of its inability
to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any such
action.
2. Acceleration of Maturity; Rescission and Annulment. If any
Event of Default occurs and is continuing (other than an Event of
Default described in Subsections I(1)(d) and (e)), then and in every
such case the Holder may declare the principal and all accrued and
unpaid interest of all the Debentures issued to the Holder to be due
and payable immediately, by a notice in writing to the Company, and
upon any such declaration such principal shall become immediately due
and payable. If an Event of Default described in Subsections I(1)(d)
and (e) shall occur, then in every such case the unpaid principal
balance hereof and all accrued and unpaid interest shall
automatically become due and payable.
3. Collection of Indebtedness and Suits for Enforcement. The
Company covenants that if
a. default is made in the payment of any installment of
interest on any Debenture issued to the Holder when such
interest become due and payable and such default continues for a
period of 30 days, or
b. default is made in the payment of the principal of (or
premium, if any, on) any Debenture issued to the Holder at the
Maturity thereof,
the Company will, upon demand by the Holder, pay to it, the whole
amount then due and payable on such Debentures for principal (and
premium, if any) and interest, with interest upon the overdue
principal (and premium, if any) and, to the extent that payment of
such interest shall be legally enforceable, upon overdue installments
of interest, at the rate borne by the Debentures and, in addition
thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable
compensation, expenses and disbursements of the Holder, its agents
and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Holder may institute a judicial proceeding for the
collection of the sums so due and unpaid, may prosecute such
proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Debentures and
collect the moneys adjudged or decreed to be payable in the manner
provided by law out of the property of the Company or any other
obligor upon the Debentures, wherever situated.
If an Event of Default occurs and is continuing, the Holder may
in its discretion proceed to protect and enforce its rights by such
appropriate judicial proceedings as it shall deem most effectual to
protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Debenture or in aid
of the exercise of any power granted herein, or to enforce any other
proper remedy.
4. Application of Money Collected. Subject to Section D, any
money collected by the Holder pursuant to this Section shall be
applied first to the payment of all fees, costs and expenses
(including attorneys fees and expenses) incurred by the Holder
(whether before or after judgment) in the collection of such sums and
second, to the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Debentures in
respect of which or for the benefit of which such money or
Debentures, as the case may be, has been collected.
5. Unconditional Right of Holder to Receive Principal, Premium
and Interest and to Convert. Notwithstanding any other provision
herein, the Holder shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium,
if any) and interest on this Debenture on the date when due (or, in
the case of redemption, on the Redemption Date) and to convert this
Debenture in accordance with Section B and to institute suit for the
enforcement of any such payment and right to convert.
6. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Holder is intended to be exclusive
of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every
other right and remedy given hereunder or now or hereafter existing
at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or
remedy.
7. Delay or Omission Not Waiver. No delay or omission of the
Holder to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver
of any such Event of Default or an acquiescence therein. Every right
and remedy given by this Section or by law to the Holder may be
exercised from time to time, and as often as may be deemed expedient,
by the Holder.
8. Amendments; Governing Law etc.. This Debenture may be
amended only by a writing signed by the Company and the Holder. The
Article and Section headings herein are for convenience only and
shall not affect the construction hereof. All covenants and
agreements in this Debenture by the Company shall bind its successors
and assigns, whether so expressed or not. In case any provision in
this Debenture shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby. This Debenture
shall be governed by and construed in accordance with the laws of the
State of Wisconsin. If any action or proceeding shall be brought by
the Holder in order to enforce any right or remedy under this
Debenture, the Company hereby consents and submits to the
jurisdiction of the courts of the State of Wisconsin and of any
Federal court sitting in The City of Milwaukee, State of Wisconsin.
Any action or proceeding brought by the Company to enforce any right,
assert any claim or obtain any relief whatsoever in connection with
this Debenture shall be brought by the Company exclusively in the
courts of the State of Wisconsin or in any Federal court sitting in
The City of Milwaukee, State of Wisconsin.
No provision of this Debenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to
pay the principal of (and premium, if any) and interest on this
Debenture at the times, place and rate, and in the coin or currency
or with another debenture, herein prescribed or to convert this
Debenture as provided herein.
Debentures are exchangeable for a like aggregate principal
amount of Debentures of a different authorized denomination, as
requested by the Holder.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
9. Definitions. The following terms shall have the meanings
specified below:
"Affiliate" of any specified person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any specified Person
means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on
the date of such certification, and delivered to the Trustee.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act
of 1934, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it
under the Trust Indenture Act, then the body performIng such duties at
such time.
"Common Stock" means all shares now or hereafter authorized of
the class of Common Stock of the Company currently authorized and stock of
any other class into which such shares may hereafter have been changed.
"Debentures" means this Debenture and all other Debentures of
the Company issued to the Holder.
"Event of Default" has the meaning specified in Section I.
"Interest Payment Date" means the Stated Maturity of a
installment of interest on the Debentures.
"Maturity" when used with respect to any Debenture means the
date on which the principal of such Debenture becomes due and payable as
therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Newco" means Newco, Inc., a Wisconsin corporation and any
successor thereto.
"Newco Indebtedness" means the principal, premium, if any, and
unpaid interest on indebtedness for money borrowed by Newco and guaranteed
by the Company (at any time and from time to time), whether outstanding on
the date hereof or hereafter, and all renewals, extensions and refundings
of any such Debt; provided, however, that the following shall not
constitute Newco Indebtedness: any Debt which by its terms refers
explicitly to the Debentures issued hereunder and states that such Debt
shall not be senior in right of payment thereto.
"Officers" Certificate" means a certificate signed by the
Chairman of the Board, the President or a Vice President, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary
of the Company, and delivered to the Holder.
"Opinion of Counsel" means a written opinion of counsel, who may
be counsel for the Company or other counsel acceptable to the Holder.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated
organization or government or any agent or political subdivision thereof.
"Redemption Date," when used with respect to any Debenture to be
redeemed, means the date fixed for such redemption by or pursuant to this
Debenture.
"Redemption Price," when used with respect to any Debenture to
be redeemed, means the price at which it is to be redeemed pursuant to
this Debenture.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the April 1st or the September 1st (whether or not a
Business Day), as the case may be, next preceding such Interest Payment
Date.
"Senior Indebtedness" means all Debts, obligations and
liabilities of the Company arising under the guarantee by the Company of
the Newco Indebtedness, whether such guarantee is outstanding on the date
hereof or hereafter, and all renewals, replacements and extensions
thereof.
"Stated Maturity," when used with respect to any Debenture or
any installment of interest thereon, means the date specified in such
Debenture as the fixed date on which the principal of such Debenture or
such installment of interest is due and payable.
"Subsidiary" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or
more other Subsidiaries. For the purposes of this definition, "voting
stock" means stock which ordinarily has voting power for the election of
directors, whether at all times or only so long as no senior class of
stock has such voting power by reason of any contingency.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
SWING-N-SLIDE CORP.
By:/s/ Richard G. Mueller
Richard G. Mueller
President
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS
OF ANY STATE BY REASON OF SPECIFIC EXEMPTIONS UNDER THE PROVISIONS OF THE
AFOREMENTIONED ACT AND LAWS AND/OR RULES AND REGULATIONS PROMULGATED
THEREUNDER. ACCORDINGLY, THIS INSTRUMENT MAY NOT BE OFFERED FOR SALE,
SOLD, OR OTHERWISE TRANSFERRED EXCEPT UPON AN EFFECTIVE REGISTRATION OF
THE SECURITIES REPRESENTED BY THIS INSTRUMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS, OR UPON
ACCEPTANCE BY THE ISSUER OF AN OPINION OF COUNSEL IN SUCH FORM AND BY SUCH
COUNSEL, OR OTHER DOCUMENTATION, AS SHALL BE SATISFACTORY TO COUNSEL FOR
THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.
SWING-N-SLIDE CORP.
Amended and Restated
10% Convertible Subordinated Debenture due 2004
$700,000.00 April 25, 1996
Swing-N-Slide Corp., a corporation duly organized and existing
under the laws of Delaware, and its permitted successors and assigns
(herein called the "Company"), for value received, hereby promises to pay
to the order of GreenGrass Holdings, a Delaware general partnership, and
its successors and assigns (the "Holder"), the principal sum of SEVEN
HUNDRED THOUSAND DOLLARS ($700,000.00) on February 15, 2004, and to pay
interest thereon commencing April 15, 1996 and on April 15 and October 15,
in each year thereafter, at the rate of 10% per annum, until the principal
hereof is paid in full. Payment of the principal of (and premium, if any)
and interest on this Debenture will be made by check payable in money of
the United States of America that at the time of payment is legal tender
for payment of public and private debts, mailed to the Holder at its
principal office in Chicago, Illinois or such other address as may be
designated by the Holder; provided, however, that until February 15, 1999,
at the option of the Company, interest on this Debenture may be paid by
the issuance of an additional debenture, in the form of this Debenture, in
the principal amount of the interest so payable, dated the interest
payment date for such interest payment, with interest payable as provided
herein with a stated maturity of principal and interest as provided in
this Debenture and otherwise identical to this Debenture. Interest shall
be calculated based on a year composed of 365 days.
Section A. Securities Offering. If debentures are issued to
shareholders of the Company as contemplated by Section 4.8(c) of the
Transaction Agreement, dated January 4, 1996, between GreenGrass Holdings
and the Company, then contemporaneously with the closing of such offer
this Debenture may be exchanged, at the option of the Holder, for
debentures issued under the indenture entered into by the Company in
connection with such offer, at par plus any accrued and unpaid interest,
except that any such debentures issued to the Holder will continue to be
convertible at the Conversion Rate (as defined below) specified below.
Section B. Conversion Rights.
1. General. The Holder shall have the right at any time prior
to maturity, at its option, to convert the principal of this
Debenture (or any portion of the principal thereof which is $1.00 or
an integral multiple of $1.00) into fully paid and nonassessable
(except as otherwise provided by law) shares of Common Stock of the
Company at the rate of one share of Common Stock for each $4.80
principal amount of Debentures or, in case an adjustment to the
number of shares of Common Stock issuable for each $4.80 principal
amount of Debentures (the "Conversion Rate" or "rate") has taken
place pursuant to the provisions hereof, then at the rate as so
adjusted. Such right shall be exercised by the surrender of the
Debenture, the principal of which is so to be converted, to the
Company, accompanied by written notice that the Holder elects to
convert the Debenture or any portion thereof and specifying the name
or names (with address) in which a certificate or certificates for
Common Stock are to be issued. For convenience, the conversion of
all or a portion, as the case may be, of the principal of this
Debenture (and any other Debentures (including without limitation any
Debentures issued in lieu of interest in accordance with the first
paragraph of this Debenture)) into the Common Stock of the Company is
hereinafter sometimes referred to as the conversion of this
Debenture. If this Debenture is converted in part only, upon such
conversion the Company shall execute and deliver to the Holder a new
Debenture or Debentures of authorized denominations in an aggregate
principal amount equal to the unconverted portion of such Debenture.
This Debenture shall continue to be convertible, in whole or in
part, (i) even though the Company or the Holder may have given notice
of prepayment or redemption with respect to this Debenture or any
part thereof pursuant to Sections C or E hereof, so long as this
Debenture and the Holder's election to convert shall have been
delivered to the Company pursuant to this Section B prior to the date
fixed for such prepayment or redemption and (ii) whether or not a
mandatory, optional or mandatory optional prepayment or redemption
prior to the date fixed for such prepayment or redemption, is due on
this Debenture on any date following such time.
2. Issuance of Common Stock; Time of Conversion. As promptly
as practicable after the surrender, as herein provided, of this
Debenture for conversion, the Company shall deliver to the Holder a
certificate or certificates representing the number of fully paid and
nonassessable (except as otherwise provided by law) shares of Common
Stock of the Company into which this Debenture (or portion thereof)
may be converted together with payment in lieu of any fraction of a
share. Subject to the following provisions of this Debenture, such
conversion shall be deemed to have been made immediately prior to the
close of business on the date that this Debenture shall have been
surrendered for conversion (except that if such conversion is in
connection with an underwritten public offering of Common Stock, then
such conversion shall be deemed to have been effected upon such
surrender), so that the rights of the Holder as a Holder shall cease
with respect to this Debenture (or the portion thereof) being
converted at such time, and the Person or Persons entitled to receive
the shares of Common Stock deliverable upon conversion of this
Debenture shall be treated for all purposes as having become the
record holder or holders of such shares of Common Stock at such time,
and such conversion shall be at the conversion rate in effect at such
time; provided, however, that no such surrender on any date when the
stock transfer books of the Company shall be closed shall be
effective to constitute the Person or Persons entitled to receive the
shares of Common Stock deliverable upon such conversion as the record
holder or holders of such shares of Common Stock on such date, but
such surrender shall be effective to constitute the Person or Persons
entitled to receive such shares of Common Stock as the record holder
or holders thereof for all purposes immediately prior to the close of
business on the next succeeding day on which such stock transfer
books are open, and such conversion shall be deemed to have been made
at, and shall be made at the conversion rate in effect at, such time
on such next succeeding day.
If the last day for the exercise of the conversion right shall
not be a business day, then such conversion right may be exercised on
the next succeeding business day.
3. Payment of Accrued Interest. Within ten (10) days after
receipt of any Debenture and an election to convert all or a portion
of the principal amount of such Debenture pursuant to this Section B,
the Company will pay to the Holder any unpaid interest, accrued to
the date of conversion of such Debenture, on the principal amount so
converted.
4. Adjustment of Conversion Price. The conversion rate shall
be subject to adjustment as follows:
a. In case the Company shall (i) pay a dividend on Common
Stock in Common Stock, (ii) subdivide its outstanding shares of
Common Stock, or (iii) combine its outstanding shares of Common
Stock into a smaller number of shares, the conversion rate in
effect immediately prior thereto shall be adjusted retroactively
as provided below so that the Holder shall be entitled to
receive the number of shares of Common Stock of the Company
which it would have owned or have been entitled to receive after
the happening of any of the events described above had this
Debenture been converted immediately prior to the happening of
such event. An adjustment made pursuant to this paragraph (a)
shall become effective immediately after the record date in the
case of a dividend and shall become effective immediately after
the effective date in the case of a subdivision or combination.
b. In case the Company shall issue rights or warrants to
all holders of its Common Stock entitling them to subscribe for
or purchase shares of Common Stock at a price per share less
than the current market price per share (determined as provided
in paragraph (e) of this Section) of the Common Stock on the
date fixed for the determination of stockholders entitled to
receive such rights or warrants, the conversion rate in effect
at the opening of business on the day following the day fixed
for such determination shall be increased by multiplying such
conversion rate by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the
number of shares of Common Stock so offered for subscription or
purchase and the denominator shall be the number of shares of
Common Stock outstanding at the close of business on the date
fixed for such determination plus the number of shares of Common
Stock which the aggregate of the offering price of the total
number of shares of Common Stocks offered for subscription or
purchase would purchase at such current market price, such
increase to become effective immediately after the opening of
business on the day following the date fixed for such
determination; provided, however, in the event that all the
shares of Common Stock offered for subscription or purchase are
not delivered upon the exercise of such rights or warrants, upon
the expiration of such rights or warrants the conversion rate
shall be readjusted to the conversion rate which would have been
in effect had the numerator and the denominator of the foregoing
fraction and the resulting adjustment been made based upon the
number of shares of Common Stock actually delivered upon the
exercise of such rights or warrants rather than upon the number
of shares of Common Stock offered for subscription or purchase.
For the purposes of this paragraph (b), the number of shares of
Common Stock at any time outstanding shall not include shares
held in the treasury of the Company.
c. In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of its
capital stock (other than Common Stock), or assets (excluding
cash dividends paid out of the retained earnings of the Company)
or rights or warrants to subscribe or purchase (excluding those
referred to in paragraph (b) above) (hereinafter collectively
referred to as "Distributions on Common Stock"), then in each
such case, the Company shall deliver to the Holder the
Distribution on Common Stock to which the Holder would be
entitled if it had converted the Debentures for Common Stock
immediately prior to the record date for the purpose of
determining stockholders entitled to receive such Distribution
on Common Stock.
d. The reclassification (including any reclassification
upon a merger in which the Company is the continuing
corporation) of Common Stock into securities including other
than Common Stock (other than any reclassification upon a
consolidation or merger to which Subsection B(6) applies) shall
be deemed to involve (i) a distribution of such securities other
than Common Stock to all holders of Common Stock (and the
effective date of such reclassification shall be deemed to be
"the date fixed for the determination of stockholders entitled
to receive such distribution" and "the date fixed for such
determination" within the meaning of paragraph (e) of this
Section), and (ii) a subdivision or combination, as the case may
be, of the number of shares of Common Stock outstanding
immediately prior to such reclassification into the number of
shares of Common Stock outstanding immediately thereafter.
e. For the purpose of any computation under paragraphs
(b) and (c) of this Section, the current market price per share
of Common Stock on any date shall be deemed to be the average of
the daily closing prices for the thirty consecutive business
days selected by the Company commencing with the forty-fifth
business day before the day in question. The closing price for
each day shall be the last reported sales price regular way or,
in case no such reported sale takes place on such day, the
average of the reported closing bid and asked prices regular
way, in either case on the American Stock Exchange or if the
Common Stock is not listed or admitted to trading on such
Exchange, on the principal national securities exchange on which
the Common Stock is listed or admitted to trading or, if not
listed or admitted to trading on any national securities
exchange, on the National Association of Securities Dealers
Automated Quotations National Market System or, if the Common
Stock is not listed or admitted to trading on any national
securities exchange or quoted on such National Market System,
the average of the closing bid and asked prices in the over-the-
counter market as furnished by any New York Stock Exchange or
American Stock Exchange member firm selected from time to time
by the Company for that purpose. If the current market price
per share of Common Stock cannot be determined in accordance
with the above procedures under this paragraph (e), such current
market price shall be determined in good faith by the Board of
Directors of the Company.
f. No adjustment in the conversion rate shall be required
unless such adjustment would require an increase or decrease of
at least 1% of such rate; provided, however, that the Company
may make any such adjustment at its election and provided,
further, that any adjustments which by reason of this paragraph
(f) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All
calculations under this Section B shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may
be. Anything in this Section B notwithstanding, the Company may
make such reductions in the conversion rate, in addition to
those required by this Section, as it considers to be advisable
in order that any event treated for Federal income tax purposes
as a dividend of stock or stock rights shall not be taxable to
the recipients.
g. Whenever the conversion rate is adjusted as herein
provided
(1) the Company shall compute the adjusted
conversion rate in accordance with paragraph (a); and
(2) notice stating that the conversion rate has
been adjusted and setting forth the adjusted
conversion rate shall forthwith be mailed to the
Holder.
h. For the purpose of this Section B(4), the term "Common
Stock" shall include any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable
in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which is not
subject to redemption by the Company. However, shares issuable
on conversion of shares of this Series shall include only shares
of the class designated as Common Stock of the Company as of
January 1, 1996, or shares of any class or classes resulting
from any reclassification or reclassifications thereof and which
have no preference in respect of dividends or of amounts payable
in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which are not
subject to redemption by the Company; provided, however, that if
at any time there shall be more than one such resulting class,
the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares
of such class resulting from all such reclassifications bears to
the total number of shares of all such classes resulting from
all such reclassifications.
5. No Fractional Shares. No fractional shares of Common Stock
shall be issued upon conversion of this Debenture. If more than one
Debenture shall be surrendered for conversion at one time by the
Holder, the number of full shares which shall be issuable upon
conversion thereof shall be computed on the basis of the aggregate
principal amount of the Debentures or specified portions thereof so
surrendered. Instead of any fractional share of Common Stock which
would otherwise be issuable upon conversion of this Debenture or any
Debentures or specified portions thereof, the Company shall pay a
cash adjustment in respect of such fraction in amount equal to the
same fraction of the current market price per share of Common Stock
(as determined in accordance with Section B.4.(e) above) at the close
of business on the day of conversion.
6. Consolidation, Merger or Sale of Assets. In case of any
consolidation of the Company with, or merger of the Company into, any
other Person, (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding
shares of Common Stock of the Company) or any sale or transfer of all
or substantially all of the assets of the Company (whether such
assets are held by the Company directly or indirectly through its
Subsidiaries), the Person formed by such consolidation or resulting
from such merger or which acquires such assets, as the case may be,
shall execute and deliver to the Holder an instrument providing that
the Holder shall have the right thereafter, during the period this
Debenture shall be convertible to convert this Debenture only into
the kind and amount of securities, cash and other property receivable
upon such consolidation, merger, sale or transfer by a holder of the
number of shares of Common Stock of the Company into which this
Debenture might have been converted immediately prior to such
consolidation, merger, sale or transfer assuming such holder of
Common Stock of the Company (i) is not a Person with which the
Company consolidated or into which the Company merged or to which
such sale or transfer was made, as the case may be ("constituent
Person"), or an Affiliate of a constituent Person and (ii) failed to
exercise his rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such
consolidation, merger, sale or transfer (provided that if the kind or
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer is not the same for each
share of Common Stock of the Company held immediately prior to such
consolidation, merger, sale or transfer by other than a constituent
Person or an Affiliate thereof and in respect of which such rights of
election shall not have been exercised ("non-electing share") then
for the purpose of this subsection the kind and amount of securities,
cash and other property receivable upon such consolidation, merger,
sale or transfer by each non-electing share shall be deemed to be the
kind and amount so receivable per share by a plurality of the non-
electing shares). Such instrument shall provide for adjustments
which, for events subsequent to the effective date of such
instrument, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Section. The above provisions
of this subsection shall similarly apply to successive
consolidations, mergers, sales or transfers.
7. Shares to be Reserved. The Company covenants that it will
at all times reserve and keep available out of its authorized Common
Stock, solely for the purpose of issue upon conversion of Debentures
as herein provided, such number of shares of Common Stock as shall
then be issuable upon the conversion of all outstanding Debentures.
The Company covenants that all shares of Common Stock which shall be
so issuable shall, when issued, be duly and validly issued and fully
paid and nonassessable.
8. Registration and Listing of Shares. The Company covenants
that if any shares of Common Stock, required to be reserved for
purposes of conversion of Debentures hereunder, require registration
with or approval of any governmental authority under any Federal or
State law before such shares may be issued upon conversion, the
Company will in good faith and as expeditiously as possible endeavor
to cause such shares to be duly registered or approved, as the case
may be. The Company further covenants that so long as the Common
Stock of the Company is listed on the American Stock Exchange or any
other national securities exchange, the Company will, if permitted by
the rules of such exchange, list and keep listed on such exchange,
upon official notice of issuance, all shares of Common Stock issuable
upon conversion of Debentures.
9. Taxes and Charges. The issuance of certificates for shares
of Common Stock upon the conversion of Debentures shall be made
without charge to the Holder for such certificates or for any tax in
respect of the issuance of such certificates or the securities
represented thereby, and such certificates shall be issued in the
name of, or in such names as may be directed by, the Holder;
provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the
issuance and delivery of any such certificate in a name other than
that of the Holder, and the Company shall not be required to issue or
deliver such certificates unless or until the Person or Persons
requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.
Section C. Optional Redemption.
The Debentures are subject to redemption upon not less than 30
or more than 60 days' notice by mail, at any time, as a whole or in
part, at the election of the Company, at a redemption price equal to
100% of the principal amount, together with accrued interest to the
redemption date, but interest installments whose stated maturity is
on or prior to such redemption date will be payable to the Holder.
In the event of redemption or conversion of this Debenture is in
part only, a new Debenture or Debentures for the unredeemed or
unconverted portion hereof will be issued in the name of the Holder
upon the cancellation hereof.
Section D. Subordination.
1. Debentures Subordinate to Senior Indebtedness. The Company
covenants and agrees, and the Holder by its acceptance hereof
likewise covenants and agrees, that, to the extent and in the manner
hereinafter set forth in this Section, the indebtedness represented
by this Debenture and the payment of the principal of (and premium,
if any) and interest on this Debenture are hereby expressly made
subordinate and subject in right of payment to the prior payment in
full of all Senior Indebtedness.
2. Payment Over of Proceeds Upon Dissolution Etc. Upon any
distribution of assets of the Company in the event of (a) any
insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Company or to its creditors, as
such, or to its assets, or (b) any liquidation, dissolution or other
winding up of the Company, whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy, or (c) any
assignment for the benefit of creditors or any other marshalling of
assets and liabilities of the Company, then and in such event the
holders of Senior Indebtedness shall be entitled to receive payment
in full of all amounts due or to become due on or in respect of all
Senior Indebtedness, or provision shall be made for such payment, in
money or money's worth, before the Holder is entitled to receive any
payment on account of principal of (or premium, if any) or interest
on the Debentures, and to that end the holders of Senior Indebtedness
shall be entitled to receive, for application to the payment thereof,
any payment or distribution of any kind or character, whether in
cash, property or securities, including any such payment or
distribution which may be payable or deliverable by reason of the
payment of any other indebtedness of the Company being subordinated
to the payment of the Debentures, which may be payable or deliverable
in respect of the Debentures in any such case, proceeding,
dissolution, liquidation or other winding up or event.
In the event that, notwithstanding the foregoing provisions of
this Subsection, the Holder shall have received any payment or
distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any such payment
or distribution which may be payable or deliverable by reason of the
payment of any other indebtedness of the Company being subordinated
to the payment of the Debentures, before all Senior Indebtedness is
paid in full or payment thereof provided for, and if such fact shall
then have been made known to the Holder, then and in such event such
payment or distribution shall be paid over or delivered forthwith to
the trustee in bankruptcy, receiver, liquidating trustee, custodian,
assignee, agent or other Person making payment or distribution of
assets of the Company for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay all
Senior Indebtedness in full, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness.
For purposes of this Section only, the words "cash, property or
securities" shall not be deemed to include shares of stock of the
Company as reorganized or readjusted, or securities of the Company or
any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinated at least to the
extent provided in this Subsection with respect to the Debentures to
the payment of all Senior Indebtedness which may at the time be
outstanding: provided, however, that (i) Senior Indebtedness is
assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of
the Senior Indebtedness are not, without the consent of such holders,
altered by such reorganization or readjustment. The consolidation of
the Company with, or the merger of the Company into, another
corporation or the liquidation or dissolution of the Company
following the conveyance or transfer of its properties and assets
substantially as an entirety to another Person upon the terms and
conditions set forth in Section G shall not be deemed a dissolution,
winding up, liquidation, reorganization, assignment for the benefit
of creditors or marshalling of assets and liabilities of the Company
for the purposes of this Section if the corporation formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer such properties and assets
substantially as a entirety, as the case may be, shall, as a part of
such consolidation, merger, conveyance or transfer, comply with the
conditions set forth in Section G.
3. Prior Payment to Senior Indebtedness Upon Acceleration of
Debentures. In the event that any of the Debentures are declared due
and payable before their Stated Maturity, then and in such event the
holders of Senior Indebtedness outstanding at the time such
Debentures so become due and payable shall be entitled to receive
payment in full of all amounts due or to become due on or in respect
of all such Senior Indebtedness, or provision shall be made for such
payment in money or money's worth, before the Holder is entitled to
receive any payment (including any payment which may be payable by
reason of the payment of any other indebtedness of the Company being
subordinated to the payment of the Debentures) by the Company on
account of the principal of (or premium, if any) or interest on the
Debentures or on account of the purchase or other acquisition of
Debentures.
In the event that, notwithstanding the foregoing, the Company
shall make any payment to the Holder prohibited by the foregoing
provisions of this Subsection, and if such facts shall then have been
made known to the Holder, then and in such event such payment shall
be paid over and delivered forthwith to the Company for the benefit
of the holders of Senior Indebtedness.
The provisions of this Section shall not apply to any payment
with respect to which Subsection 2 would be applicable.
4. No Payment When Newco Indebtedness in Default. (a) In the
event and during the continuation of any default in the payment of
principal (or premium, if any) or interest on any Newco Indebtedness
beyond any applicable grace period with respect thereto, or in the
event that any event of default with respect to any Newco
Indebtedness shall have occurred and be continuing permitting the
holders of such Newco Indebtedness (or a trustee on behalf of the
holders thereof) to declare such Newco Indebtedness due and payable
prior to the date on which it would otherwise have become due and
payable, unless and until such event of default shall have been cured
or waived or shall have ceased to exist and such acceleration shall
have been rescinded or annulled, or (b) in the event any judicial
proceeding shall be pending with respect to any such default in
payment or event of default, then no payment (including any payment
which may be payable by reason of the payment of any other
indebtedness of the Company being subordinated to the payment of the
Debentures) shall be made by the Company on account of principal of
(or premium, if any) or interest on the Debentures or on account of
the purchase or other acquisition of Debentures.
In the event that, notwithstanding the foregoing, the Company
shall make any payment to the Holder prohibited by the foregoing
provisions of this Subsection, and if such fact shall then have been
made known to the Holder, then and in such event such payment shall
be paid over and delivered forthwith to the Company for the benefit
of the holders of Newco Indebtedness.
The provisions of this Section shall not apply to any payment
with respect to which Subsection D(2) would be applicable.
5. Payment Permitted if No Default. Nothing contained in this
Section or elsewhere or in any of the Debentures shall prevent (x)
the Company, at any time except during the pendency of any case,
proceeding, dissolution, liquidation or other winding up, assignment
for the benefit of creditors or other marshalling of assets and
liabilities of the Company referred to in Subsection D(2) or under
the conditions described in Subsections D(3) or D(4), from making
payments at any time of principal of (and premium, if any) or
interest on the Debentures, or (y) the retention by the Holder of any
money deposited with it hereunder to the payment of or on account of
the principal of (and premium, if any) or interest on the Debentures
if, at the time of such retention the Holder did not have knowledge
that such payment would have been prohibited by the provisions of
this Section.
6. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the Holder
shall be subrogated to the extent of the payments or distributions
made to the holders of such Senior Indebtedness pursuant to the
provisions of this Section to the rights of the holders of such
Senior Indebtedness to receive payments or distributions of cash,
property or securities applicable to the Senior Indebtedness until
the principal of (and premium, if any) and interest on the Debentures
shall be paid in full. For purposes of such subrogation, no payments
or distributions to the holders of the Senior Indebtedness of any
cash, property or securities to which the Holder would be entitled
except for the provisions of this Section, and no payments over
pursuant to the provisions of this Section to the Company or to the
holders of Senior Indebtedness by the Holder, shall, as between the
Company, its creditors other than holders of Senior Indebtedness and
the Holder, be deemed to be a payment or distribution by the Company
to or on account of the Debentures.
7. Provisions Solely to Define Relative Rights. The
provisions of this Section are and are intended solely for the
purpose of defining the relative rights of the Holder, on the one
hand, and the holders of Senior Indebtedness, on the other hand.
Nothing contained in this Section or elsewhere in this Debenture is
intended to or shall impair, as between the Company, its creditors
other than the holders of Senior Indebtedness and the Holder, the
obligation of the Company, which is absolute and unconditional, to
pay to the Holder the principal of (and premium, if any) and interest
on the Debenture as and when the same shall become due and payable in
accordance with their terms and which, subject to the rights under
this Section of the holders of Senior Indebtedness, is intended to
rank equally with all other general obligations of the Company, or is
intended to or shall affect the relative rights against the Company
of the Holder and creditors of the Company other than the holders of
Senior Indebtedness, nor shall anything herein or therein prevent the
Holder from exercising all remedies otherwise permitted by applicable
law upon default under this Debenture, subject to the rights, if any,
under this Section of the holders of Senior Indebtedness to receive
cash, property or securities otherwise payable or deliverable to the
Holder, and nothing herein shall prevent the conversion of this
Debenture (or any part thereof) in accordance with the terms hereof.
8. No Waiver of Subordination Provisions. No right of any
present or future holder of any Senior Indebtedness to enforce
subordination herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by the Company with the terms,
provisions and covenants of this Debenture, regardless of any
knowledge thereof any such holder may have or be otherwise charged
with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and
from time to time, without the consent of or notice to the Holder,
without incurring responsibility to the Holder and without impairing
or releasing the subordination provided in this Section or the
obligations hereunder of the Holder to the holders of Senior
Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of,
or renew or alter, Senior Indebtedness, or otherwise amend or
supplement in any manner Senior Indebtedness or any instrument
evidencing the same or any agreement under which Senior Indebtedness
is outstanding; (ii) sell, exchange, release otherwise or otherwise
deal with any property pledged, mortgaged or securing Senior
Indebtedness; (iii) release any Person liable in any manner for the
collection of Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
9. Notice to Holder. The Company shall give prompt written
notice to the Holder of any fact known to the Company which would
prohibit the making of any payment to the Holder in respect of the
Debentures. Failure to give such notice shall not affect the
subordination of the Debenture to Senior Indebtedness.
Notwithstanding the provisions of this Section or any other provision
of this Debenture, the Holder shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any
payment to the Holder in respect of the Debenture, unless and until
the Holder shall have received written notice thereof from the
Company or a holder of Senior Indebtedness or from any trustee
therefor.
Section E. Optional Mandatory Repurchase.
1. Obligation to Repurchase.
a. Upon the occurrence of any Contingent Event, the
Holder shall have the right, at such Holder's option, to require
the Company to redeem this Debenture in whole or in part at a
repurchase price equal to the principal amount of this Debenture
so repurchased plus accrued and unpaid interest on the principal
amount of this Debenture so repurchased.
Such option under this Section E shall be exercised by written
notice to the Company under Section E.b. hereof given at any
time from and after the thirtieth (30th) day before such
Contingent Event through the thirtieth (30th) day after such
Contingent Event (or, if later, through the thirtieth (30th) day
after the Holder receives written notice from the Company of
such Contingent Event). Promptly (and in any event within ten
(10) days) after the occurrence of any Contingent Event, and not
more than thirty (30) days before such Contingent Event, the
Company shall given written notice to the Holder notifying such
Holder of the occurrence of such Contingent Event and informing
such Holder of its right to exercise an option to require a
repurchase under this Section E.
b. In order to exercise its rights to require a
repurchase under this Section E, the Holder shall send to the
Company a written notice demanding prepayment under this Section
E and specifying the date of such prepayment (which shall not be
less than fifteen (15) days after receipt of such notice by the
Company, but in no event earlier than such Contingent Event,
except that such date may be the same date as a Contingent Event
if requested by the Holder).
c. This obligation to repurchase is subject to the
restriction that the Company may not buy any Debenture at any
time when the subordination provisions of this Debenture would
not permit the Company to make a payment of principal, premium
or interest on the Debentures.
2. Certain Definitions. As used in this Section:
a. "Contingent Event" means any one or more of the
following events which shall occur subsequent to the date of
this Debenture:
(1) the Company shall convey, transfer or lease all
or substantially all of its assets (whether held directly
or indirectly through Subsidiaries) to any Persons (other
than to a Subsidiary of the Company);
(2) any Person (other than the Company), including a
"group" (within the meaning of Section 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934, as amended) that
includes such Person, shall acquire, directly or
indirectly, beneficial ownership, in the aggregate, of (x)
50 percent or more of the Common Stock, or (y) securities
representing 50 percent or more of the combined voting
power of the Company's voting securities, in either case,
outstanding on the date immediately prior to the date of
the last such acquisition by such Person; or
(3) on any day (a "Calculation Date") (x) (A) the
Company shall distribute cash, securities or other
properties, including cash dividends (other than Common
Stock, or rights or warrants to acquire Common Stock or
preferred stock substantially equivalent to Common Stock)
to holders of Common Stock, whether by means of dividend,
reclassification, recapitalization or otherwise, or (B) the
Company shall acquire, directly or indirectly, beneficial
ownership of Common Stock; and (y) the sum of the
Applicable Percentages (as defined below) of all such
distributions and acquisitions which have occurred on the
Calculation Date and during the 365-day period immediately
preceding the Calculation Date shall exceed 30 percent.
b. "Applicable Percentage" means (x) In the case of each
distribution referred to in clause (3) above, the percentage
determined as of the Calculation Date of each such distribution
by dividing the aggregate fair market value (as determined in
good faith by the Board of Directors), of such distribution, by
the fair market value (based on the then current market price)
of all of the shares of Common Stock outstanding on the day
immediately prior to such Calculation Date; and (y) in the case
of each acquisition referred to in clause (3) above, the
percentage determined as of the Calculation Date of each such
acquisition by dividing all amounts expended by the Company
(such amounts, if other than in cash, as determined in good
faith by the Board of Directors), in connection with the
acquisition of any shares of Common Stock, by the fair market
value (based on the then current market price) of all of the
shares of Common Stock outstanding on the day immediately prior
to such Calculation Date.
Section F. Covenants.
1. Payment of Principal, Premium and Interest. The Company
will duly and punctually pay the principal of (and premium, if any)
and interest on this Debenture in accordance with the terms hereof.
2. Statement as to Compliance. The Company will deliver to
the Holder, within 120 days after the end of each fiscal year, an
Officers' Certificate stating, as to each signer thereof, that
a. a review of the activities of the Company and its
Subsidiaries during such year and of performance under this
Debenture has been made under his supervision, and
b. to the best of his knowledge, based on such review,
the Company has fulfilled all its obligations under this
Debenture throughout such year, or, if there has been a default
in the fulfillment of any such obligation, specifying each such
default known to him and the nature and status thereof.
3. Further Instruments and Acts. From time to time the
Company will, at its own expense and upon request of the Holder,
execute and deliver or cause to be executed and delivered such
further instruments and do such further acts as may reasonably be
necessary or desirable to carry out the purposes of this Debenture.
Section G. Consolidation, Merger, Conveyance, Transfer or Lease.
1. Company May Consolidate, etc. Only on Certain Terms. The
Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as
an entirety (whether such properties and assets are held by the
Company directly or through its Subsidiaries) to any Person, unless:
a. the Person formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance
or transfer, or which leases, the properties and assets of the
Company substantially as a entirety shall be a corporation
organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and shall
expressly assume, by an instrument, executed and delivered to
the Holder, in form satisfactory to the Holder, the due and
punctual payment of the principal of (and premium, if any) and
interest on this Debenture and the performance of every
obligation herein on the part of the Company to be performed or
observed and shall have provided for conversion rights in
accordance with Subsection (B)(6).
b. immediately after giving effect to such transaction,
no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have
happened and be continuing; and
c. the Company has delivered to the Holder an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if an
instrument is required hereunder in connection with such
transaction, such instrument comply with this Section and that
all conditions precedent herein provided for relating to such
transaction have been complied with.
2. Successor Corporation Substituted. Upon any consolidation
or merger by the Company with or into any other Person or any
conveyance, transfer or lease of the properties and assets of the
Company substantially as a entirety (whether such properties and
assets are held by the Company directly or through its Subsidiaries)
to any Person in accordance with Subsection (G)(1), the successor
corporation formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and
power of the Company hereunder with the same effect as if such
successor corporation had been named as the Company herein, and
thereunder, except in the case of a lease to another Person, the
predecessor corporation shall be relieved of all obligations and
covenants under this Debenture.
Section H. Reports by Company. The Company shall mail to
the Holder, within 15 days after the Company is required to file the
same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions
of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to
file with the Commission pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934, as amended; and, if the
Company is not required to file information, documents or reports
pursuant to either of said Sections, then it shall nonetheless mail
the same to the Holder as if it were required to do so by the
Commission.
Section I. Remedies.
1. Events of Default. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason
for such Event of Default and whether it shall be occasioned by the
provisions of Section (B) or be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or
order of any court or any order, rule or regulation or any
administrative or governmental body):
a. default in the payment of any interest upon this
Debenture and any other Debenture issued to the Holder when it
becomes due and payable and continuance of such default for a
period of 10 days; or
b. default in the payment of the principal of (or
premium, if any, on) this Debenture and any other Debenture
issued to the Holder at its Maturity whether or not such payment
is prohibited by the subordination provisions of this Debenture
and continuance of such default for a period of 30 days; or
c. default in the performance, or breach, of any covenant
or warranty of the Company in this Debenture (other than a
covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with),
and continuance of such default or breach for a period of 30
days after there has been given, by registered or certified
mail, to the Company by the Holder a written notice specifying
such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
d. the entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any
applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order
adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company under
any applicable Federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of
its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in effect
for a period of 60 consecutive days; or
e. the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by it to the entry of a decree or order for relief
in respect of the Company in an involuntary case or proceeding
under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against it, or
the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or state
law, or the consent by it to the filing of such petition or to
the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Company or of any substantial part of its
property, or the making by it of an assignment for the benefit
of creditors, or the admission by it in writing of its inability
to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any such
action.
2. Acceleration of Maturity; Rescission and Annulment. If any
Event of Default occurs and is continuing (other than an Event of
Default described in Subsections I(1)(d) and (e)), then and in every
such case the Holder may declare the principal and all accrued and
unpaid interest of all the Debentures issued to the Holder to be due
and payable immediately, by a notice in writing to the Company, and
upon any such declaration such principal shall become immediately due
and payable. If an Event of Default described in Subsections I(1)(d)
and (e) shall occur, then in every such case the unpaid principal
balance hereof and all accrued and unpaid interest shall
automatically become due and payable.
3. Collection of Indebtedness and Suits for Enforcement. The
Company covenants that if
a. default is made in the payment of any installment of
interest on any Debenture issued to the Holder when such
interest become due and payable and such default continues for a
period of 30 days, or
b. default is made in the payment of the principal of (or
premium, if any, on) any Debenture issued to the Holder at the
Maturity thereof,
the Company will, upon demand by the Holder, pay to it, the whole
amount then due and payable on such Debentures for principal (and
premium, if any) and interest, with interest upon the overdue
principal (and premium, if any) and, to the extent that payment of
such interest shall be legally enforceable, upon overdue installments
of interest, at the rate borne by the Debentures and, in addition
thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable
compensation, expenses and disbursements of the Holder, its agents
and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Holder may institute a judicial proceeding for the
collection of the sums so due and unpaid, may prosecute such
proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Debentures and
collect the moneys adjudged or decreed to be payable in the manner
provided by law out of the property of the Company or any other
obligor upon the Debentures, wherever situated.
If an Event of Default occurs and is continuing, the Holder may
in its discretion proceed to protect and enforce its rights by such
appropriate judicial proceedings as it shall deem most effectual to
protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Debenture or in aid
of the exercise of any power granted herein, or to enforce any other
proper remedy.
4. Application of Money Collected. Subject to Section D, any
money collected by the Holder pursuant to this Section shall be
applied first to the payment of all fees, costs and expenses
(including attorneys fees and expenses) incurred by the Holder
(whether before or after judgment) in the collection of such sums and
second, to the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Debentures in
respect of which or for the benefit of which such money or
Debentures, as the case may be, has been collected.
5. Unconditional Right of Holder to Receive Principal, Premium
and Interest and to Convert. Notwithstanding any other provision
herein, the Holder shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium,
if any) and interest on this Debenture on the date when due (or, in
the case of redemption, on the Redemption Date) and to convert this
Debenture in accordance with Section B and to institute suit for the
enforcement of any such payment and right to convert.
6. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Holder is intended to be exclusive
of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every
other right and remedy given hereunder or now or hereafter existing
at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or
remedy.
7. Delay or Omission Not Waiver. No delay or omission of the
Holder to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver
of any such Event of Default or an acquiescence therein. Every right
and remedy given by this Section or by law to the Holder may be
exercised from time to time, and as often as may be deemed expedient,
by the Holder.
8. Amendments; Governing Law etc.. This Debenture may be
amended only by a writing signed by the Company and the Holder. The
Article and Section headings herein are for convenience only and
shall not affect the construction hereof. All covenants and
agreements in this Debenture by the Company shall bind its successors
and assigns, whether so expressed or not. In case any provision in
this Debenture shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby. This Debenture
shall be governed by and construed in accordance with the laws of the
State of Wisconsin. If any action or proceeding shall be brought by
the Holder in order to enforce any right or remedy under this
Debenture, the Company hereby consents and submits to the
jurisdiction of the courts of the State of Wisconsin and of any
Federal court sitting in The City of Milwaukee, State of Wisconsin.
Any action or proceeding brought by the Company to enforce any right,
assert any claim or obtain any relief whatsoever in connection with
this Debenture shall be brought by the Company exclusively in the
courts of the State of Wisconsin or in any Federal court sitting in
The City of Milwaukee, State of Wisconsin.
No provision of this Debenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to
pay the principal of (and premium, if any) and interest on this
Debenture at the times, place and rate, and in the coin or currency
or with another debenture, herein prescribed or to convert this
Debenture as provided herein.
Debentures are exchangeable for a like aggregate principal
amount of Debentures of a different authorized denomination, as
requested by the Holder.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
9. Definitions. The following terms shall have the meanings
specified below:
"Affiliate" of any specified person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any specified Person
means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on
the date of such certification, and delivered to the Trustee.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act
of 1934, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it
under the Trust Indenture Act, then the body performIng such duties at
such time.
"Common Stock" means all shares now or hereafter authorized of
the class of Common Stock of the Company currently authorized and stock of
any other class into which such shares may hereafter have been changed.
"Debentures" means this Debenture and all other Debentures of
the Company issued to the Holder.
"Event of Default" has the meaning specified in Section I.
"Interest Payment Date" means the Stated Maturity of a
installment of interest on the Debentures.
"Maturity" when used with respect to any Debenture means the
date on which the principal of such Debenture becomes due and payable as
therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Newco" means Newco, Inc., a Wisconsin corporation and any
successor thereto.
"Newco Indebtedness" means the principal, premium, if any, and
unpaid interest on indebtedness for money borrowed by Newco and guaranteed
by the Company (at any time and from time to time), whether outstanding on
the date hereof or hereafter, and all renewals, extensions and refundings
of any such Debt; provided, however, that the following shall not
constitute Newco Indebtedness: any Debt which by its terms refers
explicitly to the Debentures issued hereunder and states that such Debt
shall not be senior in right of payment thereto.
"Officers" Certificate" means a certificate signed by the
Chairman of the Board, the President or a Vice President, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary
of the Company, and delivered to the Holder.
"Opinion of Counsel" means a written opinion of counsel, who may
be counsel for the Company or other counsel acceptable to the Holder.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated
organization or government or any agent or political subdivision thereof.
"Redemption Date," when used with respect to any Debenture to be
redeemed, means the date fixed for such redemption by or pursuant to this
Debenture.
"Redemption Price," when used with respect to any Debenture to
be redeemed, means the price at which it is to be redeemed pursuant to
this Debenture.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the April 1st or the September 1st (whether or not a
Business Day), as the case may be, next preceding such Interest Payment
Date.
"Senior Indebtedness" means all Debts, obligations and
liabilities of the Company arising under the guarantee by the Company of
the Newco Indebtedness, whether such guarantee is outstanding on the date
hereof or hereafter, and all renewals, replacements and extensions
thereof.
"Stated Maturity," when used with respect to any Debenture or
any installment of interest thereon, means the date specified in such
Debenture as the fixed date on which the principal of such Debenture or
such installment of interest is due and payable.
"Subsidiary" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or
more other Subsidiaries. For the purposes of this definition, "voting
stock" means stock which ordinarily has voting power for the election of
directors, whether at all times or only so long as no senior class of
stock has such voting power by reason of any contingency.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
SWING-N-SLIDE CORP.
By:/s/ Richard G. Mueller
Richard G. Mueller
President
[INSERT DATE], 1997
Swing-N-Slide Corp.
1212 Barberry Drive
Janesville, WI 53545
Re: Registration Statement on Form S-2: Registration of Common
Stock
Ladies and Gentlemen:
We have acted as counsel to Swing-N-Slide Corp., a Delaware
corporation (the "Company"), in connection with the offering of up to
625,000 shares of the Company's common stock, $.01 par value per share
(the "Shares"), in accordance with the terms and subject to the conditions
set forth in the prospectus (the "Prospectus") forming a part of the
registration statement on Form S-2 filed by the Company with the
Securities and Exchange Commission on [INSERT DATE], 1997 (the
"Registration Statement"). You have requested our opinion as counsel to
the Company with respect to certain matters in connection with the
registration of the Shares.
In connection with the rendering of this opinion, we have
examined originals, or copies certified to our satisfaction, of the
Amended and Restated Certificate of Incorporation and Amended and Restated
By-Laws of the Company, as amended, the form of subscription agreement
(the "Subscription Agreement") to be executed by each stockholder who
elects to purchase a portion of the Shares, the Registration Statement and
Prospectus, certificates of officers of the Company, certificates of
public officials, and such other proceedings, documents, and records as we
deemed necessary to enable us to render this opinion.
Based on the foregoing, and subject to the assumptions and
qualifications set forth herein, we are of the opinion that:
1. The Shares are validly authorized and, assuming: (a) the
Shares will be validly authorized on the dates of execution of each
Subscription Agreement; (b) on the dates of execution of each Subscription
Agreement, each Subscription Agreement will have been duly executed and
delivered by the subscriber and will constitute the legal, valid, and
binding obligation of the subscriber; (c) no change occurs in the
applicable law or the pertinent facts during the period from the date
hereof until the dates of execution of each Subscription Agreement; (d)
the pertinent provisions of such "blue-sky" and securities laws as may be
applicable have been complied with; and (e) the Shares are issued in the
manner specified in the Registration Statement and in accordance with the
terms of the applicable Subscription Agreement, including receipt by the
Company of the purchase price with respect to the Shares, the Shares will
be validly issued, fully paid, and nonassessable.
Our opinion is further subject to the following assumptions and
qualifications:
A. We express no opinion herein other than as to the General
Corporation Law of the State of Delaware and the federal laws of the
United States.
B. This opinion is given as of the date hereof and is intended
to apply only to those facts and circumstances which exist on the date
hereof, and we assume no obligation or responsibility to update or
supplement this opinion to reflect any facts or circumstances which may
hereafter come to our attention, any changes in laws which may hereafter
occur, or to inform the addressee of any change in circumstances occurring
after the date of this opinion which would alter the opinions rendered
herein.
C. The enforceability of any instrument, document or agreement
is subject to: (i) applicable bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium, or similar laws affecting creditors'
rights generally; (ii) general equitable principles; and (iii) the
availability of specific performance, injunctive relief or any other
equitable remedy subject to the discretion of a court.
D. In rendering the opinions expressed in paragraph 1 above,
we have assumed without investigation that, with respect to each offer,
issuance, sale, and delivery by the Company of Shares and each purchase of
such Shares by the purchaser thereof, (i) except for the General
Corporation Law of the State of Delaware, at the time thereof and at all
times subsequent thereto, such offer, issuance, sale, delivery and
purchase, the execution, delivery, and performance of each Subscription
Agreement, and the consummation of the transactions contemplated thereby,
will not violate, result in a breach of, or conflict with any law, rule,
regulation, order, judgment, or decree, in each case whether then or
subsequently in effect; (ii) no event has taken place subsequent to any
such offer, issuance, sale, delivery, purchase, execution, performance, or
transaction nor will take place which would cause any such offer,
issuance, sale, delivery, purchase, execution, performance, or transaction
not to comply with any such law, rule, regulation, order, judgment,
decree, or duty, or which would permit the Company or any such other party
at any time thereafter to cancel, rescind, or otherwise avoid any such
offer, issuance, sale, delivery, purchase, execution, performance, or
transaction; (iii) there was no misrepresentation, omission, or deceit by
the Company, any such other party, or any other person or entity in
connection with any such offer, issuance, sale, delivery, purchase,
execution, performance, or transaction; (iv) each such offer, issuance,
sale, delivery, purchase, execution, performance, and transaction is
governed by the laws of the State of Delaware, without giving effect to
conflict of laws; (v) each other party to each Subscription Agreement or
to such offer, issuance, sale, delivery, purchase, execution, performance,
or transaction (a) had the power, authority, and capacity to consummate
such purchase, to execute, deliver, and perform such Subscription
Agreement, and to consummate each such transaction; and (b) duly
authorized such purchase and duly authorized, executed and delivered such
Subscription Agreement; (vi) at the time thereof and at all times
subsequent thereto, each such offer, issuance, sale, and delivery the
Company, each such purchase by the other party thereto, and the execution,
delivery, and performance of each Subscription Agreement, by the Company
and the other party thereto, will not violate, result in a breach of,
conflict with or (with or without the giving of notice or the passage of
time or both) entitle any party to terminate or call a default under any
term of any contract, agreement, instrument, lease, license, arrangement
or understanding to which the Company or any such other party is or
becomes a party or to which any of them or any of their respective
properties, assets, or security holders are or will be subject; and (vii)
at the time thereof and at all times subsequent thereto, the persons
authorizing each such offer, issuance, sale, delivery, purchase,
execution, performance or transaction for the Company or for any such
other party will not violate any fiduciary or other duty owed by them.
We hereby consent to the use of this opinion, or copies,
thereof, as an exhibit to the Registration Statement, and to the statement
made regarding our firm under the caption "Legal Matters" in the
Prospectus. In giving this consent, we do not thereby admit that we are
within the category of persons whose consent is required under Section 7
of the Securities Act of 1933 or the rules and regulations of the
Securities and Exchange Commission thereunder.
This opinion has been rendered in connection with the
Registration Statement of the Company solely for the benefit of the
Company, and except as otherwise expressly provided herein, may not be
used or relied upon by any other person or entity or for any other
purpose. Except as otherwise expressly provided herein, any further
distribution or reproduction of the contents hereof, without our prior
written consent, is strictly prohibited.
Very truly yours,
FOLEY & LARDNER
SEVERANCE, CHANGE OF CONTROL AND NONCOMPETITION AGREEMENT
THIS SEVERANCE, CHANGE OF CONTROL AND NONCOMPETITION AGREEMENT
(the "Agreement") is made and entered into as of the 21st day of May,
1997, by and between Newco, Inc., a Wisconsin corporation (the "Company"),
and Richard G. Mueller (the "Employee"), and joined in by Swing-N-Slide
Corp., a Delaware corporation and the parent corporation of the Company
("SNSC").
W I T N E S S E T H:
WHEREAS, the Employee is an officer and a key employee of the
Company; and
WHEREAS, the Employee and the Company desire to enter into this
Agreement to provide for the payment of certain benefits to the Employee
if the Employee's employment with the Company is terminated under certain
circumstances, including a termination following a change of control of
the Company or SNSC.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. The capitalized terms used in this Agreement
shall have the following meanings (unless otherwise expressly provided
herein):
a. "Change of Control" means the occurrence of any of the
following events:
(1) any Person or group of Persons acting in concert
become the beneficial owner, directly or indirectly, or
otherwise possess the voting rights of securities representing
in excess of fifty percent (50%) of the voting securities of the
Company or SNSC, except for SNSC, GreenGrass Holdings, a
Delaware general partnership ("GreenGrass Holdings"), GreenGrass
Capital LLC, a Delaware limited liability company ("Capital")
(sometimes referred to herein individually as a "Permitted
Holder" and collectively as the "Permitted Holders");
(2) SNSC or the Company sells or otherwise disposes
of all or substantially all of its assets other than to an
entity which is a Permitted Holder;
(3) Persons who, at the beginning of any twelve (12)
consecutive month period, constitute the Board of Directors of
the Company or SNSC cease, at the end of such period, to
constitute a majority of the Board of Directors of the Company
or SNSC, as the case may be; or
(4) SNSC or the Company merges with or into any other
Person unless the surviving corporation in the merger is a
Permitted Holder.
b. "Good Reason" means any of the following: (1)
reduction in the amount of or material change in terms of payment of
the Employee's base salary; (2) material reduction in the Employee's
perquisites or other benefits (other than any incentive bonus and
reduction in benefits generally applicable to all employees of the
Company); (3) relocation of the Employee's primary place of
employment to a location more than thirty-five (35) miles from the
Company's main office on the date hereof; (4) reassignment to a
position of lesser rank or status; (5) breach by the Company of this
Agreement or any other material agreement between the Employee and
the Company not cured within ten (10) days after notice; or (6) any
reason or no reason at all in the event of a Change of Control and
the Employee agrees to continue, and does so continue, his employment
with the Company for a period of at least one year following the date
of the Change of Control (provided that notice of termination of his
employment with the Company is delivered by the Employee within
thirty (30) days after expiration of such one-year period).
c. "Just Cause" means any of the following, provided that
any such occurrence has a substantial and adverse effect on the
Company: (1) conviction for, or plea of nolo contendere to, a felony
or a crime involving moral turpitude; (2) commission of any act of
personal dishonesty or fraud involving personal profit in connection
with the Employee's employment by the Company; (3) willful misconduct
or gross negligence on the part of the Employee in the conduct of his
duties on behalf of the Company; (4) habitual absenteeism after
written notice, chronic alcoholism, or any other form of addiction on
the part of the Employee; (5) willful disclosure of confidential
information or trade secrets of the Company or SNSC; or (6) actions
undertaken for the purpose of aiding a competitor of the Company or
SNSC.
d. "Permanent Disability" means that the Employee is
unable by reason of accident or illness (including mental illness) to
perform the material duties of his regular position with the Company
and not expected to recover from his disability within a period of
six (6) months from the commencement of the disability. If at any
time the Employee claims or is claimed to be Permanently Disabled, a
physician acceptable to both the Employee, or his personal
representative, and the Company (which acceptances shall not be
unreasonably withheld) shall be retained by the Company and shall
examine the Employee. The Employee shall cooperate fully with the
physician. If the physician determines that the Employee is
Permanently Disabled, the physician shall deliver to the Company a
certificate certifying both that the Employee is permanently disabled
and the date upon which the condition of permanent disability
commenced. The determination of the physician shall be conclusive.
e. "Person" means any individual or any partnership,
limited liability company, corporation, joint venture, trust, or
other entity, and the heirs, personal representatives, successors,
and assigns of the "Person" when the context so permits.
f. "Severance Period" means the period of time beginning
with the Termination Date and ending on the 18-month anniversary of
the Termination Date.
g. "Termination Date" means the date upon which the
Employee's employment with the Company is terminated.
2. Severance Benefits. In the event that the Employee's
employment with the Company is terminated by reason of the death or
Permanent Disability of the Employee or is terminated by the Company
without Just Cause or is terminated by the Employee for Good Reason, the
Employee shall be entitled to receive the following:
a. a lump sum cash payment equal to 150% of the
Employee's base salary for the calendar year immediately prior to
such termination or, at the Employee's option, continuation of the
Employee's salary during the Severance Period (which salary shall be
no less than the amount of the Employee's salary as of February 15,
1997);
b. payment of an amount equal to the Employee's
performance bonus earned, if any, for the fiscal year immediately
preceding the Termination Date;
c. continuation of coverage for the Employee and any
dependents previously covered under the group health, group life,
group long-term disability, individual long-term disability and
similar group insurance plans, if any, maintained by the Company, at
no cost to the Employee, until expiration of the Severance Period
(provided, that if such continued participation is precluded by the
provisions of such plans or by applicable law, the Company shall
provide the Employee with comparable benefits of equal value), and
execution of this Agreement by the Employee shall not be considered a
waiver of any rights or entitlements he may have under applicable law
to continuation of coverage under the group health plan maintained by
the Company;
d. termination of any restrictions imposed by GreenGrass
Holdings or its Affiliates on the sale, transfer, or other
disposition of SNSC's stock owned directly by the Employee or owned
indirectly by the Employee through GreenGrass Management LLC or
GreenGrass Holdings (subject to the Employee giving SNSC at least
three (3) business days advance notice of his intent to sell a
certain number of shares of such stock and an option for SNSC to
purchase all of said shares on the fourth (4th) business day after
notice, the purchase price of which shall be the highest closing
price of the three (3) preceding business days without deduction for
brokerage commission or other expenses);
e. full vesting of options to purchase stock of SNSC; and
f. right to a redemption, in the sole and absolute
discretion of the Employee, of any or all options to purchase stock
of SNSC that are vested in the Employee in exchange for a payment of
cash in the amount of the value of such stock options, determined by
multiplying the applicable number of shares of common stock covered
by such options by the difference between the then fair market value
of such shares and the exercise price for the shares under the stock
options.
3. Payment. Except as otherwise provided in this Agreement,
any amounts due to the Employee hereunder shall be payable in cash within
thirty (30) days after the Termination Date. The Employee may elect, in
his sole and absolute discretion, to receive any salary continuation
payments in equal installments on each regular payroll date of the Company
after the Termination Date. Notwithstanding any provision contained
herein to the contrary, any performance bonus payable to the Employee
hereunder may, at the option of either the Employee or the Company, be
paid one-half (1/2) within thirty (30) days after the Termination Date and
the balance within ninety (90) days after the Termination Date.
4. Deduction and Withholding. All benefits payable to or on
behalf of the Employee pursuant to this Agreement shall be subject to such
deductions and withholding as may be agreed to by the Employee but not
less than required by applicable law.
5. Death. In the event of the Employee's death, any amount
payable or distributable to the Employee pursuant hereto from rights and
benefits accrued to and through the date of his death shall be paid at the
time or times indicated in such Section to the beneficiary designated by
the Employee for purposes of his group term life insurance coverage with
the Company and, if no beneficiary is designated for such purposes, to the
Employee's estate. Unless the Employee's designated beneficiary for
purposes of his group term life insurance coverage is his spouse, no base
salary or annual bonus payment shall be due or payable to the Employee's
surviving spouse under this Agreement and all such payments shall be made
to his estate.
6. Other Benefits. The benefits provided under this Agreement
shall be in addition to, and not in derogation or diminution of, any
benefits that the Employee may be entitled to receive under any other plan
or program now or hereafter maintained by the Company or SNSC.
7. Exercise of Stock Options. Unless a different exercise
period is required or permitted upon termination of employment by the
terms and conditions of the governing stock option plan, any and all stock
options that are vested in the Employee under stock option plans adopted
by the Company on or after the date of this Agreement must be exercised
within ninety (90) days after the Termination Date. In the event that any
such stock option is not exercised within such 90-day period, the stock
option shall terminate and no longer be of any effect. Notwithstanding
the foregoing, the parties acknowledge and agree that any and all options
to purchase the stock of SNSC granted to the Employee under the 1992
Swing-N-Slide Corp. Stock Program are to be considered fully vested and
may be exercised by the Employee at any time prior to the latest date that
such particular options are scheduled to expire in accordance with their
terms.
8. Covenant Not to Compete. The Employee hereby agrees that
he will not, during the period of his employment with the Company and for
a period of one (1) year thereafter, as proprietor, partner, member,
shareholder (directly or indirectly owning or controlling 5% or more of
any class of stock), employee, consultant, agent, or otherwise, on his own
behalf or on behalf of another person, do any of the following in
competition with the Company or SNSC, without the prior written consent of
the Company:
a. solicit or assist in the solicitation of customers of
the Company or SNSC;
b. render or assist in rendering services to customers of
the Company or SNSC; or
c. divert or attempt to divert any customer's business
from the Company or SNSC, or otherwise interfere with the business
relationship between the Company or SNSC and any of their respective
customers, employees, or suppliers.
Notwithstanding the foregoing, this Agreement shall not in any
event be construed to prevent the Employee from earning a living utilizing
his skills in any businesses which may, as an incident to a business or
activity significantly different from the business of the Company or SNSC,
make or sell some products or provide some services which may in some
degree compete with the business of the Company or SNSC. However, nothing
in this Section 8 shall be deemed to permit the Employee to accept
employment with companies or divisions thereof which then or thereafter
will directly compete in a major way with the business of the Company or
SNSC with which the Employee was involved or had access to information
while employed by the Company.
9. Confidential Information. The Employee agrees that he will
not, while he is employed by the Company or thereafter, disclose to any
person to whom he is not otherwise authorized to do so by the Company (an
"Unauthorized Person"), or use for his own account, any information (the
"Confidential Information"), whether or not reduced to written or other
tangible form, in which the Company or SNSC has a legally protectible
interest by virtue of the following:
a. such information is not generally known in the
industry;
b. the Employee has had access to (or, either alone or in
cooperation with others, originated or developed) such information
during his employment with the Company;
c. such information has been treated by the Company or
SNSC as confidential;
d. such information relates to the business of the
Company or any of SNSC; or
e. such information is of competitive advantage to the
Company or SNSC, or any of their subsidiaries.
Confidential Information for which the Employee has first
secured the written consent of the Company for its disclosure or use, and
Confidential Information which becomes generally known in the industry, or
which otherwise ceases to be legally protectible (other than by the
Employee's breach of this Agreement), shall cease to be subject to the
restrictions set forth in this Section 9. Notwithstanding anything
contained herein to the contrary, this Section 9 prohibits only the use
and disclosure of Confidential Information and shall not be construed as
limiting the Employee's right to undertake any other employment or
business activity. The Employee shall be prohibited from competing with
the Company only as provided in Section 8 above.
10. Termination With Just Cause or Without Good Reason.
Notwithstanding any provision contained herein to the contrary, in the
event that the Employee's employment with the Company is terminated by the
Company with Just Cause or terminated by the Employee without Good Reason,
the Employee shall not be entitled to any of the benefits identified in
Section 2 of this Agreement, and shall be entitled to receive only those
benefits that the Employee would otherwise be entitled to receive under
any other agreements entered into by the Employee and the Company or under
applicable law.
11. Rights in the Event of Dispute. If a claim or dispute
arises concerning the rights of the Employee or his beneficiary (either or
both of whom are hereinafter referred to as the "claimant") under this
Agreement, regardless of the party by whom such claim or dispute is
initiated, the Company shall, upon presentation of appropriate vouchers,
pay all legal expenses, including reasonable attorneys' fees, court costs
and ordinary and necessary out-of-pocket costs of attorneys' billed to and
payable by the claimant in connection with the bringing, prosecuting,
defending, litigating, negotiating, or settling such claim or dispute;
provided, however, that the Company shall not be obligated to pay such
expenses unless and until final resolution of such claim or dispute with
the claimant being entitled to a substantial part of the rights claimed by
him.
12. General Provisions.
a. All notices or other communications required or
permitted hereunder shall be in writing and shall be deemed given (i)
when delivered in person or (ii) when telecopied (at the date and
time indicated on the receipt of transmission if such day is a
business day, and if not, at 9 a.m. on the following business day)
with hard copy delivered by hand or deposited in the United States
mail postage prepaid, registered or certified mail, on or before two
(2) business days after its delivery by telecopy, or (iii) three (3)
business days after being deposited in the United States mail,
postage prepaid, registered or certified mail, or (iv) two (2)
business days after delivery to a nationally recognized express
courier, expenses prepaid, addressed to the appropriate party as
follows: to the Employee at his address on file with the Company; or
to the Company, c/o Swing-N-Slide Corp., 1212 Barberry Drive,
Janesville, Wisconsin 53545, telecopier number (608) 755-4763,
Attention: Chairman; and with a copy to Foley & Lardner, 150 East
Gilman Street, Madison, Wisconsin 53703, Attention: Joseph P.
Hildebrandt.
b. Nothing herein shall be construed as an agreement to
continue the employment by the Company of the Employee.
c. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter contained
herein and supersedes any and all prior understandings,
representatives, negotiations, and agreements with respect thereto
(including, without limitation, that certain Amended and Restated
Transitional Compensation and Severance Agreement dated February 10,
1995, by and between the Employee and the Company.)
d. No modification or amendment of any provision of this
Agreement shall be effective unless in a written instrument executed
by both parties. Either party's failure to insist upon strict
compliance with any provision hereof shall not be deemed to be a
waiver of such provision or any other provision hereof.
e. This Agreement shall be binding upon and shall inure
to the benefit of the successors and assigns of Newco. Without
limiting the foregoing, the Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets
of Newco, to expressly assume and agree to perform Newco's
obligations under this Agreement in the same manner and to the same
extent that Newco is required to perform them if no such succession
had taken place. As used in this Agreement, "Newco" shall mean the
Company and any successor to its business and/or assets which
executes and delivers the agreement provided for in this Paragraph
12(e) or which otherwise becomes bound by all the terms and
provisions of this Agreement as a matter of law. This Agreement
shall inure to the benefit of, and shall be enforceable by, the
Employee's heirs, legal representative or other successors in
interest, but shall not otherwise be assignable or transferable.
f. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement, which shall remain in full force
and effect.
g. The validity, interpretation, construction and
enforceability of this Agreement shall be governed by the laws of the
State of Wisconsin, without regard to conflicts of laws principles.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first set forth above.
COMPANY: EMPLOYEE:
NEWCO, INC.
/s/ Richard G. Mueller
By: /s/ Richard E. Ruegger Richard G. Mueller
Name: Richard E. Ruegger
Title: Vice President
SNSC:
SWING-N-SLIDE CORP.
By: /s/ Richard E. Ruegger
Name: Richard E. Ruegger
Title: Vice President
APPROVED BY:
COMPENSATION COMMITTEE OF SWING-N-SLIDE CORP.
By: /s/ Caroline L. Williams
Name: Caroline L. Williams
Title: Chairperson, Compensation Committee
Exhibit 23.1
Consent of Ernst & Young LLP, Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-2) and related Prospectus of Swing-N-Slide
Corp. for the registration of 625,000 shares of its common stock and to
the incorporation by reference therein of our report dated January 30,
1997, with respect to the consolidated financial statements and schedules
of Swing-N-Slide Corp. included in its Annual Report (Form 10-K) for the
year ended December 31, 1996, filed with the Securities and Exchange
Commission.
Milwaukee, Wisconsin ERNST & YOUNG LLP
July 16, 1997
SUBSCRIPTION AGREEMENT
Firstar Trust Company
Corporate Trust Services
615 East Michigan Street, 4th Floor
Milwaukee, WI 53202
The undersigned ("Subscriber") hereby acknowledges receipt of
the Prospectus relating to the offer by Swing-N-Slide Corp. (the
"Company") of an aggregate of [625,000] shares (the "Maximum Offering
Number") of the Company's Common Stock, $.01 par value per share ("Common
Stock"). Under the terms and conditions set forth in the Prospectus, each
stockholder of the Company other than GreenGrass Holdings ("Other
Stockholder") is entitled to purchase his, her or its pro rata portion of
the Maximum Offering Number, determined by multiplying the Maximum
Offering Number by a percentage equal to the number of shares of Common
Stock owned by the Subscriber as of ____________, 1997 (the "Record Date"),
divided by [2,426,000], the total number of shares of Common Stock owned
by all Other Stockholders as of the Record Date, rounded down to the
nearest whole number of shares.
Under the terms and conditions set forth in the Prospectus, the
number of shares of Common Stock which the Subscriber is entitled to
purchase is as follows:
Maximum Offering Number: [625,000]
multiplied by X
Number of Shares Owned by Subscriber as of Record Date: __________
divided by
Total Number of Shares Owned by All Other Stockholders
As of Record Date: [2,426,000]
equals =
Number of Shares Offered to Subscriber,
Rounded Down to Nearest Whole Number of Shares
(the "Maximum Subscription Number"): __________
Under the terms and conditions set forth in the Prospectus, the
Subscriber hereby irrevocably commits to purchase and subscribes for the
number of shares of Common Stock set forth below, at the purchase price of
[$4.00] per share, or the aggregate purchase price set forth below:
Number of Shares of Common Stock Which Subscriber
Commits to Purchase (not to exceed Maximum Subscription
Number set forth above): __________
multiplied by X
Purchase Price Per Share of [$4.00]: $4.00
equals =
Aggregate Purchase Price of Shares Purchased: $__________
THIS SUBSCRIPTION AGREEMENT MUST BE RETURNED TO FIRSTAR TRUST
COMPANY (THE "SUBSCRIPTION AGENT"), CORPORATE TRUST SERVICES, 615 EAST
MICHIGAN STREET, 4TH FLOOR, MILWAUKEE, WISCONSIN 53202, BY 5:00 P.M.
CENTRAL TIME ON [OCTOBER 20, 1997] ("EXPIRATION DATE"). PAYMENT IN FULL
OF THE PURCHASE PRICE ("PURCHASE PRICE") FOR THE NUMBER OF SHARES OF
COMMON STOCK SUBSCRIBED FOR MUST BE MADE TOGETHER WITH THE RETURN OF THIS
SUBSCRIPTION AGREEMENT.
Payment may be made only by (a) check or bank draft drawn upon a
U.S. bank, or postal, telegraphic or express money order, payable to
Swing-N-Slide Corp., or (b) wire transfer of funds to the account
maintained by the Subscription Agent for the purpose of accepting
subscriptions, or (c) a combination of the foregoing. The Purchase Price
will be deemed to have been received by the Subscription Agent only upon
(i) clearance of any uncertified check, (ii) receipt by the Subscription
Agent of any certified check or bank draft drawn upon a U.S. bank or any
postal, telegraphic or express money order, or (iii) receipt of collected
funds in the Subscription Agent's account designated above.
THE METHOD OF DELIVERY OF THE SUBSCRIPTION AGREEMENT AND PAYMENT
OF THE PURCHASE PRICE TO THE SUBSCRIPTION AGENT ARE AT THE ELECTION AND
RISK OF THE SUBSCRIBER. IF SENT BY MAIL, THE SUBSCRIBER IS URGED TO SEND
THE SUBSCRIPTION AGREEMENT AND PAYMENTS BY REGISTERED MAIL, PROPERLY
INSURED, WITH RETURN RECEIPT REQUESTED, AND IS URGED TO ALLOW A SUFFICIENT
NUMBER OF DAYS TO ENSURE DELIVERY TO THE SUBSCRIPTION AGENT AND CLEARANCE
OF PAYMENT PRIOR TO THE EXPIRATION TIME.
IF PAYING BY UNCERTIFIED PERSONAL CHECK, PLEASE NOTE THAT THE
FUNDS PAID THEREBY MAY TAKE AT LEAST FIVE (5) BUSINESS DAYS TO CLEAR.
ACCORDINGLY, IF THE SUBSCRIBER WISHES TO PAY THE PURCHASE PRICE BY MEANS
OF UNCERTIFIED PERSONAL CHECK, THE SUBSCRIBER IS URGED TO MAKE PAYMENT
SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE TO ENSURE THAT SUCH PAYMENT
IS RECEIVED AND CLEARS BY SUCH TIME, AND IS URGED TO CONSIDER IN THE
ALTERNATIVE PAYMENT BY MEANS OF CERTIFIED OR CASHIER'S CHECK, MONEY ORDER
OR WIRE TRANSFER OF FUNDS.
For further information about this Offering, please refer to the
Prospectus or contact Firstar Trust Company, Corporate Trust Services, 615
East Michigan Street, Milwaukee, Wisconsin 53202, telephone number (414)
287-3944.
IN WITNESS WHEREOF, the undersigned has executed this
Subscription Agreement as of the date set forth below.
Dated: _________________, 1997
_____________________________
Signature
(Must be signed exactly as name appears on stock certificate or on
security position listing.)
Print Name: ____________________________________
Address: ____________________________________
____________________________________
____________________________________
Telephone Number: ____________________________________
