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EXHIBIT 4.10
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT dated as of December 31, 1996, between ALLIED
GROUP, INC., an Iowa corporation (the "Company"), and STATE STREET BANK AND
TRUST COMPANY, a Massachusetts trust company, solely in its capacity as trustee
under the Plan defined below and not individually (the "Trustee").
WITNESSETH;
WHEREAS, the Company has established and maintains The ALLIED Group Employee
Stock Ownership Plan (the "Plan"), for the benefit of all employees eligible to
participate therein;
WHEREAS, the Plan qualifies as an "employee stock ownership plan" within the
meaning of Section 4975(e)(7) of the Internal Revenue Code of 1986, as amended
(the "Code");
WHEREAS, the Company has established and maintains The ALLIED Group Employee
Stock Ownership Trust (the "Trust") and the Company has appointed the Trustee to
act as the trustee thereof pursuant to a trust agreement between the Company and
the Trustee, amended and restated as of April 16, 1991 (the "Trust Agreement");
WHEREAS, the Trust Agreement provides that the assets of the trust created
thereunder shall be invested in, among other things, shares of common stock of
the Company ("Common Stock");
WHEREAS, as directed by the ESOP Committee (the "Committee") under the terms
of the Trust Agreement, the Trustee is authorized to purchase shares of Common
Stock and the Company wishes to issue and sell such shares of Common Stock to
the Trustee, and no commission will be paid by the Trustee in connection with
the purchase of such shares of Common Stock; and
WHEREAS, the Trustee is required under the Trust Agreement to independently
determine (i.e., without direction from the Company) the purchase price that
shall be paid for any stock of the Company, and the Trustee has determined that
the average of the high and low sale prices of the shares of Common Stock as
reported on the Nasdaq National Market tier of The Nasdaq Stock Market on
December 31, 1996 is fair and equitable to the participants in the Plan and the
price to be paid for the Common Stock is not in excess of adequate
consideration.
NOW THEREFORE, in consideration of these premises and the mutual promises
contained herein, the parties hereto, intending to be legally bound, hereby
agree as follows:
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1. The Trustee hereby agrees to purchase (the "Purchase") with the funds
directed by the Committee, and the Company hereby agrees to issue and sell for
cash to the Trust 24,381 shares of Common Stock (the "Shares") for an aggregate
purchase price (the "Purchase Price") of $800,000.00 (or approximately $32.8125
per share). The Company will pay all stamp and other transfer taxes, if any,
which may be payable in respect of the issuance, sale and delivery of the Shares
and shall be entitled to any refund thereof.
2. The Purchase shall be consummated at or about 5:30 P.M. Central Standard
Time on December 31, 1996 (such date of delivery being hereinafter called the
"Delivery Date") at the offices of the Company, Des Moines, Iowa or as otherwise
agreed by the parties hereto. On the Delivery Date, the Trustee shall deliver to
the Company the Purchase Price in immediately available funds together with an
opinion of Xxxxxxx, Procter & Xxxx, LLP, counsel to the Trustee, in the form
attached as Annex A hereto, and the Company will deliver to the Trustee a
certificate or certificates representing the Shares which shall be registered in
the name of the Trustee, as trustee under the Plan, or in the name of its
nominee, together with an opinion of Xxxxxxxxx X. Xxxxxxx, Associate Corporate
Counsel of the Company, in the form attached as Annex B hereto.
3. The Company hereby represents, warrants and covenants to the Trustee as
follows:
a. the Company (i) is a corporation duly organized, validly existing
and in good standing under the laws of the State of Iowa and (ii)
has full corporate power and authority to execute and deliver this
Agreement, to carry out the transactions contemplated hereby, to
own, lease and operate its assets and properties, and to carry on
its business as now being conducted;
b. this Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights generally and to general principles of equity
(regardless of whether considered in a proceeding at law or in
equity);
c. the execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby
will not violate (i) the Company's Articles of Incorporation or
By-laws, each as amended or restated to date or, (ii) any provision
of any agreement, instrument, order, award, judgment or decree to
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which the Company is a party or by which it or any of its businesses
or properties are bound, or (iii) any statute, rule or regulation of
any federal, state or local government or governmental agency
applicable to the Company except in the case of subparagraphs (ii)
or (iii) of this Section 3(c) for any such violations which either
individually or in the aggregate do not have a material adverse
effect on the business or properties of the Company and its
subsidiaries taken as a whole;
d. except for any necessary applications with The Nasdaq Stock Market
with respect to any newly issued shares of Common Stock which may be
issued upon conversion of the Shares, no approval, authorization or
other action by, or filing (other than such filings of the Company
as may be necessary in connection with any registration for sale of
the common stock that may be issuable upon conversion of the Shares)
with, any government authority is required to be obtained or made by
the Company in connection with the execution, delivery and
performance by the Company of this Agreement and the consummation of
the transactions contemplated hereby;
e. the Shares have been duly and validly authorized and, when issued
and delivered to and paid for by the Trustee pursuant to this
Agreement, (i) will be validly issued, fully paid and nonassessable
and not liable to any further call or assessment, (ii) the
certificates representing the Shares comply with the applicable
requirements of Iowa law and (iii) the Trustee will acquire full
right, title and interest in and to the Shares free and clear of any
and all liens, claims, charges and encumbrances (other than rights
of participants in the Plan);
f. the Plan has been duly authorized and established, and the Trust
Agreement has been duly authorized, by all necessary corporate
action on the part of the Company; the Plan constitutes in all
material respects in form an employee stock ownership plan within
the meaning of Section 4975(e)(7) of the Code, Code Regulation
Section 54.4975-11 and Section 407(d)(6) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"); and each of the
Shares constitutes a qualifying employer security within the meaning
of Section 4975(e)(8) of the Code; provided, however, that in making
the representations contained in this Section 3(f) the Company has
relied upon the correctness of the Trustee's representations
contained in Section 4(f) of this Agreement;
g. the Company's Annual Report on Form 10-K for the year ended December
31, 1995 and quarterly reports on Form 10-Q for the quarterly
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periods ended March 31, June 30, and September 30, 1996, on the
respective dates filed with the Securities and Exchange Commission
("SEC"), conformed in all material respects to the requirements of
the Securities Exchange Act of 1934, as amended;
h. no person or other entity is entitled to any fees or commissions due
to the Company's actions in connection with the purchase and sale of
the Shares;
i. the Company shall use its best efforts during the term of the Trust
to cause the Plan to maintain its qualification as an employee stock
ownership plan within the meaning of Section 4975 of the Code; and
j. the Company has furnished and will continue to furnish to the
Trustee from time to time copies of all reports and financial
statements which the Company shall send or make available to its
public stockholders generally, all other written communications from
the Company to public shareholders generally and each regular or
periodic report, proxy statement, registration statement or
prospectus, if any, filed by the Company with the SEC; and
4. The Trustee represents and warrants to the Company as follows:
a. the Trustee (i) is a duly organized and validly existing
Massachusetts trust company in good standing and with full power and
authority to act as Trustee and exercise trust powers, including
without limitation, the trust powers provided in and contemplated by
the Trust Agreement, and (ii) has full corporate power and authority
to execute and deliver this Agreement and to carry out the
transactions contemplated hereby;
b. this Agreement has been duly authorized, executed and delivered by
the Trustee and constitutes a valid and binding obligation of the
Trustee, enforceable against the Trustee in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights generally and to general principles of equity
(regardless of whether considered in a proceeding at law or in
equity);
c. the execution, delivery and performance of this Agreement by the
Trustee and the consummation of the transactions contemplated hereby
will not violate (i) the Trustee's Corporate Charter or By-laws,
each as amended to date, or (ii) any provision of any agreement,
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instrument, order, award, judgment or decree to which the Trustee is
a party or by which it or any of its businesses or properties are
bound or (iii) any statute, rule or regulation of any federal, state
or local government or governmental agency applicable to the Trustee
except in the case of subparagraphs (ii) or (iii) of this Section
4(c) for any such violations which either individually or in the
aggregate do not have a material adverse effect on the business or
properties of the Trustee; provided, however, that in making the
representations contained in clause (iii) of this Section 4(c), the
Trustee has relied upon the correctness of the Company's
representations in Sections 3(g), as limited by the proviso therein,
and 3(i) of this Agreement and (2) the Committee's direction letter
dated December 30, 1996;
d. no approval, authorization or other action by, or filing with, any
governmental authority is required to be obtained or made by the
Trustee in connection with the execution, delivery and performance
by the Trustee of this Agreement and the consummation of the
transactions contemplated hereby;
e. the Trustee is acquiring the Shares on behalf of the Plan solely for
investment purposes and not with a view to, or for sale in
connection with, any distribution thereof; provided, however, that
the Shares will be allocated to the accounts of the participants in
the Plan pursuant to the terms of the Plan and distributions may be
made to participants and beneficiaries of the Plan in shares of
Common Stock, it being understood that the Shares are being sold to
the Trustee pursuant to an exemption from the registration
requirements of the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon this representation and
warranty;
f. the purchase of the Shares on the Delivery Date by the Trust for the
Purchase Price is for not greater than "adequate consideration" as
that phrase is defined in Section 3(18) of ERISA, and any proposed
regulations thereunder, and will not constitute a prohibited
transaction under Section 406 of ERISA or Section 4975(c) of the
Code by reason of the exemptions set forth in Section 408(e) of
ERISA and Section 4975(d) (13) of the Code; provided that in making
the representations contained in this Section 4(f), the Trustee has
relied upon the correctness of the Company's representations
contained in Sections 3(g), as limited by the proviso therein, and
3(i) of this Agreement;
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g. no person or other entity is entitled to any commissions due to the
Trustee's actions in connection with the purchase and sale of the
Shares.
5. The Trustee and Company agree that the per share purchase price for the
Common Stock will be the average of the high and low sale prices of the shares
of Common Stock on the Nasdaq National Market tier of The Nasdaq Stock Market on
December 31, 1996, the day prior to the stock purchase.
6. The Company has at its expense, prepared, filed, and obtained the
effectiveness of, and will use its best efforts to cause to remain effective, a
registration statement on an appropriate form, including a final prospectus (the
"Registration Statement"), under and complying with the Securities Act and the
rules and regulations thereunder, relating to the shares of the Company's Common
Stock held by the Trust. The Company shall also use its best efforts to register
or qualify such shares covered by the Registration Statement under the "blue
sky" or securities laws of such jurisdictions within the United States as the
Trustee may reasonably request; PROVIDED, HOWEVER, that the Company shall not be
required to consent to the general service of process for all purposes in any
jurisdiction where it is not then qualified to do business.
7. The Company agrees that it will use its best efforts to maintain the
qualification of the Plan as an employee stock ownership plan within the meaning
of Section 4975(e)(7) of the Code.
8. The representations, warranties and agreements in this Agreement shall
survive the date hereof and the Delivery Date.
9. This Agreement shall be governed by and construed in accordance with the
laws of the State of Iowa applicable to contracts to be executed, delivered and
performed in such state, to the extent not preempted by the laws of the United
States of America. The parties hereby irrevocably and unconditionally consent to
submit to the exclusive jurisdiction of the courts of the State of Iowa and the
United States of America located in Polk County, Iowa for any actions, suits or
proceedings arising out of or relating to this Agreement. This Agreement, the
Plan and Trust Agreement (including documents referred to therein or delivered
pursuant thereto) set forth the entire Agreement of the parties with respect to
the subject matter contained herein and supersede all prior oral and written
agreements, if any, between the parties with respect to such subject matter.
This Agreement shall bind and inure to the benefit of all successors to, and
assigns of, the parties hereto; provided, however, that the Trustee shall not
assign or otherwise transfer its interest in, or obligations under, this
Agreement without the written consent of the Company, except that the Trustee
may assign, without the Company's written consent, all its rights hereunder to
any institution exercising trust powers in connection with any such institution
assuming the duties of a trustee under the Trust Agreement. In the event that
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any provision of this Agreement shall be declared unenforceable by a court of
competent jurisdiction, such provision shall be stricken herefrom and the
remainder of this Agreement shall remain binding on the parties hereto. In the
event any such provision shall be so declared unenforceable due to its scope or
breadth, then it shall be narrowed to the scope or breadth permitted by law.
10. This Agreement may be executed in two counterparts, each of which shall
be deemed an original, but each of which taken together shall constitute one and
the same instrument.
11. This Agreement may not be modified with respect to the obligations of a
party hereto except by an instrument in writing signed by such party.
12. The terms and provisions of the Trust Agreement relating to the nature
of the responsibilities of the Trustee and the indemnification by the Company of
the Trustee are incorporated herein by reference and made applicable to this
Agreement.
13. All notices, requests, or other communications required or permitted to
be delivered hereunder shall be in writing, delivered to each party hereto at
its address specified in the Trust Agreement and shall become effective as
therein provided. Any party hereto may from time to time, by written notice
given as aforesaid, designate any other address to which notices, requests or
other communications addressed to it shall be sent.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Agreement as of the date first above written.
ALLIED GROUP, INC.
By /s/ Xxxxx X. Xxxxxxx
-----------------------------
Name Xxxxx X. Xxxxxxx
---------------------------
Title President (Financial)
--------------------------
STATE STREET BANK AND TRUST
COMPANY solely in its capacity
as Trustee under the Plan and
Trust Agreement referred to
herein and not individually
By /s/ Xxxxxxxx X. Xxxxxxxx
-----------------------------
Name Xxxxxxxx X. Xxxxxxxx
---------------------------
Title Vice President
--------------------------
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Annex A
December 31, 1996
ALLIED Group, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
Re: The ALLIED Group Employee Stock Ownership Trust
Ladies and Gentlemen:
We have acted as special counsel for State Street Bank and Trust
Company ("State Street"), as trustee (the "Trustee") of The ALLIED Group
Employee Stock Ownership Trust (the "Trust"), which forms a part of the ALLIED
Group Employee Stock Ownership Plan ("Plan"), and which is evidenced by the
Trust Agreement dated April 16, 1991 (the "ESOP Trust Agreement") between
Trustee and ALLIED Group, Inc. (the "Company") in connection with the purchase
by the Trustee of 24,381 shares of Common Stock of the Company, no par value
(the "Common Stock") pursuant to the Stock Purchase Agreement between the
Company and the Trustee dated as of December 31, 1996 (the "Stock Purchase
Agreement"). Capitalized terms used herein that are not defined herein have the
meanings set forth in the Stock Purchase Agreement.
In connection therewith, we have reviewed executed copies of: (i) the
Stock Purchase Agreement; (ii) the ESOP Trust Agreement; (iii) the corporate
charter and by-laws of State Street, both as amended to date; (iv) other
records, documents, and instruments relating to the powers and organization of
State Street and to State Street's acceptance of fiduciary duties, obligations
and trusts; and (v) such other certificates and documents as we have deemed
relevant or necessary as a basis for the opinion expressed below.
In our examination, we have assumed without any investigation (i) the
legal capacity of each natural person, (ii) the full power and authority of each
person other than State Street to execute, deliver and perform its obligations
under each document heretofore executed and delivered or hereafter to be
executed and delivered and to do each other act heretofore done or hereafter to
be done by such person, (iii) the due authorization, execution and delivery by
each person other than State Street of each document heretofore executed and
delivered by such person, (iv) the legality, validity, binding effect and
enforceability as to each person other than State Street of each document
heretofore executed and delivered or hereafter to be executed and delivered and
of each other act heretofore done or hereafter to be done by such person, (v)
the genuineness of each signature other than those of officers of State Street
and the completeness and authenticity of each document submitted to us as an
original, (vi) the conformity to the original of each document submitted to us
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as a copy, (vii) the authenticity of the original of each document submitted to
us as a copy and (viii) no amendment or modification hereafter of any provision
of any document. Insofar as our opinion relates to, or depends on, any matter of
fact, we have relied on representations as set forth in the Stock Purchase
Agreement, and upon written statements and certificates of officers of State
Street and of public officials.
We are members of the Bar of the Commonwealth of Massachusetts and,
accordingly, we express no opinion herein concerning any law other than the laws
of the Commonwealth of Massachusetts and the Federal laws of the United States
of America, to the extent specifically referred to herein.
As used in this opinion with respect to any matter, the qualifying
phrase "to the best of our knowledge" means that, without independent review or
verification, nothing has come to our attention in the course of our performing
legal services for the Trustee with respect to said matter.
We express no opinion as to matters governed by the Internal Revenue
Code of 1986 (the "Code") or the Employee Retirement Income Security Act of 1974
("ERISA"), both as amended, or federal or state securities laws.
Based on and subject to the foregoing, we are of the opinion that:
1. State Street, acting solely in its capacity as Trustee, has all
requisite power and authority to execute, deliver and perform its obligations
under the Stock Purchase Agreement.
2. The execution, delivery and performance of the Stock Purchase
Agreement by State Street, as Trustee, will not violate the charter or the
by-laws of State Street or, to the best of our knowledge, any order, judgment or
decree binding on State Street (individually or as trustee).
3. The Stock Purchase Agreement has been duly executed and delivered by
State Street, as Trustee.
4. No authorization, approval or consent of, and no filings or
registrations with, any governmental or regulatory authority or agency are
necessary for the execution, delivery or performance by State Street of the
Stock Purchase Agreement or for the validity or enforceability thereof, except
for filings with the Internal Revenue Service or the Department of Labor which
may from time to time be required by ERISA or the Code.
We express no opinion as to any matter other than as expressly set
forth above, and no other opinion is intended to be implied nor may be inferred
103
herefrom. The opinions expressed herein are given as of the date hereof and we
undertake no obligation hereby and disclaim any obligation to advise you of any
change after the date hereof pertaining to any matter referred to herein.
Neither this opinion nor any part hereof may be delivered to, used or relied
upon by any person or entity other than you without our prior written consent.
Very truly yours,
/s/ XXXXXXX, PROCTER & XXXX, LLP
---------------------------------
XXXXXXX, PROCTER & XXXX, LLP
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Annex B
December 31, 0000
Xxxxx Xxxxxx Bank and Trust Company
Legal Division, Q6N
000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
Ladies and Gentlemen:
I have acted as legal counsel of ALLIED Group, Inc., an Iowa corporation (the
"Company"), and in such capacity I have advised the Company in connection with
The ALLIED Group Employee Stock Ownership Trust (the "ESOP Trust"), a trust
established under that certain Trust Agreement amended and restated as of April
16, 1991 (the "Trust Agreement"), between the Company and State Street Bank and
Trust Company, as trustee (the "Trustee" or "State Street"), which implements
and forms a part of the ALLIED Group Employee Stock Ownership Plan (the "Plan"),
and in connection with the purchase by the Trustee of 24,381 shares of Common
Stock of the Company, no par value (the "Common Stock"), pursuant to the Stock
Purchase Agreement between the Company and the Trustee dated December 31, 1996
(the "Stock Purchase Agreement"). Capitalized terms used herein without
definition shall have the meanings ascribed to them in the Stock Purchase
Agreement.
In connection therewith, I have reviewed executed copies of (i) the Stock
Purchase Agreement, (ii) such other certificates and documents as I have deemed
relevant or necessary as a basis for the opinion expressed below.
In such connection, I have assumed the genuineness of all signatures, the
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, and the authenticity of the originals of such copies. I have relied, to
the extent I deem such reliance proper, upon representations made in the
documents and certificates or representations made in writing by duly authorized
representatives of the Company.
In rendering the opinions contained herein, I have assumed that (a) State
Street, as Trustee, has all requisite power and authority to execute, deliver,
and perform its obligations under the Stock Purchase Agreement; (b) that the
execution, delivery, and performance of the Stock Purchase Agreement by State
Street, as Trustee, will not violate the charter or bylaws of State Street; and
(c) that the Stock Purchase Agreement has been executed and delivered by State
Street as Trustee and constitutes the legal, valid, and binding obligation of
the ESOP Trust, enforceable in accordance with its terms, except as enforcement
may be limited by (i) bankruptcy, insolvency, reorganization, or similar laws
affecting the enforcement of creditors' rights generally, or (ii) equitable
principles of general applicability (regardless of whether such enforceability
is considered in a proceeding in equity or law).
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I express no opinion with respect to the laws of any jurisdiction other than the
State of Iowa and the United States of America. These opinions are expressed as
of the date hereof and are therefore subject to subsequent interpretive,
regulatory, legislative, and judicial developments.
Based on and subject to the foregoing, I am of the opinion that:
1. The Company is validly existing and in good standing under the laws of
the State of Iowa and has all requisite corporate power to execute,
deliver, and perform the Stock Purchase Agreement. The Company has taken
all necessary corporate action to authorize the execution, delivery, and
performance of the Stock Purchase Agreement.
2. The Stock Purchase Agreement has been duly executed and delivered by the
Company and is the legal, valid, and binding agreement of the Company,
enforceable against the Company in accordance with its respective terms,
except as the enforceability thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, or
similar laws affecting the enforcement of creditors' rights generally or
(ii) equitable principles of general applicability (regardless of
whether such enforceability is considered in a proceeding in equity or
at law).
3. The Shares have been validly authorized, and upon payment therefor as
provided in the Stock Purchase Agreement, will be validly issued and
outstanding and will constitute fully-paid and nonassessable shares of
Common Stock of the Company.
4. Upon payment by the Trust as provided in the Stock Purchase Agreement,
the Company will convey to the Trust good and valid title to the Shares
free and clear of any liens, claims, security interests, and
encumbrances, except for beneficial interests accruing to Plan
participants and their beneficiaries.
5. As of the date hereof, the Plan and the ESOP Trust in form meet in all
material respects (a) the applicable requirements of Section 401(a) of
the Internal Revenue Code of 1986, as amended (the "Code"), (b) the
requirements applicable to an employee stock ownership plan for purposes
of Section 4975(e)(7) of the Code and the regulations promulgated
thereunder, and (c) the requirements for exemption from tax under
Section 501(a) of the Code.
6. The shares of Common Stock to be purchased by the ESOP Trust constitute
"employer securities" within the meaning of Section 409(1) of the Code
and "qualifying employer securities" within the meaning of Section
407(d)(5) of ERISA.
7. The shares of Common Stock to be purchased by the ESOP Trust have voting
rights, and the Plan meets the voting rights requirements of Section
409(e)(2) of the Code with respect to such shares.
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In rendering the foregoing opinions and any other opinions expressed in this
letter, I have relied on the following assumptions:
a. Except as to matters expressly opined on herein, the Plan and ESOP
Trust have been, and will continue to be, administered and
operated at all times strictly in accordance with their terms and
with all requirements of applicable law including, but not limited
to, all of the requirements applicable to a qualified plan under
Section 401(a); the requirements applicable to an "employee stock
ownership plan" (within the meaning of Section 4975(e)(7)) under
Section 4975 and 409 of the Code; and the requirements applicable
to a tax-exempt trust under Section 501(a); and with the
provisions of ERISA and all regulations thereunder.
b. No fiduciary of the Plan has received any consideration of the
type described in Section 4975(c)(1)(F) of the Code and Section
406(b)(3) of ERISA in connection with the transactions described
herein.
c. The fiduciaries of the Plan and the ESOP Trust have acted
prudently and in good faith, and have given appropriate
consideration to those facts and circumstances that are relevant
to the transactions in accordance with the fiduciary requirements
of part 4 of Title I of ERISA.
These opinions are rendered solely to the Trustee in connection with the
transactions of the Trustee contemplated by the Stock Purchase Agreement. No
other person, firm, or corporation may rely upon these opinions for any purpose
without my prior written consent.
Yours very truly,
/s/ Xxxxxx X. Xxxxxx
--------------------------
Xxxxxx X. Xxxxxx
