Exhibit 4.8
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FPA CORPORATION
___________________
$2,000,000
Variable Rate Note
due September 30, 2000
___________________
NOTE PURCHASE AGREEMENT
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Dated as of August 1, 1996
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TABLE OF CONTENTS
Page
1. Authorization of Notes......................................... 1
2. Issuance of Notes.............................................. 2
3. Closing........................................................ 2
4. Conditions to Closing.......................................... 2
4.1 Representations and Warranties........................ 2
4.2 Performance; No Default............................... 2
4.3 Compliance Certificate................................ 2
4.4 Proceedings and Documents............................. 2
5. Representations and Warranties, etc............................ 3
5.1 Organization, Qualification Standing, etc............. 3
5.2 Authorization, Execution and Delivery................. 3
5.3 Tax Returns and Payments.............................. 4
5.4 Litigation, etc....................................... 4
5.5 Compliance with Other Instruments, etc................ 4
5.6 Governmental Consent.................................. 5
5.7 Offer of Notes........................................ 5
5.8 Federal Reserve Regulations........................... 5
5.9 Investment Company Act................................ 5
5.10 Public Utility Holding Company Act.................... 5
5.11 Authorization of Sale................................. 6
5.12 ERISA................................................. 6
6. Representations and Warranties of Purchaser.................... 6
6.1 Investment Representations............................ 6
6.2 No Contrary Knowledge................................. 6
7. Accounting, Financial Statements and Other Information......... 7
8. Inspection..................................................... 8
9. Payment and Prepayment of Notes................................ 8
9.1 Optional and Required Prepayments..................... 8
9.2 Maturity; Surrender, etc.............................. 8
10. Business and Financial Covenants............................... 9
10.1 Payment of Principal and Interest..................... 9
10.2 Maintenance of Office or Agency....................... 9
10.3 Corporate Existence................................... 9
10.4 Payment of Taxes and Other Claims..................... 9
10.5 Maintenance of Properties; Insurance.................. 10
10.6 Waiver of Covenants................................... 10
10.7 Company May Consolidate, etc., Only on Certain
Terms................................................. 10
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10.8 Effect of Consolidation, etc.......................... 11
11. Registration, Transfer and Substitution of Notes............... 11
11.1 Note Register; Ownership of Registered Notes.......... 11
11.2 Transfer and Exchange of Notes........................ 12
11.3 Replacement of Notes.................................. 12
12. Payments on Notes.............................................. 12
12.1 Place of Payment...................................... 12
12.2 Home Office Payment................................... 13
13. Events of Default: Acceleration................................ 13
13.1 Events of Default..................................... 13
13.2 Remedies Upon Default................................. 14
14. Enforcement.................................................... 15
15. Definitions.................................................... 16
16. Expenses, etc.................................................. 20
17. Survival of Representations and Warranties..................... 20
18. Amendments and Waivers......................................... 21
19. Notices, etc................................................... 21
20. Effectiveness.................................................. 22
21. Miscellaneous.................................................. 22
Exhibits
I. Form of $2,000,000 Variable Rate Note due September 30,
2000
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FPA CORPORATION
One Greenwood Square
3333 West Street Road
Suite 101
Bensalem, PA 19020
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Note Purchase Agreement
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$2,000,000 Variable Rate Note
due September 30, 2000
As of August 1, 1996
Jeffrey P. Orleans
Chairman and Chief Executive Officer
FPA Corporation
One Greenwood Square
3333 West Street Road
Suite 101
Bensalem, PA 19020
Dear Sir:
FPA Corporation, a Delaware corporation (the "Company"), agrees with
you as follows:
1. Authorization of Notes. The Company will authorize the issue and
delivery of its $2,000,000 Variable Rate Note due September 30, 2000 (the "VR
Note," the "Note" or the "Notes," such term to include any such Notes issued in
substitution therefor pursuant to Section 11 hereof). The VR Note shall be in
substantially the form of Exhibit I hereto, with such changes therein, if any,
as may be approved by you and the Company. Certain capitalized terms used in
this Agreement are defined in Section 15. References to an "Exhibit" are, unless
otherwise specified, to one of the Exhibits attached to this Agreement.
2. Issuance of Notes. In exchange for the payment of cash in the amount
of $2,000,000 (the "Cash Consideration"), the Company will issue and deliver to
you and, subject to the terms and conditions of this Agreement, you will acquire
from the Company, the VR Note.
3. Closing. The delivery and issue of Notes by the Company to you shall
take place at the offices of the Company, at the address noted above, at 10:00
a.m., local time, September 3, 1996 or on such other business day as may be
agreed upon by the Company and you, but in no event later than December 31, 1996
(the "Closing"). Subject to and upon the terms and conditions set forth herein,
at the Closing the Company will deliver to you the VR Note, dated the date of
such Closing and registered in your name, against delivery by you to the Company
or its order of the Cash Consideration in the amount specified in Section 2
hereof. If, at the Closing, the Company shall fail to tender the VR Note to you
as provided above in this Section 3, or any of the conditions to be performed by
the Company specified in Section 4 shall not have been fulfilled to your
reasonable satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.
4. Conditions to Closing. (A) Your obligation to deliver the Cash
Consideration for the VR Note to be issued and delivered to you at the Closing,
and to complete the Closing, is subject to the fulfillment to your reasonable
satisfaction, prior to or at such Closing, of the following conditions:
4.1 Representations and Warranties. The representations and
warranties of the Company contained in this Agreement shall be correct in all
material respects when made and at the time of such Closing.
4.2 Performance; No Default. The Company shall have performed
and complied in all material respects with all agreements and conditions
contained in this Agreement required to be performed or complied with by it
prior to or at such Closing and at the time of such Closing no Event of Default
shall have occurred and be continuing.
4.3 Compliance Certificate. The Company shall have delivered
to you or your Counsel an Officers' Certificate, dated the date of such Closing,
certifying that the conditions specified in Sections 4.1 and 4.2 have been
fulfilled.
4.4 Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
reasonably satisfactory to you, and you shall have received all such counterpart
originals or certified or other copies of such documents as you or they may
reasonably request.
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(B) The Company's obligation to deliver the VR Note at the
Closing and to complete the Closing is subject to your performance and
compliance in all material respects with the agreements and conditions contained
in this Agreement required to be performed by you prior to or at such Closing.
5. Representations and Warranties, etc. The Company represents and
warrants that:
5.1 Organization, Qualification Standing, etc. Each of the Company
and its Subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of the state of its incorporation and has all
requisite corporate power and authority to own and operate its properties and to
carry on its business as now conducted and as proposed to be conducted, and the
Company has all requisite corporate power and authority to enter into this
Agreement, to issue and deliver the Notes in exchange for the Note Consideration
and the Cash Consideration, and to carry out the terms of this Agreement and the
Notes. Each of the Company and its Subsidiaries is duly qualified and in good
standing as a foreign corporation authorized to do business in each jurisdiction
(other than the jurisdiction of its incorporation) in which the nature of its
activities or the character of the properties it owns, leases or operates makes
such qualification necessary and in which the failure so to qualify would have a
materially adverse effect on the business of the Company and its Subsidiaries
taken as a whole. The current capitalization of the Company is as follows:
Preferred Stock, par value $1.00 per share; 500,000 shares
authorized; 100,000 shares of Series C Preferred Stock authorized.
Common Stock, par value $.10 per share; 20,000,000 shares
authorized; 12,698,131 shares issued; 11,695,618 shares
outstanding and 1,002,513 held as treasury stock.
5.2 Authorization, Execution and Delivery. The execution and
delivery of this Agreement and the VR Note by the Company has been duly
authorized by all necessary corporate action on behalf of the Company and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement, the Notes, and the transactions contemplated hereby
and thereby and this Agreement is (and, upon issuance, the VR Note will be)
enforceable against the Company in accordance with its terms except as limited
by bankruptcy, insolvency, reorganization and similar laws affecting creditors
generally and by equitable principles of general applicability.
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5.3 Tax Returns and Payments. The Company and each of its
Subsidiaries have filed all tax returns required by law to be filed by them and
have paid all taxes, assessments and other governmental charges levied upon them
and any of their respective properties, assets, income or franchises which are
due and payable, other than those presently payable without penalty or interest.
The charges, accruals and reserves on the books of the Company and set forth on
the regularly-prepared balance sheets of the Company in respect of Federal and
state income and business and occupation taxes for all fiscal periods are
adequate in the opinion of the Company, and the Company knows, after making due
inquiry and reasonable investigation, of no unpaid assessment for additional
Federal or state income or business and occupation taxes for any period or any
basis for any such assessment for which adequate provision has not been made in
its accounts or in such balance sheet.
5.4 Litigation, etc. Except as described in the Company's 1995
Report on Form 10-K or as set forth on Schedule 5.4 hereto, there is no action,
investigation or proceeding pending or threatened (or any basis therefor known
to the Company) which questions the validity of this Agreement or the VR Note or
any action taken or to be taken pursuant to this Agreement or the VR Note, or
which might result, either in any case or in the aggregate, in any material
adverse change in the business, operations, affairs, condition, properties or
assets of the Company and its Subsidiaries taken as a whole or in any material
liability on the part of the Company and such Subsidiaries taken as a whole.
5.5 Compliance with Other Instruments, etc. Except as set forth on
Schedule 5.5 hereto, (i) neither the Company nor any of its Subsidiaries is in
violation of any term of its certificate or articles of incorporation or
by-laws, (ii) neither the Company nor any of its Subsidiaries is in material
violation of any term of any material agreement or instrument respecting
indebtedness for borrowed money to which it is a party or by which it is bound,
and (iii) neither the Company nor any of its Subsidiaries is in violation of any
term of any applicable law, statute, ordinance, license, franchise, rule or
regulation of any governmental authority or any term of any applicable order,
judgment or decree of any court, arbitrator or governmental authority
(including, without limitation, any law, ordinance, rule, regulation or order
relating to environmental or occupational health or safety standards and
controls, consumer protection or equal employment practices) applicable to the
Company or any Subsidiary, the consequences of which violation described in
(iii) above might have a material adverse effect on the business, operations,
affairs, condition, properties or assets of the Company and its Subsidiaries
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taken as a whole; and the execution, delivery and performance of this Agreement
and the Notes will not result in any violation of or be in conflict with or
constitute a default under any term of any item referred to in this Section 5.5
or result in the creation of (or impose any obligation on the Company or any
Subsidiary to create) any lien, pledge, security interest or other encumbrance
upon any of the properties or assets of the Company or any Subsidiary pursuant
to any such term.
5.6 Governmental Consent. No consent, approval or authorization of,
or declaration or filing with, any governmental authority on the part of the
Company or any Subsidiary is required for the valid execution, delivery or
performance of this Agreement and the Notes, or the continued conduct by the
Company or any Subsidiary of its businesses as now conducted or as proposed to
be conducted as described in the 1995 Form 10-K.
5.7 Offer of Notes. The Company has not directly or indirectly
offered the VR Note or any part thereof for sale to, or solicited any offer to
buy, any of the same from, or otherwise approached or negotiated in respect
thereof with, anyone other than you.
5.8 Federal Reserve Regulations. Neither the Company nor any
Subsidiary will, directly or indirectly, use any of the proceeds of the issuance
of the VR Note for the purpose of purchasing or carrying any "margin security"
within the meaning of Regulation G of the Board of Governors of the Federal
Reserve System (12 C.F.R. 207, as amended), or otherwise take or permit to be
taken any action which would result in the issuance and delivery of the VR Note
or the carrying out of any of the other transactions contemplated hereby, being
violative of such Regulation G or of Regulation T (12 C.F.R. 220, as amended) or
of Regulation X (12 C.F.R. 224, as amended) or any other regulation of such
Board. To your knowledge, no Indebtedness being reduced or retired out of the
proceeds of the issuance of the Notes was incurred for the purpose of purchasing
or carrying any "margin security" within the meaning of such Regulation G, and
the Company does not own and does not have any present intention of acquiring
any such margin security.
5.9 Investment Company Act. Neither the Company nor any Subsidiary
is an "investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.
5.10 Public Utility Holding Company Act. Neither the Company nor any
Subsidiary is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended.
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5.11 Authorization of Sale. The sale of the VR Note and compliance
by the Company with all of the provisions of this Agreement and the VR Note are
within the corporate powers of the Company and have been duly authorized by all
requisite corporate action on the part of the Company.
5.12 ERISA. The consummation of the transactions provided for in
this Agreement and compliance by the Company with the provisions hereof and of
the VR Note issued hereunder will not involve any prohibited transaction within
the meaning of the Employee Retirement Income Security Act of 1974 ("ERISA") or
Section 4975 of the Internal Revenue Code. No "employee pension benefit plans,"
as defined in ERISA ("Plans"), maintained by the Company or any Person which is
under common control with the Company within the meaning of Section 4001(b) of
ERISA, nor any trusts created thereunder, have incurred any "accumulated funding
deficiency" as defined in Section 302 of ERISA.
6. Representations and Warranties of Purchaser. You hereby represent
and warrant to the Company as follows:
6.1 Investment Representations. You acknowledge that the VR Note
has not been registered under the Securities Act of 1933, as amended (the
"Securities Act"), and that the VR Note is being issued to you pursuant to an
exemption from registration contained in the Securities Act based in part upon
your representations and covenants contained in this Section. You are acquiring
the VR Note solely for your own account and with no intention of distributing or
reselling said securities or any part thereof, or interest therein, in any
transaction which would be in violation of the securities laws of the United
States or any state thereof. You are an "accredited investor" (as such term is
defined in Rule 501 of Regulation D under the Securities Act). You acknowledge
and agree that (i) the VR Note is subject to limitations on transferability
under the Securities Act and applicable state securities laws, (ii) the Company
has no obligation to effect registration of the VR Note under the Securities Act
or any applicable state securities laws or otherwise to comply with any
requirements necessary for transfer or assignment of the VR Note to be exempt
from such registration, and (iii) no transfer of the Notes shall be effected
unless an Opinion of Counsel acceptable to the Company shall be delivered to the
Company to the effect that such contemplated transfer may be effected without
registration under the Securities Act and any applicable state securities laws.
6.2 No Contrary Knowledge. You are the Chief Executive Officer of
the Company and have no knowledge that any of the representations and warranties
of the Company set forth in Section 5 hereof are not correct.
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7. Accounting, Financial Statements and Other Information. The Company
will maintain and cause its Subsidiaries to maintain, a system of accounting
established and administered in accordance with generally accepted accounting
principles, and will set aside on its books, and will cause each of its
Subsidiaries to set aside on its books, all such proper reserves as shall be
required by generally accepted accounting principles. At any time the Company is
not required to file reports with the Commission pursuant to Section 13 of the
Exchange Act, the Company will deliver to you, so long as you shall be the
holder of the VR Note:
(a) within 60 days after the end of each of the first three
quarterly fiscal periods in each fiscal year of the Company,
consolidated balance sheets of the Company and its Subsidiaries as at
the end of such period and the related consolidated statements of
income, stockholders' equity and cash flows of the Company and its
Subsidiaries for such period and (in the case of the second and third
quarterly periods) for the period from the beginning of the current
fiscal year to the end of such quarterly period, setting forth in each
case in comparative form the consolidated figures for the corresponding
periods of the previous fiscal year (except for the comparative balance
sheet which is as of the end of the immediately preceding fiscal year),
all in reasonable detail and certified as complete by a principal
financial officer of the Company; it being understood that delivery to
Purchaser of a copy of the Form 10-Q for the respective fiscal period
as filed with the Commission shall fulfill the obligations of the
Company with respect to this subdivision (a);
(b) within 120 days after the end of each fiscal year of the
Company, consolidated balance sheets of the Company and its
Subsidiaries as at the end of such year and the related consolidated
statements of income, stockholders' equity and cash flows of the
Company and its Subsidiaries for such fiscal year, setting forth in
each case in comparative form the consolidated figures for the previous
fiscal year, all in reasonable detail and accompanied by a report
thereon of Price Waterhouse or other independent certified public
accountants of recognized national standing selected by the Company, so
long as you or your nominee shall be the holder of any of the Notes,
and to the Other Purchasers; it being understood that delivery to the
Purchaser of a copy of the Company's Form 10-K as filed with the
Commission respecting such fiscal year shall fulfill the obligations of
the Company with respect to this subdivision (b);
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(c) promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent or
made available generally by the Company to its public security holders,
if any, of all regular and periodic reports and all registration
statements and prospectuses, if any, filed by the Company or any
Subsidiary with any securities exchange or with the Commission or any
governmental authority succeeding to any of its functions; and
(d) with reasonable promptness, such other information and
data with respect to the Company or any of its Subsidiaries as from
time to time may be reasonably requested.
8. Inspection. The Company will permit any authorized representatives
designated by the holders of a majority in aggregate principal amount
outstanding of the VR Note, without expense to the Company, to visit and inspect
any of the properties of the Company or any of its Subsidiaries, including its
and their books of account, and to make copies and take extracts therefrom, and
to discuss its and their affairs, finances and accounts with its and their
officers and independent public accountants, all at such reasonable times during
regular business hours and upon reasonable notice and as often as may be
reasonably requested.
9. Payment and Prepayment of Notes.
9.1 Optional and Required Prepayments. The Company may, at its
option, upon not less than 30 days prior written notice to you, prepay at any
time all, or from time to time any part of, the VR Note, without premium, at a
price equal to the principal amount to be so prepaid; provided, however, for
purposes of this Section 9.1, any prepayment of less than all of the outstanding
VR Note shall be deemed to be applied first to the payment of accrued but unpaid
interest and then to the payment of the installments of principal in the order
in which such installments are due.
9.2 Maturity; Surrender, etc. In the case of each prepayment, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date. From and after such date, unless the
Company shall fail to pay such principal amount when so due and payable,
together with the interest, as aforesaid, interest on such principal amount
shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to
the Company and cancelled and shall not be reissued, and no Note shall be issued
in lieu of any prepaid principal amount of any Note.
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10. Business and Financial Covenants. The Company covenants that from
the date of this Agreement through the Closing and thereafter so long as any of
the Notes are outstanding:
10.1 Payment of Principal and Interest. The Company will duly and
punctually pay the principal of and interest on the VR Note in accordance with
the terms of the VR Note and this Agreement. Interest on the VR Note may be paid
by mailing checks for such interest payable to or upon the written order of the
Person entitled thereto, at the address of such Person as it appears on the Note
Register.
10.2 Maintenance of Office or Agency. The Company will maintain in
the Commonwealth of Pennsylvania, an office or agency where VR Notes may be
presented or surrendered for payment, where VR Notes may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Notes and this Agreement may be served. The
Company will give prompt written notice to each holder of any change in the
location of such office or agency. The initial office maintained by the Company
for such purpose shall be the executive offices of the Company set forth on page
1 hereof.
10.3 Corporate Existence. The Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence and that of each Material Subsidiary and the rights (charter and
statutory) and franchises of the Company and its Material Subsidiaries;
provided, however, that the Company shall not be required to preserve any such
right or franchise if the Board of Directors shall determine, before or
following the termination thereof, that the preservation thereof is no longer
desirable in the conduct of the business of the Company or any Material
Subsidiary or that the loss thereof is not disadvantageous in any material
respect to the holders of the Notes.
10.4 Payment of Taxes and Other Claims. The Company will pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Material Subsidiary or upon the income, profits
or property of the Company or any Material Subsidiary, and (2) all lawful claims
or indebtedness for labor, materials and supplies which, if unpaid, might by law
become a lien upon the property of the Company or any Material Subsidiary;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings and the Company shall have set aside on its books
adequate reserves, if appropriate, with respect thereto (segregated to the
extent required by generally accepted accounting principles), and failure to pay
is not prejudicial in any material respect to the holders of the VR Notes.
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10.5 Maintenance of Properties; Insurance. The Company will cause
all properties used or useful in the conduct of its business or the business of
the Company or any Material Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section 10.5 shall prevent the Company from discontinuing the
operation or maintenance of any of such properties, or disposing of any of them.
The Company will insure and keep insured, and will cause each
Material Subsidiary to insure and keep insured, with reputable insurance
companies, so much of their respective properties, to such an extent and against
such risks (including fire), as companies engaged in similar businesses
customarily insure properties of a similar character; or, in lieu thereof, in
the case of itself or of any one or more of its Material Subsidiaries, the
Company will maintain or cause to be maintained a system or systems of
self-insurance which will accord with the approved practices of companies owning
or operating properties of similar character and maintaining such systems, and,
in such cases of self-insurance, will maintain or cause to be maintained an
insurance reserve or reserves in adequate amounts.
10.6 Waiver of Covenants. The Company may omit in any particular
instance to comply with any covenant or condition set forth in Sections 10.2
through and including Section 10.7 hereof with respect to the VR Notes, if
before or after the time for such compliance, the holders of a majority in
aggregate principal amount of the VR Notes outstanding, as the case may be,
shall either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Company in
respect of such covenant or condition shall remain in full force and effect.
10.7 Company May Consolidate, etc., Only on Certain Terms. The
Company shall not consolidate with or merge into any other corporation or convey
or transfer its properties and assets substantially as an entirety to any
Person, unless:
(1) either the Company shall be the continuing corporation,
or the corporation (if other than the Company) formed by such
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consolidation or into which the Company is merged or the Person
which acquires by conveyance or transfer the properties and assets
of the Company substantially as an entirety shall be a corporation
organized and existing under the laws of the United States of
America or any State thereof or the District of Columbia and shall
expressly assume, by an agreement supplemental hereto, the due and
punctual payment of the principal of and interest on all the Notes
and the performance of every covenant of this Agreement and the
Notes on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no
Event of Default which has not been waived shall have occurred and
be continuing; and
(3) the Company has delivered to the holder an Officers'
Certificate and an Opinion of Counsel, each stating (the Opinion of
Counsel to rely on the Officer's Certificate for factual matters)
that such consolidation, merger, conveyance or transfer and such
supplemental agreement comply with this Section 10.7 and that all
conditions precedent herein provided for relating to such
transaction have been complied with.
10.8 Effect of Consolidation, etc. Upon any consolidation or merger
or any conveyance or transfer of the properties and assets of the Company
substantially as an entirety in accordance with Section 10.7, the successor
corporation formed by such consolidation or into which the Company is merged or
to which such conveyance or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Agreement with the same effect as if such successor corporation had been
named as the Company herein, and thereafter the predecessor corporation shall be
relieved of all obligations and covenants under the Agreement and the VR Notes
and in the event of such conveyance or transfer any such predecessor corporation
may be dissolved and liquidated.
11. Registration, Transfer and Substitution of Notes.
11.1 Note Register; Ownership of Registered Notes. The Company will
keep at the office of its legal department a register (the "Note Register") in
which the Company will provide for the registration of VR Notes and the
registration of transfers of VR Notes. The Company may treat the Person in whose
name any VR Note is registered on such Note Register as the owner thereof for
the purpose of receiving payment of the principal of and interest on such Note
and for all other purposes, whether or not such Note shall be overdue, and the
Company shall not be affected by any notice to the contrary. All references in
this Agreement to a "holder" of any VR Note shall mean the Person in whose name
such VR Note is at the time registered on such register.
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11.2 Transfer and Exchange of Notes. Upon surrender of any Note for
registration of transfer or for exchange to the Company at the office of its
legal department, the Company at its expense will execute and deliver in
exchange therefor a new Note or Notes of the same class in denominations of at
least $1,000,000 (except one Note may be issued in a lesser principal amount if
the unpaid principal amount of the surrendered Note is not evenly divisible by,
or is less than, $1,000,000), as requested by the holder or transferee, which
aggregate the unpaid principal amount of such surrendered Note. Each such new
Note shall be dated so that there will be no loss of interest on such
surrendered Note and otherwise of like tenor, and shall be registered in the
name or names of such Person or Persons as such holder or transferee may
request. Any Note in lieu of which any such new Note has been so executed and
delivered shall not be deemed to be an outstanding Note for any purpose of this
Agreement.
11.3 Replacement of Notes. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Note and, in the case of any such loss, theft or destruction of any Note, upon
delivery of an indemnity bond in such reasonable amount as the Company may
determine (or, in the case of any Note held by you or another institutional
holder or you or its nominee, of an indemnity agreement from you or such other
holder reasonably satisfactory to the Company), or, in the case of any such
mutilation, upon the surrender of such Note for cancellation to the Company at
its principal office, the Company at its expense will execute and deliver, in
lieu thereof, a new Note of the same class of like tenor, dated so that there
will be no loss of interest on such lost, stolen, destroyed or mutilated Note.
Any Note in lieu of which any such new Note of the same class has been so
executed and delivered by the Company shall not be deemed to be an outstanding
Note for any purpose of this Agreement.
12. Payments on Notes.
12.1 Place of Payment. Payments of principal, and interest becoming
due and payable on the Notes shall be made at the principal office of the
Company in Bensalem, Bucks County, Commonwealth of Pennsylvania, unless the
Company, by written notice to each holder of any Notes, shall designate another
address as its principal office in the Commonwealth of Pennsylvania, as such
place of payment, in which case such principal office shall thereafter be such
place of payment.
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12.2 Home Office Payment. So long as you or your nominee shall be
the holder of any Note, and notwithstanding anything contained in Section 12.1
or in such Note to the contrary, the Company will pay all sums becoming due on
such Note for principal, and interest by the method and at the address specified
for such purpose in the Note Register, or by such other method or at such other
address as the holder shall have from, time to time specified to the Company in
writing for such purpose, without the presentation or surrender of such Note or
the making of any notation thereon, except that any Note paid or prepaid in full
shall be surrendered to the Company at its principal office or at the place of
payment maintained by the Company pursuant to Section 12.1 for cancellation.
Prior to any sale or other disposition of any Note held by you or your nominee
you will, at your election, either endorse thereon the amount of principal paid
thereon and the last date to which interest has been paid thereon or surrender
such Note to the Company in exchange for a new Note or Notes pursuant to Section
11.2.
13. Events of Default: Acceleration.
13.1 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 voluntary or involuntary or be effected by
operation of law pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any interest upon any Note on
the Extension Date, and continuance of such default for a period of 10 days
after notice of default has been provided by any holder of outstanding Notes; or
(b) default in the payment of any installment of the principal
of any Note on the Extension Date; or
(c) default in the performance, or breach, of any covenant of
the Company in this Agreement (other than a covenant a default in the
performance of which or the breach of which is elsewhere in this Section 13.1
specifically addressed) or the Notes and continuance of such default or breach
for a period of 60 days after there has been given to the Company a written
notice by the holder of any of the Notes specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder and, if such default or breach is curable, such additional
period of time during which the Company shall be endeavoring diligently to cure
the same; or
(d) if an event of default, as defined in any mortgage,
indenture or instrument under which there may be issued, or by which there may
be secured or evidenced, any Indebtedness of the Company or of any Subsidiary
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in excess of $1,000,000, whether such Indebtedness now exists or shall hereafter
be created, shall happen and shall result in such Indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise have
become due and payable, unless (i) such acceleration shall have been rescinded
or annulled pursuant to the terms of such instrument or (ii) such Indebtedness
shall have been discharged within a period of 30 days after such acceleration;
provided, however, the term "Indebtedness," as used in this Section 13.1(e),
shall not include Non-Recourse Indebtedness; or
(e) the entry of a decree or order by a court having
jurisdiction in the premises adjudging the Company or any Material Subsidiary a
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of the
Company or such Material Subsidiary under the Bankruptcy Law or any other
applicable Federal or State law, or appointing a receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or any Material
Subsidiary 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 unstayed and in effect for a period of 60 consecutive days; or
(f) the institution by the Company or any Material Subsidiary
of proceedings to be adjudicated a bankrupt or insolvent, or the consent by any
of the foregoing to the institution of bankruptcy or insolvency proceedings
against it, or the filing by any of the foregoing of a petition or answer or
consent seeking reorganization or relief under the Bankruptcy Law or any other
applicable Federal or State law, or the consent by any of the foregoing to the
filing of such petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator or other similar official of any of the
foregoing or of any substantial part of its property, or the making by any of
the foregoing of an assignment for the benefit of creditors, or the admission by
any of the foregoing in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by any of the foregoing in
furtherance of any such action.
13.2 Remedies Upon Default. Upon the occurrence of any Event of
Default described in subdivisions (e) and (f) of Section 13.1 the unpaid
principal amount of and accrued interest on the Notes shall automatically become
due and payable. Upon the occurrence, and during the continuance, of any other
Event of Default, any holder or holders (other than the Company or any of its
Subsidiaries) of a majority in aggregate principal amount of any VR Notes at the
time outstanding may at any time (unless all defaults shall theretofore have
been remedied) at its or their option, by written notice or notices to the
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Company, declare all the VR Notes, to be due and payable, whereupon the same
shall forthwith mature and become due and payable, together with interest
accrued thereon, in either case without presentment, demand, protest or notice,
all of which are hereby waived provided that during the continuance of an Event
of Default described in subdivision (a) or (b) of Section 13.1, then,
irrespective of whether the holder or holders of a majority in aggregate
principal amount of the VR Notes then outstanding shall have declared all of the
VR Notes of such class to be due and payable pursuant to this Section 13.2, any
holder of the Notes may, at its option, by notice in writing to the Company,
declare the Notes then held by such holder to be due and payable, whereupon the
Notes then held by such holder shall forthwith mature and become due and
payable, together with interest accrued thereon, without presentment, demand,
protest or notice, all of which are hereby waived.
At any time after the principal of, and interest accrued on, all the
Notes are declared due and payable, the holders of not less than a majority in
aggregate principal amount of the Notes of such class then outstanding
(excluding any Notes owned by the Company or any of its Subsidiaries), by
written notice to the Company may rescind and annul any such declaration and its
consequences if (x) the Company has paid all overdue interest on such Notes, the
principal of any Notes which have become due otherwise than by reason of such
declaration, and interest on such overdue principal and (to the extent permitted
by applicable law) any overdue interest in respect of such Notes at the rate of
interest provided in such Notes in respect of overdue interest, (y) all Events
of Default, other than non-payment of amounts which have become due solely by
reason of such declaration, and all conditions and events which constitute
Events of Default have been cured or waived, pursuant to Section 18, and (z) no
judgment or decree has been entered for the payment of any monies due or
foreclosure pursuant to the Notes or this Agreement; but no such rescission and
annulment shall extend to or affect any subsequent Event of Default or impair
any right consequent thereon.
14. Enforcement. In case any one or more Events of Default shall occur
and be continuing, the holder of any Note at the time outstanding may proceed to
protect and enforce the rights of such holder by an action at law, suit in
equity or other appropriate proceeding, whether for the specific performance of
any agreement contained herein or in such Note, or for an injunction against a
violation of any of the terms hereof or thereof, or in aid of the exercise of
any power granted hereby or thereby or by law or otherwise. In case of a default
in the payment of any principal of, or interest on any Note, the Company will
pay to the holder thereof such further amount as shall be sufficient to cover
the cost and expenses of collection, including, without limitation,
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reasonable attorneys' fees, expenses and disbursements. No course of dealing and
no delay on the part of any holder of any Note in exercising any right, power or
remedy shall operate as a waiver thereof or otherwise prejudice such holder's
rights, powers or remedies. No right, power or remedy conferred by this
Agreement or by any Note upon any holder thereof shall be exclusive of any other
right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise.
15. Definitions. As used herein the following terms have the following
respective meanings:
"Agreement" means this instrument as originally executed or as it
may from time to time be supplemented or amended.
"Applicable Grace Date" means the tenth calendar day following each
Interest Target Date and VR Principal Target Date.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or
State law for the relief of debtors.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"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.
"Closing" has the meaning specified in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, as
amended, or any successor body perform the same or similar functions.
"Common Stock" or "common stock" means, when used with reference to
stock of the Company, the Common Stock of the Company presently authorized, par
value $.10 per share, and any other stock into which such presently authorized
stock may hereafter have been changed.
"Company" means the Person named as the "Company" in the first
paragraph of this Agreement and its assigns until a successor corporation shall
have become such pursuant to the applicable provisions of this Agreement, and
thereafter "Company" shall mean such successor corporation.
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"Cash Consideration" has the meaning specified in Section 2.
"Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
"Event of Default" has the meaning specified in Section 13.1.
"Extension Date" means the one hundred, eightieth (180th) day
following each Interest Target Date and VR Principal Target Date.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exhibit" has the meaning specified in Section 1.
"Holder" or "holder' means a Person in whose name a Note is
registered.
"Indebtedness" means all indebtedness of the Company, a corporate
Subsidiary or, to the extent set forth below, a partnership or joint venture
whether outstanding on the date of the Agreement or thereafter created or
incurred (a) for money borrowed, whether evidenced by bonds, notes or other
written obligations or debentures or evidenced by a loan agreement or an
indenture or similar agreement; (b) for money borrowed by others and assumed or
guaranteed, directly or indirectly, by the Company, a corporate Subsidiary or a
partnership or joint venture; (c) for deferrals, renewals, extensions or
refundings of, and amendments to, any such Indebtedness; and (d) for purchase
money obligations and obligations to public authorities as a result of their
involvement in mortgage financing. Indebtedness of a partnership or joint
venture shall be included, without duplication, for this purpose only to the
extent of the Pro Rata Interest of the Company or a Subsidiary (other than such
partnership or joint venture) therein.
"Interest Target Date" means the last day of each calendar quarter,
commencing on the first such date following the issuance of the VR Note.
"Material Subsidiary" has the meaning specified in the definition of
Subsidiary.
"Maturity" when used with respect to any Note means the date on
which all or a portion of the principal amount of such Note becomes due
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and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Non-Recourse Indebtedness" means Indebtedness secured by a lien on
property to the extent that the liability for such Indebtedness is limited to
the security of the property without liability of the Company or any Subsidiary
for any deficiency.
"Note Consideration" has the meaning specified in Section 2.
"Notes" has the meaning specified in Section 1.
"Note Register" has the meaning specified in Section 11.1.
"Notice of Default" has the meaning specified in Section 13.1(d).
"Officer's Certificate" means a certificate signed by the Chairman
of the Board, the President or any Vice President, and by the Treasurer, an
Assistant Treasurer, the Controller, an Assistant Controller, the Secretary or
an Assistant Secretary of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may
(except as otherwise expressly provided in this Agreement) be counsel for the
Company or who may be other counsel acceptable to (i) in the case of Section
10.7, the holders of a majority in principal amount of Notes then outstanding,
and (ii) in the case of Section 6.1, the Company.
"Outstanding" or "outstanding" when used with respect to Notes
means, as of the date of determination, all Notes theretofore delivered under
this Agreement, except:
(i) Notes theretofore cancelled by the Company or delivered
to the Company for cancellation;
(ii) Notes or portions thereof for the payment or redemption
of which money in the necessary amount has been theretofore
segregated in trust by the Company for the Holders of such Notes;
provided that, if such Notes or portions thereof are to be prepaid,
notice of such prepayment has been duly given pursuant to this
Agreement; and
(iii) Notes in exchange for or in lieu of which other Notes
have been issued and delivered pursuant to this Agreement;
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provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver or taken any other action
hereunder, Notes owned by the Company or any Subsidiary shall be disregarded and
deemed not to be Outstanding. Notes so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes the pledgee's
right so to act with respect to such Notes and that the pledgee is not the
Company or any subsidiary.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Plans" has the meaning specified in Section 5.12.
"Preferred Stock" or "preferred stock" as applied to any
corporation, means shares of such corporation which shall be entitled to
preference or priority over any other shares of such corporation in respect of
either the payment of dividends or the distribution of assets upon liquidation.
"Registered Form" has the meaning specified in Section 11.1.
"Securities Act" has the meaning specified in Section 6.2.
"Stated Maturity" when used with respect to any Note or any
installment of interest thereon means the date specified in such Note as the
fixed date on which all or a portion of the principal amount of such Note or
such installment of interest is payable.
"Subsidiary" means (i) any corporation of which at least a majority
in interest of the outstanding stock having by the terms thereof voting power
under ordinary circumstances to elect a majority of the directors of such
corporation, irrespective of whether or not at the time stock of any other class
or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency, is at the time, directly or indirectly,
owned or controlled by the Company, or by one or more other corporations a
majority in interest of such stock of which is similarly owned or controlled, or
by the Company and one or more other corporations a majority in interest of such
stock of which is similarly owned or controlled, and (ii) any Person (other than
a corporation) in which the Company or any Subsidiary, directly or indirectly,
has an interest entitling the Company or any Subsidiary to receive at least 50%
of such person's income or an interest in at least 50% of such person's capital,
or both. "Material Subsidiary," as of the date of determination thereof,
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means any Subsidiary having total assets on such date in excess of $15,000,000;
provided, however, that Material Subsidiary shall include a Subsidiary if the
Company or any Material Subsidiary guarantees, assumes or otherwise is or
becomes liable for Indebtedness of such Subsidiary in excess of $15,000,000.
"VR Principal Target Date" means the last day of each calendar
quarter, commencing December 31, 1996.
"VR Note" has the meaning specified in Section 1.
16. Expenses, etc. The Company will pay all its expenses in connection
with the consummation of the transactions under the Agreement and in connection
with any amendments or waivers (whether or not the same become effective) under
or in respect of this Agreement or the Notes, including, without limitation:
(a) the cost and expenses of preparing and reproducing this
Agreement, the Notes, of furnishing all opinions by counsel for the
Company and all certificates on behalf of the Company, and of the
Company's performance of and compliance with all agreements and
conditions contained herein on its part to be performed or complied
with;
(b) the cost of delivering to your principal office, insured
to your reasonable satisfaction, the Notes hereunder and any Notes
delivered to you upon any substitution of Notes and of your delivering
any Notes, insured to your reasonable satisfaction, upon any such
substitution; and
(c) the reasonable out-of-pocket expenses incurred by you,
exclusive of counsel fees, in connection with such transactions and any
such amendments or waivers.
The Company also will pay, and will save you and each holder of any Notes
harmless from, all claims in respect of the fees, if any, of brokers and finders
and any and all liabilities with respect to any taxes (including interest and
penalties) (other than your taxes on income, personal property or revenues)
which may be payable in respect of the execution and delivery of this Agreement,
the issue of the Notes and any amendment or waiver under or in respect of this
Agreement or the Notes.
17. Survival of Representations and Warranties. All representations
and warranties contained in this Agreement or made in writing by or on behalf
of the Company or you in connection with the transactions contemplated by this
Agreement shall survive the execution and delivery of this Agreement, any
investigation at any time made by the Company or you or on its or your behalf,
the acquisition of the Notes by you under this Agreement and any disposition or
payment of the Notes. All statements contained in any certificate or
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other instrument delivered by or on behalf of the Company pursuant to this
Agreement or in connection with the transactions contemplated by this Agreement
shall be deemed representations and warranties of the Company under this
Agreement.
18. Amendments and Waivers. Any term of this Agreement or of the Notes
may be amended and the observance of any term of this Agreement or of the Notes
may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the Company and
the holders of at least a majority in principal amount of the Notes at the time
outstanding (excluding any Notes directly or indirectly owned by the Company or
any of its Subsidiaries), provided, however, that, without the prior written
consent of the holders of all of the Notes at the time outstanding (excluding
any Notes owned by the Company or any of its Subsidiaries), no such amendment or
waiver shall
(a) change the fixed maturity or the principal amount of, or
reduce the rate or extend payment of interest on, or change the amount
or the time of payment of any principal payable on any prepayment of,
any Note,
(b) reduce the aforesaid percentage of the principal amount of the
Notes the holders of which are required to consent to any such
amendment or waiver,
(c) increase the percentage of the principal amount of the Notes
the holders of which may declare the Notes to be due and payable as
provided in Section 13,
(d) decrease the percentage of the principal amount of the Notes
the holders of which may rescind and annul any such declaration as
provided in Section 13.2, or
(e) amend the terms and conditions of this Section 18 or Section
10.6 hereof.
Any amendment or waiver effected in accordance with this Section 18 shall be
binding upon each holder of any Note at the time outstanding, each future holder
of any Note and the Company.
19. Notices, etc. Except as otherwise provided in this Agreement,
notices and other communications under this Agreement shall be in writing and
shall be mailed by registered or certified mail, return receipt requested, or
delivered by nationally recognized overnight air carrier that requires a receipt
against delivery or facsimile transmission addressed,
(a) if to you, at the address set forth in the Note Register or at
such other address as you shall have furnished to the Company in
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writing, except as otherwise provided in Section 12.2 with respect to
payments on Notes held by you or your nominee, or
(b) if to any other holder of any Note, at such address as
such other holder shall have furnished to the Company in writing, or,
until any such other holder so furnishes to the Company an address,
then to and at the address of the last holder of such Note who has
furnished an address to the Company as set forth in the Note Register,
or
(c) if to the Company, at its address set forth at the
beginning of this Agreement, to the attention of its President or
Treasurer, or with respect to matters arising under Section 12, at its
address set forth at the beginning of this Agreement, to the attention
of its General Counsel, or at such other address, or to the attention
of such other officer, as the Company shall have furnished to you and
each such other holder in writing.
Any notice so addressed and sent by such registered or certified mail, overnight
air carrier or facsimile transmission shall be deemed to be given when so sent.
20. Effectiveness. This Agreement shall become a binding agreement
between you and the Company upon the execution and delivery hereof by you and
the Company.
21. Miscellaneous. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the respective heirs, personal
representatives, successors and assigns of the parties hereto, whether so
expressed or not, and, in particular, shall inure to the benefit of and be
enforceable by any holder or holders at the time of the Notes or any part
thereof. This Agreement and the Notes collectively embody the entire agreement
and understanding between you and the Company and supersede all prior agreements
and understandings relating to the subject matter hereof. This Agreement and the
Notes shall be construed and enforced in accordance with and governed by the law
of the Commonwealth of Pennsylvania. The headings in this Agreement are for
purposes of reference only and shall not limit or otherwise affect the meaning
hereof. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument.
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterparts of this letter and return one of the
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same to the Company, whereupon this letter shall become a binding agreement
between you and the Company as provided in Section 20.
Very truly yours,
FPA CORPORATION
-----------------------------------------
By: Benjamin D. Goldman, President
The foregoing Agreement is hereby
agreed to as of the date hereof.
- --------------------------------
Jeffrey P. Orleans
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THIS NOTE HAS BEEN ISSUED PURSUANT TO A NOTE PURCHASE AGREEMENT DATED AS OF
AUGUST 1, 1996 (THE "AGREEMENT"), BETWEEN FPA CORPORATION AND THE ORIGINAL
PURCHASER OF THE NOTE CONTAINING SUBSTANTIAL RESTRICTIONS ON TRANSFER AND
ASSIGNMENT. IT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
CANNOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM.
FPA CORPORATION
Variable Rate Note Due September 30, 2000
Bensalem, Pennsylvania
$2,000,000.00 , 1996
FOR VALUE RECEIVED, and intending to be legally bound hereby,
FPA CORPORATION, a Delaware corporation (hereinafter referred to as the
"Company") hereby promises to pay in lawful money of the United States to the
order of JEFFREY P. ORLEANS (hereinafter referred to as "Holder"), the principal
sum of TWO MILLION DOLLARS ($2,000,000), together with interest on the daily
outstanding principal balance from time to time at a variable rate equal to two
percent (2%) in excess of the "prime rate" as announced from time to time by
CoreStates Bank, N.A. (the "Bank"). Each change in the interest rate applicable
to this Note will take place on the same date as the change in the Bank's
announced prime rate of interest becomes effective. Interest shall be computed
on the basis of a 365/366 day year and the actual number of days elapsed.
Accrued interest shall be payable not later than each Extension Date with
respect to each Interest Target Date during the term of this Note until the
obligation of the Company with respect to payment hereunder shall be discharged.
To the extent not prohibited by law, if interest in respect of any Interest
Target Date shall remain unpaid on the Applicable Grace Date, then interest
shall thereafter accrue on such unpaid interest from the Applicable Grace Date
until such interest is paid at a rate equal to three and one-half percent (3.5%)
in excess of the "prime rate" announced from time to time by the Bank.
Principal shall be payable in equal quarterly installments of
$125,000 each not later than each Extension Date with respect to each VR
Principal Target Date, commencing December 31, 1996. The entire unpaid principal
balance, plus all accrued and unpaid interest and other sums payable hereunder,
shall be due and payable not later than the Extension Date with respect to the
VR Principal Target Date of September 15, 2000. To the extent not prohibited by
law, if any principal payment due on any VR Principal Target Date shall remain
unpaid on the Applicable Grace Date, then interest shall thereafter accrue on
such unpaid principal payment until paid at a rate equal to three and one-half
percent (3.5%) in excess of the "prime rate" announced from time to time by the
Bank.
Payments of principal and interest shall be made in such coin
or currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debt by check mailed and addressed
to the registered holder hereof at the address shown in the registrar maintained
by the Company for such purpose, or, at the option of the holder hereof, in such
manner and at such other place in the United States of America the holder hereof
shall have designated to the Company in writing pursuant to the provisions of
Section 19 of the Agreement (as hereinafter defined).
Unless this Note has been executed by officers of the Company
thereunto duly authorized by manual signature, this Note shall not be entitled
to any benefit under the Agreement, or to be valid or obligatory for any
purpose.
This Note is the VR Note issued by the Company under that
certain Note Purchase Agreement (the "Agreement"), dated as of August 1, 1996,
between the Company and the original purchaser hereof.
Reference is hereby made to the Agreement for a statement of
the respective Events of Default, rights, limitations of rights, obligations,
duties and immunities thereunder of the Company and the Holders of this Note.
All terms used in this Note which are defined in the Agreement shall have the
meanings assigned to them in the Agreement.
This Note is subject to prepayment at the option of the
Company at any time on the terms and conditions and in the amounts as set forth
in the Agreement. In the event of prepayment of this Note in part only, a new
Note or Notes for the unredeemed portion hereof shall be issued in the name of
the holder hereof upon the cancellation hereof.
The Agreement permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the holders of the VR Notes under
the Agreement at any time by the Company with the consent of the holders of a
majority in aggregate principal amount of the VR Notes at the time outstanding.
The Agreement also contains provisions permitting the holders of specified
percentages in aggregate principal amount of the VR Notes at the time
outstanding, on behalf of the holders of all
-2-
the VR Notes, to waive compliance by the Company with certain provisions of the
Agreement and certain past defaults under the Agreement and their consequences.
Any such consent or waiver by the holder of this Note shall be conclusive and
binding upon such holder and upon all future holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Note.
No reference herein to the Agreement and no provision of this
Note or of the Agreement shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal and interest on this
Note at the times, place and rate, and in the coin or currency, herein
prescribed.
Prior to due presentment for registration of transfer, the
Company, and any agent of the Company, may treat the Person in whose name this
Note is registered as the owner hereof for all purposes, whether or not this
Note be overdue, and neither the Company nor any such agent shall be affected by
notice to the contrary.
This Note shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the Company has caused this Note to be
duly executed under its corporate seal by the manual signatures, of its officers
thereunto duly authorized all on the date first written above.
FPA CORPORATION
By:_____________________________________________
President
Attest:
- ---------------------
Secretary
(SEAL)
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