EXHIBIT 3
STOCK PURCHASE AND SALE AGREEMENT
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Stock Purchase and Sale Agreement (the "Agreement") dated as of December
11, 1996 between AMERICAN INTERNATIONAL GROUP, INC., a Delaware corporation and
including its wholly-owned subsidiaries ("AIG"), and AON CORPORATION, a Delaware
corporation ("Aon").
WHEREAS, AIG desires to sell to Aon or a designated wholly owned subsidiary
thereof (the "Purchaser"), and the Purchaser desires to purchase, an aggregate
of 4,846,232 shares (the "Shares") (including 95,024 shares to be issued as a
regular quarterly dividend on December 15, 1996) of 8% Series B Cumulative
Convertible Preferred Stock, par value $1.00 per share, of A&A (the "Series B
Stock") for the consideration and upon the terms and subject to the conditions
set forth herein.
NOW, THEREFORE, in consideration of the premises and of the respective
covenants, agreements and conditions contained herein, each of the parties agree
as follows:
1. Closing.
a. Time and Place of the Closing. The Closing (the "Closing") shall take
place at the offices of Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx on the date which is two Business Days after Aon or any affiliate of Aon
first acquires on or after the date hereof in any manner any equity interest in
Alexander & Alexander Services Inc. ("A&A"), or any right or security
convertible or exercisable into any such interest, or any right to acquire any
thereof, by purchase or tender offer or otherwise (an "Aon Equity Acquisition").
Aon shall give AIG two business days prior written notice of the date the
Closing is scheduled to occur. The "Closing Date" shall be the date the Closing
occurs.
b. Transactions at the Closing. At the Closing, subject to the terms and
conditions of this Agreement, AIG shall sell to Aon, and Aon shall purchase from
AIG, the Shares. At the Closing, AIG shall deliver to Aon a certificate or
certificates representing the Shares, with stock powers duly endorsed in blank
for transfer, against receipt of the Purchase Price with respect thereto by wire
transfer of immediately available funds to an account or accounts previously
designated by AIG.
c. Purchase Price. The Purchase Price for the Shares shall be
$317,500,000 in cash plus a cash amount equal to all accrued and unpaid
dividends on the Series B Stock to and including the Closing
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Date (as well as cash equal to the liquidation preference of any additional
shares of Series B Stock issued as a pay-in-kind dividend on the Series B Stock
after December 15, 1996, if any, which shares shall be included in the
definition of "Shares" herein). In the event that the Closing Date occurs after
the record date for any dividend payment date after December 15, 1996 and before
the dividend payment date, AIG will assign to Aon its right to receive any
dividend so declared by A&A.
2. Conditions to the Closing.
a. Conditions Precedent to the Obligations of Aon. The obligations of Aon
to be discharged under this Agreement on the Closing Date are subject to
satisfaction of the following conditions at the Closing (unless expressly waived
in writing by Aon at or prior to the Closing);
(i) Compliance by AIG. All of the terms, covenants and conditions of
this Agreement to be complied with and performed by AIG at or prior to the
Closing shall have been complied with and performed by AIG in all material
respects, and the representations and warranties made by AIG in this Agreement
shall be true and correct in all material respects at and as of the Closing,
with the same force and effect as though such representations and warranties had
been made at and as of the Closing.
(ii) No Injunction. No statute, rule, regulation, executive order,
decree, temporary restraining order, preliminary or permanent injunction or
other order issued by any court of competent jurisdiction or other governmental
entity preventing the consummation of the purchase of the Shares shall be in
effect.
b. Conditions Precedent to Obligations of AIG. The obligations of AIG to
be discharged under this agreement on the Closing Date are subject to
satisfaction of the following conditions at the Closing (unless waived by AIG at
or prior to the Closing):
(i) Compliance by Aon. All of the terms, covenants and conditions of
this Agreement to be complied with and performed by Aon at or prior to the
Closing shall have been complied with and performed by it in all material
respects, and the representations and warranties made by Aon in this Agreement
shall be true and correct in all material respects at and as of the Closing,
with the same force and effect as though such representations and warranties had
been made at and as of the Closing.
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(ii) No Injunction. No statute, rule, regulation, executive order,
decree, temporary restraining order, preliminary or permanent injunction or
other order issued by any court of competent jurisdiction or other governmental
entity preventing the consummation of the purchase of the Shares shall be in
effect.
3. Representations and Warranties of Aon.
Aon hereby represents and warrants to AIG:
a. Organization, Good Standing, Power, Authority, Etc. Aon is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Aon has the full corporate power and authority to
execute and deliver this Agreement and to perform its obligations under this
Agreement. Aon has taken all action required by law, its Certificate of
Incorporation, its by-laws or otherwise required to be taken by it to authorize
the execution, delivery and performance by it of this Agreement. This Agreement
is a valid and binding obligation of Aon, enforceable in accordance with its
terms, except that such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights and general principles of equity.
b. No Conflicts. Neither the execution and delivery of this Agreement nor
the consummation by Aon of the transactions contemplated hereby will (i)
conflict with, or result in a breach of, any provision of its charter or by-
laws, (ii) violate any statute or law or any judgment, order, writ, injunction,
decree, rule or regulation applicable to Aon and/or any of its subsidiaries or
(iii) cause a breach of any material contract of Aon, which breach would prevent
consummation of the transactions contemplated hereby.
c. No Consents. No consent, authorization or approval of, or declaration,
filing or registration with, or exemption by, any governmental or regulatory
authority is required in connection with the execution and delivery of, and the
performance by Aon of its obligations under, this Agreement or the consummation
by Aon of the transactions to be performed by it as contemplated hereby, other
than the approvals of the Department of Insurance of the States of Delaware, New
York, and Vermont with respect to the transactions contemplated hereby and
filings under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act ("HSR") and the
Competition Act (Canada).
d. Investment Intent, Etc. Aon (i) has such knowledge, sophistication and
experience in business and financial matters
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that it is capable of evaluating the merits and risks of an investment in the
Shares, (ii) can bear the economic risk of an investment in the Shares and can
afford a complete loss of such investment, and (iii) is purchasing the Shares
for investment and not with a view to, or for a sale in connection with, any
public distribution in violation of the Securities Act of 1933 (the "Act").
4. Representations and Warranties of AIG.
AIG hereby represents and warrants to Aon:
a. Organization, Good Standing, Power, Authority, Etc. AIG is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. AIG has the full power and authority to execute and
deliver this Agreement. AIG has taken all action required by law, its charter,
its by-laws or otherwise required to be taken by it to authorize the execution
and delivery of this Agreement and the consummation of the transactions
contemplated to be performed by it hereby. This Agreement is a valid and binding
agreement of AIG, enforceable in accordance with terms, except that such
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors' rights
and general principles of equity.
b. No Conflicts. Neither the execution and delivery of this Agreement nor
the consummation by AIG of the transactions contemplated hereby will (i)
conflict with, or result in a breach of, any provision of its charter or by-
laws, (ii) violate any statute or law or any judgment, order, writ, injunction,
decree, rule or regulation applicable to AIG and/or any of its subsidiaries or
(iii) cause a breach of any material contract of AIG, which breach would prevent
consummation of the transactions contemplated hereby.
c. No Consents. No consent, authorization or approval of, or declaration,
filing or registration with, or exemption by, any governmental or regulatory
authority is required in connection with the execution and delivery of, and the
performance by AIG of its obligations under, this Agreement or the consummation
by AIG of the transactions to be performed by it as contemplated hereby, other
than such filings under HSR as may be required.
d. Title to Shares. AIG, indirectly through its wholly owned
subsidiaries, owns the Shares. Each wholly owned subsidiary of AIG which owns
Shares has legal and valid title to such Shares, free and clear of all
restrictions on transfer (other than those
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imposed by the Act, securities or Blue Sky laws of certain jurisdictions, the
A&A charter and restrictions under Section 6 of the Stock Purchase Agreement
(the "Stock Purchase Agreement") by and between AIG and A&A dated as of June 6,
1994), liens, encumbrances, security interests and claims whatsoever.
5. Covenants.
a. Pre-Closing Activities. From and after the date of this Agreement
until the Closing, each of AIG and Aon shall act with good faith towards, and
shall use its reasonable best efforts to consummate, the transactions
contemplated by this Agreement.
b. Publicity. Each of AIG and Aon will consult with each other before
issuing any press release or otherwise making any public statements with respect
to the transactions contemplated hereby and shall not issue any such press
release or make any such public statement prior to such consultation, except as
may be required by law.
c. Dividends. Aon will not waive or modify its rights under the Merger
Agreement that require A&A to pay dividends on the Series B Stock in cash after
December 15, 1996.
d. Series B Stock. All the rights and preferences of the Series B Stock
shall remain in full force and effect until the Closing; provided, however, that
AIG agrees to suspend voluntarily its rights under Section 9(d) of the Articles
Supplementary and its right to require A&A to repurchase any of the Series B
Stock pursuant to Section 7 of the Articles Supplementary related thereto, in
each case until the earlier of the Closing or termination of this Agreement.
AIG will not transfer, assign, sell, pledge or otherwise dispose of any of the
Shares to any third party, other than as contemplated in this Agreement, until
the earlier of the Closing or the termination of this Agreement.
e. Waiver of Rights and Acknowledgment. Effective as of the date hereof,
AIG waives its rights, if any, under Section 6.o of the Stock Purchase
Agreement. AIG acknowledges that the consent of AIG referred to in paragraph
(1) of the letter between A&A and AIG dated June 30, 1994, or any other consent
related to the same subject matter, cannot be withheld or delayed with respect
to commercially reasonable actions proposed to be taken by A&A.
6. Termination. This Agreement (A) shall terminate without any action by
the parties hereto on the earliest of (i) if the Closing shall not have
occurred, April 15, 1997, (ii) if the Closing has not occurred, four Business
Days after an Aon Equity
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Acquisition and (iii) the effective date of termination of the Merger Agreement
between Aon, A&A and the other parties thereto, dated the date hereof and as
amended from time to time, and (B) may be terminated at any time prior to the
Closing by a written instrument executed and delivered by the parties hereto.
7. Miscellaneous.
a. Notices. All notices or other communications given or made hereunder
shall be validly given or made if in writing and delivered by facsimile
transmission or in person at, or mailed by registered or certified mail, return
receipt requested, postage prepaid, to, the following addressees (and shall be
deemed effective at the time of receipt thereof).
If to Aon: Aon Corporation
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Executive Vice President &
Chief Counsel
If to AIG: American International Group, Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Vice Chairman - Investments
and Financial Services
Or to such other addresses the party to whom notice is to be given may have
previously furnished in writing to the others in the manner set forth above.
b. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE STATE AND FEDERAL COURTS IN THE STATE OF NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
c. Severability; Interpretation. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, each of Aon and AIG directs that such court
interpret and apply the remainder of this Agreement in the manner which it
determines most closely effectuates their intent in entering into this
Agreement, and in doing so particularly take into account the relative
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importance of the term, provision, covenant or restriction being held invalid,
void or unenforceable.
d. Headings. The section headings herein are for convenience only and
shall not affect the construction hereof.
e. Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any party without the prior written
consent of the other party, except that Aon may assign the right to acquire the
Shares in accordance with the terms hereof to one or more wholly owned
subsidiaries of Aon.
f. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument.
g. Survival of Representations and Warranties. The representations and
warranties in this Agreement shall survive the Closing Date.
h. Entire Agreement; No Third Party Beneficiaries. This Agreement,
including the documents and instruments referred to herein, constitutes the
entire agreement, and supersedes all prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof
and is not intended to confer upon any person other than the parties any rights
or remedies hereunder.
i. Enforcement of this Agreement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state having jurisdiction, this being in addition to any other remedy to
which they are entitled at law or in equity.
j. Amendment. This Agreement may be amended, modified or supplemented;
provided that the same shall be in writing and be signed by each of the parties
hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
AMERICAN INTERNATIONAL
GROUP, INC., for and on behalf
of itself and its wholly
owned subsidiaries
By:_______________________________
Name:
Title:
AON CORPORATION
By:_______________________________
Name:
Title:
