Exhibit IV
ESCROW AGREEMENT
This ESCROW AGREEMENT (this "ESCROW AGREEMENT") is made and entered
into this 16th day of July, 2001, by and among (i) Aon Corporation, a Delaware
corporation (the "COMPANY"), (ii) Xxxxxxx X. Xxxx, Xxxxxxx X. Xxxx, Xxxxxxx X.
Xxxx, Xx., Xxxxxx X.X. Xxxx, the Xxxxxxx X.X. Xxxx Living Trust dated July 13,
2001, the Xxxxxxx X. Xxxx Living Trust dated July 10, 2001, the Xxxxxxx X. Xxxx
Living Trust dated July 10, 2001, the 2001 Xxxx Annuity Trust dated April 20,
2001 and the Family GST Trust under the PGR 2000 Trust dated November 22, 2000
(the "2000 TRUST") (all persons and entities listed in this clause (ii) are
referred to herein collectively as the "XXXX FAMILY MEMBERS" and individually as
a "XXXX FAMILY MEMBER") and (iii) American National Bank and Trust Company of
Chicago, a national banking association (the "ESCROW AGENT").
RECITALS
A. The Company, Holdco #1, Inc., a Delaware corporation and a
wholly-owned subsidiary of the Company ("RHC SUB"), Holdco #2, Inc., a Delaware
corporation and a wholly-owned subsidiary of the Company ("REC SUB"), Xxxx
Holding Corporation of Illinois, a Delaware corporation ("RHC"), Xxxx
Enterprises Corporation of Illinois, a Delaware corporation ("REC"), and the
Xxxx Family Members are parties to that certain Agreement and Plan of Merger
dated July 16, 2001 (the "MERGER AGREEMENT");
B. Pursuant to Section 7.1(b)(i) of the Merger Agreement, each of the
Xxxx Family Members must execute and deliver this Agreement;
C. Section 7.1(k) of the Merger Agreement provides that the 2000 Trust
shall transfer certificates evidencing a certain number of shares of the
Company's Common Stock, $1.00 par value ("COMMON STOCK"), along with a stock
power executed in blank to an escrow agent and be deposited in escrow for the
Escrow Period (as defined below) as a manner of securing the performance of each
Xxxx Family Member's obligations, duties, covenants and agreements under the
Merger Agreement and the Additional Agreements (as defined in the Merger
Agreement);
D. The Company would not be willing to enter into the Merger Agreement
and consummate the Mergers (as defined in the Merger Agreement) and would not be
willing to cause RHC Sub or REC Sub to enter into the Merger Agreement or
consummate the Mergers unless each Xxxx Family Member agreed to the placement of
a certain number of shares of Common Stock (determined under the terms of the
Merger Agreement) in escrow; and
E. The Escrow Agent is willing to establish an escrow account on the
terms and subject to the conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the recitals (which are deemed to
be a part of this Escrow Agreement), mutual covenants, representations,
warranties and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
Section 1. RECEIPT AND DEPOSIT. The 2000 Trust agrees to deposit with
the Escrow Agent certificates representing 583,942 shares of Common Stock (the
"ESCROW SHARES"), by delivery of one or more certificates registered in the name
of the 2000 Trust along with one or more stock powers executed in blank, and
upon receipt the Escrow Agent agrees to acknowledge, in a customary fashion,
receipt of such certificates and stock powers in escrow pursuant to this Escrow
Agreement. Upon receipt of the certificates evidencing the Escrow Shares and the
accompanying stock powers, the Escrow Agent will request the Company's transfer
agent to re-register the Escrow Shares in the Escrow Agent's name by
delivering such certificate and duly executed stock powers to the transfer
agent and requesting reissuance of certificates registered in the Escrow
Agent's name. The Escrow Agent agrees to hold and dispose of the Escrow
Shares and any Additional Shares (as defined below) in accordance with the
terms and conditions of this Escrow Agreement. Any dividend or distribution,
which does not constitute Additional Shares, in respect of the Escrow Shares
or the Additional Shares shall be distributed directly to the 2000 Trust, and
shall not be a part of the Escrow Fund (as defined below).
Section 2. ESCROW FUND. The Escrow Agent shall establish an escrow
account (the "ESCROW FUND") and hold therein the Escrow Shares, all shares of
capital stock or other securities (whether or not issued by the Company) issued
or paid as dividends or other distributions on the Escrow Shares or other shares
of capital stock or securities held in the Escrow Fund (collectively, such
shares of capital stock or other securities so issued or paid referred to herein
as the "ADDITIONAL SHARES") and release such Escrow Shares and Additional Shares
only as set forth in Section 3 below.
a. DEPOSIT OF ADDITIONAL SHARES. In the event any Additional
Shares in respect of the Escrow Shares or other Additional Shares held in the
Escrow Fund are delivered to the 2000 Trust rather than the Escrow Agent during
the Escrow Period, the 2000 Trust agrees to immediately to take all actions to
have such Additional Shares reissued in the name of the Escrow Agent and
transferred to the Escrow Agent for deposit in the Escrow Fund.
b. RELEASE OF DIVIDENDS AND DISTRIBUTIONS. In the event the
Escrow Agent receives any dividend or distribution, which dividend or
distribution does not constitute Additional Shares, in respect of the Escrow
Shares or the Additional Shares, the Escrow Agent agrees to immediately take all
actions to have such dividend or distribution transferred to the 2000 Trust.
c. STOCK SPLITS. In the event any stock dividend, stock split
or similar recapitalization with respect to the Escrow Shares or Additional
Shares becomes effective during the Escrow Period, the additional securities
issued as a result of such stock dividend, stock split or similar
recapitalization shall be added to the Escrow Fund and shall be subject to the
terms and conditions of this Escrow Agreement as if such securities were
initially delivered at the Effective Time.
x. XXXXXX. The Escrow Agent shall maintain a ledger setting
forth all Escrow Shares and Additional Shares issued in respect of such Escrow
Shares and deposited in escrow.
e. INVESTMENT OF CASH. Except as provided in Section 2(b)
above, the Escrow Agent shall invest any cash contained in the Escrow Fund and
any and all cash income produced by any investments held in the Escrow Fund
("CASH") in the One Group U.S. Treasury Securities Money Market Fund - Class I,
or a successor or similar fund, or as the Representative may from time to time
otherwise direct. Interest and other earnings on permitted investments shall be
added to the Escrow Fund. Any loss or expense incurred as a result of an
investment will be borne by the Escrow Fund. The Escrow Agent is hereby
authorized to execute purchases and sales of permitted investments through the
facilities of its own trading or capital markets operations or those of any
affiliated entity. The Escrow Agent shall send statements to each of the parties
hereto on a monthly basis reflecting activity in the Escrow Fund for the
preceding month. Although each of the parties recognizes that it may obtain a
broker confirmation or written statement containing comparable information at no
additional cost, the parties hereby agree that confirmations of permitted
investments are not required to be issued by the Escrow Agent for each month in
which a monthly statement is rendered. No statement need be rendered for the
Escrow Fund if no activity occurred for such month.
f. TAXES. All taxable income relating to the Escrow Fund shall
be taxable to the 2000 Trust. The 2000 Trust shall furnish the Escrow Agent with
a completed Form W-8 or Form W-9, as
-2-
applicable. The Escrow Agent shall be under no obligation to invest the
deposited funds or the income generated thereby until it has received a Form
W-9 or W-8, as applicable, from the 2000 Trust, regardless of whether such
party is exempt from reporting or withholding requirements under the Internal
Revenue Code of 1986, as amended (the "CODE). The Escrow Agent shall report
to the Internal Revenue Service, as of each calendar year-end, and to the
2000 Trust all income earned from the investment of any sum held in the
Escrow Fund against the 2000 Trust, as and to the extent required under the
provisions of the Code. The 2000 Trust is required to prepare and file any
and all income or other tax returns applicable to the Escrow Fund with the
Internal Revenue Service and all required state and local departments of
revenue in all years income is earned in any particular tax year as to the
extent required under the provisions of the Code. Any taxes payable on income
earned from the investment of any sums held in the Escrow Fund shall be paid
by the 2000 Trust, whether or not the income was distributed by the Escrow
Agent during any particular year as and to the extent required under the
provisions of the Code.
Section 3. DISTRIBUTIONS FROM ESCROW FUND. The Escrow Agent shall
distribute the Escrow Shares and Additional Shares and other assets held in the
Escrow Fund as follows:
a. TERMINATION OF ESCROW. Subject to the provisions of this
Section 3, all Escrow Shares, Additional Shares and other assets held in the
Escrow Fund shall be released from escrow and distributed to the 2000 Trust
promptly following the fifth anniversary of the date hereof; PROVIDED if any
Claim (as defined below) for which the Escrow Agent has received a Notice of
Claim remains pending on the expiration of such period, the Escrow Agent shall
retain Escrow Shares, Additional Shares and other assets held in the Escrow Fund
having a value equal to 200% of the amount of each such Claim to the extent then
currently available in the Escrow Fund (the Escrow Shares and Additional Shares
being valued for such purposes at the average closing price per share of such
securities as reported on the national securities exchange or inter-dealer
quotation system maintained by a registered securities association upon which
such securities are listed for the 10 trading days immediately preceding the
date of the fifth year anniversary of the date hereof) until such Claim is
resolved in accordance with the terms of this Escrow Agreement; FURTHER PROVIDED
that if the Company has received a notice of any Tax (as defined in the Merger
Agreement) deficiency, assessment, investigation or audit for any period or
portion of a period prior to the Effective Time (as defined in the Merger
Agreement) from a Governmental Authority (as defined in the Merger Agreement) or
other taxing authority related to a Tax constituting Applicable Damages (a "TAX
DISPUTE") and the Company has provided the Escrow Agent written notice of such
Tax Dispute, the Escrow Agent shall retain Escrow Shares, Additional Shares and
other assets held in the Escrow Fund having a value equal to 200% of the amount
of Tax involved in each such Tax Dispute to the extent then currently available
in the Escrow Fund (the Escrow Shares and Additional Shares being valued for
such purposes at the average closing price per share of such securities as
reported on the national securities exchange or inter-dealer quotation system
maintained by a registered securities association upon which such securities are
listed for the 10 trading days immediately preceding the date of the fifth year
anniversary of the date hereof) until the Company provides written notice that
such Tax Dispute has been resolved (such period of time referred to herein as
the "ESCROW PERIOD"), at which time any remaining assets in the Escrow Fund
shall promptly be distributed to the 2000 Trust.
b. APPLICABLE DAMAGES. The Escrow Shares, Additional Shares
and other assets held in the Escrow Fund may be distributed to a party other
than the 2000 Trust only in satisfaction of a claim for indemnification under
the Merger Agreement relating to Damages (as defined in the Merger Agreement)
other than Damages resulting from the failure of either of the Mergers to
qualify as a tax free reorganization under 368(a) of the Code (hereinafter
referred to as "APPLICABLE DAMAGES").
c. AGAINST CLAIMS FOR INDEMNIFICATION. Upon the determination
by the Company that it or one of the other Indemnified Parties (as defined in
the Merger Agreement) has a claim for Applicable Damages (a "Claim"), the
Company shall notify the Representative appointed pursuant to the Stock
Restriction Agreement (as defined in the Merger Agreement) in writing of the
Claim ("NOTICE OF CLAIM")
-3-
and shall deliver a copy of the Notice of Claim to the Escrow Agent. The
Notice of Claim shall be in substantially the same form attached hereto as
EXHIBIT I and shall specify the event giving rise to the Notice of Claim, a
description thereof, the party making the claim and the amount of the Escrow
Fund requested in satisfaction of such claim. The Escrow Agent shall
distribute to the Company or its designee from the Escrow Fund, in the manner
specified in Section 3(d) below, a number of shares of Common Stock,
Additional Shares and other assets held in the Escrow Fund having a value of
not less than the amount requested in the Notice of Claim (but not having a
value of more than the amount requested in the Notice of Claim plus the value
of one whole share of Common Stock) unless before the end of the 10th
business day following the receipt by the Escrow Agent of a copy of such
Notice of Claim, the Escrow Agent has received a notice ("NOTICE OF
OBJECTION"), which Notice of Objection shall be in substantially the same
form as EXHIBIT II hereto, signed by the Representative objecting to the
request for distribution stated in the Notice of Claim. The Representative
shall also promptly deliver a copy of such Notice of Objection to the Company.
(i) OBJECTED AMOUNTS. In the event that the objection
in the Notice of Objection is to less than the entire amount stated in the
Notice of Claim, the Escrow Agent shall distribute to the Company or its
designee a number of shares of Common Stock, Additional Shares and other assets
held in the Escrow Fund having a value of not less than the amount requested in
the Notice of Claim which is undisputed (but not having a value of more than the
amount requested in the Notice of Claim which is undisputed plus the value of
one whole share of Common Stock). The Xxxx Family Members agree that they shall
cause the Representative to not deliver a Notice of Objection with respect to
any Notice of Claim unless the Representative has a good faith belief for
disputing the validity or amount of the Claim set forth in the Notice of Claim.
(ii) RELEASE OF OBJECTED AMOUNTS. If the
Representative delivers a Notice of Objection to the Escrow Agent pursuant to
this Section 3(c) within 10 business days following the date of delivery of the
Notice of Claim, the Escrow Agent shall not deliver the disputed portion of the
requested amount of the Escrow Fund set forth in the Notice of Claim to the
Company or its designee, until (A) the Escrow Agent shall have received joint
written instructions in substantially the form attached hereto as EXHIBIT III
signed by both the Company and the Representative directing the distribution of
amounts from the Escrow Fund or (B) a state court of Illinois or a federal court
located in Illinois having jurisdiction has entered a final, non-appealable
order requiring distribution of a number of shares of Common Stock, Additional
Shares or other assets held in the Escrow Fund.
(iii) RESOLUTION. The Company and the Representative
agree to attempt to resolve in good faith any dispute regarding any request for
funds with respect to which a Notice of Objection has been delivered within 30
business days after such Notice of Objection has been delivered to the Escrow
Agent. Any dispute with respect to a Claim for which a Notice of Objection has
been delivered which has not been resolved pursuant to this Section 3(c) shall
be resolved as provided in Section 15(b) below and a number of shares of Common
Stock, Additional Shares and other assets held in the Escrow Fund shall be
distributed as determined by a final non-appealable action by such arbitrator
and, if requested, each party shall execute joint written instructions in
substantially the form attached hereto as EXHIBIT III directing the Escrow Agent
to so distribute.
(iv) OPPORTUNITY TO SATISFY. If, at any time pursuant
to this Section 3, the Escrow Agent is to make a distribution from the Escrow
Fund to a party other than the 2000 Trust, the Escrow Agent shall notify the
Xxxx Family Members in writing of the planned distribution ("DISTRIBUTION
NOTICE"). The Distribution Notice shall be substantially in the same form
attached hereto as EXHIBIT IV. The Xxxx Family Members shall have a period of
ten business days to satisfy such distribution in full with other assets. If a
Xxxx Family Member so satisfies such distribution, the Company and the
Representative will provide the Escrow Agent with joint written instructions
substantially in the form attached hereto as EXHIBIT V signed by both the
Company and the Representative withdrawing the Claim.
-4-
If no such instructions have been received by the Escrow Agent by the end of
the 10th business day following receipt by the Representative of the
Distribution Notice (the "ALTERNATIVE SATISFACTION DEADLINE"), the Escrow
Agent shall proceed with the distribution from the Escrow Fund specified in
the Distribution Notice.
d. ORDER OF DISTRIBUTION. All claims against the Escrow Fund
shall be distributed out of the assets held in the Escrow Fund in the following
order of priority: (i) first, shares of Common Stock, which securities for such
purposes shall be valued at the closing price per share of Common Stock as
reported on the New York Stock Exchange on the day of the Alternative
Satisfaction Deadline or, if such day is not a business day, on the next
business day; (ii) second, any marketable securities which securities shall be
valued at the closing price per share of such securities as reported on the
national securities exchange or inter-dealer quotation system maintained by a
registered securities association upon which such securities are listed on the
day of the Alternative Satisfaction Deadline or, if such day is not a business
day, on the next business day; (iii) third, any Cash held in the Escrow Fund;
and (iv) fourth, any assets other than Cash, marketable securities and shares of
Common Stock are to be sold or liquidated for the purpose of paying such claims.
In the event that assets other than Cash or marketable securities are required
to be sold to pay a Claim in the amount, the Escrow Agent shall so notify both
the Company and the Representative and the Representative shall have 10 business
days from the time the Escrow Agent delivers notice thereof to instruct the
Escrow Agent as to which non-cash assets of the Escrow Fund are to be sold or
liquidated for the purpose of paying the claim. If such instructions are not
given by the Representative within such period, such instructions shall be given
by the Company. The Company shall provide the Escrow Agent with a calculation,
made in accordance with the provisions of this Escrow Agreement, of the value of
Escrow Shares and other marketable securities on the date such Escrow Shares and
marketable securities are to be distributed from the Escrow Fund.
Section 4. DISTRIBUTION OF THE ESCROW SHARES AND ADDITIONAL SHARES. In
connection with any distribution of the Escrow Shares or Additional Shares
evidenced by certificates to an Indemnified Party, the Escrow Agent shall
forward the existing certificates, along with a properly executed stock power,
to the transfer agent designated by the issuer for such securities with
instructions that such certificates be canceled in exchange for new certificates
issued in the name of the Company or its designee and the Escrow Agent, as the
case may be. The Escrow Agent's sole duty with respect to the distribution of
the Escrow Shares hereunder, in the event that the stock certificates are not in
the proper number of shares for distribution, shall be to deliver the stock
certificates and assignments to the stock transfer agent for the Company and to
give proper instructions to such stock transfer agent for the re-registration
and delivery of such shares. In the event that some but not all of the Escrow
Shares are to be distributed, the Escrow Agent shall (i) direct the stock
transfer agent to re-register in the name of and deliver the appropriate number
of shares to the intended recipient, (ii) direct the stock transfer agent to
re-register the remainder of the shares in the names of the Escrow Agent and
return those shares to the Escrow Agent and (iii) to the extent applicable,
request the 2000 Trust to deliver to the Escrow Agent new assignments duly
endorsed in blank for such returned shares. The Escrow Agent shall have no
responsibility or liability for any mistake, failure or delay by the stock
transfer agent in registering or delivering any shares as described above.
Section 5. PRIORITY AND SECURITY INTEREST. The Escrow Shares and
Additional Shares to be deposited in the Escrow Fund pursuant to this Escrow
Agreement are being and will be delivered as security for the performance of the
indemnification provisions of the Merger Agreement (other than as provided in
Section 3(b) above), and the 2000 Trust grants a first priority security
interest in such shares, cash, and other assets, or proceeds thereof, to the
Company and the Indemnified Parties. The Escrow Agent hereby agrees to act as
the Company's and the Indemnified Parties' possessory agent to the extent
possession is necessary to perfect a security interest in such assets. The
Company and each Xxxx Family Member hereby acknowledge that a copy of the Merger
Agreement has been delivered to the Escrow Agent. Each Xxxx Family Member hereby
agrees to execute such financing statements and other
-5-
documents as the Company may deem necessary or desirable to reflect the
security interest granted herein. Such grants of security interest shall be
without prejudice to the Company's or the Indemnified Parties' right to argue
for alternative characterizations of their interest in the Escrow Fund. The
parties acknowledge that all interests of the Xxxx Family Members in the
Escrow Shares, Additional Shares, cash and other assets held in the Escrow
Fund are subject to the rights of the Company and the Indemnified Parties to
assert and obtain satisfaction for Claims against the Escrow Fund in
accordance with the terms and conditions of this Escrow Agreement.
Section 6. NO TRANSFERS BY THE 2000 TRUST. The 2000 Trust covenants and
agrees not to or attempt to sell, transfer, convey, grant, encumber, pledge,
hypothecate, gift, donate, bequest, devise or otherwise dispose of, whether
direct or indirect, whether or not for value, any of the Escrow Shares or
Additional Shares during the Escrow Period except in accordance with the terms
of this Escrow Agreement.
Section 7. VOTING OF STOCK AND OWNERSHIP. To the extent that the Escrow
Shares or Additional Shares are entitled to voting rights, the 2000 Trust shall
have the right to exercise all such voting rights with respect to such Escrow
Shares or Additional Shares held in the Escrow Fund. All of the parties hereto
acknowledge and agree that, except to the extent Escrow Shares, Additional
Shares or other assets held in the Escrow Fund are distributed to an Indemnified
Party, the 2000 Trust is the beneficial owner of the Escrow Shares and any
Additional Shares or other assets deposited into the Escrow Fund.
Section 8. ESCROW AGENT DUTIES. It is understood and agreed that the
Escrow Agent shall have only those duties provided herein, which shall be deemed
purely ministerial in nature. It is further agreed that:
a. the Escrow Agent may conclusively rely and shall be
protected in acting or refraining from acting upon any document, instrument,
certificate, instruction or signature believed by it to be genuine and may
assume and shall be protected in assuming that any person purporting to give any
notice or instructions in accordance with this Escrow Agreement or in connection
with any transaction to which this Escrow Agreement relates has been duly
authorized to do so, PROVIDED, HOWEVER, that the Escrow Agent shall not be
obligated to make any inquiry as to the authority, capacity, existence or
identity of any person purporting to have executed any such document or
instrument or have made any such signature or purporting to give any such notice
or instructions;
b. in the event that the Escrow Agent shall be uncertain as to
its duties or rights hereunder or shall receive instructions with respect to the
Escrow Shares and Additional Shares which, in its sole opinion, are in conflict
with either other instructions received by it or any provision of the Escrow
Agreement, it shall, without liability of any kind, be entitled to hold the
Escrow Shares and Additional Shares pending the resolution of such uncertainty
to the Escrow Agent's sole satisfaction, by final judgment of a court or courts
of competent jurisdiction or otherwise, or the Escrow Agent, at its option, may,
in final satisfaction of its duties hereunder, deposit the relevant Escrow
Shares and Additional Shares with the clerk of any court of competent
jurisdiction;
c. the Escrow Agent undertakes to perform only such duties as
are expressly set forth herein and shall not be bound in any way by any
agreement between the Company and any Xxxx Family Member, including the Merger
Agreement (whether or not the Escrow Agent has knowledge thereof);
d. the Escrow Agent shall not be liable for any action taken
by it in good faith and believed by it to be authorized or within the rights or
powers conferred upon it by this Escrow Agreement (provided that the Escrow
Agent shall be liable for its gross negligence and willful misconduct), and may
consult with counsel of its own choice and shall have full and complete
authorization and protection for
-6-
any action taken or suffered by it hereunder in good faith and in accordance
with the opinion of such counsel;
e. the Escrow Agent shall not have any right, claim or
interest in any portion of the Escrow Fund;
f. the Escrow Agent shall not assume any responsibility or
liability for any transactions between the Company and any Xxxx Family Member;
g. the Escrow Agent shall have no responsibility or liability
for any diminution in value of any assets held hereunder which may result from
any investments or reinvestment made in accordance with any provision which may
be contained herein;
h. this Escrow Agreement sets forth all matters pertinent to
the Escrow Fund contemplated hereunder, and no additional obligations of the
Escrow Agent shall be inferred from the terms of this Escrow Agreement or any
other agreement; and IN NO EVENT SHALL THE ESCROW AGENT BE LIABLE, DIRECTLY OR
INDIRECTLY, FOR ANY (i) DAMAGES OR EXPENSES ARISING OUT OF THE SERVICES PROVIDED
HEREUNDER, OTHER THAN DAMAGES WHICH RESULT FROM THE ESCROW AGENT'S FAILURE TO
ACT IN ACCORDANCE WITH THE STANDARDS SET FORTH IN THIS ESCROW AGREEMENT, OR (ii)
SPECIAL OR CONSEQUENTIAL DAMAGES, EVEN IF THE ESCROW AGENT HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES; and
i. the Escrow Agent shall have the right to perform any of its
duties hereunder through agents, attorneys, custodians or nominees.
Any banking association or corporation into which the Escrow Agent may be
merged, converted or with which the Escrow Agent may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Escrow Agent shall be a party, or any banking association or corporation to
which all or substantially all of the corporate trust business of the Escrow
Agent shall be transferred, shall succeed to all the Escrow Agent's rights,
obligations and immunities hereunder without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 9. INDEMNIFICATION OF ESCROW AGENT. Each Xxxx Family Member,
jointly and severally, agrees to indemnify the Escrow Agent, its directors,
officers, agents and employees and any person who "controls" the Escrow Agent
within the meaning of Section 15 of the Securities Act of 1933, as amended
against, and hold them harmless from, any and all loss, liability, cost, damage
and expense, including costs of investigation and reasonable counsel fees and
expenses, which any of them may suffer or incur by reason of any action, claim
or proceeding brought against any of them, arising out of or relating in any way
to this Escrow Agreement or any transaction to which this Escrow Agreement
relates, other than any action, claim or proceeding to the extent resulting from
the gross negligence or willful misconduct of such person. The provisions of
this Section 9 shall survive the termination of this Escrow Agreement and
resignation or removal of the Escrow Agent.
Section 10. TERMINATION. This Escrow Agreement shall terminate when all
Escrow Shares, Additional Shares and other assets have been distributed from the
Escrow Fund.
Section 11. NO LIMITATION ON RECOURSE. This Escrow Agreement does not
and termination hereof will not, and shall not be interpreted to, in any way,
limit or restrict the amount for or the manner in which an Indemnified Party may
seek indemnification pursuant to the terms of the Merger Agreement or require
-7-
that an Indemnified Party seek satisfaction of a claim for indemnification
under the Merger Agreement against the Escrow Fund prior to seeking
satisfaction from any Xxxx Family Member.
Section 12. FURTHER ACTIONS. The Company and each Xxxx Family Member
agree that they will execute and deliver any and all documents and instruments
and take such other actions as may be necessary and appropriate to effectuate
and carry out the transactions contemplated by the terms of and intent of this
Escrow Agreement.
Section 13. AMENDMENT, SUCCESSOR ESCROW AGENT. This Escrow Agreement
may be amended only pursuant to a written instrument signed on behalf of the
Company, each Xxxx Family Member and the Escrow Agent. If the Company and any
Xxxx Family Member attempt to change this Escrow Agreement in a manner which, in
the Escrow Agent's sole opinion, is undesirable, the Escrow Agent may resign as
Escrow Agent upon two weeks' written notice to the Company and each Xxxx Family
Member; otherwise, notwithstanding any provision hereof to the contrary, it may
resign as Escrow Agent at any time upon 60 calendar days' written notice to the
Company and each Xxxx Family Member. In the case of the Escrow Agent's
resignation, its only duty shall be to hold and dispose of the Escrow Shares and
Additional Shares in accordance with the original provisions of this Escrow
Agreement until a successor escrow agent shall be appointed by the Company and
the Xxxx Family Members acting by majority vote (in which each such party shall
have one vote) and a written notice of the name and address of such successor
escrow agent shall be given to the Escrow Agent by the Company and the Xxxx
Family Members, whereupon the Escrow Agent's only duty shall be to turn over, in
accordance with the written instructions of the Company and the Xxxx Family
Members, to the successor escrow agent the Escrow Shares and Additional Shares
and any documentation related thereto. In the event that a successor escrow
agent shall not have been appointed and the Escrow Agent shall not have turned
over to the successor escrow agent the Escrow Shares and Additional Shares
within the time periods specified above, or the Escrow Agent's written notice of
resignation, as the case may be, the Escrow Agent may deposit the assets held in
the Escrow Fund with the clerk of any other court of competent jurisdiction, at
which time the Escrow Agent's duties hereunder shall terminate.
Section 14. ESCROW AGENT FEES. The Escrow Agent shall be entitled to a
fee as detailed on SCHEDULE A (the "ESCROW AGENT FEES") and for reimbursement of
its out-of-pocket expenses including the fees and costs of attorneys or agents
which it may find necessary to engage in performance of its duties hereunder and
the Escrow Agent shall have, and is hereby granted, a prior lien upon any
property, cash, or assets of the Escrow Fund, with respect to its unpaid fees
and nonreimbursed expenses, superior to the interests of any other persons or
entities. The Escrow Agent shall be entitled and is hereby granted the right to
set off and deduct any unpaid fees and/or nonreimbursed expenses from amounts on
deposit in the Escrow Fund. The Xxxx Family Members agree, jointly and
severally, to pay the Escrow Agent Fees and all out-of-pocket expenses.
Section 15. CHOICE OF LAW, JURISDICTION, VENUE.
a. THIS ESCROW AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS WITHOUT APPLICATION OF THE
PRINCIPLES OF CONFLICTS OF LAWS.
b. The parties (other than the Escrow Agent) agree that any
and all disputes, claims or controversies arising out of or relating to this
Escrow Agreement that are not resolved by their mutual agreement shall be
submitted to final and binding arbitration before JAMS, or its successor,
pursuant to the United States Arbitration Act, 9 U.S.C. Sec. 1 et seq. Any
party may commence the arbitration process called for in this Escrow
Agreement by filing a written demand for arbitration with JAMS, with a copy
to the other parties. The arbitration will be conducted in accordance with
the provisions of JAMS' Comprehensive Arbitration Rules and Procedures in
effect at the time of filing of the demand for
-8-
arbitration. The parties (other than the Escrow Agent) will cooperate with
JAMS and with one another in selecting an arbitrator who has previously
served as judge in a federal court from JAMS' panel of neutrals, and in
scheduling the arbitration proceedings. The parties (other than the Escrow
Agent) covenant that they will participate in the arbitration in good faith,
and that they will share equally in its costs. The provisions of this Section
may be enforced by any court of competent jurisdiction, and the party seeking
enforcement shall be entitled to an award of all costs, fees and expenses,
including attorneys fees, to be paid by the party against whom enforcement is
ordered.
C. NOTICE: BY SIGNING THIS ESCROW AGREEMENT, EACH PARTY (OTHER
THAN THE ESCROW AGENT) IS AGREEING TO HAVE ALL DISPUTES, CLAIMS OR CONTROVERSIES
ARISING OUT OF OR RELATING TO THIS ESCROW AGREEMENT DECIDED BY NEUTRAL
ARBITRATION, AND EACH PARTY (OTHER THAN THE ESCROW AGENT) IS GIVING UP ANY
RIGHTS SUCH PARTY MIGHT POSSESS TO HAVE THOSE MATTERS LITIGATED IN A COURT OR
JURY TRIAL. BY SIGNING THIS ESCROW AGREEMENT, EACH PARTY (OTHER THAN THE ESCROW
AGENT) IS GIVING UP SUCH PARTY'S JUDICIAL RIGHTS TO DISCOVERY AND APPEAL EXCEPT
TO THE EXTENT THAT THEY ARE SPECIFICALLY PROVIDED FOR UNDER THIS ESCROW
AGREEMENT. IF ANY PARTY REFUSES TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS
PROVISION, SUCH PARTY MAY BE COMPELLED TO ARBITRATE UNDER FEDERAL OR STATE LAW.
EACH PARTY'S AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.
Section 16. SUCCESSORS AND ASSIGNS. This Escrow Agreement shall be
binding upon the parties hereto and their respective successors and assigns;
provided, however, that any assignment or transfer by any party of its rights
under this Escrow Agreement shall be void (as against the Escrow Agent or
otherwise) unless:
a. written notice thereof shall be given to the Escrow Agent,
the Company and each Xxxx Family Member; and
b. the Escrow Agent, the Company and each Xxxx Family Member
shall have consented, in writing, to such assignment or transfer.
Section 17. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given upon the earlier of delivery
thereof if by hand or upon receipt if sent by mail (registered or certified
mail, postage prepaid, return receipt requested) or on the next business day
after deposit if sent by a recognized overnight delivery service or upon
transmission if sent by telecopy or facsimile transmission (with request of
assurance of receipt in a manner customary for communication of such type) as
follows (or at such other address for a party as shall be specified by like
notice):
If to the Escrow Agent:
American National Bank and Trust Company
of Chicago
000 Xxxxx XxXxxxx, 0xx Xxxxx
Mail Code IL1-1250
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxx
Telecopy: (000) 000-0000
Notice to the Company:
Aon Corporation
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxx, Chief Counsel
Telecopy: (000) 000-0000
-9-
with a copy to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
8000 Sears Tower
000 X. Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
Notice to any of the Representatives or any Xxxx
Family Member, including the 2000 Trust:
Xxxxxxx X. Xxxx
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
with a copy to:
Sidley Xxxxxx Xxxxx & Xxxx
Bank One Plaza
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
Section 18. THIRD PARTY BENEFICIARIES. Each Indemnified Party, other
than the Company, is intended to be, and shall be, a third party beneficiary of
the provisions of this Escrow Agreement and shall have the right to enforce the
obligations of each Xxxx Family Member to such Indemnified Party under this
Escrow Agreement in its own name and behalf.
Section 19. SEVERABILITY. If any provision of this Escrow Agreement or
the application thereof to any person or circumstance shall be determined to be
invalid or unenforceable, the remaining provisions of this Escrow Agreement or
the application of such provision to persons or circumstances other than those
to which it is held invalid or unenforceable shall not be affected thereby and
shall be valid and enforceable to the fullest extent permitted by law.
Section 20. COUNTERPARTS, FACSIMILE SIGNATURES. This Escrow Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same agreement.
This Escrow Agreement may be executed by facsimile signature and a facsimile
signature shall constitute an original signature for all purposes.
Section 21. INTERPRETATION OF CERTAIN TERMS. All pronouns and any
variations thereof shall be deemed to refer to the masculine, feminine, neuter,
singular or plural as the context may require. Any words herein used in the
singular shall denote the plural as the context so requires and, when used
herein in the plural shall denote the singular as the context so requires.
Pronouns used herein, whether masculine, feminine, or neuter, shall be
interpreted as the context so requires. The word "including" shall mean
"including, without limitation," and thus indicate part of a larger whole; but
shall not be interpreted as indicating the stated limits or extremes. Any
reference to any federal, state, or local law shall be deemed also to refer to
all rules and regulations promulgated thereunder, unless the context requires
otherwise. The term "BUSINESS DAY" means for all purposes, a day other than
Saturday or Sunday on which banks are open for business in Chicago, Illinois.
-10-
Section 22. WAIVER OF COMPLIANCE; CONSENTS. Any failure of the parties
hereto to comply with any obligation, covenant, agreement or condition contained
herein may be waived in writing by the other parties hereto, respectively, but
such waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any other failure.
Section 23. HEADINGS. The article and section headings contained in
this Escrow Agreement are solely for the purpose of reference, are not part of
the agreement of the parties and shall not affect in any way the meaning or
interpretation of this Escrow Agreement.
*** Remainder of Page Intentionally Remains Blank, Signature Page Follows ***
-11-
IN WITNESS WHEREOF, the undersigned have executed this Escrow Agreement as of
the day and year first above written.
Aon CORPORATION AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, as
Escrow Agent
By: /s/ Xxxxxxx X. X'Xxxxxxxx By: /s/ Xxxxx X. Xxxx
------------------------------ ---------------------------------------
Name: Xxxxxxx X. X'Xxxxxxxx Name: Xxxxx X. Xxxx
Title: President and Chief Title: Authorized Officer
Operating Officer
XXXXXXX X. XXXX LIVING TRUST XXXXXXX X. XXXX LIVING TRUST
DATED JULY 10, 2001 DATED JULY 10, 2001
By: /s/ Xxxxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxx
------------------------------ --------------------------------------
Name: Xxxxxxx X. Xxxx Name: Xxxxxxx X. Xxxx
Its: Trustee Its: Trustee
AND
By: /s/ Xxxxxxx X. Xxxx
--------------------------------------
Name: Xxxxxxx X. Xxxx
Its: Trustee
2001 XXXX ANNUITY TRUST /s/ Xxxxxxx X. Xxxx
DATED APRIL 20, 2001 ------------------------------------------
Xxxxxxx X. Xxxx
By: /s/ Xxxxxxx X. Xxxx
-----------------------------
Name: Xxxxxxx X. Xxxx
Its: Trustee /s/ Xxxxxxx X. Xxxx
------------------------------------------
Xxxxxxx X. Xxxx
By: /s/ Xxxxxxx X. Xxxx, Xx. By: /s/ Xxxxxx X.X. Xxxx
------------------------------ --------------------------------------
Xxxxxxx X. Xxxx, Xx. Xxxxxx X.X. Xxxx
XXXXXXX X. X. XXXX FAMILY GST TRUST UNDER PGR
LIVING TRUST 2000 TRUST DATED NOVEMBER 22, 2000
DATED JULY 13, 2001
By: /s/ Xxxxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxx
------------------------------ --------------------------------------
Name: Xxxxxxx X. Xxxx Name: Xxxxxxx X. Xxxx
Its: Trustee Trustee
SIGNATURE PAGE TO ESCROW AGREEMENT
