NEW 1991 LOAN AGREEMENT
This LOAN AGREEMENT dated June 30, 1998 (this "Agreement"), by and
between The Xxxxxxx Works, a Connecticut corporation, (the "Company"), as lender
hereunder, and Citibank, N.A., a national banking association, as trustee (the
"Trustee") under a trust (the "Trust") which is maintained under a trust
agreement effective June 29, 1998 between the Company and the Trustee (the
"Trust Agreement").
W I T N E S S E T H:
WHEREAS, effective as of January 1, 1987, the Company and the predecessor
trustee established an employee stock ownership trust for hourly employees which
was known as the Xxxxxxx Works Savings Trust for Hourly Paid Employees (the
"Prior Hourly ESOP Trust") and effective as of January 1, 1985 an employee stock
ownership trust for salaried employees which was known as The Xxxxxxx Works
Savings and Retirement Trust (the "Prior Salaried ESOP Trust");
WHEREAS, the Prior Hourly ESOP Trust was formed to fund the Savings Plan
for Hourly Paid Employees of The Xxxxxxx Works (the "Hourly Plan"), which
contained both a profit sharing feature and employee stock ownership feature;
WHEREAS, the Prior Salaried ESOP Trust was formed to fund the Savings and
Retirement Plan for Salaried Employees of The Xxxxxxx Works (the "Salaried
Plan"), which contained both a profit sharing feature and employee stock
ownership feature;
WHEREAS, effective June 7, 1991, the Prior Hourly ESOP Trust borrowed
$26,499,973.50 (the "1991 Hourly ESOP Loan") from a subsidiary of the Company
pursuant to a term note dated June 7, 1991 (the "1991 Hourly Term Note"), the
proceeds of which were used to purchase common stock of the Company ("Company
Stock");
WHEREAS, effective June 7, 1991, the Prior Salaried ESOP Trust borrowed
$153,499,995.00 (the "1991 Salaried ESOP Loan") from a subsidiary of the Company
pursuant to a term note dated June 7, 1991 (the "1991 Salaried Term Note"), the
proceeds of which were used to purchase Company Stock;
WHEREAS, effective September 30, 1994, the Prior Hourly ESOP Trust was
merged into the Prior Salaried ESOP Trust, which was amended and restated as The
Xxxxxxx Works 401(k) Savings Plan Trust (the "Former Trust") and the Hourly Plan
was merged into the Salaried Plan, which was amended and restated as The Xxxxxxx
Works 401(k) Savings Plan, now amended and restated as the Xxxxxxx Account Value
Plan (the "Plan");
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WHEREAS, effective September 30, 1994, the 1991 Hourly ESOP Loan and
related promissory note, was assumed by the Former Trust;
WHEREAS, the 1991 Salaried ESOP Loan and the 1991 Hourly ESOP Loan
(together, the "Current 1991 ESOP Loans") provide for the Trust to make annual
principal and interest payments as of each January 31 through January 31, 2026;
WHEREAS, the Current 1991 ESOP Loans were based on certain assumptions of
growth in the employee work force;
WHEREAS, due to intervening economic factors and corporate restructuring,
these assumptions have proved to be inaccurate;
WHEREAS, because these assumptions have proved to be inaccurate, the
Company and the Trustee have decided to refinance and extend the maturity of the
Current 1991 ESOP Loans and the related promissory notes;
WHEREAS, the Company and the Trustee have exchanged various proposals, and
negotiated the terms and conditions of a refinancing of the maturity of the
Current 1991 ESOP Loans and the related promissory notes;
WHEREAS, the Company has engaged the Trustee under an agreement to make
the determination in its sole and independent discretion as to whether the terms
of the proposed refinancing and extension is in accordance with its fiduciary
duties under the Employee Retirement Income Security Act of 1974, as amended
("ERISA");
WHEREAS, the Trustee has made the determination to enter into this
Agreement and other documents related to the refinancing of the Current 1991
ESOP Loans and the related promissory notes, including the Implementation
Agreement dated as of the date hereof between the Company and the Trust (the
"Implementation Agreement"), the Amended and Restated 1991 Salaried ESOP Note
dated as of the date hereof (the "Replacement 1991 Salaried ESOP Note") and the
Amended and Restated 1991 Hourly ESOP Note dated as of the date hereof (the
"Replacement 1991 Hourly ESOP Note");
WHEREAS, it is intended that the loan made under this Agreement and
evidenced by the Replacement 1991 Salaried ESOP Note and the Replacement 1991
Hourly ESOP Note (collectively, the "Replacement ESOP Loan") be primarily for
the benefit of the Plan participants and beneficiaries and will constitute an
"exempt loan" within the meaning of section 4975(d)(3) of the Internal Revenue
Code of 1986, as amended (the "Code"), Treasury Regulation ss.54.4975-7(b),
Section 408(b)(3) of ERISA and Department of Labor Regulation ss.2550.408b-3;
WHEREAS, the Company has agreed to enter into the Implementation Agreement
in
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consideration for the Trustee entering into this Agreement and executing the
Replacement 1991 Salaried ESOP Note and the Replacement 1991 Hourly ESOP Note;
and
WHEREAS, Company and the Trust desire to amend and restate the Current
1991 ESOP Loans in their entirety as this Agreement to reflect the refinancing
of the Current 1991 ESOP Loans.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained and other good and valuable
consideration (the receipt, adequacy and sufficiency of which each party hereto
respectively acknowledges by its execution hereof), the parties hereto intending
legally to be bound do hereby agree to the implementation of their understanding
as follows:
Section 1. AMOUNT AND TERMS OF THE LOAN
1.1 The Loan. The Trust hereby consents and agrees to the continuation
of its indebtedness to the Company described in the foregoing recitals, and
acknowledges and agrees that as of the date hereof the Trust is indebted to the
Company in the principal amount of $180,122,846.12 (together, the "Loan"). The
outstanding aggregate principal amount of the Loan shall, beginning on June 30,
1998, bear interest at the rate of 6.09% per annum from (and including) the
date hereof to (but excluding) the date of repayment thereof. Interest on the
Loan shall be computed on the basis of a 365-day year and the number of days
elapsed. The Loan shall be due and payable on December 31, 2028. The Trust shall
make principal payments on the Loan as set forth on Annex I hereto. Interest on
the outstanding principal balance of the Loan shall be payable (i) monthly in
arrears on the last business day of each calendar month commencing July 31,
1998; and (ii) at maturity. All or any portion of the outstanding principal
balance of, or interest on, the Loan may be prepaid at any time without penalty.
Prepayments will be applied to reduce the amount of future scheduled payments,
and the Company shall determine which future scheduled payments to which the
prepayments are applied.
1.2 The Note. The obligation of the Trust to repay the Loan shall be
evidenced by promissory notes in the form of the Replacement 1991 Salaried ESOP
Note, attached as Exhibit A and the Replacement 1991 Hourly ESOP Note, attached
as Exhibit B, together (the "Notes"). The Company shall use its best efforts to
record the date and the amounts of any payments and prepayments of the principal
amount on Annex A to the Replacement 1991 Salaried ESOP Note and the Replacement
1991 Hourly ESOP Note. The insertions on said Annex A to the Replacement 1991
Salaried ESOP Note and the Replacement 1991 Hourly ESOP Note shall be
presumptive evidence of the outstanding principal amount of the Loan. Failure to
make such insertions shall not affect the Company's rights or the Trust's
obligations hereunder and under the Replacement 1991 Salaried ESOP Note and the
Replacement 1991 Hourly ESOP Note.
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1.3 Payments Free of Taxes. All payments made by the Trust in
connection with this Agreement shall be made free and clear of, and without
reduction by reason of, any taxes.
1.4 Immediately Available Dollars. All payments hereunder shall be in
U.S. Dollars and in immediately available funds.
Section 2. CONDITIONS OF LOAN CONTINUATION
2.1 Company Conditions. The obligation of the Company to continue the
Loan as set forth hereunder shall be subject to the conditions that (i) the
Company shall have received, in form and substance satisfactory to the Company,
the Replacement 1991 Salaried ESOP Note and the Replacement 1991 Hourly ESOP
Note (collectively with this Agreement, the "Loan Document"), duly executed by
the Trustee on behalf of the Trust, and such other documents as the Company may
reasonably request in order to effect fully the purposes of this Agreement, and
(ii) no Event of Default set forth in Section 4 herein shall have occurred and
be continuing.
2.2 Trust Conditions. The agreement of the Trust to the continuation of
its indebtedness to the Company as provided hereunder shall be subject to the
condition that the Trust shall have received from the Company the original of
the Current 1991 ESOP Notes duly marked by the Company, in form and substance
satisfactory to the Trustee, to evidence its cancellation, or such other
evidence of cancellation of Notes that the Trustee deems satisfactory.
Section 3. TRUST'S AFFIRMATIVE COVENANT
The Trustee covenants and agrees that, until payment in full of the
Note, the Trust shall comply at all times with the provisions of Treasury
Regulations Section 54.4975-7 with respect to "exempt loans" to an "employee
stock ownership plan."
Section 4. EVENTS OF DEFAULT
4.1 Failure to Make Required Payments. Failure of the Trustee to pay
any installment of principal or interest on the Notes on or prior to the third
business day after such payment was due shall constitute an event of default.
4.2 Breach of Covenant. Failure of the Trustee to perform any material
term or condition under this Loan shall constitute an event of default.
Section 5. MISCELLANEOUS
5.1 Special ERISA Provisions.
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(a) Other than as specifically set forth in this Section 5.1, no
person or entity shall have any recourse against the Plan or Trust with
respect to any obligation of the Trust hereunder. No person or entity entitled
to payment hereunder shall have any recourse, for any payments due on the Notes,
against any Plan assets other than the following categories of assets:
(i) contributions (other than securities of the Company (the
"Securities")) made to the Trust from time to time pursuant to the Plan to meet
the obligations of the Trust,
(ii) dividends paid on the shares purchased by the Plan from the
proceeds of a loan which was repaid with the proceeds of the Notes, provided
that such dividends and earnings thereon shall not constitute more than 98.42%
of any payment of principal, interest or principal and interest under the Notes
except to the extent permitted under Code Section 404(k), and provided further
that dividends paid on allocated shares may be used for the payment of the
obligations to the extent permitted under section 404(k) of the Code,
(iii) earnings attributable to the investment of the contributions and
dividends referred to in the preceding clauses (i) and (ii),
(iv) proceeds of a loan entered into to repay the loan evidenced by
the Notes, and
(v) to the extent permitted by law, proceeds from the sale
of collateral with respect to the Notes.
The foregoing limitations shall not affect the Company's rights, which are
unconditional and absolute, to declare the indebtedness evidenced by the Notes
to be immediately due and payable upon the occurrence of any default; provided,
however, that the extent of the Company's ability to declare such an
acceleration and to transfer assets of the Trust in satisfaction of any default
shall be subject to the applicable limits of Treasury Regulation section
54.4975-7(b)(6). Notwithstanding any provision to the contrary, the proceeds
from the sale of shares attributable to the Notes cannot be used to pay the
obligations hereunder unless (1) the Trustee receives a legal opinion, from
legal counsel satisfactory to it, that such payment does not violate any
provision of the Code or ERISA, and (2) the Company commits to the contributions
of amounts to the Trust which have a fair market value equal to or exceeding the
value of amounts which would have been allocated to participants' accounts had
the 1991 Salaried Term Note and the 1991 Hourly Term Note not been refinanced.
(b) The Trustee may rely on the determination and directions of the
Plan Administrator (as defined in and appointed pursuant to the Plan) with
respect to any payments that are due from time to time hereunder, and the
Trustee shall have no liability attributable to its reliance thereon.
-5-
5.2 Modification. This Agreement may not be amended, waived or modified
in any manner without the written consent of the Company and the Trustee.
5.3 Notices. Except as otherwise expressly provided, any notice herein
required or permitted to be given shall be in writing and may be personally
served or sent by United States mail, and shall be deemed to have been given
when personally served or five days after being deposited in the United States
mail, registered, with postage prepaid and properly addressed. For the purposes
hereof, the addresses of the parties hereto (until notice of a change thereof is
served as provided in this Section 5.3) shall be as follows:
If to the Trustee:
Citibank, N.A.
000 Xxxx Xxxxxx
15th Floor, Zone 9
New York, New York 1005
Attention: Xxxxxxxx Xxxxxx-Xxxxxx
If to the Company:
The Xxxxxxx Works
00 Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Mr. Xxxxx Xxxxxxx
4.4 Severability. In case any provision hereof shall be invalid,
illegal or unenforceable, such provision shall be severable from the remainder
of this Agreement and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
4.5 Applicable Law. Except to the extent superseded by laws of the
United States, this Agreement shall be governed by and interpreted under the
internal laws of the State of New York.
4.6 Assignability. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns, and shall inure to the
benefit of the parties hereto and the successors and assigns of the Company.
Without the prior written consent of the Company, which may be granted or
withheld in the Company's sole discretion, the Trustee may not assign any of its
rights or delegate any of its obligations hereunder.
4.7 Counterparts. This Agreement may be executed in two counterparts,
each of which shall be deemed an original but both of which together shall
constitute one and the
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same instrument.
4.8 Section Headings. The various headings used in this Agreement are
are inserted for convenience only and shall not affect the meaning or interpre-
tation of this Agreement or any provision hereof
4.9 Further Assurances. At any time or from time to time upon the
request of the Company, the Trustee shall execute and deliver such further
documents and do such other acts and things as the Company may reasonably
request in order to effect fully the purposes of this Agreement and to provide
for the payment of all borrowings hereunder and interest thereon in accordance
with the terms of this Agreement.
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Witness the due execution hereof as of the date first above written.
CITIBANK, N.A., solely in its
capacity as Trustee of the trust
agreement under the Xxxxxxx
Account Value Plan
By: Xxxxx Xxx
Its: Vice-President
THE XXXXXXX WORKS, in its capacity
as lender hereunder
By: Xxxxx X. Xxxxxxx
Its: Treasurer
-8-
AMENDED AND RESTATED 1991 HOURLY ESOP NOTE
June 30, 1998
New York, New York
FOR VALUE RECEIVED, the undersigned promises to pay to the order of The
Xxxxxxx Corporation ("the Company") the principal amount of $26,518,403.53 (the
"Principal Amount Outstanding") with respect to the borrowings originally made
under a promissory note dated as of June 7, 1991, and again amended and restated
as of the date hereof, pursuant to a loan agreement dated the date hereof be-
tween the undersigned, as Borrower, and the Company, as lender (the "New 1991
Loan Agreement"), payable as hereinafter set forth and the New 1991 Loan Agree-
ment. The undersigned promises to pay interest on the Principal Amount Outstand-
ing from time to time from the date hereof until the date of payment in full,
payable as hereinafter set forth.
Terms defined in the New 1991 Loan Agreement and not otherwise defined
herein are used herein with the meanings defined for those terms in the New 1991
Loan Agreement. This is the Replacement 1991 Hourly ESOP Note referred to in the
New 1991 Loan Agreement, and any holder hereof is entitled to all of the rights,
remedies, benefits and privileges provided for in the New 1991 Loan Agreement.
The New 1991 Loan Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
upon the terms and conditions therein specified.
The Principal Amount Outstanding evidenced by this Note shall be
payable as provided in the New 1991 Loan Agreement.
Interest shall be payable on the Principal Amount Outstanding from the
date hereof until payment in full and shall accrue and be payable at the rate
and on the dates set forth in the New 1991 Loan Agreement both before and after
default and before and after maturity and judgment. Accrued interest as of the
date hereof shall be payable in the amount and on the date set forth in the New
1991 Loan Agreement.
Anything contained in this Note to the contrary notwithstanding, the
sole and only recourse of the Company for the payment of the obligations of
undersigned hereunder shall be derived solely from (a) contributions (other than
securities of the Company (the "Securities")) made to the undersigned from time
to time pursuant to the Xxxxxxx Account Value Plan (the "Plan") to meet the
obligations of undersigned hereunder, (b) dividends paid on the shares purchased
by the Plan from the proceeds of a loan which was repaid with the proceeds of
this Note, provided that such dividends and earnings thereon shall not con-
stitute more than 98.42% of any payment of principal, interest or principal and
interest under this Note except to the extent permitted under section 404(k) of
the Internal Revenue Code of 1986, as amended (the
-1-
"Code") and provided further that dividends paid on allocated shares may be used
for the payment of the obligations to the extent permitted under Code section
404(k), (c) earnings attributable to the investment of the contributions and
dividends referred to in the preceding clauses (a) and (b), (d) proceeds of a
loan entered into to repay the loan evidenced by this Note, and (e) to the
extent permitted by law, proceeds from the sale of shares attributable to this
Note. The foregoing limitations shall not affect the Company's rights, which are
unconditional and absolute, to declare the indebtedness evidenced by this Note
to be immediately due and payable upon the occurrence of any default; provided,
however, that the extent of the Company's ability to declare such an
acceleration and to transfer assets of the undersigned in satisfaction of any
default shall be subject to the applicable limits of Treasury Regulation section
54.4975-7(b)(6). Notwithstanding any provision to the contrary, the proceeds
from the sale of shares attributable to this Note cannot be used to pay the
obligations hereunder unless (1) the Trustee receives a legal opinion, from
legal counsel satisfactory to it, that such payment does not violate any
provision of the Code or ERISA, and (2) the Company commits to the contributions
of amounts to the Trust which have a fair market value equal to or exceeding the
value of amounts which would have been allocated to participants' accounts had
the 1991 Hourly ESOP Note not been refinanced.
In all respects, this Note shall be subject to and construed in a
manner consistent with the applicable requirements for an "exempt loan" (within
the meaning of section 4975(d)(3) of the Code and Treasury Regulation section
54.4975-7(b)(1)(iii)).
The amount of each payment hereunder shall be made to the Company at
the Company's offices located at 00 Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxx
(Attn: Vice President, Corporate Finance) or at such other address as the
Company may specify from time to time, in lawful money of the United States of
America and in immediately available funds not later than 11:00 a.m., Eastern
time, on the day of payment. All payments received after 11:00 a.m., Eastern
time, shall be deemed received on the next succeeding business day. The Company
shall use its best efforts to keep a record of payments of principal with
respect to this Note on Annex A hereto, and such record shall be presumptive
evidence of the Principal Amount Outstanding under this Note. Failure to make
such record shall not affect the Company's rights hereunder and under the New
1991 Loan Agreement.
The undersigned hereby waives presentment, demand for payment,
dishonor, notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable laws.
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This Note shall be delivered to and accepted by the Company in the
State of New York, and shall be governed by and interpreted under the internal
laws thereof.
CITIBANK, N.A., solely in its
capacity as Trustee of the trust
agreement under the Xxxxxxx
Account Value Plan
By: Xxxxxxxx Xxxxxx-Xxxxxx
Its: Vice President
-3-
ANNEX A
LOANS AND PAYMENTS OF PRINCIPAL
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Amount Amount of Principal
of Principal Paid Amount Notation
Date Loan or Prepaid Outstanding Made By
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AMENDED AND RESTATED 1991 SALARIED ESOP NOTE
June 30, 0000
Xxx Xxxx, Xxx Xxxx
FOR VALUE RECEIVED, the undersigned promises to pay to the order of The
Xxxxxxx Corporation ("the Company") the principal amount of $153,604,442.59 (the
"Principal Amount Outstanding") with respect to the borrowings originally made
under a promissory note dated as of June 7, 1991, and again amended and
restated as of the date hereof, pursuant to a loan agreement dated the date
hereof between the undersigned, as Borrower, and the Company, as lender (the
"New 1991 Loan Agreement"), payable as hereinafter set forth and the New 1991
Loan Agreement. The undersigned promises to pay interest on the Principal Amount
Outstanding from time to time from the date hereof until the date of payment in
full, payable as hereinafter set forth.
Terms defined in the New 1991 Loan Agreement and not otherwise defined
herein are used herein with the meanings defined for those terms in the New 1991
Loan Agreement. This is the Replacement 1991 Salaried ESOP Note referred to in
the New 1991 Loan Agreement, and any holder hereof is entitled to all of the
rights, remedies, benefits and privileges provided for in the New 1991 Loan
Agreement. The New 1991 Loan Agreement, among other things, contains provisions
for acceleration of the maturity hereof upon the happening of certain stated
events upon the terms and conditions therein specified.
The Principal Amount Outstanding evidenced by this Note shall be
payable as provided in the New 1991 Loan Agreement.
Interest shall be payable on the Principal Amount Outstanding from the
date hereof until payment in full and shall accrue and be payable at the rate
and on the dates set forth in the New 1991 Loan Agreement both before and after
default and before and after maturity and judgment. Accrued interest as of the
date hereof shall be payable in the amount and on the date set forth in the New
1991 Loan Agreement.
Anything contained in this Note to the contrary notwithstanding, the
sole and only recourse of the Company for the payment of the obligations of
undersigned hereunder shall be derived solely from (a) contributions (other than
securities of the Company (the "Securities")) made to the undersigned from time
to time pursuant to the Xxxxxxx Account Value Plan (the "Plan") to meet the
obligations of undersigned hereunder, (b) dividends paid on the shares purchased
by the Plan from the proceeds of a loan which was repaid with the proceeds of
this Note, provided that such dividends and earnings thereon shall not
constitute more than 98.42% of any payment of principal, interest or principal
and interest under this Note except to the extent permitted under section 404(k)
of the Internal Revenue Code of 1986, as amended (the
-1-
"Code") and provided further that dividends paid on allocated shares may be
used for the payment of the obligations to the extent permitted under Code
section 404(k), (c) earnings attributable to the investment of the contributions
and dividends referred to in the preceding clauses (a) and (b), (d) proceeds of
a loan entered into to repay the loan evidenced by this Note, and (e) to the
extent permitted by law, proceeds from the sale of shares attributable to this
Note. The foregoing limitations shall not affect the Company's rights, which are
unconditional and absolute, to declare the indebtedness evidenced by this Note
to be immediately due and payable upon the occurrence of any default; provided,
however, that the extent of the Company's ability to declare such an
acceleration and to transfer assets of the undersigned in satisfaction of any
default shall be subject to the applicable limits of Treasury Regulation section
54.4975-7(b)(6). Notwithstanding any provision to the contrary, the proceeds
from the sale of shares attributable to this Note cannot be used to pay the
obligations hereunder unless (1) the Trustee receives a legal opinion, from
legal counsel satisfactory to it, that such payment does not violate any
provision of the Code or ERISA, and (2) the Company commits to the contributions
of amounts to the Trust which have a fair market value equal to or exceeding the
value of amounts which would have been allocated to participants' accounts had
the 1991 Salaried ESOP Note not been refinanced.
In all respects, this Note shall be subject to and construed in a
manner consistent with the applicable requirements for an "exempt loan" (within
the meaning of section 4975(d)(3) of the Code and Treasury Regulation section
54.4975-7(b)(1)(iii)).
The amount of each payment hereunder shall be made to the Company at
the Company's offices located at 00 Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxx
(Attn: Vice President, Corporate Finance) or at such other address as the
Company may specify from time to time, in lawful money of the United States of
America and in immediately available funds not later than 11:00 a.m., Eastern
time, on the day of payment. All payments received after 11:00 a.m., Eastern
time, shall be deemed received on the next succeeding business day. The Company
shall use its best efforts to keep a record of payments of principal with
respect to this Note on Annex A hereto, and such record shall be presumptive
evidence of the Principal Amount Outstanding under this Note. Failure to make
such record shall not affect the Company's rights hereunder and under the New
1991 Loan Agreement.
The undersigned hereby waives presentment, demand for payment,
dishonor, notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable laws.
-2-
This Note shall be delivered to and accepted by the Company in the
State of New York, and shall be governed by and interpreted under the internal
laws thereof.
CITIBANK, N.A., solely in its
capacity as Trustee of the trust
agreement under the Xxxxxxx
Account Value Plan
By: Xxxxxxxx Xxxxxx-Xxxxxx
Its: Vice President
-3-
ANNEX A
LOANS AND PAYMENTS OF PRINCIPAL
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Amount Amount of Principal
of Principal Paid Amount Notation
Date Loan or Prepaid Outstanding Made By
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A Partnership Including Boston
Professional Corporations Chicago
000 Xxxx Xxxxxx Xxxxxx Xxx Xxxxxxx
Xxxxxxx, XX 00000-0000 Miami
000-000-0000 Newport Beach
Facsimile 000-000-0000 New York
St. Petersburg (Russia)
Vilnius (Lithuania)
Washington, D.C.
Xxxxxxxxx X. Xxxxx, P.C
Attorney at Law
xxxxxx@xxx.xxx
XxXXXXXXX, WILL & XXXXX 000-000-0000
June 30, 1998
The Xxxxxxx Works
00 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Re: New 1991 Loan Agreement
Ladies and Gentlemen:
We are special counsel to Citibank, N.A., a national banking
association (the "Bank"). The Bank is the trustee (the "ESOP Trustee") of that
certain Xxxxxxx Account Value Plan Trust (the "ESOP Trust") dated as of June 29,
1998 between the Bank and The Xxxxxxx Works (the "Company"), a Connecticut
corporation, which forms a part of the Xxxxxxx Account Value Plan (the "ESOP").
The Bank, not in its individual capacity but solely as the ESOP Trustee under
the ESOP Trust, and the Company have entered into an Implementation Agreement
and New 1991 Loan Agreement, each dated as of June 30, 1998 (collectively, the
"Agreements"), pursuant to which the Company will loan the ESOP Trust an
aggregate principal amount of $180,122,846.12, which to refinance existing loans
between the ESOP Trust and the Company (the "Refinancing Transaction"). In
exchange the ESOP Trustee will issue to the Company the Amended and Restated
1991 Salaried ESOP Note, in the principal amount of $153,604,442.59 and the
Amended and Restated 1991 Hourly ESOP Note, in the principal amount of
$26,518,403.53 (collectively, the "Notes") This opinion is being rendered to you
pursuant to an agreement of the parties. Capitalized terms used herein that are
not defined herein have the meanings set forth in the Agreements.
In connection with the Refinancing Transaction, we have examined copies
of the Articles of Association and By-Laws of the Bank certified to us on June
17, 1998 as in effect, a certificate from the Bank dated June 26, 1998 relating
to its power to execute the ESOP Trust, a certificate from the Office of the
Comptroller of the Currency dated May 27, 1998 establishing the Bank as a
validly existing national banking association, notice from the Office of the
Comptroller of the Currency dated June 23, 1998 that the Bank possesses the
required permit to act as a fiduciary, the ESOP Trust, the Agreements, the Notes
and such other certificates and documents as we have deemed relevant or
necessary as a basis for the opinions set forth below. In such connection, we
have assumed the genuineness of all signatures, the
Page 2
authenticity of all documents submitted to me as originals, the conformity to
original documents of all documents submitted to me as photostatic or certified
copies, the authenticity of the originals of such copies, and the conformity,
other than as to the dollar amounts, of all executed Agreements to the examined
copies of the Agreements. We have relied, to the extent we deem such reliance
proper, upon representations made in the Agreements, the ESOP Trust, and
certificates or representations made in writing by duly authorized
representatives of the ESOP trustee and the Company, copies of which, we
understand, have been delivered to you.
Based on and subject to the foregoing, we are of the opinion that:
1. The Bank is a national banking association, duly organized and
validly existing under the laws of the United States of America. The Bank has
full corporate power and legal authority to execute and deliver the ESOP Trust
and to undertake its duties thereunder. The ESOP Trustee has all requisite trust
power and authority under the ESOP Trust to execute, deliver and undertake its
obligations under the Agreements and the Notes.
2. The ESOP Trust has been duly executed and delivered by the Bank in
its individual capacity, and the Agreements have been duly executed by the ESOP
Trustee in its trustee capacity.
3. The ESOP Trust constitutes the legal, valid and binding obligation
of the Bank solely as an exercise of its trust powers, and is enforceable
against the Bank as trustee in accordance with its terms, except as
enforceability thereof may be limited by (a) the availability of equitable
remedies, including, without limitation, specific enforcement and injunctive
relief, which remedies may be subject to the discretion of the court before
which any proceedings therefor may be brought, and (b) applicable bankruptcy,
administration, reorganization, arrangement, insolvency, fraudulent conveyance,
moratorium or similar laws affecting the enforcement of creditors' rights
generally as at the time in effect.
4. The ESOP Trust is a trust duly constituted and validly existing
under the laws of the State of New York. The ESOP Trust acting through the ESOP
Trustee has the requisite trust power and authority to own its properties and
assets. The ESOP Trustee has all requisite trust power and authority to execute,
deliver and perform all of the obligations of the ESOP Trust under the
Agreements and the Notes and to bind the ESOP Trust in connection therewith.
5. Each of the Agreements and the Notes is a legal, valid and binding
obligation of the ESOP Trust and is enforceable against the ESOP Trust in
accordance with its terms, except as the enforceability thereof may be limited
by (a) the availability of equitable remedies, including, without limitation,
specific enforcement and injunctive relief, which remedies may be subject to the
discretion of the court before which any proceedings therefor may be brought,
and (b) applicable bankruptcy, administration, reorganization, arrangement,
insolvency, fraudulent conveyance, moratorium or similar laws affecting the
enforcement of creditors' rights generally as at the time in effect.
Page 3
No opinion is expressed herein with respect to matters arising under
the Employee Retirement Income Security Act of 1974, as amended.
We express no opinion as to the law of any jurisdiction other than the
law of the State of New York and the federal law of the United States of
America.
This opinion is rendered solely to and for the benefit of The Xxxxxxx
Works in connection with the refinancing transaction, and may not be relied upon
by any other person or for any other purposes. This opinion is given as of the
date hereof, and subsequent legislative, judicial, regulatory, administrative or
other developments may occur after the date hereof, which may cause our opinion
to change.
XxXxxxxxx, Will & Xxxxx
---------------------------
XxXXXXXXX, WILL & XXXXX
