THE DEBENTURE REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS, AND NEITHER SUCH DEBENTURES OR ANY INTERESTS THEREIN MAY BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (I) A
REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES
ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (II) THE ISSUER RECEIVES AN
OPINION OF COUNSEL TO THE HOLDER OF SUCH DEBENTURE, WHICH COUNSEL AND OPINION
ARE REASONABLY SATISFACTORY TO THE ISSUER, THAT SUCH DEBENTURE MAY BE OFFERED,
SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR APPLICABLE STATE
SECURITIES LAWS.
Number
R- $
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TOP AIR MANUFACTURING, INC.
CONVERTIBLE SUBORDINATED DEBENTURE DUE JANUARY 15, 2005
TOP AIR MANUFACTURING, INC., an Iowa corporation (the "Company")
promises to pay to _______________, or registered assigns, the principal sum of
Dollars, ($) on January 15, 2005 (the "Maturity Date"), and to pay interest on
the principal amount of this Debenture semi-annually on July 15 and January 15
of each year; provided, however that if such date is not a Business Day, then
the Interest Payment Date shall occur on the first succeeding Business Day
(collectively, the "Interest Payment Dates"), commencing on July 15, 2000.
Interest on the unpaid principal balance shall accrue from the date hereof at a
fluctuating rate per annum equal at all times to one percent (1%) per annum in
excess of the Prime Rate, with each change in such fluctuating interest rate to
take effect simultaneously with the corresponding change in the Prime Rate.
This Debenture is one of the Company's convertible subordinated
debentures due 2005 (collectively, the "Debentures") in the aggregate principal
amount of $500,000 issued by the Company in a private placement transaction
effected on January 25, 2000. Certain defined terms used in this instrument are
set forth in paragraph 23 of this Debenture.
Each of the Debentures, including this Debenture, is subject to the
following terms:
1. Payment.
The payment of interest on this Debenture shall be made on each
Interest Payment Date to the Holder hereof as of the close of business on the
first day of the month in which the subject Interest Payment Date occurs (the
"Interest Payment Record Date"), whether or not such Interest Payment Record
Date is a Business Day. Payment of the principal of and interest on the
Debentures will be made at the principal office of the Company or such other
place as may be designated by the Company, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that payment of principal and
interest may be made, at the option of the Company, by check mailed to the
address of the Holder of the Debentures (each a "Holder," and collectively, the
"Holders") entitled thereto at such address as shall appear on the Debenture
records maintained by the Company. Interest payable will be paid to the Holder
in whose name the Debentures are registered as of the close of business on the
Interest Payment Record Date which corresponds to the Interest Payment Date in
question.
2. Redemption.
This Debenture is not subject to redemption prior to January 15, 2002.
Thereafter, the Debentures will be redeemable, at the option of the Company, at
any time in whole and from time to time in part at: (a) 105% of par from January
15, 2002 to January 15, 2003; (b) 103% of par from January 15, 2003 to January
15, 2004; and (c) from and after January 15, 2004, at par, in each case, plus
accrued interest.
If less than all of the Debentures are to be redeemed, the Company will
select Debentures for such partial redemption pro rata or by lot, and the
Company may select for redemption portions of the principal amount of any
Debentures of a denomination larger than $1,000. In the event of redemption of
this Debenture in part only, a new Debenture(s) for the unredeemed portion shall
be issued in the name of the Holder upon the surrender hereof.
The Company shall give notice of any redemption permitted pursuant to
this paragraph 2 by first class mail, postage prepaid, mailed not less than 30
nor more than 90 days prior to the date fixed for such redemption (the
"Redemption Date"), to each Holder of Debentures to be redeemed, at the address
of such Holder appearing in the Debenture register and otherwise in the manner
prescribed in paragraph 14 hereof. All such notices of redemption shall state
(i) the Redemption Date, (ii) the Redemption Price, (iii) if less than all of
the Debentures are to be redeemed, the identification (and, in the case of
partial redemption, the principal amount) of the particular Debentures to be
redeemed, (iv) that on the Redemption Date the Redemption Price will become due
and payable upon each such Debenture, and that interest thereon shall cease to
accrue on or after said date, and (v) the place or places where such Debentures
are to be surrendered for payment of the Redemption Price.
3. Subordination.
(a) The indebtedness evidenced by this Debenture and other rights
of the Holder of this Debenture granted by or arising out of this Debenture
shall be unconditionally subordinated and junior in priority and rank and
subject in right of payment, to the extent and in the manner herein set forth,
to the prior payment in full of all Senior Debt (as hereinafter defined), and to
all of the liens, security interests and other rights of the holders of the
Senior Debt, whether existing on the date hereof or hereafter created. The
subordination of priorities and all other aspects of the subordination
provisions contained in this paragraph 3 shall apply and be effective: (i)
regardless of the time or order of perfection or filing of security interests or
the time or order of attachment of security interests, (ii) notwithstanding
anything to the contrary contained in the provisions of the Bankruptcy Code, the
Uniform Commercial Code in any relevant statute of the United States, or the
laws of the State of Iowa or any other relevant state which relate to the
priority of liens, security interests or mortgages, and (iii) notwithstanding
the lapse of perfection of liens or security interests of any holder of Senior
Debt or the failure of any holder of Senior Debt to perfect its liens or
security interests. "Senior Debt" shall mean the principal of (and premium, if
any), interest accrued or to be accrued, absolute or contingent obligations, and
obligations acquired by purchase or otherwise, as well as all reasonable
collection costs and attorneys' fees incurred in enforcing any rights and
obligations, and all other obligations, liabilities or rights (and, in addition,
of the Company as a debtor-in-possession under any bankruptcy act or code, state
or federal law, common law or equitable doctrine, and of any trustee, receiver
or other party appointed for the Company under any such law, doctrine or
proceeding): (A) under any indebtedness of the Company, whether outstanding on
the date hereof or hereafter created, for money borrowed by or loaned to or on
behalf of the Company, whether or not secured and whether or not the Company is
the sole or a joint obligor thereof, including but not limited to, any
obligation of the Company to any financial institution under any loan agreement,
instrument, or letter of credit that has been or will be issued for the account
of the Company; (B) under any obligations of the Company under any guarantee of
the Company, whether existing on the date hereof or hereafter created, of any
payment obligation for money borrowed by or loaned to any Subsidiary of the
Company, whether or not secured; (C) under any deferrals, renewals or extensions
of any such indebtedness or any debentures, notes or other evidence of
indebtedness issued in exchange for such Senior Debt; and (D) with respect to
any costs, whether payable by way of enforcement or otherwise, which the holders
of the Senior Debt are entitled to be paid or recover.
(b) (i) Subject to the provisions of clauses (ii), (iii) and (iv)
of this paragraph 3(b), the Company shall make all regularly scheduled payments
on the Debentures and all other payments in respect of any Optional Redemption
of the Debentures (including premiums thereon, if any), so long as no Senior
Debt Default has occurred or would occur as a result of such payment.
(ii) In the event of any Senior Debt Default, no amount shall
be paid by the Company in respect to any interest hereon, principal hereof
(whether at maturity by Optional Redemption or otherwise) or any other payment
obligation hereunder, and the Holder of this Debenture shall not be entitled to
receive any amount, in respect of this Debenture unless and until such Senior
Debt Default shall have been cured or waived or shall have ceased to exist and
any acceleration of Senior Debt occurring as a result thereof shall have been
rescinded or annulled, or the Senior Debt to which such default relates shall
have been paid in full.
(iii) In the event that any Senior Debt is declared due and
payable before its maturity date because of the occurrence of a Senior Debt
Default not cured within any applicable cure periods, the holders of such Senior
Debt shall be entitled to receive payment in full of such Senior Debt before the
Holder of this Debenture is entitled to receive any payment on account of the
Debenture.
(iv) In the event of the liquidation of the Company or the
distribution of any of its assets or the securities of any successor on account
of any liquidation, bankruptcy, receivership, reorganization, assignment for the
benefit of creditors or similar proceeding, the Holder of this Debenture shall
not be entitled to any payment or distribution on account of the Debenture until
all Senior Debt has been satisfied in full, and the Holder of this Debenture
shall receive any money, securities or other property distributed in any such
proceeding on account of the Debenture in trust for the benefit of the holders
of the Senior Debt and shall deliver any such property to the holders of the
Senior Debt in the same form as received, adding only such endorsements or
assignments as may be necessary, for application to the satisfaction of the
Senior Debt in such order as the holders of the Senior Debt in their discretion
may determine. Any excess of such property remaining after satisfaction of all
of the Senior Debt shall be returned to the Holder of this Debenture or
delivered as otherwise ordered by any court having jurisdiction over such
proceedings. The holders of the Senior Debt may liquidate any noncash property
received from the Holder of this Debenture in the manner in which collateral may
be liquidated under the terms of the Uniform Commercial Code as enacted in the
State of Iowa and such property may be liquidated in any order that the holders
of the Senior Debt shall determine in the exercise of their sole discretion.
(v) In the event that any payment or distribution of assets of
the Company of any kind or character, whether in cash, property or securities
(other than securities which are subordinate and junior in right of payment to
the payment in full of all Senior Debt outstanding at the time of the issue of
such securities), shall be received by the Holder of this Debenture in violation
of the terms of this Debenture, such payment or distribution shall be held by
the Holder of this Debenture in trust for the benefit of the holders of the
Senior Debt and shall, with or without demand, be immediately paid over (in the
same form in which received, with the addition only of such endorsements or
assignments as may be necessary) to the holders of such Senior Debt or their
representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior Debt may
have been issued, ratably according to the aggregate amounts remaining unpaid on
account of the Senior Debt held or represented by each for application to the
payment of all Senior Debt remaining unpaid until such Senior Debt shall have
been paid in full, after giving effect to any concurrent payment or distribution
to the holders of such Senior Debt. The rights conveyed by this paragraph 3 to
the holders of the Senior Debt may be enforced by the holders of Senior Debt
directly against the Holder of this Debenture, the Holder of this Debenture
acknowledging that each holder of Senior Debt is an intended, third party
beneficiary of this paragraph 3.
(vi) The Holder of this Debenture covenants to the holders of
the Senior Debt that the Holder of this Debenture will not take any action or
inaction or permit or direct the taking on its behalf of any action or inaction,
without first having given not less than sixty (60) days prior written notice to
the Company, to: (A) file any petition against the Company under the Bankruptcy
Code or any insolvency or similar statute, (B) file any petition or complaint to
enforce the Debenture, (C) file any petition seeking to have a receiver
appointed for the Company or any of the Company's assets, properties or rights,
or (D) file any other petition or action against the Company, unless the holders
of the Senior Debt have previously filed a similar petition or action or
consented in writing to the filing thereof.
(vii) The Holder of this Debenture agrees that all payments
received by the holders of the Senior Debt may be applied, reversed and
reapplied, in whole or in part, to any of the Senior Debt as the receiving
holder of the Senior Debt deems appropriate without affecting the validity or
enforceability of the subordination provisions of this Debenture. The Holder of
this Debenture hereby consents to any extension or postponement of the time of
payment of all or any part of the Senior Debt or to any other indulgence with
respect thereto, and to any substitution, exchange or release of all or any of
the collateral or other security with respect to all or any part of the Senior
Debt, and to the addition or release of any other party or person primarily or
secondarily liable therefor. The holder of any Senior Debt may at any time, and
from time to time, enter into such agreement or agreements with the Company as
such holder of Senior Debt may deem proper, altering the terms of all or any of
the Senior Debt owing to it or affecting the collateral or other security with
respect to such Senior Debt or any guarantee underlying any or all of such
Senior Debt, and may exchange, sell, release, surrender or otherwise deal with
any such security or guarantees, without in any way thereby impairing or
affecting the provisions of this Debenture or the rights and interests of the
holder of the Senior Debt arising hereunder or provided for herein.
(viii) The Holder of this Debenture hereby agrees that the
holders of the Senior Debt shall have no duty to advise the Holder of this
Debenture of information known to any of them regarding any condition or
circumstance, including those described in clause (vii) of this subparagraph
(b). The Holder of this Debenture acknowledges and agrees that none of the
holders of the Senior Debt have made any warranties or representations with
respect to the legality, validity, completeness, enforceability or the
collectability of all or any part of the Senior Debt owing to them, and that the
holders of the Senior Debt shall be entitled to manage and supervise the Senior
Debt in accordance with applicable law and their usual practices, without
affecting the validity or enforceability of the subordination provisions of this
Debenture.
(ix) This is a continuing agreement of subordination and the
holders of the Senior Debt may continue, at any time and without notice to the
Holder of this Debenture, to extend credit or other financial accommodations and
loan monies to or for the benefit of the Company on the faith hereof. The
provisions in this paragraph 3 are unconditional and irrevocable and shall
continue in full force and effect until, with respect to all collateral or other
security interests pledged as security therefor, all Senior Debt shall be paid
in full and no further Senior Debt can arise.
(x) The subordination provisions in this Debenture may not be
changed, waived, discharged or terminated except by an instrument in writing
signed by the Company and the holder or holders of Senior Debt whose rights or
interests under such Senior Debt or with respect to any collateral or other
security therefor would be affected thereby, and then any such change, waiver,
discharge or termination shall be effective only in respect to the holders of
Senior Debt consenting thereto.
(xi) The subordinations contained in this Agreement shall
continue in all events, including, but not limited to, the dissolution, winding
up, liquidation (total or partial), reorganization (whether voluntary or
involuntary) of the Company or the filing of a bankruptcy petition by or against
the Company, or the insolvency of the Company, the appointment of a receiver, or
the institution of any other proceedings by or against the Company, or the
seeking by any creditor in the future to rescind, amend, terminate, or reform,
by litigation or otherwise, its respective agreements with the Company.
(xii) No present or future holder of Senior Debt shall be
prejudiced in any right to enforce subordination of the Debenture by any act or
failure to act on the part of the Company or the Holder of this Debenture. No
waiver shall be deemed to be made by any holder of Senior Debt of any of its
rights hereunder, unless the same shall be in writing signed by such holder of
Senior Debt, and each waiver, if any, shall be a waiver only with respect to the
specific instance involved and shall in no way impair the rights or the
obligations of any party to each other in any other respect at any other time.
(xiii) The Holder of this Debenture, within a reasonable time
after receipt of a request from the Company or any holder of Senior Debt, will
prepare, execute, obtain and/or file all documents and take all such actions
which the Company or holder of Senior Debt deems reasonably necessary to
effectuate the lien, priorities and subordinations set forth herein.
(c) From and after the payment in full of all Senior Debt, to the
extent that the Holder of this Debenture is required to turn over funds to any
holder of Senior Debt which were otherwise properly paid on the Debenture, the
Holder of this Debenture shall be subrogated (equally and ratably with the
holders of all other subordinated debt of the Company of equal ranking) to the
rights of the holders of Senior Debt to receive payments or distributions of
assets or securities of the Company applicable to the Senior Debt including,
without limitation, any assets securing Senior Debt until the Debenture is paid
in full, and, for purposes of such subrogation, no such payments or
distributions to the holders of Senior Debt of assets or securities, which
otherwise would have been payable or distributable to Holder of this Debenture,
shall, as between the Company, its creditors other than the holders of Senior
Debt, and the Holder of this Debenture, be deemed to be a payment by the Company
to or on account of the Debenture, it being understood that the foregoing
provisions of this paragraph 3 are intended solely for the purpose of defining
the relative rights of the Holder of this Debenture, on the one hand, and the
holders of the Senior Debt, on the other hand, and nothing contained in this
paragraph 3 or elsewhere in this Debenture is intended to or shall impair, as
between the Company, its creditors other than the holders of Senior Debt and the
Holder of this Debenture, the obligation of the Company, which is unconditional
and absolute, to pay to the Holder of this Debenture the principal, and premium,
if any, and interest on this Debenture as and when the same shall become due and
payable in accordance with their terms or to affect the relative rights of the
Holder of this Debenture and creditors of the Company other than the holders of
the Senior Debt, nor shall anything herein or therein prevent the Holder of this
Debenture from exercising all remedies otherwise permitted by applicable law
upon default under the Debenture, subject to the rights, if any, under this
paragraph 3, of the holders of Senior Debt to receive cash, property or
securities otherwise payable or deliverable to the Holder of this Debenture.
(d) Upon any distribution or payment in connection with any
insolvency or bankruptcy proceedings, or any receivership, liquidation,
reorganization or other similar proceedings in connection therewith, relative to
the Company, or to its property, or any proceedings for voluntary liquidation,
dissolution or other winding up of the Company, whether or not involving
insolvency or bankruptcy, the Holder of this Debenture shall be entitled to rely
upon any order or decree of a court of competent jurisdiction in which any
proceedings are pending or any order or decree of the court which entered the
judgment pursuant to which any such sale was made, as the case may be, and the
Holder of this Debenture shall be entitled to rely upon a certificate of the
liquidating trustee or agent or other person making any distribution or payment
to the Holder of this Debenture for the purpose of ascertaining the persons
entitled to participate in such distribution, the holders of Senior Debt and
other indebtedness of the Company, the amount thereof or the amount payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this paragraph 3.
(e) Upon the request of the holders of the Senior Debt, the Company
and the Holder of this Debenture will execute such documents and perform all
such other acts as may be reasonably required to rescind any premature payment
or performance of the Debenture and to reestablish, to the maximum extent
practical, the status quo prior to such premature payment or performance.
4. Conversion of Debentures.
(a) At the option of the Holder, this Debenture or any portion
thereof which is $1,000 or an intrical multiple thereof may be converted into
shares of Common Stock. The conversion price shall equal $1.25 principal amount
of this Debenture per share, subject to adjustments as provided below (the
"Conversion Price"). Such conversion right shall expire at the close of business
on the Business Day immediately preceding the Redemption Date applicable to this
Debenture, if any.
(b) To exercise the conversion privilege provided for in paragraph
4(a), the Holder of this Debenture shall surrender this Debenture to the Company
together with the conversion notice in the form set forth as Attachment A
hereto, duly executed. If this Debenture is surrendered for conversion during
the period from the close of business on any Interest Payment Record Date to the
corresponding Interest Payment Date, it shall also be accompanied by payment in
funds acceptable to the Company of an amount equal to the interest payable on
such Interest Payment Date on the principal amount of this Debenture then being
converted. Such interest shall be payable to the Holder notwithstanding such
conversion.
(c) If this Debenture is converted in part only, the Company shall
execute and deliver to or on the order of the Holder, at the expense of the
Company, a new Debenture or Debentures in principal amount equal to the portion
of this Debenture which is not converted.
(d) As soon as practicable following the conversion of this
Debenture, the Company will deliver to the Holder hereof a certificate or
certificates representing the number of shares of Common Stock (excluding any
fractional shares) issuable by reason of such conversion in such name or names
in such denomination or denominations as the converting Holder has specified. If
any fractional share of Common Stock would, except for the provisions hereof, be
deliverable upon conversion of this Debenture, the Company, in lieu of
delivering such factional share, will pay cash in respect thereof based upon the
Conversion Price which would otherwise have been attributable to such fractional
share. The issuance of certificates for shares of Common Stock upon conversion
of this Debenture will be made without charge to the Holder hereof for any
issuance tax in respect thereof or other cost incurred by the Company in
connection with such conversion and the related issuance of such shares of
Common Stock.
(e) The Conversion Price is subject to adjustment upon the
occurrence of any subdivision (by any stock split, stock dividend or otherwise)
of the outstanding shares of Common Stock into a greater number of shares. In
such case, the Conversion Price in effect immediately prior to such subdivision
will be proportionately reduced. If the Company at any time combines (by reverse
stock split or otherwise) its outstanding shares of Common Stock into a smaller
number of shares, the Conversion Price in effect immediately prior to such
combination will be proportionately increased.
5. Debenture Otherwise Payable.
Except to the extent specifically provided herein, nothing contained in
this Debenture shall prevent at any time, except under the conditions described
in paragraph 3 or during the pendency of any proceedings therein referred to,
the Company from making payments at any time on this Debenture.
6. Nonimpairment.
Nothing contained in this Debenture is intended to or shall impair, as
between the Company, the Company's creditors other than the Holders of Senior
Debt and the Holders of the Debentures, the obligation of the Company, which is
absolute and unconditional, to pay to the Holder of this Debenture the principal
of and interest on this Debenture, as and when the same shall become due and
payable in accordance with its terms, and which (subject to the rights under
paragraph 3 of the holders of Senior Debt) is intended to rank equally with all
other general obligations of the Company, or is intended to or shall affect the
relative rights of the Holders of the Debentures and creditors of the Company
other than the holders of Senior Debt, nor shall anything herein prevent the
Holder from exercising all remedies otherwise permitted by applicable law upon
the occurrence of an Event of Default (as that term is defined in paragraph 16),
subject to the rights, if any, under paragraph 3 of the holders of Senior Debt.
7. Representations, Warranties and Covenants.
The Company represents and warrants to the Holder as of the original
date of the issuance of the Debenture as follows:
(a) The Company (i) is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Iowa; (ii) has all
requisite corporate power and authority to own or lease and operate its
properties and assets, and to carry on its business as now conducted, and (iii)
is duly qualified or licensed to do business and is in good standing as a
foreign corporation in all jurisdictions in which the ownership or leasing of
its property or in which the conduct of its business requires it so to qualify
or be licensed, except for such jurisdictions where, in the aggregate, the
failure to so qualify or be licensed would not have a material adverse effect
upon the Company and its subsidiaries, taken as a whole;
(b) The Company has all requisite corporate power and authority to
execute, deliver and perform all of its obligations under this Debenture;
(c) The Company has reserved a sufficient number of shares of
Common Stock for issuance upon conversion of the Debentures in accordance with
paragraph 4. The shares of Common Stock so reserved have been duly authorized
and, when issued upon conversion of the Debenture in accordance with the terms
of paragraph 4, will be validly issued, fully paid and nonassessable and will
not have been issued in violation of any preemptive or similar rights;
(d) The Company has taken all corporate actions necessary to
authorize it to enter into and perform its obligations under this Debenture and
to consummate the transactions contemplated hereby;
(e) This Debenture is a legal, valid and binding obligation of the
Company, enforceable in accordance with its terms, except that such enforcement
may be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally
and general principles of equity;
(f) Neither the execution, delivery or performance by the Company
of this Debenture nor the consummation of the transactions contemplated hereby
will conflict with, violate, constitute a breach of or a default (with the
passage of time or otherwise) under, result in the imposition of a lien on any
properties of the Company or any of its subsidiaries or an acceleration of
indebtedness pursuant to, or, with respect to clause (ii) below, require the
consent of any person (other than consents already obtained or waived) under:
(i) the Amended and Restated Articles of Incorporation or Amended and Restated
Bylaws of the Company, (ii) any material bond, debenture, note or any other
evidence of indebtedness or any material indenture, mortgage, deed of trust,
stockholder agreement or any other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which any of them is bound or to
which any of their property or assets is subject, or (iii) any material law,
judgment, decree, order, regulation or rule or order of any court or
governmental agency or authority applicable to the Company or any of its
subsidiaries or any of their properties or assets other than any such conflicts
with, violations or breaches of, defaults under, and failures to obtain consents
under, such instruments that are not reasonably likely to have, singly or in the
aggregate, a material adverse effect on the Company and its subsidiaries taken
as a whole; and
(g) No consent, approval or authorization of, or filing,
registration or qualification with (collectively, a "consent"), any governmental
or regulatory authority or body is required in connection with or as a condition
to the execution and delivery by the Company of this Debenture, or the
consummation by the Company of the transactions contemplated hereby.
8. Financial Information.
The Company will deliver to the Holder a copy of each annual and
quarterly report provided by the Company to its shareholders at the time of the
distribution thereof to its shareholders.
9. Registration, Transfer and Exchange.
The Company shall cause to be kept at the principal office of the
Company a record in which, subject to such reasonable regulations as the Company
may prescribe and applicable law, the Company shall provide for the registration
of the Debentures and the registration of transfers of the Debentures.
Upon surrender for registration of transfer of any portion of the
Debenture at the office of the Company, the Company shall execute and deliver,
in the name of the designated transferee or transferees, one or more new
Debentures of a like aggregate principal amount.
At the option of the Holder, the Debenture may be exchanged for another
Debenture or Debentures of any authorized denominations, of a like aggregate
principal amount, upon surrender of the Debenture to be exchanged at such
office. Whenever any Debenture is so surrendered for exchange, the Company shall
execute and deliver the Debenture(s) which the Holder making the exchange is
entitled to receive.
Any Debenture issued upon any registration of transfer or exchange of
the Debenture shall be the valid obligation of the Company, evidencing the same
debt, and entitled to the same benefits as the Debenture surrendered upon such
registration of transfer or exchange.
Upon the presentation or surrender of the Debenture for registration of
transfer or exchange, the Debenture shall (if so required by the Company) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company, duly executed by the Holder thereof or attorney of
the Holder duly authorized in writing, with the signature of such person being
guaranteed by a bank or other institution acceptable to the Company.
No service charge shall be made for any registration of transfer or
exchange of Debenture, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Debenture.
10. Mutilated, Destroyed, Lost and Stolen Debenture.
If (i) a mutilated Debenture is surrendered to the Company, or the
Company receives evidence to its satisfaction of the destruction, loss, or theft
of the Debenture, and (ii) there is delivered to the Company such security or
indemnity as may be required by the Company to save the Company harmless, then,
in the absence of actual notice to the Company that such Debenture has been
acquired by a bona fide purchaser, the Company shall execute and deliver, in
exchange for, or in lieu of, such mutilated, destroyed, lost or stolen
Debenture, a new Debenture of like tenor and principal amount.
In case any such mutilated, destroyed, lost or stolen Debenture has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Debenture, pay the indebtedness represented by such
Debenture.
Upon the issuance of any new Debenture under this paragraph, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses connected therewith.
The provisions of this paragraph 10 are exclusive and (to the extent
lawful) shall preclude all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Debentures.
11. Deemed Owner.
Prior to due presentment for registration of transfer or exchange of
any Debenture, the Company and any agent of the Company may treat the person in
whose name any Debenture is registered on the Debenture register as the owner of
such Debenture for the purpose of receiving payment of principal of and interest
on such Debenture and for all other purposes whatsoever, whether or not such
Debenture is overdue, and neither the Company nor any agent of the Company shall
be affected by notice to the contrary.
12. Acts of Holder.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action to be given or taken by the Holder or Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holder(s) in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holder(s) signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Debenture and conclusive in favor of the Company, if made in the manner provided
in this paragraph 12.
(b) The fact and date of the execution by any Holder of any such
instrument or writing may be proved by the certificate of any notary public or
other officer authorized by law to take acknowledgments of deeds, certifying
that the person signing such instrument or writing acknowledged the due
execution thereof. Where such execution is by an officer of a corporation or
association or a member of a partnership or an official of a public or
governmental body, on behalf of such corporation, association, partnership, or
public or governmental body or by a fiduciary, such certificate shall also
constitute sufficient proof of such person's authority. The fact and date of the
execution by any Holder of any such instrument or writing, or the authority of
the person executing the same, may also be proved in any other manner which the
Company deems sufficient and in accordance with such reasonable rules as the
Company may determine.
(c) The ownership of this Debenture shall be proved by the
Debenture records maintained by the Company.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder shall bind the Holder of every Debenture
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done or suffered to be done by the Company
in reliance thereon, whether or not notation of such action is made upon the
Debenture.
13. Notices, etc., to the Company.
Any request, demand, authorization, direction, notice, consent, or
waiver or Act of Holder or other document provided or permitted by this
Debenture to be made upon, given or furnished to, or filed with the Company by
any Holder shall be sufficient for every purpose hereunder if in writing and
mailed, first class postage prepaid, to the Company, 317 Savannah Park Road,
Cedar Falls, Iowa 50613, or at such other address as shall have been furnished
in writing to the Holder by the Company for this purpose, to the attention of
the Secretary.
14. Notices to Holder; Waiver.
Where this Debenture provides for notice to the Holder, such notice
shall be sufficiently given (unless otherwise expressly provided herein) if in
writing and mailed, first class postage prepaid, to the Holder's address as it
appears on the Debenture register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In any
case where notice to the Holder is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to the Debenture Holder
shall affect the sufficiency of notice given to another Debenture Holder. Where
this Debenture provides for notice in any manner, notice may be waived in
writing by the person entitled to receive notice, either before or after the
event, and the waiver shall be the equivalent of such notice. Waiver of notice
by the Holder shall be filed with the Company, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
15. Legal Holidays.
In any case where any action to be taken under this Debenture is not a
Business Day, then (notwithstanding any other provision of this Debenture) the
taking of such action, including the payment of interest or principal, need not
be made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on the date provided herein, and no
additional interest shall accrue for the period from the date any payment is
otherwise required hereunder to such Business Day.
16. Events of Default.
Each of the following events shall constitute an event of default
hereunder (an "Event of Default"). Upon the occurrence of any Event of Default,
the Company shall immediately notify the Holders in writing of the occurrence
thereof.
(a) Default in the payment of any interest upon this Debenture on
an Interest Payment Date, which default continues for more than five (5)
Business Days after the occurrence of such Interest Payment Date.
(b) Default in the payment of the principal of this Debenture on
the Maturity Date.
(c) The failure by the Company duly to observe or perform in any
material respect any other of the covenants or agreements specified in this
Debenture to be observed or performed by the Company for a period of ninety (90)
days after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Company by the Holder hereof.
(d) The filing of a petition against the Company or any of its
subsidiaries seeking reorganization, arrangement, adjustment or composition of
the Company or any of its subsidiaries, or under the Federal Bankruptcy Act, any
insolvency act or any other applicable federal or state law dealing with
creditors rights generally, or the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Company or
any of its subsidiaries or of any substantial part of their property or an order
for the winding up or liquidation of any of their affairs, and the failure to
obtain the dismissal or a stay of such petition for a period of 45 days.
(e) The institution by the Company or any of its subsidiaries of
proceedings, or the consent by any of them to the institution of bankruptcy or
insolvency proceedings against any such person or the filing by any of them of a
petition or answer or consent seeking reorganization or release under the
Federal Bankruptcy Act, any insolvency act or any other applicable federal or
state law dealing with creditors rights generally, or the consent by any of them
to the filing of any such petition or to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of the
Company or any of its subsidiaries or of any substantial part of any of their
property, or the making by any of them of an assignment for the benefit of
creditors, or the admission by any of them in writing of their inability to pay
their debts generally as they become due or the taking of corporate action by
the Company or any of its subsidiaries in furtherance of any such action.
17. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default occurs and is continuing as a result of the
occurrence of any of the events identified in paragraph 16(a) through (c) of
this Debenture, the Holder of this Debenture may declare the entire principal of
this Debenture to be due and payable immediately, by notice in writing to the
Company, and upon any such declaration such principal shall become immediately
due and payable. If an Event of Default occurs and is continuing as a result of
the occurrence of any of the events identified in paragraph 16(d) through (e) of
this Debenture, all principal and accrued and unpaid interest due under this
Debenture shall automatically become immediately due and payable.
18. Restoration of Rights and Remedies.
If the Holder has instituted any proceeding to enforce any right or
remedy under this Debenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Holder, the
Company and the Holder shall, subject to any determination in such proceeding,
be restored to their former positions hereunder, and all rights and remedies of
the Holder shall continue as though no such proceeding had been instituted.
19. 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, but subject in all instances to the provisions of
this Debenture. 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.
20. Delay or Omission Not Waiver.
No delay or omission of the Holder of this Debenture 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.
21. Governing Law - Jurisdiction.
This Debenture is made under and will be governed by the internal laws
of the State of Iowa, without regard to its conflict of laws principles. All
parties hereto consent to the jurisdiction of any state court located within
Iowa or the federal district court for the Northern district of Iowa, and waive
personal service of any and all process. All service of process may be made by
messenger, by certified or registered mail, return receipt requested, directed
(i) if to Company, at the address determined in accordance with paragraph 13,
and (ii) if to any Holder, at the address determined in accordance with
paragraph 14. Each party hereto waives any objection which it may have to any
proceeding commenced in these courts based upon improper venue or forum non
conveniens.
22. Severability Clause.
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.
23. Certain Defined Terms.
The following defined terms shall have the meanings specified when used
in this instrument:
Business Day - any day except Saturday, Sunday or any legal
holiday or any day on which banking institutions in Cedar
Falls, Iowa are closed.
Common Stock - means the no par value common stock of the
Company.
Company - means Top Air Manufacturing, Inc, an Iowa
corporation.
Event of Default - is defined in paragraph 16 of this
Debenture.
Federal Bankruptcy Act - means 11 U.S.C., Sections 101 et seq.
Holder - is defined in paragraph 1 of this Debenture.
Interest Payment Dates - is defined on the first page of this
Debenture.
Interest Payment Record Dates - is defined in paragraph 1 of
this Debenture.
Maturity Date - is defined in the first paragraph of this
Debenture.
Optional Redemption - is the redemption, at the option of the
Company, permitted and described in the first unnumbered
paragraph of paragraph 2 of this Debenture.
Person - means any individual, partnership, corporation, joint
venture, association, trust or other enterprise or any
government or political subdivision or any agency, department
or instrumentality thereof.
Prime Rate - the rate announced from time to time by Firstar
Bank as its prime lending rate.
Redemption Date - is defined in paragraph 2 of this Debenture.
Redemption Price - means the principal, premium, if any, and
accrued interest required to be paid under paragraph 2 hereof
in respect of any Optional Redemption.
Senior Debt - is defined in paragraph 3 of this Debenture.
Senior Debt Default - means the occurrence of a default under
the terms of any instrument constituting, evidencing, governing
or securing any Senior Debt which, upon the giving of notice or
the passage of time or both, would permit the holder of such
Senior Debt to accelerate the maturity thereof.
Subsidiary - means any corporation, partnership or other entity
in which the Company holds, directly or indirectly, more than
fifty percent (50%) of the outstanding equity securities having
general voting power.
IN WITNESS WHEREOF, the Company has caused this Debenture to be signed
as of the _____ day of January, 2000.
TOP AIR MANUFACTURING, INC.
ATTEST: By:
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Title: President and CEO
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Secretary