AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 16, 1994
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ALEXANDER & ALEXANDER SERVICES INC.
(Exact name of registrant as specified in its charter)
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<TABLE>
<S> <C>
MARYLAND 52-0969822
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
1211 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
(212) 840-8500
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
RONALD J. ROESSLER, ESQ.
SENIOR VICE PRESIDENT & GENERAL COUNSEL
ALEXANDER & ALEXANDER SERVICES INC.
1211 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
(212) 444-4535
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. X
CALCULATION OF REGISTRATION FEE
<TABLE><CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE AGGREGATE PRICE AGGREGATE AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock ($1.00 par value per
share)(2)........................... 1,136,900 $19.625 $22,311,662.50 $7,693.73
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee on the
basis of the average of the high and low reported sales prices of the Common
Stock on August 11, 1994, on the New York Stock Exchange, in accordance with
Rule 457(c) under the Securities Act of 1933.
(2) Includes the preferred share purchase rights associated with the Common
Stock.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
(SUBJECT TO COMPLETION) ISSUED AUGUST 16, 1994
PROSPECTUS
ALEXANDER & ALEXANDER SERVICES INC.
1,136,900 SHARES OF COMMON STOCK, $1.00 PAR VALUE
This Prospectus relates to the offering of up to an aggregate of 1,136,900
shares (the "Shares") of Common Stock, $1.00 par value per share (the "Common
Stock"), of Alexander & Alexander Services Inc. (the "Company") by certain
stockholders named herein (the "Selling Stockholders"). See "Selling
Stockholders." The Company will not receive any proceeds from the sale of the
Shares. The Company has agreed to indemnify the Selling Stockholders for certain
liabilities, including civil liabilities under the Securities Act of 1933, as
amended (the "Securities Act"), in certain circumstances. See "Plan of
Distribution."
The Selling Stockholders acquired the Shares from the Company in a
transaction related to the Company's acquisition of all the interests in the
assets and the business of Clay & Partners, a U.K. partnership. Except for the
fees and disbursements of counsel and other advisors to the Selling
Stockholders, any underwriters' fees and expenses and underwriting discounts and
commissions and transfer taxes in respect of the Shares being sold, which will
be borne by the Selling Stockholders, the Company has agreed to pay all other
expenses related to this registration.
The Selling Stockholders, directly or through agents or through
broker-dealers or underwriters from time to time designated, may effect sales of
Shares from time to time on the New York Stock Exchange or The International
Stock Exchange of the United Kingdom and The Republic of Ireland, Ltd. (the
"Exchanges") or otherwise pursuant to and in accordance with the applicable
rules of the Exchanges, in block transactions, in negotiated transactions, in an
underwritten public offering or in a combination of any such methods of sale, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. To the extent required, the
number of Shares to be sold, purchase price, public offering price, the name of
any such agent or broker-dealer and any applicable commission or discount with
respect to a particular offering will be set forth in an accompanying Prospectus
Supplement. The aggregate proceeds to the Selling Stockholders from the sale of
the Shares so offered will be the purchase price of the Shares sold less the
aggregate agents' commissions and underwriters' discounts, if any, and other
expenses of issuance and distribution not borne by the Company. See "Plan of
Distribution."
On August 12, 1994, the last reported sale price of the Company's Common
Stock on the NYSE was $19.875.
The Selling Stockholders and any broker-dealers, agents or underwriters
that participate in the distribution of any of the Shares may be deemed to be
"underwriters" within the meaning of the Securities Act and any commission
received by them and any profit on the Shares purchased by them may be deemed to
be underwriting commissions or discounts under the Securities Act. See "Plan of
Distribution."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS AUGUST , 1994
<PAGE>
No person has been authorized to give any information or to make any
representation other than those contained or incorporated by reference in this
Prospectus in connection with the offer contained herein and, if given or made,
such other information or representation must not be relied upon as having been
authorized by the Company or by any other person. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that there has been no change in the information about the
Company since the date hereof, or that the information herein is correct as of
any time subsequent to their respective dates. This Prospectus shall not
constitute an offer to sell, or the solicitation of an offer to buy, any
security other than the Shares, nor shall this Prospectus constitute an offer or
solicitation by anyone in any jurisdiction in which such offer or solicitation
is not authorized, or in which the person making such offer or solicitation is
not qualified to do so, or to any person to whom it is unlawful to make such
offer or solicitation.
------------------------
2
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy
statements, and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, as well as the following
regional offices of the Commission: New York Regional Office, Seven World Trade
Center, 13th Floor, New York, New York 10048 and the Chicago Regional Office,
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained by mail from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 upon payment of the fees prescribed by the Commission.
Reports, proxy statements and other information concerning the Company can also
be inspected at the offices of the New York Stock Exchange at 20 Broad Street,
New York, New York 10005.
The Company has also filed with the Commission a Registration Statement
(together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act. This Prospectus does not contain all of
the information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission. For
further information, reference is made to the Registration Statement, copies of
which may be obtained from the Public Reference Section of the Commission, 450
Fifth Street, N.W., Washington, D.C. 20549 upon payment of the fees prescribed
by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No.
1-8282) are hereby incorporated by reference in this Prospectus:
(1) Annual Report on Form 10-K for the year ended December 31, 1993;
(2) Current Report on Form 8-K, dated January 18, 1994;
(3) Current Report on Form 8-K, dated February 25, 1994;
(4) Quarterly Report on Form 10-Q for the quarter ended March 31, 1994;
(5) Current Report on Form 8-K, dated April 21, 1994;
(6) Current Report on Form 8-K, dated June 14, 1994;
(7) Proxy Statement, dated June 27, 1994, for the Special Meeting of
Stockholders held on July 15, 1994;
(8) Quarterly Report on Form 10-Q for the quarter ended June 30, 1994;
(9) Current Report on Form 8-K, dated July 19, 1994;
(10) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A, including any subsequent
amendments or reports filed for the purpose of updating such
description; and
(11) The description of the Company's preferred share purchase rights
contained in the Company's Registration Statement on Form 8-A,
including any subsequent amendments or reports filed for the
purpose of updating such description.
3
<PAGE>
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering of the Shares covered by this
Prospectus shall be deemed to be incorporated herein by reference into this
Prospectus and to be a part hereof from their respective dates of filing. Any
statement contained in this Prospectus or in a document incorporated or deemed
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained in this
Prospectus or in any other subsequently filed document which is or is deemed to
be incorporated herein by reference modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any and all of the documents that have been incorporated by reference (other
than any exhibits thereto). Requests for such documents should be directed to
Alexander & Alexander Services Inc. at 10461 Mill Run Circle, Owings Mills,
Maryland 21117, Attention: Frank R. Wieczynski, Secretary.
4
<PAGE>
THE COMPANY
Alexander & Alexander Services Inc., a holding company incorporated under
the laws of Maryland in 1973, together with its subsidiaries, is a global
insurance brokerage, risk management and human resource management consulting
company. It is one of the leading insurance brokerage and risk management
companies worldwide. Through predecessor entities the Company has been in
business since 1899. The Company has approximately 14,300 employees and operates
from offices located in more than 80 countries and territories through wholly
owned subsidiaries, affiliates and other servicing capabilities. Its clients are
primarily commercial enterprises, including a broad range of industrial,
transportation, services, financial and other businesses. Clients also include
government and governmental agencies, non-profit organizations and individuals.
The Company's four core businesses include risk management and insurance
services, specialist broking, reinsurance broking and human resource management
consulting.
RISK MANAGEMENT AND INSURANCE SERVICES. The Company develops risk
management programs and places coverage on behalf of its clients directly with
an insurance company or indirectly through a specialist broker. Since January
1991, the Company's worldwide risk management and insurance services have
operated under a single coordinated management structure. In 1993, the Company
introduced the common trading name of "Alexander & Alexander" throughout its
global insurance services network in the U.S., the U.K., Canada and Japan and in
most of its markets in continental Europe, Asia-Pacific and the Middle East. The
Company's risk analysis and management capabilities include a broad range of
services such as risk surveys and analyses, loss control and cost studies,
formulation of safety procedures and insurance programs. In addition, other
divisions of the Company provide complementary services.
SPECIALIST BROKING. The Company acts as an intermediary between retail
brokers and insurance companies and Lloyd's of London syndicates. London-based
Alexander Howden Limited places large and complex risks that require access to
the London and world markets. U.S.-based Alexander Howden North America, Inc.
offers excess, surplus and specialty lines placements. From Australia and
Singapore, Alexander Howden Asia Pacific specializes in wholesale insurance
broking and facultative reinsurance.
REINSURANCE BROKING. The Company places coverage on behalf of its insurance
or reinsurance company clients to reinsure all or a portion of the risk
underwritten by that insurance or reinsurance company. The Company's worldwide
reinsurance brokerage services, led by its U.K. subsidiary, Alexander Howden
Reinsurance Brokers Limited, arrange reinsurance programs for Lloyd's of London
syndicates and other insurance and reinsurance companies worldwide. Alexander
Reinsurance Intermediaries, Inc. provides a full range of reinsurance services
in the United States.
HUMAN RESOURCE MANAGEMENT CONSULTING. The Company offers global human
resource management consulting services and benefits brokerage through The
Alexander Consulting Group Inc. ("ACG"). ACG provides advisory and support
services in human resource management, organizational effectiveness, integrated
information technologies, strategic health care and flexible compensation,
retirement planning and actuarial services, benefit plan design and
implementation, international benefits/compensation, and benefit plan investment
consulting through Alexander & Alexander Consulting Group Inc. in the U.S.,
Alexander Clay & Partners in Europe and Alexander Consulting Group Limited in
Canada and the Asia-Pacific region. ACG provides brokerage services for group
health and welfare, special risk, and association/mass marketing insurance
coverage through Alexander & Alexander Benefits Services Inc. in the U.S. and as
a division of the Alexander Consulting Group Limited in Canada. ACG operates in
18 countries.
5
<PAGE>
RECENT DEVELOPMENTS
The factors that have negatively influenced the Company's insurance
brokerage revenues in the past years continued through the first six months of
1994. These factors include soft pricing due to the intense competition among
insurance underwriters and significant declines in interest rates. Consulting
revenues have also been constrained during this period due to worldwide economic
conditions and uncertainty over health care reform in the U.S. The Company does
not anticipate significant changes in such conditions for the remainder of 1994.
For the first six months of 1994, the Company reported a net loss of $6.6
million, $0.25 per share. Included in the results were a $6.0 million after-tax
charge, or $0.14 per share, relating to the purchase of reinsurance coverage for
the Company's discontinued operations and a $2.6 million after-tax charge, or
$0.06 per share, for the cumulative effect of a change in an accounting
principle.
Since mid-June 1994, the Company's Board of Directors and management team
have completed a number of initiatives to improve the Company's financial
condition and future profitability. These actions include the following:
- In June, Frank G. Zarb was appointed Chairman of the Board,
President and Chief Executive Officer of the Company.
- In June, the quarterly dividend on the Company's Common Stock and
Common Stock equivalents was reduced by 90 percent from $0.25 to
$0.025 per share. The estimated annual cash flow savings based upon
the current number of shares outstanding is approximately $39
million.
- In July, American International Group, Inc., invested $200 million
in the Company (the "AIG Investment") and received 4 million shares
of the Company's non-voting 8% Series B Cumulative Convertible
Preferred Stock, $1.00 par value (the "Series B Convertible
Preferred Shares"). Net proceeds to the Company are approximately
$196 million. Proceeds from this capital infusion will be used
for general corporate purposes, including significant investments
to improve its U.S. operations and other core businesses.
- In July, certain subsidiaries of the Company entered into a
reinsurance agreement providing $200 million of coverage for certain
discontinued exposures in excess of an aggregate self-insured
retention of $73 million for a premium of $80 million. The
reinsurance agreement provides protection against further
deterioration in loss reserves related to the Company's discontinued
operations. Of the $80 million premium due, $30 million was paid
from the proceeds of the AIG Investment.
- In July, the Company borrowed $50 million from the reinsurance
company that executed the reinsurance agreement described above.
The note is payable in five equal annual installments, commencing
July 1997.
- In July, the Company's long-term credit agreement with various banks
was amended to restore the Company's ability to borrow up to $150
million. The Company has no borrowings outstanding under this
agreement, and does not anticipate a need to borrow under the
agreement for the remainder of its term which expires in July 1995.
- In July, three new directors were elected, increasing the size of
the Company's Board of Directors from 8 to 11 members.
In addition to these actions already taken, a number of initiatives are
underway to further strengthen the Company's balance sheet and increase
operating margins.
The Company is conducting an analysis of its core business activities and
is currently reviewing its options with respect to selling certain non-core
businesses and other assets. In this regard, in early August the Company
announced it had signed a letter of intent to sell its personal lines insurance
brokerage business in the U.S. The total proceeds on this sale are estimated to
be $30 million with a resulting estimated pre-tax gain of approximately $20
million.
6
<PAGE>
The Company is actively reviewing its options with respect to indemnity
exposures relating to operations previously sold.
The Company has also begun comprehensive worldwide reviews of its
operations to identify and implement ways of expanding new business efforts and
reducing overall costs. These reviews are expected to be completed by year-end
1994 and could result in a significant charge for restructuring and other
matters.
Among the principal objectives of these financial and organizational
initiatives is to effect improvements in the Company's revenue stream, reduce
costs and improve organizational controls. However, no assurances can be given
that these objectives will be accomplished. Further, factors such as the
effectiveness of implementing these strategies could impact the future
profitability of the Company, and hence shareholder value. In addition,
dividends on the Series B Convertible Preferred Shares will reduce the amount of
earnings otherwise available for distribution to holders of the Common Stock by
approximately $16 million in the first year after issuance, and by approximately
$23 million by the fifth year after issuance, assuming dividends on the Series B
Convertible Preferred Shares were to be paid in kind over this period. The
holders of the Series B Preferred Shares also have the right to require the
Company to repurchase their shares at specified premium prices if a "Special
Event" occurs. This right may tend to deter the Company from engaging in a
Special Event, which includes, for example, the declaration or payment of
dividends aggregating in excess of $0.075 per share of Common Stock during the
last seven months of 1994, cumulatively 25% of earnings in 1995 and 1996, and
cumulatively 50% of earnings thereafter; the disposition by the Company of
assets representing 35% or more of the Company's book value or gross revenues;
and certain mergers of the Company or any of its principal subsidiaries with or
into any other firm or entity. Other Special Events include the acquisition by a
third party, with the consent or approval of the Company, of beneficial
ownership of securities representing 35% or more of the Company's total
outstanding voting power. These factors, together with cash flow, operating
results, possible changes in near-and long-term corporate strategies resulting
from management changes, as well as general market and economic conditions,
could affect future decisions of the Board of Directors with respect to the size
and timing of dividends and other distributions on the Company's Common Stock,
as well as other matters generally affecting the rights of holders of the Common
Stock.
ACQUISITION OF CLAY & PARTNERS AND RELATED AGREEMENTS
The Selling Stockholders acquired 2,274,410 shares of the Common Stock,
$1.00 par value per share (the "Consideration Shares") of the Company in
connection with the Company's acquisition from each of the Selling Stockholders
of his or her respective interests in the assets and business of Clay &
Partners, a U.K. partnership ("Clay"). At the time of the acquisition, Clay was
the third largest U.K. partnership of consulting actuaries and pension fund
administrators, providing employee benefits and related consulting services to
corporate clients, primarily in the United Kingdom. Through the acquisition of
Clay, the Company plans to expand the European operations of ACG, its human
resource management consulting subsidiary.
The Consideration Shares were the total consideration paid for the purchase
of Clay. For the purpose of the transaction, the Consideration Shares were given
a value of $20.00 per share, valued at an exchange rate expressed in dollars per
B.P.1.00 of $1.479.
The acquisition was effected pursuant to a Sale and Purchase Agreement (the
"Purchase Agreement"), dated as of November 30, 1993, among the Company and the
Selling Stockholders. Pursuant to the Purchase Agreement, the parties entered
into certain other agreements, including a Registration Rights Agreement (the
"Registration Rights Agreement"), dated as of November 30, 1993, among the
Company and the Selling Stockholders. The sale and purchase of Clay and the
issuance of the Consideration Shares were consummated on November 30, 1993.
The Shares offered hereunder represent that portion of the Consideration
Shares the Selling Stockholders have elected to sell at the present time
pursuant to this registration.
7
<PAGE>
The following description of the Purchase Agreement and the Registration
Rights Agreement are summaries of certain of the material terms contained
therein and are qualified in their entirety by reference to the full text of
such agreements which have been filed as Exhibits to the Registration Statement
of which the Prospectus is a part.
PURCHASE AGREEMENT
Pursuant to the Purchase Agreement, on the Transfer Date, the Company
issued to each of the Selling Stockholders that portion of the Consideration
Shares allocable to each of the respective Selling Stockholder's interest in
Clay. Under the Purchase Agreement, each of the Selling Stockholders agreed not
to sell or otherwise dispose of his or her Consideration Shares prior to the
public announcement by the Company of its financial results for the year ended
December 31, 1993 which occurred on February 25, 1994 (the "Announcement Date").
Further, 10% of the Consideration Shares are being held in escrow and will be
released upon the occurrence of certain events and accordingly, such escrowed
Consideration Shares are not in any event included in the Shares.
REGISTRATION RIGHTS AGREEMENT
Under the Registration Rights Agreement, the Company has agreed to register
the Consideration Shares under the Securities Act and to use its best efforts to
register the Consideration Shares on Form S-3 pursuant to Rule 415 under the
Securities Act as soon as practicable (but in any event not earlier than the
Announcement Date) and to maintain the effectiveness of such registration for 90
days (subject to extension, in the event the Company exercises its rights to
prevent sales of the Shares during a transaction blackout or information
blackout, as such terms are described below). Notwithstanding the foregoing, the
Company has agreed to maintain the effectiveness of such registration statement
for 120 days (subject to extension, in the event the Company exercises its
rights to prevent sales of the Shares during a transaction blackout or
information blackout, as such terms are described below). Consideration Shares
so registered may be sold in "block" sales to institutional investors or through
broker-dealers in privately negotiated transactions with institutional or
corporate investors, through customary brokerage channels or in an underwritten
public offering. The Selling Stockholders are not entitled to sell their
Consideration Shares in more than one underwritten public offering or in a
public offering unless the number of Consideration Shares sold exceeds 400,000.
The Registration Rights Agreement contains additional agreements among the
parties, including, among other things, agreements relating to indemnification
and contribution and the Company's agreement to comply with applicable rules in
order to permit resales of the Consideration Shares without registration
pursuant to Rule 144 under the Securities Act. The parties have agreed that
except for the fees and expenses of counsel and other advisors to the Selling
Stockholders, underwriters' fees and expenses, underwriting discounts and
commissions and transfer taxes in respect of the Consideration Shares
registered, which will be borne by the Selling Stockholders, the Company will
pay all other expenses of the registration.
The Selling Stockholders have agreed not to sell any of the Shares after
receipt of notice from the Company that, in its reasonable judgment, it would
not be in the best interests of the Company and its stockholders generally for
such Shares to be sold (for customary reasons, including but not limited to,
such matters as the Company being engaged in active negotiations or planning for
a merger or acquisition or disposition transaction or a private or public
offering of debt securities or having recently completed such an offering) (a
"transaction blackout") or that it is in possession of material non-public
information that, in the reasonable opinion of the Company's counsel, would
expose the Company to securities laws liabilities if Shares continued to be sold
(an "information blackout"). Any information blackout will expire on the date
which is two business days after the information is disclosed. Any transaction
blackout will expire on the date which is two business days after the date the
transaction is abandoned, publicly disclosed or completed (whichever occurs
first). The Company has agreed that, if there is any blackout, it will maintain
the effectiveness of the Registration Statement of which this Prospectus is a
part for an additional period equal to the greater of 15 days and the duration
of such blackout.
8
<PAGE>
SELLING STOCKHOLDERS
The following table identifies each of the Selling Stockholders and
indicates (i) the nature of any position, office or other material relationship
that each such Selling Stockholder has had within the past three years with the
Company (or any of its predecessors or affiliates) and (ii) the number of shares
of Common Stock owned by each such Selling Stockholder prior to the offering,
the number of shares to be offered for the account of such Selling Stockholder
and the number of shares and percentage of outstanding shares to be owned by
such Selling Stockholder after completion of the offering.
The Purchase Agreement contemplated that Clay would be integrated with the
Company's human resource consulting division in the United Kingdom. The combined
operation was named Alexander Clay & Partners Consulting ("AC&P"). Each of the
Selling Stockholders (other than Simon Stoye) was offered employment with AC&P
and those who were offered employment have accepted such employment.
<TABLE><CAPTION>
SHARES SHARES AND
SHARES OFFERED PERCENTAGE**
OWNED IN OF CLASS OWNED
POSITION WITH OR RELATIONSHIP BEFORE THE THE AFTER THE
NAME TO THE COMPANY OFFERING OFFERING OFFERING
- ----------------------------------- ------------------------------------- ----------- --------- --------------
<S> <C> <C> <C> <C>
Ian S. Aitken...................... Principal Consultant--AC&P 87,337 30,000 57,337
Nigel R. Bankhead.................. Principal Consultant--AC&P 64,844 21,000 43,844
Geoffrey Booth*.................... Principal Consultant--AC&P 109,195 0 109,195
Jonathan R.P. Checkley............. Principal Consultant--AC&P 136,487 0 136,487
Lynne Davis........................ Principal Consultant--AC&P 87,337 69,337 18,000
Maurice Dyson...................... Director of Pension 136,487 86,487 50,000
Administration/Principal
Consultant--AC&P
Jeremy D. Fisher................... Principal Consultant--AC&P 109,195 98,275 10,920
Alan S. Fishman.................... Deputy Chairman--AC&P 187,525 87,525 100,000
Stephen L. Gooch................... Principal Consultant--AC&P 170,626 125,000 45,626
Helen James........................ Director of Professional and 109,195 98,275 10,920
Technical Services/Principal
Consultant--AC&P
Peter R. Lockyer................... Director of Investment 87,337 42,337 45,000
Services/Principal Consultant--AC&P
Stephen M. Riley................... Business Develoment Director--AC&P 109,195 50,000 59,195
Thomas M. Ross..................... Executive Director--AC&P 170,626 80,000 90,626
John E. Shepley.................... Principal Consultant--AC&P 136,487 100,000 36,487
Simon C. Stoye..................... None 87,337 35,000 52,337
Richard C.W. Strattan.............. Principal Consultant--AC&P 136,487 65,000 71,487
Nigel Taylor....................... Principal Consultant--AC&P 64,844 34,800 30,044
Robert S. Thomson.................. Principal Consultant--AC&P 87,337 43,669 43,668
John P. Woodhouse.................. Principal Consultant--AC&P 87,337 40,000 47,337
Stephen F. Yeo..................... Principal Consultant--AC&P 109,195 30,195 79,000
</TABLE>
- ---------------
* Mr. Booth transferred all his Consideration Shares to his spouse after the
Announcement Date.
** No Selling Stockholder acquired or, following the sale of his or her Shares,
will own more than 0.50% of the outstanding shares of the Company's Common
Stock.
The Selling Stockholders have filed a Statement on Schedule 13D pursuant to
Regulation 13D under the Exchange Act with respect to their acquisition of the
Consideration Shares. According to such Statement, the Selling Stockholders made
such filing because there may be deemed to have been the formation of a "group"
(as contemplated by Rule 13d-5(b) under the Exchange Act) consisting of the
Selling Stockholders. However, each Selling Stockholder expressly declared that
such Statement may not be construed as an admission that any such "group" has
been formed or that such Selling Stockholder is, for purposes of Section 13(d)
or 13(g) of the Exchange Act, the beneficial owner of any Consideration Shares
owned by other Selling Stockholders.
The Consideration Shares represent approximately 5.5% of the shares of the
Company's Common Stock outstanding as of August 1, 1994. Following the Offering,
assuming all the shares are sold, the Consideration Shares held in the aggregate
by the Selling Stockholders (or in the case of Mr. Booth, his spouse) will
represent approximately 2.7% of the Company's Common Stock outstanding as of
August 1, 1994.
9
<PAGE>
PLAN OF DISTRIBUTION
The Company has been advised by the Selling Stockholders that they intend
to sell either directly or through broker-dealers, acting either as principal
or as agent, or underwriters, all or a portion of the Shares from time to time
in one or more transactions on the New York Stock Exchange ("NYSE"), The
International Stock Exchange of the United Kingdom and the Republic of
Ireland, Ltd. (the "London Stock Exchange"), in block transactions, in
privately negotiated transactions, or through customary brokerage channels,
in a public offering or in a combination of any such methods of sale, at prices
and at terms prevailing at the time of sale or at prices related to the then
current market price, or at negotiated prices. Usual and customary or
specifically negotiated brokerage fees, discounts and commissions may be paid
by the Selling Stockholders in connection with such sales of Shares. The
Company's Common Stock is listed on the NYSE (symbol: AAL) and the London
Stock Exchange (symbol: ALXA). On August 12, 1994, the last reported sale
price of the Company's Common Stock on the NYSE was $19.875. Pursuant to the
Registration Rights Agreement, the shares registered pursuant to a Registration
Statement may be sold by the Selling Stockholders in the manner selected by
the Selling Stockholders in their sole discretion.
The aggregate proceeds to the Selling Stockholders from the sale of the Shares
so offered will be the purchase price of the Shares sold less the aggregate
agents' commissions and underwriters discounts, if any, and other expenses of
issuance and distribution not borne by the Company. The Company will not
receive any of the proceeds from the sale by the Selling Stockholders of the
Shares offered hereby. Any broker-dealers that participate with the Selling
Stockholders in the distribution of Shares may be deemed to be underwriters,
and any commissions received by them and any profit on the resale of the Shares
purchased by them might be deemed to be underwriting discounts and commissions
under the Securities Act.
The Selling Stockholders may effect transactions by selling the Shares to
or through broker-dealers acting either as principal or as agent, and such
broker-dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Stockholders. Such broker-dealers,
as agent or principal, may sell or resell the Shares on the Exchanges at market
prices prevailing at the time of such sales or otherwise.
Sales to institutional investors in privately negotiated transactions may
be at market prices prevailing at the time of sales, at prices related to such
prevailing prices or at negotiated prices. Institutional investors who may
acquire Shares from the Selling Stockholders, or, if applicable, a broker-dealer
or underwriter acting for the Selling Stockholders, include commercial and
savings banks, pension funds, investment companies, educational and charitable
institutions and other institutional investors.
If Shares are sold in an underwritten offering, the Shares may be acquired
by the underwriters for their own account and may be further resold from time to
time in one or more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time of sale. The
names of the underwriters with respect to any such offering and the terms of the
transactions, including any underwriting discounts, concessions or commissions
and other items constituting compensation of the underwriters and
broker-dealers, if any, will be set forth in a Prospectus Supplement relating to
such offering. Any public offering price and any discounts, concessions or
commissions allowed or reallowed or paid to broker-dealers may be changed from
time to time. Unless otherwise set forth in a Prospectus Supplement, the
obligations of the underwriters to purchase the Shares will be subject to
certain conditions precedent and the underwriters will be obligated to purchase
all of the Shares specified in such Prospectus Supplement if any are purchased.
The Registration Rights Agreement provides that, in certain circumstances,
the Company will indemnify the Selling Stockholders and certain other persons,
including any person who participates as an underwriter (and its controlling
persons) in the offering or sale of the Shares against certain liabilities,
including civil liabilities under the Securities Act. In addition, the
Registration Rights
10
<PAGE>
Agreement provides that to the extent such indemnification is not available in
such circumstances, the Company will under certain circumstances, contribute to
payments any such Selling Stockholder, underwriter or other person may be
required to make in respect of such liabilities.
See "Acquisition of Clay and Related Agreements-Registration Rights
Agreement" for a further description of certain terms of the Registration Rights
Agreement.
The Selling Stockholders (other than Messrs. Booth and Checkley) have
engaged CS First Boston Corporation ("CS First Boston") to provide advice
concerning the appropriate method of selling the Shares. In that regard, CS
First Boston has indicated that it may, on terms and conditions to be
negotiated, further act on behalf of the Selling Stockholders in connection with
a placement of the Shares in a block transaction, act as a broker-dealer in
selling Shares through customary brokerage channels and/or act as an underwriter
in a public offering of the Shares. CS First Boston has in the past provided,
and continues to provide, investment banking services to the Company.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares by
the Selling Stockholders. All the proceeds will be received by the Selling
Stockholders.
LEGAL MATTERS
The legality of the Shares is being passed upon by Ronald J. Roessler,
Esq., Senior Vice President and General Counsel of the Company. As of August 1,
1994, Mr. Roessler owned 2,403 shares directly and 200 shares indirectly of the
Company's Common Stock, and also held options exercisable for 33,500 shares of
Common Stock. In addition, 5,919 shares of Common Stock are attributed to Mr.
Roessler's account under the Company's Thrift Plan.
EXPERTS
The consolidated financial statements and the related financial statement
schedules incorporated in this Prospectus by reference from the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1993 have been
audited by Deloitte & Touche LLP.
11
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following sets forth the costs and expenses in connection with the
distribution of the shares being registered, other than any underwriting
discounts and commissions. All of the amounts shown, except the Securities and
Exchange Commission registration fees and stock exchange filing fees, are
estimates. Except for the fees and disbursements of counsel and other advisors
to the Selling Stockholders, any underwriters' fees and expenses and
underwriting discounts and commissions and transfer taxes in respect of the
Shares being sold, which will be borne by the Selling Stockholders, the Company
has agreed to pay all other expenses related to this registration.
<TABLE><CAPTION>
TO BE PAID BY
REGISTRANT
--------------
<S> <C>
SEC registration fee................................................................... $ 7,694
NYSE filing fee........................................................................ 7,960
London Stock Exchange filing fee....................................................... 9,995
Blue Sky fees and expenses............................................................. 0
Accounting fees and expenses of the Company's auditors................................. 9,000
Printing expenses...................................................................... 20,000
Legal fees and expenses of the Company's counsel....................................... 3,000
Miscellaneous expenses................................................................. 3,000
Total........................................................................... $ 60,649
</TABLE>
Any other expenses in connection with the Shares being registered will be
borne by the Selling Stockholders.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 2-418 of the Maryland General Corporation Law establishes
provisions whereby a Maryland corporation may indemnify any director or officer
made party to an action or proceeding by reason of service in that capacity,
against judgments, penalties, fines, settlements and reasonable expenses
incurred in connection with such action or proceeding unless it is proved that
the director or officer (i) acted in bad faith or with active and deliberate
dishonesty, (ii) actually received an improper personal benefit in money,
property or services or (iii) in the case of a criminal proceeding had
reasonable cause to believe that his act was unlawful. However, if the
proceeding is a derivative suit in favor of the corporation, indemnification may
not be made if the individual is adjudged to be liable to the corporation. In no
case may indemnification be made until a determination has been reached that the
director or officer has met the applicable standard of conduct. Indemnification
for reasonable expenses is mandatory if the director or officer has been
successful on the merits or otherwise in the defense of any action or proceeding
covered by the indemnification statute. The statute also provides for
indemnification of directors and officers by court order. The indemnification
provided or authorized in the indemnification statute does not preclude a
corporation from extending other rights (indemnification or otherwise) to
directors and officers.
The Company's Bylaws provide for indemnification of any person who is
serving or has served as a director or officer of the Company, against all
liabilities and expenses incurred in connection with any action, suit or
proceeding arising out of such service to the full extent permitted under
Maryland law.
The Company currently maintains policies of insurance under which the
Company and the directors and officers of the Company are insured, within the
limits of the policies, against certain expenses in connection with the defense
of actions, suits or proceedings, and certain liabilities which might be imposed
as a result of such actions, suits or proceedings, to which directors and
officers of the Company are parties by reason of being or having been such
directors or officers.
II-1
<PAGE>
EXHIBITS
The following exhibits are filed with this Registration Statement:
<TABLE><CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- --------- -----------------------------------------------------------------------------------------------------
<S> <C>
5.1 Opinion of Counsel of Ronald J. Roessler, Esq., Senior Vice President and General Counsel of the
Company
10.1 Purchase Agreement, dated November 30, 1993, among the Company and the Selling Stockholders
(including certain parts of the Schedule thereto)
10.2 Registration Rights Agreement, dated November 30, 1993, among the Company and the Selling
Stockholders
10.3 Letter Agreement, dated June 28, 1994, between CS First Boston Corporation, the Selling Stockholders
(other than Messrs. Booth and Checkley) and the Company respecting the offering and sale of the
Shares.
23.1 Consent of Deloitte & Touche LLP, independent public accountants
23.2 Consent of Ronald J. Roessler, Esq., Senior Vice President and
General Counsel of the Company, included in Exhibit 5.1
24.1 Power of Attorney is included in the Signature Page contained in Part II of the Registration
Statement
</TABLE>
UNDERTAKINGS
The undersigned Registrant undertakes: (1) To file, during any period in
which offers or sales are being made, a post-effective amendment to this
Registration Statement: (i) To include any prospectus required by section
10(a)(3) of the Securities Act; (ii) To reflect in the prospectus any facts or
events arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement; (iii) To include any material information with respect
to the plan of distribution not previously disclosed in the Registration
Statement; provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated in the
Registration Statement. (2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof. (3) To remove from registration by means of a
post-effective amendment any of the Shares being registered which remain unsold
at the termination of the offering.
The undersigned Registrant hereby further undertakes that for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the
II-2
<PAGE>
questions whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
The undersigned Registrant hereby further undertakes that: (1) for the
purposes of determining any liability under the Securities Act, the information
omitted from the form of Prospectus filed as part of this Registration Statement
in reliance upon Rule 430A and contained in a form of Prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of the Registration Statement as of the time it was
declared effective. (2) for the purposes of determining any liability under the
Securities Act, each post-effective amendment that contains a form of Prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on the 16th day of
August, 1994.
ALEXANDER & ALEXANDER SERVICES INC.
By: /s/ Frank G. Zarb
..................................
Frank G. Zarb
Chairman of the Board, Chief
Executive Officer,
President and Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the officers and directors
whose signature appears below constitutes and appoints Frank G. Zarb and Robert
E. Boni, and each of them, their true and lawful attorneys and agents, with full
power of substitution each with power to act alone, to sign and execute on
behalf of the undersigned any and all amendments (including pre-effective and
post-effective amendments) to this registration statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them acting singly, full power and authority to do and
perform each and every act and thing necessary and requisite to be done, as
fully and to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys and agents or their or his
substitutes, shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on August 16, 1994 by the following
persons in the capacities indicated.
<TABLE><CAPTION>
NAME TITLE
- --------------------------------------------------- --------------------------------------------------------------
<S> <C>
/s/ Frank G. Zarb Chairman of the Board, Chief Executive Officer, President and
.............................................. Director
Frank G. Zarb
/s/ Paul E. Rohner Senior Vice President and Chief Financial Officer
..............................................
Paul E. Rohner
/s/ Ronald L. Hendrick Vice President and Controller
..............................................
Ronald L. Hendrick
</TABLE>
<PAGE>
<TABLE><CAPTION>
NAME TITLE
- --------------------------------------------------- --------------------------------------------------------------
<S> <C>
/s/ Kenneth Black, Jr. Director
..............................................
Kenneth Black, Jr.
/s/ John A. Bogardus, Jr. Director
..............................................
John A. Bogardus, Jr.
/s/ Robert E. Boni Director
..............................................
Robert E. Boni
/s/ Peter C. Godsoe Director
..............................................
Peter C. Godsoe
/s/ Angus M.M. Grossart Director
..............................................
Angus M.M. Grossart
/s/ Vincent R. McLean Director
..............................................
Vincent R. McLean
/s/ William M. Wilson Director
..............................................
William M. Wilson
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE><CAPTION>
EXHIBIT PAGE
NUMBER EXHIBIT TITLE NO.
- --------- ---------------------------------------------------------------------------------------------- ---------
<S> <C> <C>
5.1 Opinion of Counsel of Ronald J. Roessler, Esq., Senior Vice President and General Counsel of
the Company...................................................................................
10.1 Purchase Agreement, dated November 30, 1993, among the Company and the Selling Stockholders
(including certain parts of the Schedule thereto).............................................
10.2 Registration Rights Agreement, dated November 30, 1993, among the Company and the Selling
Stockholders..................................................................................
10.3 Letter Agreement, dated June 28, 1994, between CS First Boston, the Selling Stockholders
(other than Messrs. Booth and Checkley) and the Company respecting the sale of the Shares.....
23.1 Consent of Deloitte & Touche LLP, independent public accountants..............................
23.2 Consent of Ronald J. Roessler, Esq., Senior Vice President and General Counsel of the Company,
included in Exhibit 5.1
24.1 Power of Attorney is included in the Signature Page contained in Part II of the Registration
Statement.....................................................................................
</TABLE>
August 16, 1994 Exhibit 5.1
Board of Directors
Alexander & Alexander Services Inc.
1211 Avenue of the Americas
New York, NY 10036
Re:
Alexander & Alexander Services Inc.
Registration Statement on FOrm
Gentlemen:
I am General Counsel of Alexander & Alexander Services Inc., a Maryland
corporation (the "Company"), and have acted as counsel for the Company in
connection with the Registration Statement on Form S-3 ("Registration
Statement") to be filed under the Securities Act of 1933, as amended, in
connection with the proposed offering and sale, from time to time, of up to
1,136,900 shares of the Company's Common Stock, $1.00 par value per share (the
"Shares"), by certain selling stockholders who are identified in the
Registration Statement.
In connection with the foregoing, I have examined the originals or copies of
such corporate records, documents, certificates and other instruments as I have
deemed necessary or appropriate for the purposes of rendering this opinion.
Based on the foregoing, it is my opinion that the Shares are legally issued,
fully paid and non-assessable.
The foregoing opinions are limited to the laws of the state of Maryland and I do
not express any opinion herein concerning any other law. I thereby consent to
the filing of this opinion as an exhibit to the Registration Statement. In
giving this consent, I do not hereby admit that I am within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933.
Very truly yours,
Ronald J. Roessler
Senior Vice President
and General Counsel
AGREEMENT
---------
between
ALEXANDER & ALEXANDER SERVICES INC.
-----------------------------------
and
THOSE SEVERAL PERSONS
---------------------
UT INTUS
--------
Dorman Jeffrey & Co.
Solicitors, Glasgow
<PAGE>
INDEX
-----
CLAUSE PAGE
------ ----
1. Interpretation 1-12
2. Eurobenefits Shares 12
3. Purchase of the Assets 13-13
4. Value Added Tax 13-16
5. Restrictions on The Consideration Shares 16-17
6. Completion 17-20
7. Agreement to Continue after Completion 20-21
8. Completion Accounts 21-22
9. Warranties 22-26
10. Employees 26-28
11. Leasehold Properties 28
12. Confidentiality 28-29
13. Pensions 29
14. Limitation of Liability of the Purchaser 29-30
15. Contracts 30-31
16. Restrictive Covenant 31-32
17. Assignment 32-33
18. Aims and Intent 33
19. Costs 33-34
20. Miscellaneous 34-36
21. Notices 36-37
22. Announcements 37
23. Governing Law 37-38
SCHEDULE PART
1. The Vendors 43-44
2. Employee Loans 45
3. Employment Contract 46-50
4. Escrow Agreement 51-66
5.(A) Leasehold Properties 67-68
(B) Terms and Conditions of Sale 69-77
6. Transferring Employees 78
7. Warranties 79-104
8. Tax Indemnity 105-128
9. Details of Professional Liability Insurance 129-146
10. Key Clients 147-
148
11. Key Employees 149
12. The Accounts 150
<PAGE>
THE SHARES BEING OFFERED HEREUNDER HAVE NOT
AMENDED ("THE ACT") AND MAY NOT BE
OFFERED OR SOLD UNLESS THE SECURITIES ARE
REGISTERED UNDER THE ACT, OR AN EXEMPTION
FROM REGISTRATION REQUIREMENTS OF THE ACT
IS AVAILABLE.
This SALE & PURCHASE AGREEMENT is made
-------------------------
the 30th day of November 1993
between
ALEXANDER & ALEXANDER SERVICES INC. a
------------------------------------
Maryland Corporation having its
principal office at 1211 Avenue of the
Americas, New York 10036, U.S.A.
hereinafter referred to as "the
Purchaser")
OF THE ONE PART
---------------
and
Those persons whose names and
addresses are set out in Part 1 of the
Schedule to this Agreement
(hereinafter collectively referred to
as "the Vendors")
OF THE OTHER PART
-----------------
WHEREAS
-------
(A) the Vendors carry on business in the United Kingdom as
consulting actuaries under the firm name of "Clay &
Partners";
(B) the Vendors have agreed to sell and the Purchaser has
agreed to purchase such business and the right to
carry it on in succession to the Vendors on the terms and
subject to the conditions hereinafter written:
NOW THEREFORE THE PARTIES HERETO HAVE AGREED AND DO HEREBY AGREE AS
- -----------------------------------------------------------------------
FOLLOWS:-
- -------
1. INTERPRETATION
--------------
In this Agreement and the Schedule:
"the Accounting Date" means 31st May 1993;
-------------------
<PAGE>
"the Accounts" means the balance sheet of the Business as at the
------------
Accounting Date produced for the purposes of this
Agreement and set out in Part 12 of the Schedule;
"the Act" means the U.S. Securities Act of 1933 (as amended);
-------
"Assets" means:
------
(1) the whole property and assets of the Vendors employed in
and for the purposes of the Business including,
without limitation:
(a) the Goodwill; and
(b) the Leasehold Properties; and
(c) the whole furniture, fixtures and fittings, and
equipment motor vehicles and other assets of
whatsoever nature used by the Vendors in and
for the purposes of the Business including
without prejudice to the generality of the
foregoing the burden of any and all leasing, hire
purchase, hire or credit sale agreements relating
to any of the foregoing and disclosed in the Letter
of Disclosure as from and after the Transfer
Date, (subject always to the written consent
of the owner of the subject matter of such
agreements where such consent is necessary); and
(d) the Work in Progress; and
(e) Stock; and
(f) all trade lists, lists of clients and suppliers'
names and addresses, and lists of agents; and
(g) the benefit of
(i) all Contracts; and
(ii) insofar as contracts result therefrom, all
tenders relating to the Business as at the
Transfer Date; and
(h) the Debtors; and
(i) the Employee Loans, and
(j) the Industrial Property Rights; and
(k) the Companies; and
<PAGE>
(l) all stocks, shares, debentures and other investments;
and
(m) cash in hand and at bank; and
(n) all stock and work in progress records, fee tables,
catalogues, sales literature and publicity material
of the Business and all other documents relating to
the Business as the Purchaser may reasonably
require to enable it effectively to carry on the
same in succession to the Vendors; and
(o) all rights and claims of the Vendors against third
parties (including without limitation all rights in
connection with such third parties'
guarantees, conditions, indemnities, warranties
and representations) with respect to the Business so
far as the Vendors can assign the same; and
(p) without prejudice to the generality of the foregoing,
all other assets (if any) of whatever nature
employed in and for the purposes of the Business
at the Transfer Date.
(2) the Creditors;
"Balance Sheet" means the balance sheet comprised in the
---------------
Accounts;
"Business Day" means any day on which the branches of the Bank of
------------
Scotland in London are open for business;
"Business" means all the business carried on by the Vendors under
--------
"Clay & Partners" including without prejudice to the foregoing
generality the business of consulting actuaries and pension fund
administrators;
"Company Accounts" means in relation to each of the Companies the
----------------
latest set of audited accounts which have been filed by the
relevant company with the Registrar of Companies;
"Company Accounts Date" means in respect of each of the Companies
---------------------
the date to which the relevant Company Accounts have been
made up;
"the Companies" means Clay Communications Limited, Clay &
--------------
Partners Pension Trustees Limited, Clay & Partners
Independent Trust Corporation Limited, Clay & Partners
Limited, Clay & Partners (1987) Limited and Claytime
Limited;
"Completion" means due performance by the Parties of their
----------
respective obligations under or pursuant to Clause 6;
- 5 -
<PAGE>
"Completion Accounts" means the profit and loss account and
--------------------
balance sheet of the Business as at the Transfer Date
produced for the purposes of this Agreement and to be agreed or
determined pursuant to Clause 8;
"the Consideration Shares" means 2,274,410 unregistered Common
-------------------------
Stock, $1 par value, in the capital of the Purchaser to be
offered and sold pursuant to Clause 3, such shares being
offered and sold in reliance on an exemption from
registration under and in accordance with Regulation S of the
Act;
"the Contracts" means the contracts engagements and commitments
-------------
entered into or undertaken by the Vendors in relation to
the Business (other than the contracts of employment of
employees);
"Creditors" means all the creditors of the Business as at close
---------
of business on the Transfer Date but not including
liabilities for taxation on profits or chargeable gains;
"Debtors" means all the debtors of or related to the Business as
-------
at close of business on the Transfer Date;
"Employee Loans" means the loans made by the Vendors to certain
--------------
Transferring Employees specified in Part 2 of the Schedule
and outstanding as at the Transfer Date;
"Employment Contracts" means employment contracts in the terms
--------------------
set out in Part 3 of the Schedule between the Purchaser and each
of the Vendors;
"Escrow Agent" means The Royal Bank of Scotland plc, whose
-------------
registered office is situated at 42 St. Andrew Square,
Edinburgh EH2 2YE;
"Escrow Agreement" means the agreement in the terms set out in
----------------
Part 4 of the Schedule among the Purchaser, the Vendors and
the Escrow Agent;
"Escrow Consideration Shares" means the ten per centum of the
---------------------------- --- ------
Consideration Shares to be delivered to the Escrow Agent
pursuant to Clause 5 together with any additional shares
issued or issuable with respect to or in exchange for said
shares of the Purchaser's stock by reason of any stock
dividend, stock split, reorganisation, reclassification or
similar change affecting said shares;
"Eurobenefits" means Eurobenefits Limited (Company No. 02322193)
------------
whose registered office is situated at 61 Grosvenor Street,
London W1;
- 6 -
<PAGE>
"Eurobenefits Shares" means the 32,080 Ordinary Shares in
--------------------
Eurobenefits which are held by Clay & Partners Limited as
nominee for the Vendors;
"Goodwill" means the goodwill of the Vendors in connection with
--------
the Business and the exclusive right of the Purchaser or its
assignee to use the name "Clay & Partners" and to
represent itself as carrying on the Business in succession to the
Vendors, including the benefit of all pending
instructions, contracts and engagements and the right to all
lists of clients and suppliers of the Business;
"ICTA" means the Income and Corporation Taxes Act 1988;
----
"Industrial Property Rights" means all industrial and
------------------------------
intellectual property rights of the Vendors, used in or for the
purposes of the Business and all know-how and
confidential information so owned and used including without
limitation rights under patents, trade marks, and/or service
marks (whether registered or unregistered) registered
designs, unregistered designs and copyrights, and any
applications for any of the foregoing in any part of the
world, and the rights under copyright in all drawings,
plans, specifications, designs and computer software owned or
licensed by the Vendors;
"Key Clients" means those persons specified in Part 10 of the
-----------
Schedule;
"Key Employees" means those persons specified in Part 11 of the
-------------
Schedule.
"Know-how" means all information (including that comprised in or
--------
derived from data, disks, tapes, manuals, source codes, flow-
charts, catalogues and instructions) relating to the Business
and the services provided by the Business save to the extent
that the Vendors have disclosed in the Letter of Disclosure
that they are not entitled to disclose such information
without breach of an undertaking or obligation of
confidentiality, or that they do not own the same;
"in the agreed form" means in a form agreed prior to the
---------------------
execution hereof between the Purchaser's Solicitors and the
Vendors' Solicitors and for the purposes of identification
signed by or on behalf of the Parties;
"Leasehold Properties" means the leasehold premises described in
--------------------
Part 5 (A) of the Schedule;
"the Leases" means the leases relating to the Leasehold
-----------
Properties, brief details of which are set out in Part 5 (A) of
the Schedule;
- 7 -
<PAGE>
"Letter of Disclosure" means a letter of even date herewith from
--------------------
the Vendors' Solicitors to the Purchaser's Solicitors and
making disclosures relative to the warranties,
representations and undertakings referred to in this
Agreement and contained in Part 7 of the Schedule;
"Liabilities" means all the obligations and liabilities of the
-----------
Business as at close of business on the Transfer Date of
whatsoever nature including, without prejudice to the
foregoing generality, obligations and liabilities
(a) whether actual or contingent, accrued or accruing, arising
under or in respect of or out of the performance of
any Contract (including those arising by virtue of pre-
payments and advance payments of any kind) and which are
owed by the Vendors to the other party or parties to any
such Contract; and
(b) in respect of all claims by any third parties against the
Vendors, whether actual or contingent, accrued or accruing
and whether arising in contract or quasi-contract,
or in tort, or under any trust, or fiduciary relationship
of whatsoever nature or any statute or regulation
insofar as the same arise out of the conduct or operation
of the Business or the ownership of the assets employed
in and for the purposes of the Business, or any of them;
but excluding (i) any liabilities for taxation on profits or
---------
chargeable gains and (ii) any costs, expenses or liabilities
arising under or in respect of any claim made against the
Vendors or any of them under the Deed of Partnership relating to
the Business dated 16th June 1992, or otherwise relating to the
partnership relationship of the Vendors or any of them with any
of the existing or former partners in the Business (whether
salaried or equity).
"Parties" means the Purchaser and the Vendors;
-------
"Purchaser's Accountants" means Messrs. Touche Ross & Co.,
------------------------
Chartered Accountants, 39 St. Vincent Place, Glasgow G1 2QQ;
"Purchaser's Group" means the group of companies comprising
------------------
Alexander & Alexander Services Inc., and its subsidiaries;
"Purchaser's Solicitors" means Dorman Jeffrey & Co., Solicitors,
----------------------
Madeleine Smith House, 6/7 Blythswood Square, Glasgow G2 4AD;
"Purchaser Warranties" means the warranties, representations and
--------------------
undertakings of the Purchaser contained in the Warranties and
Indemnities Agreement;
- 8 -
<PAGE>
"Records" means all books, accounts, records, registers and lists
-------
of or relating to either or both the Business and the Assets;
"the Regulations" means the Transfer of Undertakings (Protection
---------------
of Employment) Regulations 1981/1794 as amended by Statutory
Instrument 1987/442;
"Relevant Claim" means any claim by the Purchaser against any or
--------------
all of the Vendors in respect of any representation,
indemnity, warranty, covenant, agreement, undertaking or
obligation expressed to be given or entered into by the
Vendors either in or under this Agreement or in the Tax
Indemnity;
"Schedule" means the schedule to this Agreement;
--------
"Stock" means the stock in trade of the Business and materials
-----
situated at any of the Leasehold Properties or in the course of
delivery thereto to the Business as at the Transfer Date,
including (without limitation) goods, stores, consumables,
raw materials, and components;
"the Stock Exchange" means The International Stock Exchange of
-------------------
the United Kingdom and the Republic of Ireland Limited;
"subsidiary" and "holding company" shall have the respective
---------- ----------------
meanings ascribed thereto under section 736 of the Companies Act
1985;
"Taxation" includes without limitation income tax, surtax, the
--------
special charge, capital transfer tax, inheritance tax, estate
duty, corporation tax (including taxation on capital gains),
capital gains tax, overseas taxation, value added tax,
development gains tax, development land tax, development
charge, betterment levy, withholding tax, rates,
national insurance and graduated pension scheme
contributions, social security payments, company's capital
duty, stamp duty, stamp duty reserve tax, any levy under the
Industrial Training Act 1964, and shall include all costs,
charges, penalties, fines, interest and expenses incidental or
relating to any of the foregoing;
"the Tax Indemnity" means the Indemnity in the terms of Part of
------------------
the Schedule with respect to the Companies;
"TCGA" means the Taxation of Chargeable Gains Act 1992;
----
"Transfer Date" means 30th November 1993 or such other date
--------------
(being not later than 31st December 1993) as may be mutually
agreed;
"Transferring Employees" means those employees of the Business
----------------------
named in Part 6 of the Schedule;
- 9 -
<PAGE>
"VAT" means Value Added Tax;
---
"the Vendors' Accountants" means Messrs. KPMG Peat Marwick,
--------------------------
Puddle Dock, Blackfriars, London EC4V 3PD;
"the Vendors' Solicitors" means Messrs. Field Fisher Waterhouse,
------------------------
Solicitors, 41 Vine Street, London EC3N 2PX;
"Warranties" means the agreements, obligations, warranties,
----------
representations and undertakings of the Vendors contained in
this Agreement, including Part 7 of the Schedule;
"Warranty Claim" means any claim made by the Purchaser for breach
--------------
of any of the Warranties;
"Warranties and Indemnity Agreement" means the agreement in the
-----------------------------------
agreed form to be delivered by the Purchaser pursuant to Clause
6.2.3.3;
"Work in Progress" means the work performed or being performed by
----------------
the Business for the benefit of clients but not invoiced.
1.1 References to any of the Parties shall include their
respective successors in title, executors, personal
representatives and assignees.
1.2 The provisions of the Interpretation Act 1978 with respect to
interpretation and construction shall apply mutatis mutandis.
------- --------
1.3 The headings contained herein and in the Schedule are for
convenience only and shall not be construed as forming part of
this Agreement or taken into account in the interpretation
hereof.
1.4 References to recitals, clauses, sub-clauses and paragraphs
shall be construed as references to recitals, clauses,
sub-clauses and paragraphs of this Agreement unless the
context otherwise requires.
1.5 References to any section of, or part of, or schedule to, any Act
of Parliament shall include any re-enactment or
modification thereof.
1.6 Terms defined in the U.K. taxation statutes or in the U.K.
Companies Act 1985 shall, save as otherwise provided herein or
as the context may otherwise require, have the same
meanings herein, provided that where there is a conflict
--------
between definitions in the U.K. Taxation Statutes and in the
U.K. Companies Act 1985, the definitions in the latter shall
prevail.
- 10 -
<PAGE>
1.7 Any undertaking or covenant granted herein by the Vendors
(other than in terms of Clause 16) shall be deemed to be
granted jointly and severally.
2. EUROBENEFITS SHARES
-------------------
2.1 The Vendors shall procure the sale of the Eurobenefits Shares to
a person or persons not connected with them or any of them (other
than by reason only of such person or persons being a member or
members of Eurobenefits) as soon as reasonably practicable
(in accordance with the Shareholders Agreement pertaining to
and the Articles of Association of Eurobenefits) and in
any event not later than twelve months from the Transfer Date.
2.2 The Vendors shall exercise all reasonable endeavours to
obtain a reasonable price for the Eurobenefits Shares (having due
regard to the provisions of the Articles of Association of
Eurobenefits) and shall account to in respect of, and pay over
to the Purchaser, the relevant sale proceeds, net only of the
reasonable and proper costs of such sale.
3. PURCHASE OF THE ASSETS
----------------------
3.1 The Vendors shall, relying on the Purchaser Warranties
subject to the provisions of this Agreement, sell as
beneficial owners to the Purchaser and the Purchaser shall,
relying on the Warranties, purchase as at the Transfer Date
from the Vendors free from all liens, charges, equities and
encumbrances (other than the Liabilities) the Business as a
going concern, including the Assets.
3.2 The consideration for the sale by the Vendors of the Business and
Assets shall be the sum of THIRTY MILLION SEVEN HUNDRED
THOUSAND POUNDS STERLING (B.P.30,700,000) (exclusive of VAT) and
such sum shall be allocated between Goodwill, fixed assets,
Work in Progress, Debtors and other current assets and
liabilities as shall be set out in the Completion Accounts.
3.3 The consideration shall be settled on the Transfer Date by the
sale and issue to the Vendors of the Consideration Shares free
from all liens, charges or encumbrances other than (in respect
of the Escrow Consideration Shares) under the Escrow Agreement
and not bearing any legend the effect of which would be to
restrict dealing, the number of which to be offered and sold
having been determined by reference to a value of 20 U.S.
Dollars for each share of the Purchaser's Common Stock converted
at the average rate of exchange for the US Dollar against the
Pound Sterling at close of business in New York over the ten
Business Days to and including the fourth Business Day prior to
the Transfer Date, as may be reported in the eastern edition of
The Wall Street Journal.
- 11 -
<PAGE>
3.4 The Vendors shall be entitled to the Consideration Shares in the
same proportions (as nearly as circumstances permit) as they
share in the profits of the Business, provided that no
fractions of shares shall under any circumstances be issued or
allotted.
3.5 The sale and issue contemplated in Clause 3.3 shall be deemed to
constitute full implementation by the Purchaser of its
obligations to pay and settle the consideration hereunder.
4. VALUE ADDED TAX
---------------
4.1 The Purchaser and the Vendors intend that the Value Added Tax Act
1983 Section 33 ("Section 33") and the Value Added Tax
(Special Provisions) Order 1992 Article 5 ("Article 5") shall
apply to the sale and purchase of the Business, and
accordingly:
4.1.1 the Parties shall use all reasonable endeavours to
secure that pursuant to Section 33 and Article 5 the
sale of the Business is treated by HM Customs and
Excise as a transfer of a business as a going concern
for the purposes of VAT;
4.1.2 The Vendors shall not be required by virtue of this
sub-clause to make any appeal to any court against
any determination of HM Customs and Excise that the
sale does not fall to be so treated (so that any
appeal shall be made solely in accordance with the
provisions of sub-clause 4.1.3 below);
4.1.3 if notwithstanding the provisions of sub-clause
4.1.1, HM Customs and Excise shall determine that VAT
is chargeable in respect of the supply of all or any
part of the Business the Vendors shall notify the
Purchaser of that determination within seven days of
its being so advised by HM Customs and Excise and the
Purchaser shall, unless it exercises its rights under
sub-clause 4.1.4 below, pay to the Vendors by way of
additional purchase price, a sum equal to the amount
of VAT determined by HM Customs and Excise to be so
chargeable within fourteen days of the Vendors
notifying the Purchaser of that determination
(against delivery by the Vendors of an appropriate
tax invoice for VAT purposes);
4.1.4 if the Purchaser disagrees with the determination of
HM Customs & Excise referred to in sub-clause 4.1.3
it may, within seven days of being notified by the
Vendors of that determination give notice to the
Vendors that the Purchaser will request the
Commissioners of Customs & Excise to review that
determination and the Purchaser may, if it disagrees
- 12 -
<PAGE>
with the decision arising out of the review, make all
such appeals against that decision as it considers
appropriate. The Vendors shall not be obliged to
take any action in connection with such a review (or
any appeal(s) against a decision arising out of the
review) unless (a) the Vendors have been indemnified
to the Vendors' reasonable satisfaction against all
reasonable costs and expenses (including VAT) that
the Vendors may incur by taking such action and (b)
the action requested of it by the Purchaser is
reasonable;
4.1.5 within fourteen days of the decision of the
Commissioners arising out of the review referred to
in sub-clause 4.1.4 or if the Purchaser shall have
made any appeal or appeals against that decision
within fourteen days of the decision of the Court or
Tribunal to which the final such appeal has been made
the Purchaser shall pay to the Vendors by way of
additional purchase price a sum equal to the amount
of VAT that has thereby been determined to be
properly chargeable in respect of the supply of all
or any part of the Business hereunder (against
delivery by the Vendors of an appropriate tax invoice
for VAT purposes) together with any interest or
penalty or surcharge.
4.1.6 on Completion the Vendors shall deliver to the
Purchaser all records relating to the Business
referred to in Section 33;
4.1.7 the Parties warrant to each other that they are and
will at Completion be duly registered for the
purposes of VAT.
4.2 The Purchaser shall for a period of not less than six years
from the Transfer Date preserve the records delivered to it by
the Vendors under this Clause 4 and upon reasonable notice during
normal business hours, make them available to the Vendors or
their agents.
5 RESTRICTIONS ON THE CONSIDERATION SHARES
----------------------------------------
5.1 The Vendors hereby irrevocably and unconditionally undertake and
agree not at any time prior to the date on which the
Purchaser publicly announces its 1993 year end financial
results to offer or sell, dispose of or otherwise deal in any
of the Consideration Shares, or any interest therein.
The Vendors shall also observe and act in accordance with the
provisions of paragraph 4.32 of Part 7 of the Schedule.
- 13 -
<PAGE>
5.2 At Completion the Vendors shall deliver to the Purchaser as
agent for the Escrow Agent the Escrow Consideration Shares,
issued in the name of the Escrow Agents or its nominee (as the
Escrow Agent may direct).
5.3 The Escrow Consideration Shares shall be held by the Escrow
Agent, and the Vendors and the Purchaser shall have the
respective rights in and to the Escrow Consideration Shares, all
as more particularly set out and provided in the Escrow
Agreement.
5.4 The balance of the Consideration Shares shall be held by the
Vendors' Solicitors until the expiration of the prohibition on
dealing therein or in any interest therein, as
contemplated in Clause 5.1. Thereafter said shares may be
delivered to the relevant Vendors, in accordance with
arrangements agreed between the Vendors and the Vendors'
Solicitors, the details of which being of no concern to the
Purchaser.
6 COMPLETION
----------
6.1 The sale and purchase contemplated hereunder shall be
completed immediately following upon execution of this
Agreement when all the matters set out in this Clause 6 shall be
given effect to or otherwise implemented.
6.2 Completion shall take place on the Transfer Date within
Sciphol Airport, Amsterdam or such other place as may be
agreed at which time
6.2.1 the Vendors shall deliver to the Purchaser
6.2.1.1 such of the Assets as are capable of being
transferred by delivery;
6.2.1.2 duly executed assignment of the Goodwill in the
agreed terms;
6.2.1.3 duly executed assignment of the Employee Loans
in the agreed terms;
6.2.1.4 duly executed assignment of the Contracts in
the agreed terms;
6.2.1.5 duly executed assignment of the Debtors in the
agreed terms;
6.2.1.6 duly executed assignment of such of the
Industrial Property Rights as are capable of
assignment in the agreed terms;
- 14 -
<PAGE>
6.2.1.7 duly executed transfers in favour of the
Purchaser or as the Purchaser may direct
accompanied by the relative share
certificate in respect of the whole issued share
capital of each of the Companies held by the
Vendors;
6.2.1.8 bank certificates of balance showing all the
accounts of the Business and each of the
Companies as at the close of business on 26th
November 1993;
6.2.1.9 a letter from the Vendors' Solicitors
confirming that all deeds and documents
relating to the Vendors' title to the
Leasehold Properties in their possession or under
their control are held subject to the terms of
this Agreement and without any lien attaching
to them;
6.2.1.10 the statutory books, Certificates of
Incorporation and Common Seals of each of the
Companies;
6.2.1.11 all the Records and correspondence of the
Business, provided that the Purchaser shall
afford the Vendors access to all the Records and
correspondence of the Business delivered to the
Purchaser hereunder and (in the case of the
financial records) shall be entitled to take
copies thereof at all reasonable times for a
period of six years thereafter, and in all
other cases shall be entitled to take copies
thereof at all reasonable times for a period
of two years thereafter;
6.2.1.12 the Tax Indemnity duly executed;
6.2.1.13 the Escrow Agreement duly executed in
triplicate, together with the Escrow
Consideration Shares;
6.2.1.14 the Employment Contracts duly executed in
duplicate;
6.2.1.15 a certified copy of any Power of Attorney under
which any document required to be delivered
hereunder or pursuant hereto has been executed
or signed.
6.2.2 The Vendors shall procure:-
- 15 -
<PAGE>
6.2.2.1 the registration of the Purchaser (or as the
Purchaser may direct) in the books of the
Companies as the holder or, as the case may be,
the holders of the shares in their respective
capital held by the Vendors, subject only to
the relevant transfers being duly stamped,
which shall be the sole responsibility of the
Purchaser;
6.2.2.2 the appointment as a director of each of the
Companies of Mr. Alex Porte;
6.2.2.3 the resignation of Messrs. Sproull & Co.,
Chartered Accountants, 31/33 College Road,
Harrow, Middlesex, as auditors of Clay
Communications Limited and Derek R. Judd,
Chartered Accountant, Grovelands, Busbridge
Lane, Godalming, Surrey as auditor of Clay &
Partners Independent Trust Corporation
Limited, Clay & Partners Pension Trustees
Limited, Clay & Partners Limited, Clay &
Partners (1987) Limited and Claytime Limited
acknowledging that there are no
circumstances connected with their
resignation which they consider should be
brought to the notice of the members or
creditors of the Company for the purposes of
section 390 of the Companies Act 1985; and
6.2.2.4 settlement of any sums due to the Companies or
any of them by the Vendors (other than debts
incurred in the ordinary course of trade
between the Business and any of the Companies
not exceeding B.P.15,000).
6.2.3 The Purchaser shall
6.2.3.1 duly allot, issue and deliver to the Vendors in
the proportions referred to in Clause 3.4 the
Consideration Shares, fully paid, free of all
liens, charges, equities and encumbrances
other than (in respect of the Escrow
Consideration Shares) under the Escrow
Agreement;
6.2.3.2 undertake to file (as soon as practicable) the
necessary applications to have the
Consideration Shares admitted to the
Official List of the Stock Exchange and to
listing on the New York Stock
Exchange; and
- 16 -
<PAGE>
6.2.3.3 deliver the Warranties and Indemnity
Agreement duly executed.
7 AGREEMENT TO CONTINUE AFTER COMPLETION
--------------------------------------
This Agreement shall notwithstanding completion of the sale and
purchase of the Business contemplated hereunder remain in full
force and effect in regard to all of the provisions
remaining to be performed or carried into effect and, subject as
aftermentioned, in regard to all the undertakings
hereinbefore and hereinafter contained or referred to in this
Agreement and the Schedule and to the Warranties.
8 COMPLETION ACCOUNTS
-------------------
8.1 The Vendors shall procure that as soon as practicable after the
Transfer Date and in any event within 28 days of the
Transfer Date a valuation of the Work in Progress is carried out
and will then prepare the Completion Accounts.
8.2 The Completion Accounts shall be prepared on the historic
cost convention, fully adjusted for all accruals and
prepayments and otherwise in accordance with generally
accepted accounting practice in the United Kingdom and
consistent with the bases, principles and practice adopted in the
preparation of the Accounts. The Purchaser shall give to the
Vendors and the Vendors' Accountants access to all Records
necessary to enable the said preparation.
8.3 The Vendors shall submit the Completion Accounts to each of the
Purchaser and the Purchaser's Accountants on or prior to 31st
January 1994, together with such other papers,
documents, calculations and all other information relevant to
their preparation as may be reasonably required by the
Purchaser and the Purchaser's Accountants respectively.
8.4 The Parties shall exercise their best endeavours to agree the
Completion Accounts, but if within 14 days of such
submission the Parties shall have failed to agree the
Completion Accounts, either party may request an independent
firm of chartered accountants to agree or amend and report on the
Completion Accounts, such firm to be appointed by the Parties
jointly or (in default of agreement as to such appointment
within 7 days of one party notifying the other of its wish to
appoint an independent firm) by the President for the time being
of the Institute of Chartered Accountants in England and Wales,
on the application of either party.
8.5 The Purchaser shall be responsible for the costs of the
Purchaser's Accountants, the Vendors shall be responsible for the
costs of the Vendors' Accountants, and the costs of the
- 17 -
<PAGE>
independent firm of Chartered Accountants shall be
apportioned between the Purchaser and the Vendors as such
independent firm shall determine.
8.6 The profits or, as the case may be, losses of the Business for
the period from 1st June 1993 to the Transfer Date
inclusive, and the net assets of the Business as at the
Transfer Date shall, for the purposes of this Agreement and the
Schedule (including without prejudice to the foregoing
generality Part 7 of the Schedule), be determined by
reference to the Completion Accounts.
8.7 The agreement of the Parties as to the Completion Accounts or,
as the case may be, the report of the said independent firm of
chartered accountants shall be final and binding on the Parties
and the said independent firm shall act as experts and not
as arbitrators.
9 WARRANTIES
----------
9.1 The sale and purchase of the Business and the Assets
contemplated hereunder has been entered into by the Purchaser in
consideration of and in reliance upon the Warranties, and the
Tax Indemnity provided that the liability of the Vendors under,
arising out of or in connection with the Warranties, and the Tax
Indemnity shall be restricted in the following respects:-
9.1.1 the Vendors shall not be liable in respect of any
matters fairly disclosed in the Letter of Disclosure;
9.1.2 no claim by the Purchaser in respect of a Relevant
Claim shall on the expiry of the period of one year
commencing on the Transfer Date be entertained unless
such claim shall have been intimated in writing
within said period of one year;
9.1.3 the Vendors shall not be liable for any Relevant
Claim which would not have arisen but for any
voluntary act, omission or transaction of (i) any of
the Companies (including without prejudice to the
foregoing generality any cessation by any of the
Companies of its business after the Transfer Date)
occurring after the Transfer Date except pursuant to a
legally binding obligation of the Companies entered
into prior to the Transfer Date; or (ii) the
Purchaser, except in the ordinary course of business
without knowing that such act, omission or
transaction could (except for this sub-clause 9.1.3)
give rise to a Relevant Claim;
- 18 -
<PAGE>
9.1.4 the Vendors shall have no liability under or in
respect of any Relevant Claim
(a) to the extent that provision or reserve or a note in
respect of the matter or thing giving rise to any
such liability has been made in the Accounts,
the Completion Accounts or the Company Accounts
(including a provision, reserve or note in respect of
deferred Taxation);
(b) in respect of which provision for Taxation or reserve
has been made or amount recorded in any of the
Accounts, the Completion Accounts, the Company
Accounts or in any other accounts of the Companies
or notes thereto disclosed to the Purchaser which is
or are insufficient by reason of any increase
in the rates of Taxation or variation in the
method of applying, or calculating, the rate of
Taxation made after the Accounting Date;
(c) to the extent that such liability would not have
arisen but for any alteration, enactment or re-
enactment of any statute, statutory instrument or
other legislative or quasi-legislative act or
alteration in Revenue practice which occurs or has
effect after the date hereof;
(d) if such liability arises in respect of the trading
activities of the Business or the Companies after
the Accounting Date;
9.1.5 the Purchaser and the Companies shall take all
reasonable steps to minimise their loss and the
amount of any consequent claim against the Vendors;
9.1.6 the liability of each of the Vendors for any
Relevant Claims shall not in aggregate exceed the
value of the Consideration Shares received by that
Vendor (calculated in accordance with the method set
out in Clause 3.3);
9.1.7 if but for this Clause 9 the Vendors would be liable
in respect of the same matter under both the
Warranties and under the Tax Indemnity:-
(a) if any sum in respect of that matter is paid under the
Warranties to the Purchaser or the Companies the amount
of the liability of the Covenantors under the Tax
Indemnity shall be reduced by the amount of that sum;
or
- 19 -
<PAGE>
(b) if any sum in respect of that matter is paid under the
Tax Indemnity to the Purchaser or the Companies the
liability of the Vendors under the Warranties shall be
reduced by the amount of such sum;
9.1.8 no claim shall be made unless the aggregate of all
claims available hereunder and under the Tax
Indemnity shall exceed B.P.100,000;
9.1.9 any payment made by the Vendors hereunder shall be
treated as reducing pro tanto the consideration for
--- -----
the Business payable in accordance with this
Agreement;
9.1.10 no claim hereunder shall be made unless it is in
respect of a sum exceeding B.P.5,000;
9.1.11 if the Vendors or any of them shall have made any
payment pursuant to any relevant provision of this
clause and the Purchaser or any of the Companies
shall subsequently receive an allowance or benefit
which was not taken into account in computing the
liability of the relevant Vendors and would have
reduced same had it been so taken into account
(including the receipt of a refund of taxation paid)
the Purchaser shall repay to the relevant Vendors a
sum corresponding to the benefit;
9.1.12 no claim shall be made to the extent that it relates
to a loss which is covered under any policy of
insurance maintained by any of the Companies, or
would have been covered by a policy of insurance if
the insurance maintained for the benefit of the
Business by the Vendors or any of the Companies
immediately prior to the date of this Agreement had
been maintained by the Purchaser; and
9.1.13 no claim shall be made where full provision or
reserve was made in any of the Accounts, the
Completion Accounts or the Company Accounts in
respect of the matter giving rise to the claim.
9.2 In the event of any breach of the Warranties, the Purchaser's
remedies shall lie in damages only and the Purchaser shall not
be entitled to treat this Agreement as rescinded or non-
effective or not binding on it as a result of any such breach.
9.3 The Purchaser shall notify the Vendors of any legal
proceedings whatsoever or arbitration concerning any of the
matters covered by any warranties contained in Part 7 of the
Schedule of which the Purchaser may become aware and to which the
- 20 -
<PAGE>
Vendors shall if they so wish and at their sole expense be
entitled to assist in the conduct of such proceedings or
arbitration.
10 EMPLOYEES
---------
10.1 Subject to Regulation 5(4A) and 5(4B) of the Regulations the
contracts of employment of the Transferring Employees shall be
transferred to the Purchaser on the Transfer Date pursuant to the
Regulations and the Vendors while they are employed in the
Purchaser's Group shall at all times during the period of two
years following the Transfer Date exercise their
reasonable endeavours (consistent with their respective
responsibilities within the Purchaser's Group) to retain the
services of each of the Transferring Employees and their best
endeavours to retain the services of each of the Key
Employees, for the Purchaser (but excluding in each case any
obligation to incur expenditure).
10.2 With regard to the Employee Loans the Vendors hereby agree
with effect from and after the Transfer Date that the terms of
the Employee Loans are altered with the intent and to the effect
that the condition of the Employee Loans whereby any
outstanding amount of the loan becomes immediately repayable in
the event of the employee leaving the Vendors' employment shall
not apply to the transfer of the employment of the
transferred employee from the Vendors to the Purchaser and
shall thereafter be construed on the basis that all
references to the Vendors' employment shall be references to the
Purchaser's employment.
10.3 The Vendors shall indemnify the Purchaser against each and
every cost, claim, liability, expense or demand which
relates to or arises from any act or omission by the Vendors or
any other event or occurrence prior to the Transfer Date and
which the Purchaser may incur in relation to any contract of
employment and collective agreements concerning employees
pursuant to the Regulations including without limitation any
such matter relating to or arising out of:
10.3.1 the Vendors' rights, powers, duties, and/or
liabilities under or in connection with any such
contract of employment and any such collective
agreements (which rights, powers, duties and/or
liabilities are or will be transferred to the
Purchaser in accordance with the Regulations);
10.3.2 anything done or omitted to be done on or before the
Transfer Date by or in relation to the Vendors in
respect of any contract of employment or any such
collective agreements or any person employed in the
Business, which is deemed to have been done or
- 21 -
<PAGE>
omitted to be done by or in relation to the Purchaser
in accordance with the Regulations;
10.3.3 the Vendors' failure to pay any employee any sums due
in respect of any period prior to the Transfer Date;
10.3.4 any claim by any trade union, staff association or
staff body recognised by the Vendors in respect of
all or any employees arising out of the Vendors'
failure to comply with its legal obligations to such
trade unions or staff associations or bodies;
10.3.5 any claim by any employee (whether former or
existing) of the Vendors (other than the Transferring
Employees) against the Purchaser concerning or
relating to any matter whatsoever.
10.4 The Purchaser shall indemnify the Vendors against each and
every cost, claim, liability, expense or demand arising from:
10.4.1 any claim or allegation by a Transferring Employee
that in consequence of the sale of the Business to
the Purchaser there has been or will be a substantial
change to his detriment in such employee's working
conditions;
10.4.2 any act or omission of the Purchaser in relation to a
Transferring Employee occurring after Completion and
against any claim for redundancy payments or
protective awards and any liability for wrongful
dismissal, or unfair dismissal or otherwise in
connection with the transfer of the employment of the
Transferring Employees to the Purchaser.
11 LEASEHOLD PROPERTIES
--------------------
The terms and conditions relating to the assignment of the
Leasehold Properties are as set out in Part 5(B) of the
Schedule.
12 CONFIDENTIALITY
---------------
The Vendors hereby irrevocably and unconditionally agree and
undertake with the intent and to the effect that the
Purchaser shall have the full benefit and value of the
Goodwill and the connections of and pertaining to the
Business through the purchase by the Purchaser of the
Business, not without the prior written consent of the
Purchaser to divulge to any person, firm or corporation
(other than in the ordinary and proper course of their
employment with the Purchaser) any secrets, trade secrets,
- 22 -
<PAGE>
confidential knowledge or information concerning the
business, finance or affairs of or pertaining to the
Business, their customers or clients which may have come or may
come to the knowledge of the Vendors, or their servants or
agents at any time and shall use their best endeavours to
prevent the publication or disclosure of any such secrets,
knowledge or information by any third party.
13 PENSIONS
--------
13.1 The Purchaser shall with effect from and after the Transfer
Date continue the employer's contributions payable under and in
accordance with the Pension Schemes operated by the Vendors
for employees of the Business and of the Companies.
13.2 Each of the Vendors commencing employment with the Purchaser
hereunder shall be eligible for membership of the Alexander &
Alexander UK Pension Scheme ("the Scheme"). The death in
service and retirement benefits for each Vendor who becomes a
member of the Scheme shall be calculated with reference to the
Rules of said Scheme but related to total annual basic salary
unrestricted by any Inland Revenue rules governing the Scheme.
Should the benefits so calculated exceed those permitted to
be paid from the Scheme by the Inland Revenue then the
Purchaser will make good the balance of benefits so calculated.
14 LIMITATION OF LIABILITY OF PURCHASER
------------------------------------
The Purchaser shall not otherwise than as expressly provided
herein be deemed to assume or in any way be responsible for any
debt, obligation or liability whatsoever whether
enforceable or not, incurred by or on behalf of the Vendors in
relation to the Business.
15 CONTRACTS
---------
15.1 If required by the Purchaser the Vendors shall with the
Purchaser exercise all reasonable endeavours to agree with the
parties to each ongoing contract of the Business that the rights
and obligations of the Vendors be novated in favour of the
Purchaser.
15.2 To the extent that agreement to the novation envisaged in
Clause 15.1 in respect of any ongoing contract of the
Business is not forthcoming the Vendors agree to assign the
benefit of any such contract to the Purchaser (but only if
they can do so without breach of the contract in question,
without causing an event of default or termination and
without breach of law).
- 23 -
<PAGE>
15.3 To the extent that it is not practical or possible to deal
with any contract in the manner envisaged in Clause 15.1 and
15.2, the Vendors shall execute a declaration of trust in
favour of the Purchaser in respect of the benefit of such
contract (but only if they can do so without breach of the
contract in question, without causing an event of default or
termination and without breach of law).
15.4 To the extent that it is not possible to deal with any
ongoing contract of the Business in the manner envisaged in
Clauses 15.1 to 15.3 the Vendors shall account to the
Purchaser for any amounts received under any such contract, and
shall use their best endeavours to afford to the
Purchaser the enjoyment of any benefits under any such
contract which are not monetary amounts and the Purchaser
shall perform the obligations of the Vendors under such
contracts as the Vendors' agent.
16 RESTRICTIVE COVENANT
--------------------
16.1 None of the Vendors shall at any time within a period of
eighteen months from the Transfer Date directly or indirectly
whether as principal, servant or agent, canvass, solicit or
entice or endeavour to entice away from the Purchaser or the
Purchaser's Group, any director or employee thereof.
16.2 None of the Vendors shall (other than in the ordinary and
proper course of his employment in the Purchaser's Group) at any
time for a period of two years after the Transfer Date
directly or indirectly carry on in London any business as
consulting actuaries or pension fund administrators, provided
that this restriction shall not apply to any Vendor whose
employment within the Purchaser's Group is terminated by his
employing company without due cause.
16.3 None of the Vendors shall (other than in the ordinary and
proper course of his employment in the Purchaser's Group) at any
time for a period of eighteen months after the Transfer
Date directly or indirectly, whether as principal, servant or
agent, solicit or seek to obtain for himself or for any
person, firm or corporation by whom he is employed or with
whom he is associated the actuarial or pension fund
administration custom of, or act as consulting actuary or
pension fund administrator for, or directly or indirectly
accept any benefit whether in money or moneysworth from, any
actuarial or pension fund administration business conducted for
any person, firm or corporation who either at the
Transfer Date or at any time during the twelve months
preceding such date is or was a client of the Business;
provided that
- 24 -
<PAGE>
16.3.1 for the purposes of this clause 16.3 the expression
"client" shall be deemed to include a prospective
customer whose business was the subject of
negotiation with the Business at any time within a
period of twelve months prior to the Transfer Date,
and
16.3.2 in the event of any of the Vendors directly or
indirectly receiving any benefit whether in money or
moneysworth as aforesaid at or in respect of any time
during said period of eighteen months he shall,
without prejudice to any other rights or remedies
competent to the Purchaser be bound forthwith to
account for and make payment to the Purchaser in
respect of such benefit.
16.4 The foregoing obligations shall be deemed to be separate and
severable obligations and each of said obligations shall be
construed accordingly.
16.5 While the foregoing restrictions are considered by the
Parties to be reasonable in all the circumstances, it is
agreed that if any of such restrictions shall be held to be
void or ineffective for whatever reason but would be held to be
valid and effective if part of the wording thereof were
deleted or the periods thereof reduced or the area thereof
reduced in scope, the said restrictions shall apply with
such modifications as may be necessary to make them valid and
effective.
17 ASSIGNMENT
----------
17.1 The Purchaser may not assign the benefit or burden of this
Agreement save that the Purchaser shall be entitled at any
time and from time to time to assign the benefit of this
Agreement and all rights and duties hereunder to any company
which is for the time being a member of the Purchaser's
Group,provided that in the event that such transferee or any
subsequent transferee from time to time shall cease to be a
member of the Purchaser's Group, the Purchaser shall
procure that before the relevant transferee so ceases to be a
member of the Purchaser's Group, the relevant transferee
will assign the benefit of this Agreement to a company in the
Purchaser's Group, to the intent that such benefit shall
always be retained by a company which is a member of the
Purchaser's Group.
17.2 None of the Vendors shall be entitled to assign this
Agreement or any rights or obligations hereunder, to any
person.
18 AIMS AND INTENT
---------------
- 25 -
<PAGE>
18.1 The Vendors hereby undertake to do all such acts and things and
execute all such deeds and documents as may be necessary fully
and effectively to vest in the Purchaser the Business and the
Assets hereby agreed to be sold and to assure to the Purchaser
or its nominee the rights hereby agreed to be granted.
18.2 The parties hereto hereby undertake to execute all documents and
do all acts and things necessary for the purpose of giving
full force and effect to the provisions of this Agreement
and the parties further agree to co-operate in and implement the
aims and intent of the sale and purchase contemplated
hereunder.
19 COSTS
-----
Each of the parties shall pay its own costs in connection with
or incidental to this Agreement and the sale and purchase
contemplated hereunder save only that the Vendors may make
payment of professional fees in a maximum sum of B.P.267,680.03
with Value Added Tax thereon from the Business prior to the
Transfer Date. The Purchaser shall pay any stamp duty in
respect of this Agreement or anything to follow hereon.
20 MISCELLANEOUS
-------------
20.1 Completion shall not constitute a waiver by the Purchaser or (as
the case may be) the Vendors of any breach of this
Agreement whether or not known to the Purchaser or (as the
case may be) the Vendors at the date of Completion.
20.2 Time shall be deemed to be of the essence of this Agreement.
20.3 This Agreement and the Schedule shall constitute the entire
agreement and understanding between the Parties with respect to
all matters which are referred to and to the sale and
purchase contemplated hereunder and shall supersede any
previous agreements between the Parties with respect thereto
including, without prejudice to the foregoing generality, the
Letter of Intent dated 19th August 1993 from the Purchaser to the
Vendors.
20.4 If any term or provision in this Agreement shall in whole or in
part be held to any extent to be illegal or unenforceable under
any enactment or rule of law, that term or provision or part
shall to that extent be deemed not to form part of this
Agreement and the enforceability of the remainder of this
Agreement shall not be affected.
20.5 No variation to this Agreement shall be effective unless in
writing and signed on behalf of each of the Parties (in the
case of the Purchaser by a director or other authorised
person).
- 26 -
<PAGE>
20.6 Neither Party shall have the right to rescind this Agreement
after Completion. Any remedy or right conferred upon any
breach of this Agreement shall be in addition to and without
prejudice to all other rights and remedies available to it and
no exercise or pursuit or failure to exercise or pursue such a
right or remedy shall constitute a waiver by a party of any
other right or remedy.
20.7 After the Transfer Date, it is the intention of the Purchaser to
integrate the Business operationally within The Alexander
Consulting Group of the Purchaser, for the first twelve
months under the name "Alexander Clay & Partners Consulting",
with Mr. Alan Fishman acting as managing director.
20.8 With effect from and after the Transfer Date and for so
long as he continues to be in the employment of the Purchaser or
any member of the Purchaser's Group, each of the Vendors shall
exercise his best endeavours (but excluding any obligation
to incur expenditure) to retain each of the Key Clients as
clients of the Business or otherwise as clients of a member of
the Purchaser's Group.
20.9 The Purchaser undertakes not to bring any action against any
servant, agent or adviser of the Vendors for
misrepresentation relating to the Business or this Agreement.
20.10 The Vendors undertake not to bring any action against any
servant, agent or adviser of the Purchaser for
misrepresentation relating to the Purchaser or this
Agreement.
20.11 The Vendors shall indemnify and save harmless the Purchaser
against each and every cost, claim, expense and other loss or
liability incurred by the Purchaser in connection with or
arising out of any wilful damage or interference as at the
Transfer Date by any person engaged in the Business (whether
partner or employee) with any of the computer hardware and
software systems employed in the Business, and the tracing,
repair or rectification thereof.
20.12 Those of the Vendors interested in shares in the capital of
Claybrook Computing Holdings Limited will procure that as
soon as practicable (in accordance with the Articles of
Association of the Company and the Shareholders Agreement) and
in any event within 12 months of the Transfer Date they dispose
of said shares and all interests therein in an orderly
manner to the reasonable satisfaction of the Purchaser.
The disposal will be to a person or persons not connected with
them or any of them.
- 27 -
<PAGE>
20.13 The Purchaser and the Vendors each acknowledge and undertake
that they have not relied and shall not be entitled to rely on
any express or implied warranty, representation or
covenant of the Vendors (in the case of the Purchaser) or the
Purchaser (in the case of the Vendors) (including any implied by
statute or by common law) except as expressly stated in this
Agreement.
21 NOTICES
-------
Any notice or document required or permitted to be given or
served under this Agreement may be given or served personally or
by leaving the same or by sending the same by first class
recorded delivery post or fax or telex as follows:-
(a) in the case of the Purchaser at or to its address specified
in the preamble to this Agreement marked for the
attention of General Counsel, (fax number 212 444 46),
and copied to:
Alexander & Alexander Services UK plc.,
8 Devonshire Square,
London. EC2M 4PL
Attention: John L. Hill, Company Secretary;
(b) in the case of the Vendors, at or to Alan Fishman, Flat 21,
Chester Court, Albany Street, London NW1 4BU;
or to such other address as will have been last notified to the
other party for that purpose. Any notice or document given
or served by post will be deemed to have been duly given or
served on the second Business Day after the letter containing
same was posted and in proving that any notice or document was
so given or served it will be necessary only to prove that the
same was properly addressed and posted. Any notice or document
given or served by hand, by fax or by telex will be deemed to
have been duly given or served at the time of delivery or
despatch or, if that is not between the hours of 0900 and
1700 on a Business Day other than a Saturday or a Sunday,
at 0900 hours on the next following such Business Day, and
in proving that any notice or document was so given or
served it will be necessary only to prove that the same was
properly addressed and delivered or despatched.
22 ANNOUNCEMENTS
-------------
Neither the Vendors nor the Purchaser shall make any announcement
or disclosure touching or concerning the subject matter of this
Agreement or the cessation of trading by the Vendors without the
previous approval of the other party as to the form, medium and
timing thereof.
- 28 -
<PAGE>
23 GOVERNING LAW
-------------
23.1 This Agreement shall be governed by and construed in
accordance with English Law which shall apply to the whole
terms and provisions hereof, and each of the Parties hereby
submit to the non-exclusive jurisdiction of the High Court of
England insofar as not already subject thereto.
23.2 The Purchaser irrevocably agrees that any writ, summons,
order, judgment or other process may be sufficiently and
effectively served on it in connection with any suit, action, or
other proceedings arising out of or in connection with this
Agreement in England and Wales by service on its agent,
Alexander & Alexander Services U.K. plc, 8 Devonshire
Square, London EC2M 4PL, provided a copy thereof is sent by
first class airmail post to the Purchaser at the address set out
in the preamble to this Agreement, or at such other address
as may from time to time be notified to the Vendors for that
purpose marked for the attention of John L. Hill, Company
Secretary.
IN WITNESS WHEREOF these presents on this and the thirty seven
preceding pages are together with the Schedule in 12 Parts annexed
hereto executed on the date first above mentioned as follows:-
SUBSCRIBED for and on behalf
- ----------
of the PURCHASER by
---------
Donald Lewis Seeley /s/ Donald Lewis Seeley
an officer thereof, duly authorised
EXECUTED as a deed by Alan Fishman
- --------
in the presence of:- /s/ Alan S. Fishman
Witness /s/ T.J. Davies
EXECUTED as a deed by Ian Spencer Aitken
- --------
by his duly authorised attorney
in the presence of:- /s/ Ian S. Aitken
Witness /s/ T.J. Davies
EXECUTED as a deed by Stephen Leeds Gooch
- --------
by his duly authorised attorney
in the presence of:- /s/ Stephen L. Gooch
Witness /s/ T.J. Davies
EXECUTED as a deed by Thomas MacKenzie Ross
- --------
by his duly authorised attorney
in the presence of:- /s/ Thomas M. Ross
Witness /s/ T.J. Davies
- 29 -
<PAGE>
EXECUTED as a deed by Helen James
- --------
by her duly authorised attorney
in the presence of:- /s/ Helen James
Witness /s/ T.J. Davies
EXECUTED as a deed by Jonathan Richard
- --------
Parnell Checkley by his duly authorised
attorney in the presence of:- /s/ Jonathan R.P. Checkley
Witness /s/ T.J. Davies
EXECUTED as a deed by Richard Charles
- --------
Weir Strattan by his duly authorised
attorney in the presence of:- /s/ Richard C.W. Strattan
Witness /s/ T.J. Davies
EXECUTED as a deed by Maurice Dyson
- --------
by his duly authorised attorney
in the presence of:- /s/ Maurice Dyson
Witness /s/ T.J. Davies
EXECUTED as a deed by Simon Craig
- --------
Stoye by his duly authorised attorney
in the presence of:- /s/ Simon Craig
Witness /s/ T.J. Davies
EXECUTED as a deed by Geoffrey Booth
- --------
by his duly authorised attorney
in the presence of:- /s/ Geoffrey Booth
Witness /s/ T.J. Davies
EXECUTED as a deed by John Eric Shepley
- --------
by his duly authorised attorney
in the presence of:- /s/ John E. Shepley
Witness /s/ T.J. Davies
EXECUTED as a deed by Lynne Davis
- --------
by her duly authorised attorney
in the presence of:- /s/ Lynne Davis
Witness /s/ T.J. Davies
EXECUTED as a deed by John Patrick Woodhouse
- --------
by his duly authorised attorney
- 30 -
<PAGE>
in the presence of:- /s/ John Woodhouse
Witness /s/ T.J. Davies
EXECUTED as a deed by Jeremy David Fisher
- --------
by his duly authorised attorney
in the presence of:- /s/ T.J. Davies
Witness /s/ T.J. Davies
EXECUTED as a deed by Stephen Martin Riley
- --------
by his duly authorised attorney
in the presence of:- /s/ Stephen M. Riley
Witness /s/ T.J. Davies
EXECUTED as a deed by Stephen Frances Yeo
- --------
by his duly authorised attorney
in the presence of:- /s/ Stephen F. Yeo
Witness /s/ T.J. Davies
EXECUTED as a deed by Peter Richard Lockyer
- --------
by his duly authorised attorney
in the presence of:- /s/ Peter R. Lockyer
Witness /s/ T.J. Davies
EXECUTED as a deed by Robert Stephen Thomson
- --------
by his duly authorised attorney
in the presence of:- /s/ Robert S. Thomson
Witness /s/ T.J. Davies
EXECUTED as a deed by Nigel Ramsey Bankhead
- --------
by his duly authorised attorney
in the presence of:- /s/ Nigel R. Bankhead
Witness /s/ T.J. Davies
EXECUTED as a deed by Nigel Taylor
- --------
by his duly authorised
attorney in the presence of:- /s/ Nigel Taylor
Witness /s/ T.J. Davies
- 31 -
<PAGE>
SCHEDULE
--------
PART 1
------
THE VENDORS
-----------
Alan Seymour Fishman, Flat 21, Chester Court, Albany Street, London NW1
4BU
Ian Spencer Aitken, Serendi, 22 Hitchin Road, Letchworth, Hertfordshire
SG6 3LT
Stephen Leeds Gooch, Francklins Cottage, Dinton, Aylesbury,
Buckinghamshire HP17 8UR
Thomas MacKenzie Ross, Beauchamp Barn, Drayton, Beauchamp,
Buckinghamshire HP22 5LS
Helen James, 15 Church Avenue, Ruislip, Middlesex HA4 7HX
Jonathan Richard Parnell Checkley, 27 Oakeshott Avenue, Highgate,
London N6 6NT
Richard Charles Weir Strattan, 42 Reigate Road, Reigate, Surrey RH2 OQN
Maurice Dyson, 6 Cheyne Close, Chesham Bois, Amersham, Buckinghamshire
HP15 6XB
Simon Craig Stoye, 32 Connaught Square, London W2 2HL
Geoffrey Booth, Squirrels, Trinity Hill, Medstead, Alton, Hampshire
GU34 5LS
John Eric Shepley, West Riding, Tewin Wood, Welwyn, Hertfordshire AL6
OPD
Lynne Davis, 99 Daws Lane, Mill Hill, London NW7 4SJ
John Patrick Woodhouse, 37 Chiddingfold, London N12 7EX
Jeremy David Fisher, 12 Powell Close, Canons Drive, Edgeware, Middlesex
HA8 7QU
Stephen Martin Riley, Toad Hall, Hervines Road, Amersham,
Buckinghamshire PH6 5HS
Stephen Frances Yeo, 6 Bracken Gardens, Barnes, London SW13 9HW
Peter Richard Lockyer, 112 Delaware Mansions, Delaware Road, London W9
2LJ
<PAGE>
Robert Stephen Thomson, Larch House, 14a Viney's Gardens, Tenterden,
Kent TN30 7AZ
Nigel Ramsey Bankhead, Somersby, Fulmer Way, Gerrards Cross,
Buckinghamshire.
Nigel Taylor, 71 Turners Meadow Way, Beckenham, Kent BR3 4TJ
- 2 -
<PAGE>
SCHEDULE
--------
PART 2
------
THE EMPLOYEE LOANS
------------------
Name of Total amount Amount outstanding Repayment
- ------- ------------ ------------------ ---------
employee of loan at Transfer Date terms
- -------- ------- ---------------- -----
Details as set out in the Letter of Disclosure.
<PAGE>
SCHEDULE
--------
PART 3
------
EMPLOYMENT CONTRACT
-------------------
Dear
I am writing to confirm your appointment as a senior member of staff
at Alexander Clay & Partners Consulting (a division of Alexander &
Alexander Services Inc.).
Your salary has been agreed at B.P.<> and will be reviewed with effect
from April 1995, and annually thereafter.
With respect to pension, as you know, you will be eligible for
membership of the Alexander & Alexander UK Pension Scheme. The death
in service and retirement benefits thereunder will be calculated with
reference to the Rules of that Scheme, but related to total annual
basic salary. Any benefits that cannot be paid under the Scheme due
to Inland Revenue or other restrictions will be made good by
Alexander & Alexander Services Inc. A copy of The Alexander
Consulting Group Limited Employee Handbook has already been made
available to you. The Handbook, (other than the non-solicitation
provisions in Section Five) together with this letter and the
statement of Terms and Conditions contained in the annexe to this
letter, constitute your contract of employment. Please sign the
docquet on this letter.
I look forward to working with you in this exciting new venture.
Yours sincerely,
BRIAN KENNEDY
<PAGE>
ANNEXE
------
TERMS & CONDITIONS
------------------
Employing Company: ALEXANDER CLAY & PARTNERS CONSULTING (a branch of
- ------------------
Alexander & Alexander Services Inc.) (hereinafter
referred to as "the Company").
Job Title:
- ---------
Date of 30th November 1993
Commencement of
Employment
Salary Your initial salary will be B.P.<> per annum, payable
monthly in arrears direct to your bank. This salary
will be reviewed with effect from April 1995 and
annually thereafter.
Hours of Work Your daily hours of work will be 9 a.m. to 5 p.m.
Monday to Friday. The luncheon break will be one
hour per day and therefore your normal hours of work
will be 35 per week.
Holiday Your holiday entitlement will be 25 working days per
Entitlement calendar year excluding statutory holidays.
Pension You will be eligible to join the Company's pension scheme
with effect from commencement of employment which is
non-contributory and contracted-out of the State
Scheme. The basic benefit structure has been explained
to you and is confirmed in the pension booklet
supplied to you.
Car Save as otherwise agreed you will be eligible for a
vehicle in the <> range, in accordance with the rules of
the Company Car Scheme as amended from time to time.
Restrictive (a) You shall not at any time during your
Covenant employment with the Company or at any time
within a period of eighteen months from the date
of termination thereof for whatever reason
directly or indirectly whether as principal,
servant or agent, canvass, solicit or entice or
endeavour to entice away from the Company or the
Company's Group, any director or employee thereof.
(b) You shall not at any time for a period of eighteen
months after the date of termination of your
employment with the Company for whatever
<PAGE>
reason directly or indirectly, whether as
principal, servant or agent, solicit or seek
to obtain for yourself or for any person, firm or
corporation by whom you are employed or with whom
you are associated the actuarial or pension fund
administration custom of, or act as consulting
actuary or pension fund administrator for, or
directly or indirectly accept any benefit whether
in money or moneysworth from, any actuarial or
pension fund administration business conducted for
any person, firm or corporation who either at
the date of termination of your employment or
at any time during the twelve months preceding
such date is or was a client of the Company with
whom you had any dealings or for whose business
you were responsible; provided that
(i) for the purposes of this paragraph (b) of
these terms and conditions the expression
"client" shall be deemed to include a
prospective customer whose business was the
subject of negotiation with the Company at any
time within a period of twelve months prior to
the date of termination of your employment
with the Company, and
(ii) in the event of you directly or indirectly
receiving any benefit whether in money or
moneysworth as aforesaid at or in respect of
any time during said period of eighteen months
you shall, without prejudice to any other
rights or remedies competent to the Company be
bound forthwith to account for and make
payment to the Company in respect of such
benefit.
(c) The foregoing obligations shall be deemed to be
separate and severable obligations and each of said
obligations shall be construed accordingly.
(d) While the foregoing restrictions are considered to
be reasonable in all the circumstances, it is
agreed that if any of such restrictions shall be
held to be void or ineffective for whatever reason
but would be held to be valid and effective if part
of the wording thereof were deleted or the
periods thereof reduced or the area thereof reduced
in scope, the said restrictions shall apply with
such modifications as may be necessary to make them
valid and effective.
- 2 -
<PAGE>
Financial Employment is subject to conditions contained in the
Services Act Company's Compliance Manual, a copy of which shall be
given to you following regulatory approval under the
Financial Services Act 1986. In the meantime you will be
required to comply with the Compliance Manual of The
Alexander Consulting Group Limited, a copy of which has
been given to you.
Healthcare You will be entitled to join the A & A Services (UK)
Limited private healthcare scheme which will provide
benefits for yourself and your immediate family.
Notice Your employment will continue until terminated
(a) by not less than 3 months' written notice given by
you to the Company, expiring on 30th
November, 1995 or on any date thereafter, or
(b) by not less than 6 months' written notice given by
the Company to you at any time.
DOCQUET
- -------
I confirm my agreement to the terms and conditions of my Employment as
stated above and subject to the conditions in your letter, the
company's terms and conditions in the annexe thereto, and the
further terms and conditions set out in The Alexander Consulting
Group Limited Employee Handbook.
Signed ................................ Date ........................
- 3 -
<PAGE>
SCHEDULE
--------
PART 4
------
ESCROW AGREEMENT
----------------
among
-----
ALEXANDER & ALEXANDER SERVICES INC.
-----------------------------------
Those persons
-------------
ut intus
--------
and
---
THE ROYAL BANK OF SCOTLAND PLC
------------------------------
Dorman Jeffrey & Co.
Solicitors, Glasgow
<PAGE>
INDEX
-----
CLAUSE PAGE
- ------ ----
1. Interpretation
2. Delivery
3. Rights in the Escrow Fund
4. Holding and Distribution
5. Termination
6. Obligations of the Escrow Agent
7. Indemnification
8. Notices
9. Governing Law
10. Miscellaneous
Schedule
<PAGE>
This ESCROW AGREEMENT is made on the day of 1993
----------------
among
ALEXANDER & ALEXANDER SERVICES INC. a Maryland Corporation having its
- ------------------------------------
principal office at 1211 Avenue of the Americas, New York 10036
U.S.A. (hereinafter referred to as "the Purchaser")
OF THE FIRST PART
- -----------------
and
Those persons whose names and addresses are set out in the Schedule to
this Agreement (hereinafter referred to as "the Vendors")
OF THE SECOND PART
- ------------------
and
THE ROYAL BANK OF SCOTLAND plc, a company registered in Scotland whose
- ------------------------------
registration number is 90312 and having its registered office at 36
St. Andrew Square, Edinburgh EH2 2YE (hereinafter referred to as "the
Escrow Agent")
OF THE THIRD PART
- -----------------
WHEREAS
- -------
(A) The Purchaser and the Vendors have entered into a Sale and
Purchase Agreement dated 30th November 1993 (hereinafter
referred to as "the Purchase Agreement") providing for the
sale of the Vendors' business to the Purchaser;
(B) It is a condition of the Purchase Agreement that certain stock of
the Purchaser be held by the Escrow Agent, and delivered
after the fulfilment of certain conditions;
NOW THEREFORE IN CONSIDERATION OF THE COVENANTS EXCHANGED HEREIN, THE
PARTIES HAVE AGREED AND DO HEREBY AGREE AS FOLLOWS:-
1. INTERPRETATION
--------------
In this Agreement:-
1.1 "Escrow Fund" shall mean in the aggregate the Escrow
-------------
Consideration Shares deposited hereunder, together with any
additional shares issued or issuable with respect to or in
exchange for said shares by reason of any stock dividend,
stock split, reorganisation, reclassification or similar
change affecting said shares, and all cash dividends from
<PAGE>
time to time paid on the Escrow Consideration Shares during the
period they are comprised in the Escrow Fund, together with
all interest from time to time accrued thereon but
excluding any shares, stock or other securities issued
pursuant to a subscription made by the Escrow Agent in
accordance with an instruction given by the Vendors or any of
them pursuant to Clause 3.1 to take up any subscription
rights.
1.2 "Escrow Consideration Shares" shall mean the ten per centum of
---------------------------- --- ------
the Consideration Shares, registered in the name of the Escrow
Agent or its nominee and deposited hereunder.
1.3 "Transfer Date" shall mean 30th November 1993.
-------------
1.4 "Vendors' Solicitors" shall mean Messrs. Field Fisher Waterhouse,
-------------------
Solicitors, 41 Vine Street, London EC3N 2PX.
1.5 References to any of the parties hereto shall include their
respective successors in title, executors, personal
representatives and permitted assignees.
1.6 All undertakings, covenants and indemnities granted herein by the
Vendors shall be deemed to be granted jointly and severally.
1.7 The headings contained herein and in the Schedule hereto are for
convenience only and shall not be construed as forming part
of this Agreement or taken into account in the
interpretation hereof.
2. DELIVERY
--------
2.1 The Escrow Consideration Shares shall be issued on the Transfer
Date in accordance with the Purchase Agreement and registered
in the name of the Escrow Agent who shall hold the same on trust
for the Vendors on the terms set out in this Agreement.
2.2 The Purchaser shall deliver the certificates representing the
Escrow Consideration Shares to the Escrow Agent on the
Transfer Date.
2.3 The Escrow Agent shall hold the Escrow Fund on trust for the
Vendors on the terms set out in this Agreement until release in
accordance with Clauses 4 and 5 hereof.
3. RIGHTS IN THE ESCROW FUND
-------------------------
3.1 The Escrow Agent shall retain all cash dividends on the Escrow
Fund which are paid by the Purchaser to the Escrow Agent in
an interest bearing deposit account. The Escrow Agent shall
act in accordance with the instructions of any of the
individual Vendors in exercising any voting or other rights
- 2 -
<PAGE>
attaching to the Escrow Consideration Shares which are
attributable to that Vendor including, subject to
indemnification for any costs thereby incurred, the exercise of
any subscription rights or similar benefits which are
available to the Escrow Agent as the holder of the Escrow
Consideration Shares.
3.2 The Escrow Agent shall copy to the Vendors any notices, or other
documentation received by it in its capacity as the holder
of the Escrow Consideration Shares as soon as reasonably
practicable following receipt of the same, with the intent of
giving the Vendors an opportunity to consider what action to
take in respect of any voting or other rights arising in
connection with the Escrow Consideration Shares.
3.3 Subject to indemnification of the Escrow Agent for any costs
thereby incurred the Escrow Agent shall on the written
instruction of Vendors entitled on termination in terms of
Clause 5 hereof, to at least 50 per centum of the Escrow
--- ------
Consideration Shares convert into pounds sterling the whole
cash held as part of the Escrow Fund which shall be
denominated in any other currency.
4. HOLDING AND DISTRIBUTION
------------------------
4.1 The Escrow Fund shall be received and held by the Escrow Agent
pursuant to the terms and conditions of this Agreement and the
Escrow Agent shall hold and distribute the Escrow Fund upon
the following terms and conditions of this Clause and of Clause
5 of this Agreement.
4.2 The Purchaser shall be entitled to resort to the Escrow Fund in
the event that the Purchaser shall have a Warranty Claim under
the Purchase Agreement and/or any of the Companies shall
have an indemnity claim under the Tax Indemnity. In any such
event, the Purchaser shall give written notice of the nature and
amount of such claim to the Escrow Agent and to the Vendors.
4.4 In the event:
4.4.1 that the Vendors do not deny such claim, or make a
counterclaim in writing to the Purchaser and the
Escrow Agent within 30 days of such notice being
given in compliance with Clause 4.9; or
4.4.2 of final determination of any disputed claim and any
relevant counterclaim,
the Escrow Agent shall transfer and deliver to the Purchaser
- 3 -
<PAGE>
(i) any cash forming part of the Escrow Fund to the amount of
such claim; and (to the extent that the cash forming
part of the Escrow Fund is not sufficient);
(ii) that number of shares (excluding fractions) of the
Purchaser's Common Stock or any other assets
comprised in the Escrow Fund whose total value
calculated in accordance with Clause 4.5 is nearest to
the amount of such claim (insofar as not satisfied by
cash) against a receipt from the Purchaser in favour
of the Escrow Agent and the Vendors
acknowledging receipt of such shares or assets in
full satisfaction of such claim up to the total value as
provided in Clause 4.5.
4.5 The value of any Escrow Consideration Share forming part of the
Escrow Fund for the purposes of this Agreement shall be
determined by reference to a value of 20 U.S. Dollars for
each share of the Purchaser's Common Stock at the average
rate of exchange for the US Dollar against the Pound Sterling at
close of business in New York, over the ten Business Days to
and including the fourth Business Day prior to the
Transfer Date, as may be reported in the Eastern Edition of The
Wall Street Journal.
4.6 The valuation of any other assets forming part of the Escrow Fund
shall be determined by the Escrow Agent (which may employ
and rely upon the advice of any investment adviser it may
choose). The Escrow Agent is asked to determine such value
according to such methodology as most closely
approximates to that set out in Clause 4.5 above.
Notwithstanding such request the Escrow Agent shall act as
expert and not as arbitrator and its determination of value
shall be final. For the avoidance of doubt the value of any
cash assets forming part of the Escrow Fund which are held in the
form of US dollars shall be translated into sterling using
such exchange rate as the Escrow Agent (acting as expert
and not as arbitrator) shall consider appropriate.
4.7 In the event that any computation of the portion of the Escrow
Fund to be transferred and delivered by the Escrow Agent to
the Purchaser pursuant to Clause 4.4 shall exceed the total
value of the Escrow Fund then in the possession of the Escrow
Agent, valuing each share as hereinbefore provided, the
Escrow Agent shall transfer and deliver to the Purchaser the
whole of the Escrow Fund then in its possession against a receipt
as provided in Clause 4.4, and the Vendors shall remain liable
to the Purchaser or, as the case may be, any of the Companies,
for the said excess pursuant to the provisions of the Purchase
Agreement or the Tax Indemnity, as the case may be.
- 4 -
<PAGE>
4.8 For the purposes of this sub-clause "final determination" of a
disputed claim shall occur when
4.8.1 the parties agree; or
4.8.2 the disputed claim is determined by a court of competent
jurisdiction, and an appeal is not intimated by
the unsuccessful party within 21 days of the issue of the
relevant judgment; or
4.8.3 any appeal intimated is subsequently abandoned; or
4.8.4 the disputed claim is determined by a court of competent
jurisdiction, from which there is no further right
of appeal,
and shall be jointly certified by Messrs. Field Fisher Waterhouse
and Messrs. Dorman Jeffrey & Co. In the event of failure to
agree to certify within 14 days of the matter being raised
by either party, the question will be referred to an
independent person nominated by The President for the time
being of The Law Society, whose decision shall be final and
binding on the Purchaser, the Vendors and the Escrow Agent
and whose costs shall be borne by the party whose approach
he rejects.
4.9 Any action, claim, counterclaim, compromise or settlement
purported to be made by or on behalf of the Vendors shall
require to be approved in writing by a majority in number of the
Vendors, addressed both to the Purchaser and the Escrow Agent.
4.10 The rights of the Purchaser under this Agreement shall be in
addition to and not in lieu of any other rights to which it may
be entitled by law, agreement or otherwise.
5. TERMINATION
-----------
5.1 Subject to the provisions hereinbefore and hereinafter written
the Escrow Fund shall be terminated and the Escrow Agent shall
transfer and deliver the Escrow Fund to the Vendors (free
of escrow and free of any liability or requirement, in
order to perfect such transfer, to pay any transfer,
registration or stamp tax, duty or levy) upon the expiration of
one year after the Transfer Date ("the Termination Date").
The Purchaser shall indemnify the Escrow Agent from any such
transfer, registration or Stamp tax, duty or levy.
5.2 In the event that any claims made by the Purchaser against the
Vendors in accordance with Clause 4 are still pending at the
Termination Date, the Purchaser shall so notify the Escrow
Agent and a portion of the Escrow Fund having a value equal to
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<PAGE>
one hundred per centum of the amount of said claims shall be
--- ------
retained in the Escrow Fund.
5.3 As a final determination is made of each outstanding claim, the
Purchaser shall notify the Escrow Agent accordingly and the
portion of the Escrow Fund retained by the Escrow Agent shall
be reduced to an amount having a value equal to one hundred
per centum of the claims which remain unsettled, and the
--- ------
remainder shall be transferred and delivered free of escrow
to the Purchaser and/or the Vendors' in accordance with the
relevant determination.
5.4 For the purposes of this Clause, the value of all or any portion
of the Escrow Fund shall be computed on the basis of Clause 4.5
hereof.
6. OBLIGATIONS OF THE ESCROW AGENT
-------------------------------
6.1 The duties of the Escrow Agent are restricted to those expressly
specified herein.
6.2 The Escrow Agent shall not in any way be required to determine
whether or not the terms and conditions of the Purchase
Agreement have been complied with by the parties.
6.3 The Escrow Agent shall incur no liability whatever so long as he
acted in good faith and without negligence.
6.4 The Escrow Agent shall have the power to place any monies from
time to time received in the Escrow Fund in an interest bearing
deposit account with a recognised bank within the United
Kingdom. Save as aforesaid, the Escrow Agent shall not have
any powers of investment.
6.5 The Escrow Agent may act in reliance upon any instrument or
signature which it believes to be genuine and may assume that any
person purporting to give notice or advice or instruction in
connection with the provisions hereof has been duly
authorised to do so.
6.6 Save for legal proceedings instituted against the Escrow Agent by
the Purchaser or the Vendors in respect of a breach by the
Escrow Agent of its obligations in terms of this Agreement,
the Escrow Agent shall not be required to institute legal
proceedings of any kind or to defend any legal proceedings
which may be instituted against it in respect of the
subject matter of this Agreement unless requested so to do
by the Purchaser, or the Vendors, and then only if it is
indemnified to its satisfaction against the costs and expenses
of such proceedings.
- 6 -
<PAGE>
6.7 The fee and other reasonable charges, costs and disbursements,
including legal fees, of the Escrow Agent in connection with
this Escrow Agreement shall be paid, on demand, by the
Purchaser.
6.8 In the event of the Escrow Agent notifying the Purchaser and the
Vendors of his desire to be relieved of any further
obligations hereunder, the Escrow Agent shall deliver the
Escrow Fund to a successor escrow agent appointed by the
Purchaser with the approval of the Vendors.
7. INDEMNIFICATION
---------------
Save as otherwise provided in this Agreement the Purchaser and
the Vendors hereby agree to jointly and severally
indemnify and hold the Escrow Agent harmless from and against any
and all losses, damages and expenses that may be incurred by the
Escrow Agent by reason of its compliance in good faith with the
terms of this Agreement.
8. NOTICES
-------
Any notice or document required or permitted to be given or
served under this Agreement may be given or served personally or
by leaving the same or by sending the same by first class
recorded delivery post or fax or telex as follows:-
(a) in the case of the Purchaser at or to its address
specified in the preamble to this Agreement marked for
the attention of General Counsel, (fax number 212 444
46, and copied to:
Alexander & Alexander Services UK plc.,
8 Devonshire Square,
London. EC2M 4PL
Attention: John L. Hill, Company Secretary;
(b) in the case of the Vendors, at or to Alan Fishman, Flat
21, Chester Court, Albany Street, London NW1 4BU;
(c) in the case of the Escrow Agent at The Royal Bank of
Scotland plc, 19 - 25 Birchin Lane, London EC3V 9DJ
marked for the attention of John Salter, (fax number 929
0710);
or to such other address as will have been last notified to the
other party for that purpose. Any notice or document given
or served by post will be deemed to have been duly given or
served on the second Business Day after the letter containing
same was posted and in proving that any notice or document was
so given or served it will be necessary only to prove that the
- 7 -
<PAGE>
same was properly addressed and posted. Any notice or document
given or served by hand, by fax or by telex will be deemed to
have been duly given or served at the time of delivery or
despatch or, if that is not between the hours of 0900 and
1700 on a Business Day other than a Saturday or a Sunday,
at 0900 hours on the next following such Business Day, and
in proving that any notice or document was so given or
served it will be necessary only to prove that the same was
properly addressed and delivered or despatched.
9. GOVERNING LAW
-------------
This Agreement shall be construed in accordance with the laws of
England.
10. MISCELLANEOUS
-------------
This Agreement may not be assigned except with the written
consent of all parties hereto. This Agreement may be
executed simultaneously in any number of counterparts, each of
which shall be deemed an original, but all of which
together shall constitute one and the same instrument AS
WITNESS the hands of the parties or their duly authorised
representatives the day and year first above written:-
SIGNED by for
- ------
and on behalf of Alexander & Alexander Services Inc.
...............................
SIGNED by for and on behalf of The Royal Bank of
- ------
Scotland plc
...............................
Signed by Alan Fishman
...............................
Signed by Alan Fishman as
Attorney for Ian Spencer Aitken ...............................
Signed by Alan Fishman as
Attorney for Stephen Leeds Gooch ...............................
Signed by Alan Fishman as Attorney for
Thomas MacKenzie Ross ...............................
Signed by Alan Fishman as
Attorney for Helen James ...............................
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<PAGE>
Signed by Alan Fishman as
Attorney for Jonathan Richard
Parnell Checkley ...............................
Signed by Alan Fishman as
Attorney for Richard Charles Weir
Strattan ...............................
Signed by Alan Fishman as
Attorney for Maurice Dyson ...............................
Signed by Alan Fishman as
Attorney for Simon Craig Stoye ...............................
Signed by Alan Fishman as
Attorney for Geoffrey Booth ...............................
Signed by Alan Fishman as
Attorney for John Eric Shepley ...............................
Signed by Alan Fishman as
Attorney for Lynne Davis ...............................
Signed by Alan Fishman as
Attorney for John Patrick Woodhouse ...............................
Signed by Alan Fishman as
Attorney for Jeremy David Fisher ...............................
Signed by Alan Fishman as
Attorney for Stephen Martin Reiley ...............................
Signed by Alan Fishman as
Attorney for Stephen Frances Yeo ...............................
Signed by Alan Fishman as
Attorney for Peter Richard Lockyer ...............................
Signed by Alan Fishman as
Attorney for Robert Stephen Thomson ...............................
Signed by Alan Fishman as
Attorney for Nigel Ramsay Bankhead ...............................
Signed by Alan Fishman as
Attorney for Nigel Taylor ...............................
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<PAGE>
SCHEDULE
--------
THE VENDORS
-----------
Alan Seymour Fishman, Flat 21, Chester Court, Albany Street, London NW1
4BU
Ian Spencer Aitken, Serendi, 22 Hitchin Road, Letchworth, Hertfordshire
SG6 3LT
Stephen Leeds Gooch, Francklins Cottage, Dinton, Aylesbury,
Buckinghamshire HP17 8UR
Thomas MacKenzie Ross, Beauchamp Barn, Drayton, Beauchamp,
Buckinghamshire HP22 5LS
Helen James, 15 Church Avenue, Ruislip, Middlesex HA4 7HX
Jonathan Richard Parnell Checkley, 27 Oakeshott Avenue, Highgate,
London N6 6NT
Richard Charles Weir Strattan, 42 Reigate Road, Reigate, Surrey RH2 OQN
Maurice Dyson, 6 Cheyne Close, Chesham Bois, Amersham, Buckinghamshire
HP15 6XB
Simon Craig Stoye, 32 Connaught Square, London W2 2HL
Geoffrey Booth, Squirrels, Trinity Hill, Medstead, Alton, Hampshire
GU34 5LS
John Eric Shepley, West Riding, Tewin Wood, Welwyn, Hertfordshire AL6
OPD
Lynne Davis, 99 Daws Lane, Mill Hill, London NW7 4SJ
John Patrick Woodhouse, 37 Chiddingfold, London N12 7EX
Jeremy David Fisher, 12 Powell Close, Canons Drive, Edgeware, Middlesex
HA8 7QU
Stephen Martin Riley, Toad Hall, Hervines Road, Amersham,
Buckinghamshire PH6 5HS
Stephen Frances Yeo, 6 Bracken Gardens, Barnes, London SW13 9HW
Peter Richard Lockyer, 112 Delaware Mansions, Delaware Road, London W9
2LJ
Robert Stephen Thomson, Larch House, 14a Viney's Gardens, Tenterden,
Kent TN30 7AZ
<PAGE>
Nigel Ramsay Bankhead, Somersby, Fulmer Way, Gerrards Cross,
Buckinghamshire
Nigel Taylor, 71 Turners Meadow Way, Beckenham, Kent BR3 4TJ
- 2 -
<PAGE>
SCHEDULE
--------
PART 5 (A)
----------
THE LEASEHOLD PROPERTIES
------------------------
Property Floor Nett Lease Rent Date of
Area Terms p.a next
sq.ft. Review
1. Carnegie House, Whole 25 yrs from B.P.630,000 29/9/95
Peterborough Rd, Building 29.9.90
Harrow, Middlesex 5 yearly rent
HA1 2AJ review
Lease dated 29.10.90 between Grosvenor Developments Limited (1) Alan
Seymour Fishman, Thomas MacKenzie Ross, Stephen Leeds Gooch and
Jonathan Richard Parnell Checkley. (2)
2. 61/63 Brook St, Basement 2851 25 yrs from
& 7.2.80
Ground 2300 5 yearly
rent review
Full repair-
ing lease B.P.123,250 24/6/96
Underlease dated 13.5.85 between Scottish Equitable Life Assurance
Society (1) and Alan Seymour Fishman, Ian Spencer Aitken, Stephen
Leeds Gooch and Brian Tatch (2).
1st 2690 5 yearly rent
review Full
repairing
lease B.P.94,150 24/6/96
Underlease dated 7.2.80 between Scottish Equitable Life Assurance
Society (1) Keith Graham Whitehead, Alan Seymour Fishman, Ian Spencer
Aitken and Stephen Leeds Gooch (2).
3rd 2615 5 yearly rent
review Full
repairing
lease B.P.86,950 24/6/96
Underlease dated 11.5.87 between Scottish Equitable Life Assurance
Society (1) Alan Seymour Fishman, Ian Spencer Aitken, Stephen Leeds
Gooch and Brian Tatch (2).
<PAGE>
4th 1048 5 yearly rent
back review Full
repairing
lease B.P.34,850 24/6/96
Underlease dated 2.12.81 between Scottish Equitable Life Assurance
Society (1) Keith Graham Whitehead, Alan Seymour Fishman, Ian Spencer
Aitken and Stephen Leeds Gooch (2).
4th
Front 862 5 yearly rent
review Full
repairing
lease B.P.14,335 24/6/96
Underlease dated 21.5.84 between Scottish Equitable Life Assurance
Society (1) Keith Graham Whitehead, Alan Seymour Fishman, Ian Spencer
Aitken and Stephen Leeds Gooch (2).
3. 72 Brook St. Basement 3500 20 yrs from
to 3rd 29/9/76 4
Floor yearly rent
review (right
not exercised
in 1992) Full
repairing and
insuring B.P.137,125 Expires
29/9/96
Underlease dated 29.12.76 between Central and West End Property Company
Limited (1) Keith Graham Whitehead, Alan Seymour Fishman, Ian Spencer
Aitken and Stephen Leeds Gooch (2) and Brian Tatch, Graham Harvey
Macpherson Goddard and Thomas MacKenzie Ross (3).
4. 67/68 Grosvenor Basement 9700 17 yrs (less 1
St. to 4th day) from
Floor 24/6/87 5
yearly rent
review Full
repairing and
insuring B.P.506,250 24/6/94
Sub-underlease dated 1.12.87 between Donald Crowther, Ian Spencer
Aitken, Jonathan Gerald Spain and John Patrick Woodhouse (1) and Alan
Seymour Fishman, Stephen Leeds Gooch, Brian Tatch and Thomas
MacKenzie Ross (2).
- 2 -
<PAGE>
SCHEDULE
--------
PART 5 (B)
----------
TERMS AND CONDITIONS OF SALE OF THE LEASEHOLD PROPERTIES
--------------------------------------------------------
1. The Vendors shall sell the Leasehold Properties as beneficial
owner.
2. The Leasehold Properties are sold with vacant possession on
completion.
3.1 The sale of the Leasehold Properties shall be conditional upon
licence, or consent or agreement of the respective
landlords for the assignment or transfer of the Leases to the
Purchaser ("Licence") being obtained and completion of the
sale of each Leasehold Property shall take place five working
days after the relevant Licence is obtained.
3.2.1 The Vendors shall both before and after the Transfer Date at
their own cost use all reasonable endeavours (such endeavours not
to include the institution or maintenance of proceedings or any
payment to the Landlord other than its reasonable legal
and surveyors costs in connection with its
consideration of the application for Licence or entering into any
new onerous obligations to the Landlord) to obtain Licence
as soon as possible and the Purchaser shall use all reasonable
endeavours to assist the Vendors in so doing including the
provision of such references and information and entering
into such direct covenants with regard to liabilities under
the Lease as the Landlord may reasonably require or may be
required by the provisions of the Lease.
3.2.2 The Vendors shall be entitled to apply to each Landlord for a
full release of the Vendors and any past partners of Clay and
Partners from all future liability under privity of contract
with respect to the Lease and may persist in efforts to
procure such a release for a period of six months from the
Transfer Date but not thereafter.
3.2.3 The Purchaser shall have the right within the period of two
months from the Transfer Date to require the Vendors to
obtain Licence and to complete the assignment or transfer of any
Leasehold Property in the name of a UK subsidiary of the
Purchaser acceptable to the Landlord (and superior landlords if
any) PROVIDED THAT the Purchaser shall join in the
assignment or transfer to guarantee the liabilities of such
subsidiary to the Vendors.
3.2.4 If Licence for any Lease shall be obtained but such full release
of the Vendors shall not be forthcoming then the assignment
<PAGE>
or transfer of that Lease to the Purchaser shall contain the
following provisions:-
(a) "The Purchaser and its successors in title and those
deriving title under them will at all times duly pay all
rent and other payments becoming due under the Lease
and will observe and perform all the covenants,
agreements and conditions contained therein and on the
part of the Vendors as tenant to be performed and
observed and will keep the Vendors fully and
effectually indemnified against all actions,
proceedings, costs, claims, demands, expenses, losses and
liabilities whatsoever in respect of such
matters."
(b) "If at any time during the residue of the term of the
Lease there shall be any breach of the covenants for
payment of rent observance and performance of
covenants, agreements and conditions or for indemnity on
the part of the Purchaser herein implied the Vendor
may serve upon the Purchaser and upon any mortgagee
whose name and address for service shall have been
notified in writing to the Vendor a notice in writing
referring to the said breach and requiring the same to be
remedied within such period (not being less than twenty
one days) as may be specified in the Notice and if at
the end of the said period the said breach shall not
have been remedied in its entirety then and in any such
case it shall be lawful for the Vendor and without
prejudice to any other right or remedy which may be
vested in him and notwithstanding any actual or
constructive waiver of any previous right of re-entry
or other right or remedy to or upon the property
comprised in the said Lease or any part thereof in the
name of the whole and thenceforth to hold and enjoy the
same for the residue of the term subsisting under or by
virtue of the said Lease free from incumbrances or
any derivative estates or interests and thereupon
the person or persons exercising such right of
re-entry shall become entitled to delivery up of the
original of the said Lease and all title deeds relating
to the Property."
3.2.5 If the landlord of any Leasehold Property shall refuse to give
its Licence or shall proffer such licence subject to
conditions reasonably unacceptable to the Vendor or the
Purchaser then the Vendor shall at its own expense apply for and
endeavour to obtain licence for a subletting of that
Leasehold Property to the Purchaser for a term equal to the
then unexpired residue of the term granted by the Vendors own
lease less one day and subject in all respects to the same
covenants conditions and other terms as are contained in the
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<PAGE>
Vendors own lease (mutatis mutandis) and the provisions of
paragraphs 3.2.1, 3.2.2 and 3.2.3 shall apply to such
application.
3.3 After the Transfer Date, and until such time as:-
3.3.1 Licence is obtained and the Leasehold Property assigned
or transferred to the Purchaser; or
3.3.2 the Vendor or the Purchaser elects to terminate the
Purchaser's right to occupy the Leasehold Property as
hereinafter provided,
the Vendors shall be deemed to hold the benefit of that Leasehold
Property in trust for the Purchaser.
3.4 Where the Vendors are deemed to hold the benefit of a Leasehold
Property in trust for the Purchaser the Vendors shall:-
3.4.1 provide the Purchaser with vacant possession on
Completion;
3.4.2 (subject to prior reimbursement by the Purchaser) pay the
rents service charges and other sums reserved by and
(subject to full performance by the Purchaser of its
obligations in this clause 3.4 and insofar as the
Purchaser is unable itself to do so) observe and
perform the covenants and conditions contained in the
Lease in respect of that Leasehold Property;
3.4.3 deal with it in all respects in accordance with the
reasonable requirements of the Purchaser;
and the Purchaser shall promptly and in any event within such
time limits as shall preclude any breach of the covenants and
conditions in the relevant Lease provide the Vendors with all
such funds as may be necessary to discharge all liabilities
under the Lease and shall observe and perform all covenants and
conditions contained in the Lease.
3.5 If any such Licence is refused or not obtained within 12 months
after the Transfer Date in respect of any Leasehold Property
the Purchaser's right to occupy that Leasehold Property
shall, if either the Vendors or the Purchaser so elects in
writing, be terminated.
3.6 Upon any election by the Vendors or the Purchaser to terminate
the Purchaser's right to occupy a Leasehold Property:-
3.6.1 the Purchaser shall vacate the Leasehold Property within
one month from the date of such election leaving it
in at least as good a state of repair and condition and
decoration as it is in at the Transfer Date; and
- 3 -
<PAGE>
3.6.2 with effect from the date of vacation the Purchaser shall
be released from all obligations to pay rent or other
outgoings and all liability whatsoever in relation
to that Leasehold Property (save with respect to
any antecedent breach of the provisions of this Part 5
(B) of this Schedule); and
3.6.3 with effect from the date of vacation the provisions of
paragraph 3.4 shall cease to apply but the
provisions of Clause 3.8 shall come into effect.
3.7 After the Purchaser has vacated the Leasehold Property pursuant
to Clause 3.6 the Vendors shall hold the benefit of that
Leasehold Property upon trust for the Purchaser and:-
3.7.1 the Purchaser shall have no liability to the Vendors with
regard to reimbursement of the outgoings payable with
respect to the Leasehold Property nor the
performance or observance of the covenants and
conditions contained in the Lease nor in any other
respect whatever; and
3.7.2 in the event that the Leasehold Property shall be
disposed of (whether by assignment or sub-letting or any
other manner) the Purchaser shall permit the Vendors
to reimburse themselves out of the proceeds of such
disposal (if any) any expenses whatsoever incurred by
the Vendors with regard to that Leasehold Property or its
disposal including the payment of rent or other sums
due under the Lease or the expenses incurred in
performing or observing any of the obligations contained
in the Lease or otherwise PROVIDED THAT if such
proceeds shall be less than such expenses the Vendors
shall have no right of recourse against the Purchaser
in respect thereof; and
3.7.3 the Vendors shall have complete discretion to deal with
the Leasehold Property in any manner whatsoever and
shall be entitled to exercise the full powers of an
absolute beneficial owner with regard thereto; and
3.7.4 the provisions of clause 4 of this Part shall cease to
apply in relation to that Leasehold Property.
3.8 Subject to Clause 3.3 until completion of the sale of each of the
Leasehold Properties the Vendors shall retain the deeds and
documents of title relating to the Vendor's title to the
Leasehold Properties.
4. The National Conditions of Sale (Twentieth Edition) ("the
National Condition") are incorporated in the terms of this
- 4 -
<PAGE>
Part 5(B) of the Schedule insofar as they are applicable to the
sale by private treaty and are consistent with the express
terms hereof. The National Conditions shall be varied as
follows:-
4.1 The following general conditions shall not apply:-
2, 3, 4, 5(4) & (5), 6, 7, 8, 9, 10, 11(5), 12, 13, 15(3) & (5),
18, 19(1) & (4), & 21.
4.2 The following general conditions shall be amended as follows:-
4.2.1 In general condition 15(4) delete the words "(without
prejudice to any right of the Purchaser to rescind the
contract under paragraph (3) of this condition)";
4.2.2 In general condition 20 delete the words ", the Purchaser
shall not become entitled to any right to light or air
over or in respect of any adjacent or neighbouring
Property which is retained by the Vendor and".
5. The Leasehold Properties are sold subject to (and with the
benefit of) the following matters that relate thereto:-
5.1 all Local Land Charges (whether registered or not before the date
of this Agreement) and all matters capable of
registration as Local Land Charges and not actually so
registered;
5.2 all charges, designations, regulations and restrictions made or
imposed or about to be made or imposed by or under the Town
and Country Planning Acts and all notices, charges, orders,
resolutions, demands, plans, proposals, requirements,
restrictions, agreements, conditions, directions or other
matters whatsoever served or made by any local or other
competent authority before, on or after the date hereof;
5.3 all such matters as are referred to in Section 70 of the Land
Registration Act 1925 (but so that this Clause 5.3 shall not
detract from the effect of Warranty 5.10 contained in Part 7 of
this Schedule) and all other rights of support, way, water,
light, air and other rights easements quasi-easements or reputed
easements, liabilities and public rights whatever and any
liability to repair or contribute to the repair of roads,
ways, passages, sewers, drains, fences or other matters and
to all encumbrances of whatever nature;
5.4 the covenants, obligations and conditions on the part of the
lessee contained in the Leases and any licence granted
thereunder or deed or other instrument supplemental thereto.
- 5 -
<PAGE>
6. Title to the Property having been deduced the Purchaser is deemed
to have accepted the same and shall raise no objection or
requisition on title with regard thereto.
7. The Purchaser having satisfied itself on all matters relating to
user under the Town and Country Planning Acts 1971 (and any
statutory modification or re-enactment thereof) and all
enactments from time to time in force relating wholly or
partly to town and country planning shall be deemed to
purchase with full knowledge thereof and shall raise no
requisition or objection in relation thereto.
8.1 The assignments and transfers of the Leasehold Properties to the
Purchaser shall be prepared by the Vendor in duplicate and
such duplicate executed by the Purchaser and the
Purchaser shall deliver a certified copy of the Assignment as
stamped and denoted to the solicitors for the Vendor within
fourteen days after completion of the sale.
8.2 Such assignments and transfers shall contain the following
provisions:-
"the covenants implied by virtue of Section 24 (1) (a) of the
Land Registry Act 1925 or Section 76 (1) (B) of the Law of
Property Act 1925 shall be modified so that it shall not be
implied that the covenants contained in the Lease and on the
part of the tenant to be performed and observed and which
relate to the state of repair and condition of the Property
have been observed and performed up to the date of the
assurance and the Purchaser hereby requests the Chief Land
Registrar to enter notice of this declaration on the register of
the title to the Property".
9. In respect of the Leasehold Property at Carnegie House, 21
Peterborough Road, Harrow the Vendors will, if required by the
Purchasers and so far as they are permitted thereby assign
to the Purchasers the benefit of the five deeds of collateral
warranty dated 29.10.90.
10. The provisions of this Part 5 (B) of this Schedule shall remain
in full force and effect notwithstanding completion of the sale
and purchase of the Leasehold Properties insofar as they remain
to be observed and performed.
- 6 -
<PAGE>
SCHEDULE
--------
PART 6
------
THE TRANSFERRING EMPLOYEES
--------------------------
All persons on the payroll of the Business as at the Transfer Date.
<PAGE>
SCHEDULE
--------
PART 7
------
WARRANTIES, REPRESENTATIONS AND UNDERTAKINGS
--------------------------------------------
The Vendors jointly and severally warrant to the Purchaser that
except as disclosed to the Purchaser in the Letter of Disclosure (it
being understood that any reference herein to "the best of the
knowledge, information and belief" of the Vendors or to any phrase of
similar import, or any references "so far as the Vendors are aware"
shall be construed and extended to include knowledge which is or
which ought on careful and diligent enquiry to be in the possession
of the Vendors or the Vendors' Director of Finance and
Administration, Mr. William B. Grieve -
1 ACCOUNTS
--------
1.1 The Accounts, copies of which have been supplied to the
Purchaser present fairly in all material respects the
financial position of the Business as at the Accounting Date set
forth the assets and liabilities (including contingent
liabilities and Taxation liabilities) of the Business as at
such date were prepared in accordance with generally accepted
accounting practice and show a true and fair view of the
affairs of the Business as at the Accounting Date and were not
affected by any extraordinary, exceptional or prior year item;
1.2 the Balance Sheet of the Business as at the Accounting Date
sets forth the assets and liabilities of the Business at the
Accounting Date; and
1.2.1 the values placed on the current assets of the
Business in the Balance Sheet were not materially in
excess of current market values at the Accounting
Date and the values placed on the fixed assets were
reasonably stated in relation to the accounting
policy as disclosed in the Accounts;
1.2.2 full provision in accordance with good accounting
practice was made in the Balance Sheet for bad and
doubtful debts;
1.2.3 full provision was made in the Balance Sheet for all
known liabilities;
1.2.4 nothing has occurred since the Accounting Date to
suggest that any provision referred to in paragraphs or
1.2.3 above is or may be insufficient;
1.2.5 full disclosure was made in the Accounts of all
material commitments and contingent liabilities in
existence or in contemplation at the Accounting Date;
<PAGE>
1.2.6 full disclosure was made in the Accounts of all
indebtedness to the Vendors or any of them as at the
Accounting Date and such indebtedness has not
increased since that date; and
1.2.7 the Accounts were prepared on the historic cost
convention, fully adjusted for all accruals and
prepayments and making full provision for the rent
payable over the remainder of the lease term for 67
Grosvenor Street, London and otherwise in accordance
with generally accepted accounting practice in the
United Kingdom.
2 SHARES AND DISTRIBUTIONS
------------------------
2.1 The Company Accounts, copies of each of which have been
supplied to the Purchaser, present in all material respects the
financial position of the relevant Company as at the
relevant Company's Accounts Date set forth the assets and
liabilities (including contingent liabilities and Taxation
liabilities) of the relevant company as at such date and the
profits and Taxation liabilities of the relevant company for the
respective periods in respect of which they were
prepared, were prepared in accordance with the Companies Acts and
all applicable Standard Statements of Accounting
Practice, and show a true and fair view of the affairs of the
relevant company as at the relevant accounting date and were
not affected by any extraordinary, exceptional or prior year
item;
2.2 With respect to the Company Accounts:-
2.2.1 the values placed on the current assets of the
relevant company in its Company Accounts were not
materially in excess of current market values at the
relevant Company Accounts Date and the values placed on
the fixed assets were reasonably stated in
relation to the accounting policy as disclosed in the
said Company Accounts;
2.2.2 full provision in accordance with good accounting
practice was made in the relevant Company Accounts for
bad and doubtful debts existing as at the relevant
Company Accounts Date;
2.2.3 full provision in accordance with good accounting
practice was made in the relevant Company Accounts for
all known liabilities;
2.2.4 nothing has occurred since the relevant Company
Accounts Date to suggest that any provision referred to
- 2 -
<PAGE>
in paragraph 2.2.2 or 2.2.3 above is or may be
insufficient;
2.2.5 full disclosure in accordance with good accounting
practice was made in the relevant Company Accounts of all
material commitments and contingent liabilities in
existence at the relevant Company Accounts Date;
2.2.6 full disclosure was made in the relevant Company
Accounts of all indebtedness to the Vendors or any of
them as at the relevant Company Accounts Date and
such indebtedness has not increased since that date; and
2.2.7 the relevant Company Accounts were prepared on the
historic cost convention, fully adjusted for all
accruals and prepayments and otherwise in accordance
with generally accepted accounting practice in the
United Kingdom;
2.3 none of the Companies has at any time since whichever is the
later of 6th April, 1965 and its date of incorporation
2.3.1 repaid or agreed to repay or redeemed or agreed to
redeem any share capital of any class; or
2.3.2 capitalised or agreed to capitalise in the form of
shares or debentures any profits or reserves of any
class or description nor has it passed or agreed to
pass any resolution to do so;
2.4 no securities (within the meaning of ICTA, Section 254(1))
issued by any of the Companies and remaining in issue at the
date hereof were issued in such circumstances that the
interest payable thereon falls or has at any time fallen to be
treated as a distribution under ICTA, Section 209(2)(e);
2.5 none of the Companies has received and will not on or prior to
the Transfer Date receive or be entitled to receive any
capital distributions to which the provisions of TCGA,
Section 189 could apply;
2.6 none of the Companies has issued any share capital to which the
provisions of ICTA, Section 249 could apply nor does it own any
such share capital;
2.7 none of the Companies has entered into any transaction to
which the provisions of ICTA section 242 have been, or could be,
applied.
- 3 -
<PAGE>
3 EVENTS SUBSEQUENT TO THE ACCOUNTING DATE
----------------------------------------
Since the Accounting Date:-
3.1 there has not been any material change in the
financial or trading position or so far as the
Vendors are aware prospects of the Business; and
3.2 the Business has been carried on in similar manner as
heretofore and there has not been -
3.2.1 any contract or commitment entered into or
made involving or relating to capital
expenditure by the Business in excess of
B.P.20,000 in respect of any one such matter
and B.P.100,000 in aggregate excluding those
contracts or commitments disclosed in the
Disclosure Letter;
3.2.2 any material increase in the liabilities of
the Business otherwise than such as may have
been incurred for full value in the normal
course of business;
3.2.3 except in the normal course of business and
in an arm's length transaction any disposal
of any of the assets of the Business;
3.2.4 any mortgage, debenture or floating charge
or letter of inhibition created or entered
into affecting any of the property or assets
of the Business or any of the Companies and
all reasonable endeavours have been
exercised to ensure that no lien has been
permitted to attach to any of such property
or assets;
3.2.5 the assumption of any new partners in the
Business, or the granting to, or obtaining
by, any person of any right or interest in
the Business, or (whether by allotment,
transfer, option or otherwise) in and to any
shares in the capital of any of the
Companies;
3.2.6 any payment or distribution to any partner
(whether by way of payment to account of
profits, repayment of capital, or otherwise)
other than the fixed monthly drawings
pertaining as at 1st June, 1993;
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<PAGE>
3.2.7 the appointment of any person as an employee
in the Business, with a remuneration package
in excess of B.P.30,000 per annum;
3.2.8 any issue of share capital or loan capital
or any increase in the nominal share capital
of any of the Companies or any distribution
by any of the Companies (whether of capital
or income) or dividend or bonus declared or
paid on any part of its share capital;
3.2.9 any agreement entered into or otherwise in
force for or relating to the purchase or
redemption by any of the Companies of any of
its shares;
3.2.10 any increase in the emoluments whether by
way of salary, fee, bonus, pension or
otherwise or alterations in the terms of
engagement of any partner of the Business;
3.2.11 any increase in the emoluments whether by
way of salary, fee, bonus, pension or
otherwise or alterations in the terms of
engagement of any employee in the Business;
3.2.12 any guarantee or any indemnity given or
granted by or in name of the Business in
respect of the due discharge of the
liabilities or due performance of any of the
obligations whether present or future of any
other person, firm or corporation;
3.2.13 any contract for hire or rent, hire
purchase or purchase by credit sale or
periodical payment in respect of goods or
plant or equipment in respect of which the
aggregate of any payments made by the
Business under such contract will exceed
B.P.20,000;
3.2.14 any liability of the Business to pay to any
one or more of its partners any capital sum,
fee or other payment or benefit whatsoever
other than by way of reimbursement of
expenses in the ordinary course of business
and the payment of the fixed monthly
drawings at the rate pertaining as at the
Accounting Date;
- 5 -
<PAGE>
3.2.15 so far as the Vendors are aware any
withdrawal of business from the Business or
any threat of such withdrawal by any person
firm or corporation for whom the Business
transacted business at any time during the
year ended on the Accounting Date;
3.3 each debt which was owed to the Business as at the
Accounting Date and which has not been written off in the
accounts of the Business has been recovered;
3.4 the Business has continued to pay its creditors in
the ordinary course of business;
3.5 neither the trading results of nor so far as the
Vendors are aware the prospects of the Business have
deteriorated since the Accounting Date by comparison
with its trading results and prospects for the
comparable period in the financial period ended on the
Accounting Date;
3.6 the Business has not incurred any known liabilities
nor made any payments otherwise than in the normal and
proper course of carrying on its business;
3.7 the profits of the Business as shown in the
Completion Accounts for the period commencing 1st
June 1993 and ending on the Transfer Date will be not
less than B.P.1,024,000 before deduction of tax; and
3.8 the value of the net assets of the Business (being
the aggregate of partners capital, car suspense
account and reserves (other than tax reserves)) as at the
Transfer Date as shown in the Completion Accounts will be
not less than B.P.NIL.
4 THE BUSINESS
------------
4.1 The recitals contained in the preamble to this Agreement and the
particulars relating to the Business and the Assets
contained in the foregoing Agreement and the Schedule are
true and accurate in all respects;
4.2 the Vendors (other than in the capacity of trustee or nominee for
a third party) are not engaged whether as plaintiffs,
defendants or otherwise in any litigation, arbitration,
prosecution, tribunal or other legal proceedings relating to the
Business save for normal debt collection in respect of sums
not exceeding B.P.10,000 in respect of any one case and B.P.50,000
in aggregate, and so far as the Vendors are aware no such
proceedings are contemplated or known to be threatened. So far
as the Vendors are aware there have not been any incidents
- 6 -
<PAGE>
likely to give rise to any claim against the Vendors in
respect of professional liability, and none of the clients of
the Business are presently questioning or disputing the
amount of any outstanding invoice;
4.3 with respect to the Business the Vendors are not a party to and
do not derive any benefit under any long term (being a term of
or in excess of one year) or unusual and material contract
which would have a material effect on the profits of the Business
or on the future trading prospects of the Business nor any
contract with the Vendors or any of them or with any companies
(other than companies which are listed or the shares of which
are publicly traded and in which the Vendors own less than 5
per centum of the issued share capital) in the issued share
--- ------
capital of which any of the Vendors are beneficially
interested, other than in the normal course of business;
4.4 neither the Vendors nor the Business are directly or
indirectly engaged in any underwriting activities (whether
insurance, re-insurance, financial or otherwise) and neither
have at any time been so engaged;
4.5 there are no subsisting written service agreements between the
Vendors and any partner or employee in the Business and the
services of all employees can be terminated without breach
of contract by giving prior notice of not more than three
months;
4.6 there is no liability whatsoever to make payment to or for the
benefit of any partner or employee or ex-partner or ex-
employee in respect of his past services to the Business
whether by way of pension contribution or otherwise and the
Business has not any superannuation fund retirement benefit
scheme or other pension schemes or arrangements and in
respect of any such funds schemes or arrangements which are
disclosed the Business has not any unfunded contingent
obligations and any such funds schemes or arrangements which are
funded are solvent;
4.7 save as may be required by statute or any regulation or order
thereunder the Business has not incurred any obligation to
employees as to the introduction or increase of any pension
rights or entitlements;
4.8 the Business has not terminated the appointment of any
representative, agent or distributor in circumstances which may
give rise to or have given rise to any claim for
compensation;
4.9 there is not at the date hereof any liability to pay
compensation or any liability (other than contingent) to make
- 7 -
<PAGE>
redundancy payments to any partner or employee of the
Business;
4.10 there are no employees of the Business as regards whom the
length of their employment for the purpose of calculating
redundancy payments payable by the Business would exceed the
length of their employment therewith;
4.11 all the Accounts, Records books, ledgers, stock and
financial and other material records of whatsoever kind of the
Business are fully, properly and correctly made up, kept and
compiled in accordance with good accounting practice;
4.12 the Business has made full and proper returns and has given
proper notices for the purposes of Taxation, and customs &
excise and there are no material disputes whatsoever with the
Inland Revenue or other taxation authorities in the United
Kingdom or elsewhere or the Department of Trade, H.M.
Customs & Excise, the Bank of England, H.M. Treasury, the
Institute of Actuaries or any other governmental department or
body or regulatory authority (whether in the United Kingdom
or elsewhere);
4.13 the Business has not in the last six years been the subject of
a discovery by the Inland Revenue and there are no facts which
are likely to cause a discovery to be made;
4.14 other than in respect of the Leasehold Properties all title
deeds, leases and agreements to which the Business (or the
Vendors or any of them on its behalf) is or are a party and
other documents owned by the Business are in its possession and
those which the Business may require to enforce are (where
necessary) properly stamped;
4.15 the copy of the Deed of Partnership relating to the Business
dated 16th June 1992 and of the Memorandum and Articles of
Association of each of the Companies which have been given to the
Purchaser's Solicitors are accurate and complete in all
respects as at the date of this Agreement and the Register of
Members and other statutory books and books of account of the
Companies have been properly kept and contain a true,
accurate and complete record of the matters which are
required in accordance with statute to be dealt with therein;
4.16 there are no contracts, licences, leases, agreements,
claims, elections (whether in respect of Taxation or
otherwise) or arrangements which in accordance with their
terms will be or could be at the instance of the other party
affected by the implementation of the sale and purchase
contemplated hereunder and in particular, but without
prejudice to the generality of the foregoing, none of the
Business or any of the Companies shall in connection with or
- 8 -
<PAGE>
arising out of said implementation, become liable for
payment of any additional sums or repayment of any sums,
premiums, grants or others;
4.17 so far as the Vendors are aware the Business has not, nor
have the Vendors on its behalf, committed or omitted to do any
act or thing the commission or omission of which is in
contravention of any Act of Parliament or statutory or local
order, regulation, bye-law, or the like, or which could
give rise to any fine, penalty, enforcement order or the
like;
4.18 no act or transaction has been effected in consequence of
which the Business has become or will become liable to refund in
whole or in part any grant paid under the Industry Act 1972,
or employment subsidy received by virtue of the Local Employment
Acts;
4.19 the Business has properly operated the Pay As You Earn system of
deduction of and accounting to the Inland Revenue for tax and
national insurance contributions chargeable on the
emoluments (including benefits in kind) of its employees and has
paid all sums so deductible to the Inland Revenue
timeously in accordance with the relevant statutory
requirements;
4.20 the Vendors have obtained for the Business and are the
holders of all necessary governmental, local authority or
regulatory licences, permits, consents and authorities for the
proper carrying on of the Business in the places and in the
manner in which such business is now carried on, have so far as
the Vendors are aware at all times complied with all conditions
attached to such licences, permits, consents and authorities
and all such licences, permits, consents and authorities are
valid and subsisting and (save with respect to the
authorisation by the Institute of Actuaries to give investment
advice) the Vendors are not aware, of any reason any of them
which require to be renewed will or may not be renewed free of
new or substituted conditions at the relevant date of renewal by
the relevant licensing or other regulatory authority, or any
reason any of such licences, permits, consents and authorities
will or may be suspended, cancelled, revoked or withdrawn in
any other way or be qualified by additional or substituted
conditions or any reason any of such licences, permits,
consents and authorities may not be validly transferred or
assigned to the Purchaser;
4.21 all forms of intellectual property required by the Business in
connection with its business which are capable of
protection by way of registration or otherwise are so
protected in the name of the Business or the Vendors on
behalf of the Business and, without prejudice to the
foregoing generality:-
- 9 -
<PAGE>
4.21.1 all copyrights used by the Business in connection
with its business are vested in the Business and are not
subject to any licence or authority to or in favour
of any other person;
4.21.2 all patents, trademarks and registered designs (if
any) used by the Business in connection with its
business are either (i) the property of the Business and
are duly registered in the name of the Business or the
Vendors on behalf of the Business as sole proprietor
and all fees and expenses have been timeously paid;
or (ii) are made available to the Business under
licence and such licence is assignable to the Purchaser
and does not give rise to any material continuing
payment obligation (being in excess of B.P.10,000 per
annum);
4.21.3 no licences or registered user or other rights have
been granted or agreed to be granted to any other
person in respect of any know-how of the Business, and
the Business is not the licensee under any patent or
trademark, licence or know-how agreement or the like
nor has any undertaking been made by or in favour
of the Business in respect of any trademark, patent or
registered design;
4.21.4 with respect to any licence on which the Business
relies as licensee, the Purchaser shall be able to
obtain the full benefit with effect from and after the
Transfer Date without any increase in the relevant
fees;
4.22 the Business is the beneficial owner of the whole of the
issued share capital of each of the Companies and save as
aforesaid neither the Business nor the Companies are
interested in the share or loan capital of any other company nor
do any of the Vendors have a material interest in any company
which has a trading interest with the Business or any of the
Companies;
4.23 the Business is not party to any joint venture, consortium or
partnership arrangement or agreement;
4.24 the Vendors have not received any notice that the Business is not
nor has it been at any time party to or involved in any
agreement or arrangement which infringes the provisions and
requirements of Articles 85 and 86 of the Treaty of Rome 1957 and
the regulations and orders made pursuant thereto nor have the
Vendors received any notice that the Business is or has at any
time been party to or involved in any restrictive trade
practice or arrangement prohibited by the Restrictive Trade
Practices Acts 1956 and 1968, the Fair Trading Act 1973,
the Restrictive Trade Practices Acts 1976 and 1977 or the
Competition Act 1980;
- 10 -
<PAGE>
4.25 the Business has no outstanding borrowings other than the
loans or advances and overdraft facilities referred to in the
Accounts;
4.26 the Business is not party to any agreement restricting its
freedom to manufacture, process, purchase, supply or sell its
services or products by such means and to such persons as it may
from time to time think fit;
4.27 no agreement has been entered into or is otherwise in force
which calls either at the date hereof or in the future for the
issue of or accords to any person, firm or corporation the
right to call for a share in the profits of the Business or the
issue of any share or loan capital of any of the Companies;
4.28 no guarantee or indemnity has been given or granted by any
person firm or corporation in respect of the due discharge of any
liability or the due performance of any obligation whether
present or future of the Business;
4.29 the Business has no liability to pay to any person firm or
corporation any management fee or like fee or charge
otherwise than in the ordinary course of trade;
4.30 so far as the Vendors are aware (their ability to make
inquiries of third parties or the employees being inhibited by
the necessity to preserve confidentiality), none of the Key
Clients is likely to withdraw their business from the
Business after the Transfer Date (whether in consequence of the
sale and purchase contemplated herein or otherwise);
4.31 so far as the Vendors are aware (their ability to make
inquiries of third parties or the employees being inhibited by
the necessity to preserve confidentiality), none of the Key
Employees is likely to terminate his employment with the
Purchaser within six months of the Transfer Date;
4.32 the Vendors:
4.32.1 acknowledge and understand, that the Consideration
Shares have not been registered under the Act, and may
not be offered or sold within the United States or to
U.S. persons (as defined in Regulation S under the Act)
unless the Consideration Shares are registered
under the Act or an exemption from the registration
requirements of the Act is available;
4.32.2 represent, warrant and agree that neither they nor any
of them nor their affiliates, nor any person acting
on behalf of them or any of them, has engaged in any
directed selling efforts in the United States of America
- 11 -
<PAGE>
within the meaning of Regulation S under the Act with
respect to the Consideration Shares;
4.32.3 represent, warrant and agree that Clay & Partners is a
partnership organised under the laws of a
jurisdiction other than the United States of America,
that the Companies are organised under the laws of a
jurisdiction other than the United States of America,
that all of the Vendors are natural persons who are not
resident in the United States of America; each of the
Vendors acknowledges and understands that the
Purchaser is relying on Rule 903 of Regulation S
under the Act in connection with the sale of the
Consideration Shares to the Vendors hereunder;
4.32.4 represent and warrant that each of them has received and
had the opportunity to review the Exchange
Documents, Convertible Preferred Circular and other
documents and information pertaining to the
Purchaser, and has had the opportunity to ask
questions and receive answers from the Purchaser
regarding the Purchaser's business, operations and
financial condition;
4.33 The Computer Hardware and Software Systems employed
by the Business are in good working order and capable
of properly and reliably processing, storing and
otherwise dealing with all transactions and data from
time to time required and generally are capable of
performing the functions for which they are installed.
5 ASSETS
------
5.1 Except for those assets held under hire purchase contracts,
details of which are set out in the Letter of Disclosure, the
Vendors are the owners of and have good and marketable title to
all those fixed assets shown in the books of account of the
Business and all loose plant equipment materials parts goods
vehicles assets and moveable or personal property used in or for
the purposes of the Business are free from any credit sale or
hire purchase agreement or agreements for payment on hiring
or deferred terms;
5.2 OWNERSHIP OF ASSETS
-------------------
5.2.1 Except for those assets held under hire purchase contracts,
details of which are set out in the Letter of Disclosure and for
current assets subsequently acquired, sold or realised in the
ordinary course of business the Vendors owned absolutely at the
Accounts Date and still own absolutely the Assets;
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<PAGE>
5.2.2 the Vendors have not disposed of or agreed to dispose of or
granted or agreed to grant any security or other encumbrance in
respect of any of the Assets;
5.2.3 none of the Assets is subject to and there is no agreement or
commitment to give or create, any option, lien or encumbrance
(including without limitation any Inland Revenue charges as
defined in the Inheritance Tax Act 1984, Section 237);
5.2.4 none of the Assets has been purchased on terms that property
does not pass to the Vendors until full payment is made by it to
the supplier;
5.2.5 there has been no exercise, purported exercise or claim for any
charge, lien, encumbrance or equity over any of the Assets
and there is no dispute directly or indirectly relating to
ownership of any of the Assets.
5.3 No other properties:
--------------------
The Leasehold Properties comprise all the freehold, leasehold or
other real property owned, occupied or otherwise used as part
of or in connection with the Business.
5.4 Occupation:
-----------
The Vendors are in physical possession and actual and exclusive
occupation of the whole of each of the Leasehold Properties.
5.5 Ownership:
----------
The Vendors are the legal and beneficial owners of each of the
Leasehold Properties for an unencumbered estate in
possession.
5.6 Particulars of Leasehold Properties:
------------------------------------
The particulars of each of the Leasehold Properties set out in
Part 5(A) of the Schedule are true and accurate in all
respects.
5.7 Possession of title deeds:
--------------------------
The Vendors have in their physical possession all of the title
deeds and documents to each of the Leasehold Properties of which
copies have been supplied to the Purchaser and which are
originals or properly examined abstracts. No such title deeds
or documents to any of the Leasehold Properties are missing
or incomplete.
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<PAGE>
5.8 Charges:
--------
The Leasehold Properties are free from and not affected by any
mortgage or charge (whether legal or equitable, specific or
floating), debenture, lien, pledge or other security
interest or other encumbrance whatsoever, including without
limitation any which secure the payment of monies or other
obligation or liability of any third party.
5.9 Outgoings:
----------
The Leasehold Properties are not subject to the payment of any
outgoings other than general rates and water rates and sums
reserved by the Leases and all outgoings have been duly paid and
none is the subject of dispute.
5.10 Overriding Interests
--------------------
The Leasehold Properties are not subject to any overriding
interest as specified in Section 70 of the Land Registration Act
1925.
5.11 Planning:
---------
5.11.1 Each of the Leasehold Properties is presently used as
offices except for the front part of the fourth
floor at 61/63 Brook Street which is used as Boardroom
accommodation and kitchen ancillary to the adjoining
offices.
5.11.2 All planning conditions imposed on, or affecting, the
Leasehold Properties have been complied with in all
respects.
5.12 Leases:
-------
In relation to each of the Leasehold Properties:-
5.12.1 each is held under the terms of the relevant lease
(briefly referred to in Part 5(A) of the Schedule) and
no licences, consents or concessions have been
granted;
5.12.2 the Vendors have paid the rent and have substantially
observed and performed the covenants and agreements on
the part of the tenant and the conditions
contained in any Lease, and in any licences or other
documents supplemental to or granted under any Lease, and
the Vendors are aware of no outstanding
complaints by any lessor;
5.12.3 the Leases are valid and in full force and effect;
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<PAGE>
5.12.4 the covenants on the part of the landlord contained in
any Lease have been fully observed and performed; and
5.12.5 no notices have been served or received and no
proceedings have been commenced or are pending under
Part II of the Landlord and Tenant Act 1954.
5.13 Formerly owned properties:
--------------------------
None of the Companies have any actual or contingent liability in
respect of any freehold or leasehold property which was
previously owned or used as part of or in connection with the
Business or otherwise but is not presently owned, occupied or
used whether under restrictive or other covenants as
original tenant or as guarantor, assignee or otherwise.
5.14 Authorisations; environment etc.:
---------------------------------
5.14.1 Where it is the duty of the lessee or occupier so to do
the Vendors have obtained and complied with all
permits, licences, other authorisations or approvals,
conditions or restrictions affecting the Vendor's
interest in the Leasehold Properties and have filed
all notifications required to enable the Business to
be lawfully and properly operated from the Leasehold
Properties.
5.14.2 The Vendors have complied with all requirements relating
to the Business carried on from or at the Leasehold
Properties, whether contained in statute, order,
regulation, byelaw or elsewhere relating to:-
(a) pollution or protection of the environment;
(b) health and safety;
(c) emissions or releases of any kind whatsoever;
(d) discharges of radioactive waste, or chemical or other
pollutants or contaminants, or industrial, toxic or
hazardous substances or waste;
(e) the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of
any discharges or materials whatsoever including
without limitation, those referred to in paragraph (d)
above;
(f) the control of noise and noise emission;
(g) landfill sites or contaminated land; and
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<PAGE>
(h) water pollution including, without limitation, pollution
by trade and sewage effluent.
5.14.3 There is no civil, criminal or administrative action,
claim, investigation or other proceeding or suit
pending or threatened in respect of any of the
matters referred to in this paragraph 5.14 or other
environment related matter.
6 INSURANCES
----------
The Business has at all times had in force not only insurance
coverage on all its property and assets of an insurable
nature in the full reinstatement cost thereof and for such
risks (including but not limited to professional liability) and
for such amounts as it would be reasonable and prudent for it
to maintain having regard to the custom of its business
but also such fully comprehensive insurance coverage in respect
of all third party risks against which it is necessary and
usual to insure and all such insurance will be maintained; no
claim made under any policy of insurance held by the Business is
in dispute or subject to a reservation of rights and the Vendors
are not aware of any act or omission whereby the policies for
any such insurance may be rendered void or voidable. The
details of the Vendors' professional liability insurance set out
in Part 9 of the Schedule and of other policies of insurance
set out in the Letter of Disclosure are true and accurate.
7 TAXATION
--------
7.1 None of the Companies has committed itself, been a party to or
otherwise involved in any transaction which is affected by ICTA,
Section 703, and will not commit, become party to or so
involved on or prior to the Transfer Date;
7.2 none of the Companies has entered into or been concerned with or
involved in any arrangements of which the main purpose was the
avoidance of Taxation;
7.3 the Letter of Disclosure contains particulars of all
elections made by the Companies under ICTA, Section 247
within the six years prior to the Transfer Date and all such
elections are now in force and the Companies have not within
such period paid and will not up to and including the
Transfer Date, pay any dividend without advance corporation
tax, and has not within such period made and will not make up
to and including the Transfer Date, any payments without
deduction of tax in the circumstances specified in ICTA,
Section 247(4);
7.4 none of the Companies has at any time within the six years
prior to the Transfer Date surrendered or claimed or agreed to
- 16 -
<PAGE>
surrender or claim, any amount by way of group relief under
the provisions of ICTA, Part X, Chapter IV, and has not
within such period made or received, or agreed to make or
receive, a payment for group relief within the meaning of ICTA,
Section 402(6);
7.5 none of the Companies has at any time within the six years
prior to the Transfer Date surrendered or claimed or agreed to
surrender or claim, any amount of advance corporation tax under
the provisions of ICTA, Section 240, and has not within
such period made or received, or agreed to make or receive a
payment in respect of the surrender of the benefit of an amount
of advance corporation tax within the meaning of ICTA, Section
240(8);
7.6 none of the Companies has without the prior consent of H.M.
Treasury under ICTA, Section 765, carried out or agreed to
carry out any transaction which would be unlawful in the
absence of such consent;
7.7 no liability will arise on any of the Companies under TCGA
Sections 178 to 181 inclusive in consequence of
implementation of the sale and purchase contemplated in the
foregoing Agreement and any of the Companies thereby leaving or
being deemed to leave any group;
7.8 none of the assets (other than inventory and plant and
machinery whose market value at the date of transfer did not
exceed cost for the purposes of capital gains) owned by any of
the Companies at the date hereof, was acquired from any
company which at the time of the acquisition was a member of the
same group (as defined in TCGA, Section 170);
7.9 no claim has been made by any of the Companies under TCGA,
Section 279;
7.10 none of the Companies has disposed of or acquired any asset in
circumstances such that the provisions of TCGA, Section will
apply, and is not entitled to any capital loss to which the
provisions of TCGA, Section 18(3) will apply;
7.11 no reorganisation within TCGA, Sections 126 to 130 inclusive has
taken place on or after 10th March, 1981 in
circumstances such that Section 128(2) will apply;
7.12 no capital gain chargeable to corporation tax will accrue to any
of the Companies on the disposal of any debt owed to it for
proceeds equal to the value of the debt (net of
provisions) in the Accounts;
7.13 no claims have been made under TCGA, Sections 247, 152, 153 or
175 insofar as they would affect the chargeable gain or
- 17 -
<PAGE>
allowable loss which would arise on a disposal by any of the
Companies of any of its assets;
7.14 the Companies have duly notified the Inland Revenue of
their chargeability to corporation tax in terms of section 10 of
the Taxes Management Act 1970;
7.15 the Companies have filed timeously with the relevant
Inspector of Taxes all corporation tax returns which should
have been filed pursuant to section 11 of the Taxes
Management Act 1970;
7.16 all corporation tax due and payable by the Companies has been
paid in time and no liability for interest on such tax has
been or is accruing; and
7.17 no appeals by any of the Companies against assessment to
Taxation or determinations of losses are undetermined.
8 DISCLOSURE OF INFORMATION
-------------------------
8.1 All factual matters contained in information and documents
concerning the Business and the Assets which have been
supplied to the Purchaser or its agents by or on behalf of the
Vendors were true and accurate in all material respects at the
time such information and documents were originated and
(except with respect to financial information) so far as the
Vendors are aware (their ability to make inquiries of third
parties or the employees being inhibited by the necessity
to preserve confidentiality) remain true and accurate in
all material respects at the Transfer Date.
8.2 so far as the Vendors are aware the Business is not party to any
contract, commitment or arrangement which has not been
disclosed but which is likely adversely to affect materially the
future trading prospects of the Business;
8.3 there are no facts or circumstances relative to the Business or
any of the Companies and which so far as the Vendors are aware
are likely to be material to a purchaser for value of the
Business which have not been disclosed.
9 GENERAL
-------
9.1 The warranties, representations and undertakings contained in
paragraphs 3 to 6 inclusive and paragraph 8 of Part 7 of the
Schedule shall be construed with the intent and to the effect
that
9.1.1 the expression "the Business" shall extend to and
include each of the Companies and said warranties,
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<PAGE>
representations and undertakings shall apply to each
such Company mutatis mutandis; and
------- --------
9.1.2 references to assets, liabilities, duties,
obligations or other commitments, and rights and
privileges of the Business and contracts, documents,
permits, consents or others held by the Business or to
which the Business is a party, shall be deemed to
include assets, liabilities, duties, obligations, or
other commitments, and rights and privileges of the
Business, and contracts, documents, permits,
consents or others held by the Vendors, or to which the
Vendors are party on behalf of, or as trustees for the
Business;
9.2 none of the foregoing warranties, representations and
undertakings shall be limited by reference to any other
warranty, representation or undertaking, or anything in the
foregoing Agreement or in this Schedule, other than Clause 9 of
said Agreement and the Letter of Disclosure;
- 19 -
<PAGE>
SCHEDULE
--------
PART 8
------
Tax Indemnity
-------------
Date: 30th November 1993
DEED OF INDEMNITY
-----------------
by
Those persons whose names and
addresses are set out in the
Schedule to this Deed (hereinafter
collectively referred to as "the
Covenantors")
in favour of
ALEXANDER & ALEXANDER SERVICES INC.
-----------------------------------
a Maryland Corporation having its
principal office at 1211 Avenue of
the Americas, New York 10036,
U.S.A. hereinafter referred to as
"the Purchaser")
WHEREAS
- -------
(A) The Covenantors have entered into a Sale and Purchase Agreement
with the Purchaser for the sale of the Business (as therein
defined (hereinafter referred to as "the Agreement");
(B) this Deed is entered into pursuant to the Agreement;
NOW THEREFORE THE PARTIES HERETO HAVE AGREED AND DO HEREBY AGREE AS
FOLLOWS:-
1. INTERPRETATION
--------------
In this Deed and the Schedule hereto
1.1 Words and expressions defined in the Agreement shall, save where
otherwise provided or expressly defined herein, have the same
meanings in this Deed.
1.2 "Taxation" means all forms of taxation, duties, imposts and
levies whatsoever and whenever imposed and whether of the
<PAGE>
United Kingdom or elsewhere, and without prejudice to the
generality of that expression includes:
1.2.1 income tax, corporation tax (including taxation on
capital gains), capital gains tax, inheritance tax,
stamp duty, stamp duty reserve tax, rates, value
added tax, customs and other import duties and
national insurance contributions, graduated pension
scheme contributions, social security payments, and any
levy under the Industrial Training Act 1964, and any
payment whatsoever which the Company may be or become
bound to make to any person as a result of any enactment
relating to taxation and any other taxes, duties or
levies supplementing or replacing any of the above;
1.2.2 all costs, charges, interest, fines, penalties and
expenses incidental, or relating, to any Taxation.
1.3 Where the context admits, "Company" includes each of the
Companies, so that this Deed shall apply to each of the
Companies as if it were the Company, and the covenants given by
the Covenantors are expressly given to each of the
Companies and may be enforced against the Covenantors by each and
every one of the Companies acting jointly or severally.
1.4 "Relief" includes any relief, allowance, exemption, set-off or
deduction in computing or against profits, income or gains of any
description or from any source, or credit against Taxation.
1.5 "Liability to Taxation" means any liability of the Company to
make a payment in respect of Taxation but does not include:
1.5.1 the loss, counteracting or clawing back of any Relief
which would otherwise have been available to the
Company;
1.5.2 the nullifying, cancellation or set-off of a right to
repayment of Taxation which would otherwise have been
available to the Company;
provided however that if such loss, counteracting or clawing back
of any such Relief as is referred to in clause 1.5.1 or the
nullifying, cancellation or set-off of that right to
repayment as is referred to in clause 1.5.2 results in the
Company thereby suffering a liability to make a payment in
respect of Taxation, that liability shall itself be a
"Liability to Taxation" for the purposes of this Deed.
1.6 "Claim for Taxation" includes any notice, demand, assessment,
letter or other document issued, or action taken, by or on
behalf of the Inland Revenue or Customs and Excise
authorities or any other statutory or governmental authority or
- 2 -
<PAGE>
body whatsoever in any part of the world, whereby it
appears that the Company is or may be subject to a liability to
Taxation (whether or not it is primarily payable by the
Company and whether or not the Company has or may have any
right of reimbursement).
1.7 "Final Determination" means in relation to a Claim for Taxation
where there is an appeal against that assessment:
1.7.1 an agreement under TMA S 54 or any legislative provision
corresponding to that section; or
1.7.2 a decision of a court or tribunal from which either no
appeal lies, or in respect of which no appeal is made
within the prescribed time limit.
1.8 "TMA" means the Taxes Management Act 1970.
---
1.9 "Latest Accounts" means in relation to each of the Companies the
---------------
latest published audited accounts of that company filed with
the Registrar of Companies.
1.10 "Last Accounts Date" means in relation to each of the Companies
------------------
the accounting reference date to which the Latest Accounts were
made up.
1.11 References to any of the parties hereto shall include their
respective successors in title, executors, personal
representatives and permitted assignees.
1.12 All undertakings, covenants and indemnities granted herein by the
Covenantors shall be deemed to be granted jointly and severally.
1.13 The headings contained herein and in the Schedule hereto are for
convenience only and shall not be construed as forming part
of this Agreement or taken into account in the
interpretation hereof.
2. INDEMNITY
---------
2.1 Subject as provided below, the Covenantors jointly and severally
covenant with the Purchaser that they will each indemnify the
Purchaser and keep it fully indemnified from:
2.1.1 either any Liability to Taxation or any depletion in the
value of the assets of the company arising by reason
of or in consequence of or in connection with any
Liability to Taxation;
2.1.2 any settlement of a Claim for Taxation; and
- 3 -
<PAGE>
2.1.3 the costs incurred by the Company in relation to any
demands, actions, proceedings and claims in respect of
Liabilities to Taxation or Claims for Taxation.
2.2 The indemnity in clause 2.1 shall apply only where the Liability
to Taxation or the Claim for Taxation:
2.2.1 is made in respect of or in consequence of any acts,
omissions or transactions whatsoever of the Company or
of the Covenantors occurring or entered into on or before
the date of this Deed; or
2.2.2 results from or is calculated by reference to any actual
or deemed income, profits or gains earned, received
or accrued, or deemed to have been earned, received or
accrued, on or before that date; or
2.2.3 results from or is made by reference to any dividend or
distribution paid or made, or deemed to have been paid
or made by the Company, before that date.
2.3 All payments under this Deed shall be treated as a reduction of
the consideration payable under Clause 3 of the Agreement.
3. EXCLUSIONS
----------
3.1 The indemnity in clause 2.1 shall not apply to any Liability to
Taxation or Claim for Taxation:
3.1.1 to the extent that an appropriate provision or reserve
was made in the Latest Accounts or was specifically
referred to in the notes to those Accounts;
3.1.2 for which the Company is or may become liable as a result
of transactions in the ordinary course of its business
after the Last Accounts Date;
3.1.3 to the extent that the Liability or Claim arises as a
result only of the appropriate provision or reserve in
the Latest Accounts being insufficient by reason of any
increase in rates of Taxation or variation of the method
of applying or calculating the rate of taxation made
after the date of the Agreement;
3.1.4 which would not have arisen but for a voluntary act or
transaction carried out by the Company or the
Purchaser after the date of this Deed otherwise than in
the ordinary course of business;
3.1.5 which would not have arisen but for a change or changes
in legislation announced after the date of the
- 4 -
<PAGE>
Agreement (whether relating to the taxation rates of
taxation or otherwise) or the withdrawal of any extra
statutory concession or written administrative
arrangement with any of the Companies previously made by
the Inland Revenue or other taxing authority and
whether or not such charge or charges purport to be
effective retrospectively in whole or in part;
3.1.6 to the extent to which the Liability to Taxation or Claim
for Taxation is due to the failure of the Purchaser
or any of the Companies as the case may be to act
expeditiously in accordance with the reasonable
instructions of the Covenantors in conducting a
matter within Clause 5 hereof;
3.1.7 to the extent that the Liability to Taxation or Claim for
Taxation would not have arisen or would have been reduced
or eliminated but for a failure or omission on the part
of the Company after the Transfer Date to make any claim,
election, surrender or disclaimer or give any notice or
consent or do any other thing, in respect of any
accounting period ended on or before Completion,
following the receipt by the Purchaser or the Company
of written notice of such claim, election,
surrender, disclaimer, notice, consent or other thing;
3.1.8 to the extent that that Liability to Taxation or Claim
for Taxation would not have arisen but for a
disclaimer of capital allowances or a revision to a
claim therefor in respect of any accounting period
ended on or before Completion where such revision or
disclaimer is caused or made by the Purchaser or the
Company after the Transfer Date except where the
Purchaser or the Company makes any such disclaimer or
revision at the written request of the Covenantors;
3.1.9 to the extent that the Purchaser makes or has made
recovery in respect of that Liability to Taxation or
Claim for Taxation under any provision of the
Agreement;
3.1.10 to the extent that that Liability to Taxation or Claim
for Taxation arises or is increased as a result of any
voluntary change in accounting practice or principles
made after the Transfer Date;
3.1.11 unless a claim in respect of that Liability to Taxation
or Claim for Taxation shall have been made on or before
the sixth anniversary of the Transfer Date by notice
in writing to the Covenantors and unless legal
proceedings in respect of it are commenced within
12 months after expiry of such period save to the
- 5 -
<PAGE>
extent that the claim has been admitted by, or
otherwise settled with, the Covenantors prior to
such time;
3.1.12 to the extent that the Liability to Taxation or Claim for
Taxation arises or is increased as a result of any
failure by the Purchaser or the Company to take any
action or do anything which either is reasonably
requested by the Covenantors in writing in respect of any
accounting period ended on or before Completion or any
part accounting period ending on Completion;
3.1.13 in respect of any Taxation of the United States of
America as a result of the said sale to the Purchaser or
any Taxation arising as a result of the proposed
transfer of the Business by the Purchaser to a new
company; and
3.1.14 in the case of a Liability to Taxation to the extent to
which it has already been recovered under this Deed
as a Claim for Taxation and vice versa.
---- -----
3.2 Claims under this Deed shall be limited in the manner set out in
Clauses 9.1.6, 9.1.7, 9.1.8, 9.1.10 and 9.1.11 of the
Agreement.
3.3 If any Liability to Taxation or Claim for Taxation which results
in an amount becoming payable by the Vendors under this Deed
shall give rise to a corresponding saving or benefit for
the Purchaser or the Company as the case may be then the amount
of such saving shall be paid by the Purchaser to the Covenantors
immediately such saving is effected.
4. MITIGATION
----------
4.1 Except as provided in clause 4.2, the Covenantors shall be liable
under the Indemnity in Clause 2.1 notwithstanding any Reliefs,
rights of repayment or other rights or claims of a similar
nature, which may be available to any person entitled to the
benefit of the indemnity to set against or otherwise mitigate
any Liability to Taxation, so that the indemnity in Clause 2.1
shall take effect as though no such Reliefs, rights of
repayment or other rights or claims were available.
4.2 The provisions of clause 4.1 shall not apply if and to the extent
that the Reliefs, rights of repayment, or other rights or claims
mentioned in that clause arose:
4.2.1 wholly or mainly by reason of any act, omission or
transaction of any of the Companies before the date
hereof;
- 6 -
<PAGE>
4.2.2 wholly or mainly by reason of any act, omission or
transaction of the Covenantors which does not cause the
Company to incur any liabilities, costs or expenses
(unless the Company receives a satisfactory indemnity
against them) and, without prejudice to the generality
of this Clause, the Company shall co-operate at
the cost of the Covenantors in making a claim for group
relief which falls within this Clause.
4.3 Where and to the extent that clause 4.2 applies, credit shall be
given to the Covenantors against any liability under this Deed
for any such Reliefs, rights of repayment or other rights
or claims as are mentioned in Clause 4.1.
4.4 When the Covenantors have satisfied an obligation under this deed
to indemnify the Purchaser against a Liability to Taxation
or a Claim for Taxation and the Company has (whether by operation
of law, contract or otherwise) a right of reimbursement
(including by way of indemnity) against any other person or
persons in respect of the Liability to Taxation or a Claim
for Taxation, the Purchaser and/or the Company shall take all
reasonable steps to enforce the right, giving credit to the
Covenantors for any sum recovered by the Purchaser and/or the
Company by reason of the right, or shall at the request
and expense of the Covenantors assign the right to the
Covenantors, in such form as they shall reasonably require.
4.5 If:
4.5.1 any provision for Taxation contained in the Latest
Accounts is or has been at the date that any payment is
due to be made by the Covenantors under Clause 2
certified by the relevant company's auditors at the
Covenantors' request and expense to be an
over-provision; or
4.5.2 the tax liability which has resulted in the payment by
the Covenantors gives rise to a corresponding saving
for any of the Companies;
the value (as certified by the relevant company's auditors) of
the over-provision or corresponding provision shall be set off
first against the payment then due from the Covenantors and
secondly (to the extent there is any excess) against any further
such payment(s) in chronological order until exhausted
but if it is subsequently found that the over-provision
or corresponding saving as certified was not in fact an over-
provision or corresponding saving or that the certified amount or
value was excessive any amount which has been set off under
this clause in respect of the purported over-provision or
corresponding saving shall on demand be repaid forthwith by
the Covenantors to the Purchaser or (as the case may be) to the
relevant company.
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<PAGE>
5. CONDUCT OF CLAIMS
-----------------
5.1 The Purchaser shall notify the Covenantors in writing of any
Liability to Taxation or Claim for Taxation which comes to its
notice whereby it appears that the Covenantors are or may become
liable to indemnify the Purchaser under this Deed. Where a
time limit for appeal applies to the Liability or Claim, the
notification shall be given as soon as reasonably possible (but
in any event within ten Business Days) after the date on
which the Liability or Claim comes to the notice of the Purchaser
but, where no time limit applies or the period to which the
limit relates has not commenced, the notification shall be
given within twenty Business Days of that date, provided
--------
that no failure by the Purchaser to comply with the terms of
this sub-clause shall give rise to an exclusion of its indemnity.
5.2 The Purchaser shall ensure that a Liability to Taxation or Claim
for Taxation to which this Deed applies, is, so far as
reasonably practicable, dealt with separately from
liabilities or claims to which it does not apply and is not
paid prematurely; and for this purpose any payment made by the
Company to avoid incurring interest or any penalty in respect
of unpaid Taxation shall be deemed not to be paid
prematurely.
5.3 Subject to Clause 5.6, the Purchaser shall ensure at the request
in writing of the Covenantors that the Covenantors are placed
in a position to dispute on behalf of the Company any Liability
to Taxation or Claim for Taxation to which this Deed applies and
shall render, or cause to be rendered, to the Covenantors at
their expense all such co-operation, access, assistance and
copy documents as the Covenantors, or a majority of them, may
reasonably require in disputing or compromising any Liability
to Taxation or Claim for Taxation.
5.4 Subject to Clause 5.5, the Covenantors shall be entitled on
behalf of any of the Companies to instruct such solicitors or
other professional advisers as the Covenantors, or a
majority of them, may nominate to act on behalf of the
Covenantors or the relevant company, to the intent that the
conduct, and costs and expenses, of the dispute shall be
delegated entirely to and be borne solely by the Covenantors and
the Purchaser shall ensure that the relevant company takes
all such reasonable action as the Covenantors may request.
The costs arising from obtaining the determination of counsel
shall be borne as to one half by the Covenantors and as to the
other half by the relevant company.
5.5 In connection with the conduct of any dispute relating to a
Liability to Taxation or Claim for Taxation to which this
Deed applies:
- 8 -
<PAGE>
5.5.1 the Covenantors shall keep the relevant company fully
informed of all relevant matters and the Covenantors
shall promptly forward or procure to be forwarded to the
secretary of the company copies of all
correspondence and other written communications
pertaining thereto;
5.5.2 the appointment of solicitors or other professional
advisers shall be subject to the approval of the
relevant company, such approval not to be
unreasonably withheld or delayed;
5.5.3 the Covenantors shall make no settlement or compromise of
the dispute, nor agree any matter in the conduct of
the dispute which is likely to affect the amount
involved or the future Liability to Taxation of the
relevant company without its prior approval, such
approval not to be unreasonably withheld or delayed;
5.5.4 if any dispute arises between the Purchaser and the
Covenantors as to whether the Liability or Claim
should at any time be settled in full or contested in
whole or in part, the dispute shall be referred to the
determination of a senior tax counsel of at least ten
years standing appointed by agreement between the
Purchaser and the Covenantors, or (if they do not
agree) upon the application by either party to the
President for the time being of The Law Society,
whose determination shall be final. The counsel
shall be asked to advise whether in his opinion an
appeal against the Liability or Claim would on the
balance of probabilities be likely to succeed and as to
how the costs of such dispute should be allocated
between the Covenantors and the Purchaser. Only if his
opinion is in the affirmative shall an appeal be made
and that Liability or Claim not then be settled. Any
further dispute arising between the Covenantors and the
Purchaser as to whether any further appeal should be
pursued following determination of an earlier appeal
(whether or not in favour of the relevant company)
shall be resolved in a similar manner.
5.6 The Covenantors shall at the request of the Purchaser or any of
the Companies provide, to the reasonable satisfaction of the
relevant company, security or indemnities, or both, in respect
of all the costs and expenses of disputing any Liability
to Taxation or Claim for Taxation to which this Deed applies.
5.7 None of the Companies shall be subject to any claim by or
liability to, any of the Covenantors on the ground that it has
not complied with the foregoing provisions, if it has bona
------
- 9 -
<PAGE>
fide acted in accordance with the instructions or approval
----
of any one or more of the Covenantors.
6. DATES FOR AND QUANTUM OF PAYMENTS
---------------------------------
6.1 This Clause shall apply solely for determining the date on which
any payments or repayments shall be made by or to the
Covenantors pursuant to this Deed and (where expressly
provided) the amounts of the payments or repayments.
6.2 The Covenantors shall make payment to the Purchaser to the extent
that and on the date on which the relevant company discharges
or is deemed to discharge a Liability to Taxation in respect
of which the Purchaser is entitled to be indemnified
under this Deed.
6.3 The Purchaser shall make a repayment to the Covenantors to the
extent that and on the date on which the relevant company
receives any repayment of any amount paid in respect of any
Liability to Taxation pursuant to clause 6.2. Any repayment to
the Covenantors pursuant to this Clause 6.3 shall not
prejudice the right of the Purchaser to recover from the
Covenantors under this Deed in the event that a further
Liability to Taxation is imposed upon the relevant Company,
whether in respect of matters to which the repayment relates or
otherwise.
6.4 For the purposes of Clause 6.2, the relevant company shall be
deemed to discharge a Liability to Taxation:
6.4.1 on the date on which the relevant company pays any amount
of Taxation;
6.4.2 on the date on which any Liability to Taxation would have
fallen due but for Reliefs, rights of repayment or other
rights or claims of a similar nature to which clause
4.1 applies.
6.5 For the purpose of Clause 6.3, the relevant company shall be
deemed to receive a repayment:
6.5.1 on the date on which the relevant company receives a
repayment of Taxation to which Clause 6.2 applies;
6.5.2 if and when the relevant company would have received a
repayment but for a Liability to Taxation in
respect of which the Company is not entitled to be
indemnified under this deed;
6.5.3 if and when the relevant company would have received a
repayment had the Liability to Taxation been
discharged by a payment of Taxation; or
- 10 -
<PAGE>
6.5.4 if and when the relevant company is able to obtain the
benefit of a reduction in its Liability to Taxation
as a result of the right to repayment.
6.6 Upon Final Determination of a relevant Claim for Taxation the
Covenantors shall promptly pay to the Purchaser such amount or
further amount in addition to any sums already paid under this
Deed as is required to cover the full liability of the
Covenantors under this Deed.
6.7 Any dispute in relation to the provisions of Clauses 6.4, 6.5 or
6.6 may be referred, by the relevant company or the
Covenantors, to the auditors for the time being of the
relevant company, acting as experts and not as arbitrators,
whose certificate shall be final and binding upon the parties in
the absence of manifest error.
7. TAX RETURNS
-----------
7.1 The Covenantors or their duly authorised agents shall (at their
own expense) prepare the tax returns of the Company for all
accounting periods ended on or before Completion to the extent
that the same shall not have been prepared before
Completion.
7.2 Subject to a copy of the returns being first delivered to the
Purchaser, the Purchaser shall procure that the Company shall
cause the returns mentioned in sub-clause 7.1 above insofar as
they are legally able to do so to be authorised, signed and
submitted to the appropriate authority without amendment or with
such amendments as the Covenantors shall agree and shall give
the Covenantors or their agents all such assistance as
may be necessary or reasonably required to agree those
returns with the appropriate authorities.
7.3 The Covenantors or their duly authorised agents shall (at their
own expense) prepare all documentation and deal with all
matters (including correspondence) relating to the returns
of the Company for all accounting periods ending on or before
Completion and the Purchaser will procure that the Company shall
provide such access to their books, accounts and records as
is necessary or reasonable to enable the Covenantors or
their duly authorised agents to prepare those returns and the
conduct of matters relating thereto in accordance with the
Covenantors' rights under this Clause.
7.4 The Covenantors shall ensure that all material communications to
the relevant taxation authority under this Clause shall be first
sent to the Purchaser and the Covenantors shall consult with
the Purchaser regarding the content of such
communications and will incorporate any reasonable comments of
the Purchaser (provided that the Covenantors shall in any event
be entitled to despatch any such communication to the relevant
- 11 -
<PAGE>
taxation authority if it has received no comments from the
Purchaser within ten business days).
7.5 On the agreement with the Inland Revenue of the matters carried
out by the Covenantors under this Clause and in particular
on the completion of the tax affairs under Clause the
Covenantors shall forthwith hand copies of all its relevant
files, documents and information obtained and arising from
such matters to the Purchaser.
7.6 The Covenantors shall promptly notify the Purchaser of any matter
which in the Covenantors' reasonable opinion is likely to give
rise to a Claim under this Deed in respect of Taxation or
any Liability for Taxation upon becoming aware of such matter to
the intent that the Covenantors shall obtain no advantage in
respect of this Deed arising from any delay or failure to
notify the Purchaser of such a liability or potential
liability.
7.7 The Covenantors shall use all reasonable expedition to ensure
that all the tax affairs of the Company conducted by the
Covenantors under this Clause shall be completed as soon as
possible.
7.8 The Covenantors shall promptly provide to the Purchaser all
information documents and evidence in their possession in
respect of any accounting period of the Company ended on or
before Completion as may reasonably be requested by the
Purchaser.
7.9 The Covenantors shall lodge all tax returns and make all appeals
and payments timeously.
8. GENERAL
-------
8.1 The provisions of the Agreement relating to notices and the
appointment of an agent for service shall apply to any notice to
be given under, or in connection with, this Deed.
8.2 The construction, validity and performance of this Deed shall be
governed by the laws of England IN WITNESS WHEREOF, the
parties have caused this Agreement to be duly executed as a
deed on the day and year first above written.
- 12 -
<PAGE>
EXECUTED as a deed by Alan Fishman
- --------
in the presence of:-
.................................. Witness .........................
A. Fishman Full Name .......................
Address .........................
.................................
Occupation ......................
EXECUTED as a deed by Ian Spencer Aitken
- --------
by his duly authorised attorney
in the presence of:-
.................................. Witness ........................
Full Name ......................
Address.........................
................................
Occupation .....................
EXECUTED as a deed by Stephen Leeds Gooch
- --------
by his duly authorised attorney
in the presence of:-
.................................. Witness ........................
Full Name ......................
Address.........................
................................
Occupation .....................
EXECUTED as a deed by Thomas MacKenzie Ross
- --------
by his duly authorised attorney
in the presence of:-
.................................. Witness ........................
Full Name ......................
Address.........................
................................
Occupation .....................
- 13 -
<PAGE>
EXECUTED as a deed by Helen James
- --------
by her duly authorised attorney
in the presence of:-
.................................. Witness ........................
Full Name ......................
Address.........................
................................
Occupation .....................
EXECUTED as a deed by Jonathan Richard
- --------
Parnell Checkley by his duly authorised
attorney in the presence of:-
.................................. Witness ........................
Full Name ......................
Address.........................
................................
Occupation .....................
EXECUTED as a deed by Richard Charles
- --------
Weir Strattan by his duly authorised
attorney in the presence of:-
.................................. Witness ........................
Full Name ......................
Address.........................
................................
Occupation .....................
EXECUTED as a deed by Maurice Dyson
- --------
by his duly authorised attorney
in the presence of:-
.................................. Witness ........................
Full Name ......................
Address.........................
................................
Occupation .....................
- 14 -
<PAGE>
EXECUTED as a deed by Simon Craig
- --------
Stoye by his duly authorised attorney
in the presence of:-
.................................. Witness ........................
Full Name ......................
Address.........................
................................
Occupation .....................
EXECUTED as a deed by Geoffrey Booth
- --------
by his duly authorised attorney
in the presence of:-
.................................. Witness ........................
Full Name ......................
Address.........................
................................
Occupation .....................
EXECUTED as a deed by John Eric Shepley
- --------
by his duly authorised attorney
in the presence of:-
.................................. Witness ........................
Full Name ......................
Address.........................
................................
Occupation .....................
EXECUTED as a deed by Lynne Davis
- --------
by her duly authorised attorney
in the presence of:-
.................................. Witness ........................
Full Name ......................
Address.........................
................................
Occupation .....................
- 15 -
<PAGE>
EXECUTED as a deed by John Patrick Woodhouse
- --------
by his duly authorised attorney
in the presence of:-
.................................. Witness ........................
Full Name ......................
Address.........................
................................
Occupation .....................
EXECUTED as a deed by Jeremy David Fisher
- --------
by his duly authorised attorney
in the presence of:-
.................................. Witness ........................
Full Name ......................
Address.........................
................................
Occupation .....................
EXECUTED as a deed by Stephen Martin Riley
- --------
by his duly authorised attorney
in the presence of:-
.................................. Witness ........................
Full Name ......................
Address.........................
................................
Occupation .....................
EXECUTED as a deed by Stephen Frances Yeo
- --------
by his duly authorised attorney
in the presence of:-
.................................. Witness ........................
Full Name ......................
Address.........................
................................
Occupation .....................
- 16 -
<PAGE>
EXECUTED as a deed by Peter Richard Lockyer
- --------
by his duly authorised attorney
in the presence of:-
.................................. Witness ........................
Full Name ......................
Address.........................
................................
Occupation .....................
EXECUTED as a deed by Robert Stephen Thomson
- --------
by his duly authorised attorney
in the presence of:-
.................................. Witness ........................
Full Name ......................
Address.........................
................................
Occupation .....................
EXECUTED as a deed by Nigel Ramsey Bankhead
- --------
by his duly authorised attorney
in the presence of:-
.................................. Witness ........................
Full Name ......................
Address.........................
................................
Occupation .....................
EXECUTED as a deed by Nigel Taylor
- --------
by his duly authorised
attorney in the presence of:-
.................................. Witness ........................
Full Name ......................
Address.........................
................................
Occupation .....................
- 17 -
<PAGE>
THE SCHEDULE
------------
NAMES AND ADDRESSES OF COVENANTORS
----------------------------------
Alan Seymour Fishman, Flat 21, Chester Court, Albany Street, London NW1
4BU
Ian Spencer Aitken, Serendi, 22 Hitchin Road, Letchworth, Hertfordshire
SG6 3LT
Stephen Leeds Gooch, Francklins Cottage, Dinton, Aylesbury,
Buckinghamshire HP17 8UR
Thomas MacKenzie Ross, Beauchamp Barn, Drayton, Beauchamp,
Buckinghamshire HP22 5LS
Helen James, 15 Church Avenue, Ruislip, Middlesex HA4 7HX
Jonathan Richard Parnell Checkley, 27 Oakeshott Avenue, Highgate,
London N6 6NT
Richard Charles Weir Strattan, 42 Reigate Road, Reigate, Surrey RH2 OQN
Maurice Dyson, 6 Cheyne Close, Chesham Bois, Amersham, Buckinghamshire
HP15 6XB
Simon Craig Stoye, 32 Connaught Square, London W2 2HL
Geoffrey Booth, Squirrels, Trinity Hill, Medstead, Alton, Hampshire
GU34 5LS
John Eric Shepley, West Riding, Tewin Wood, Welwyn, Hertfordshire AL6
OPD
Lynne Davis, 99 Daws Lane, Mill Hill, London NW7 4SJ
John Patrick Woodhouse, 37 Chiddingfold, London N12 7EX
Jeremy David Fisher, 12 Powell Close, Canons Drive, Edgeware, Middlesex
HA8 7QU
Stephen Martin Riley, Toad Hall, Hervines Road, Amersham,
Buckinghamshire PH6 5HS
Stephen Frances Yeo, 6 Bracken Gardens, Barnes, London SW13 9HW
Peter Richard Lockyer, 112 Delaware Mansions, Delaware Road, London W9
2LJ
Robert Stephen Thomson, Larch House, 14a Viney's Gardens, Tenterden,
Kent TN30 7AZ
<PAGE>
Nigel Ramsey Bankhead, Somersby, Fulmer Way, Gerrards Cross,
Buckinghamshire
Nigel Taylor, 71 Turners Meadow Way, Beckenham, Kent BR3 4TJ
- 2 -
REGISTRATION RIGHTS AGREEMENT
between
ALEXANDER & ALEXANDER SERVICES INC.
and
THE SELLING SHAREHOLDERS
(as defined herein)
Dated November 30, 1993
<PAGE>
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated
November 30, 1993, between Alexander & Alexander Services Inc., a
Maryland Corporation (the "Company"), and the individuals whose
names are set forth on the signature pages hereof under the
caption "The Selling Shareholders" (individually, a "Selling
Shareholder" and, collectively, the "Selling Shareholders").
1. Background. Pursuant to a Sale & Purchase Agreement,
----------
made the 30th day of November 1993 (the "Purchase Agreement"),
between the Company and the Selling Shareholders, the Company
has, subject to the terms and conditions contained therein,
agreed to purchase from the Selling Shareholders each Selling
Shareholder's undivided interest (the "Partnership Interests") in
the assets of Clay & Partners, a general partnership existing
under the laws of England. In consideration of the sale of the
Partnership Interests to the Company, the Company has agreed to
issue to each Selling Shareholder that number of shares of the
Company's Common Stock, $1.00 par value (the "Common Stock"), to
be determined pursuant to the Purchase Agreement.
2. Definitions. As used herein, unless the context
-----------
otherwise requires, the following terms have the following
respective meanings:
"Commission" means the Securities and Exchange Commission
or any other Federal agency at the time administering the
Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended, or any similar Federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall
be in effect at the time. Reference to a particular section of
the Exchange Act shall include a reference to the comparable
section, if any, of any such similar Federal statute.
"Person" means any natural person, corporation, firm,
partnership, association, government (or political subdivision
thereof), governmental agency or any other entity, whether acting
in an individual, fiduciary or other capacity.
"Registration Expenses" means all expenses incident to the
Company's performance of or compliance with Section 3 hereof,
including, without limitation, all registration, filing and
applicable national securities exchange fees, all fees and
expenses of complying with securities or blue sky laws, all word
processing, duplicating and printing expenses, messenger and
delivery expenses, the fees and disbursements of counsel for the
Company and of its independent public accountants, including the
expenses of "comfort" letters required by or incident to such
performance and compliance; provided, however, that Registration
-------- -------
Expenses shall exclude, and the Selling Holders shall pay, the
<PAGE>
fees and disbursements of counsel and other advisors to such
Selling Holders, underwriters' fees and expenses and underwriting
discounts and commissions and transfer taxes in respect of the
Shares being registered.
"Registration Statement" is defined in Section 3.1(a).
"Shares" means (i) the shares of Common Stock issued to the
Selling Shareholders pursuant to the Purchase Agreement and (ii)
any shares of Common Stock or other securities of the Company
issued as (or issuable upon the conversion or exercise of any
warrant, right or other security issued as) a dividend or other
distribution with respect to or in exchange for or in replacement
of the Shares referred to in (i) above.
"Securities Act" means the Securities Act of 1933, or any
similar Federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the
time. References to a particular section of the Securities Act
shall include a reference to the comparable section, if any, of
any such similar Federal statute.
"Selling Holder" means any Selling Shareholder or other
holder of Shares (of whom the Company has been notified in
writing pursuant to Section 7) desiring to sell Shares pursuant
to the Registration Statement.
3. Registration Under Securities Act, etc.
---------------------------------------
3.1. Form S-3 Shelf Registration.
---------------------------
(a) Obligations of Company. The Company shall use
----------------------
its best efforts to effect a registration, pursuant to Rule
415 under the Securities Act, of all of the Shares as soon
as practicable (but, in any event, not earlier than the
date the Company publicly announces its annual earnings for
the year ended December 31, 1993). The registration of the
Shares shall be made on the Commission's Form S-3 (the
"Registration Statement") effected and maintained in
accordance with the procedures set out in this Section 3
and signed by the requisite number of the directors of the
Company. Subject to Section 3.2(b), the Company shall
maintain the effectiveness of the Registration Statement
and continue to perform the obligations set out in this
Section 3 and any other acts that will facilitate the sale
from time to time of securities by the Selling Holders
pursuant to the Registration Statement or otherwise until
the date which is 90 days after the effective date of the
Registration Statement, as such period may be extended
pursuant to Section 3.1(j) below.
-2-
<PAGE>
(b) Method of Disposition. Shares registered
---------------------
pursuant to the Registration Statement may be sold by the
Selling Holders in the manner selected by the Selling
Holders in their sole discretion, including, without
limitation: (i) in "block" sales to institutional investors
or through broker dealers, (ii) in privately negotiated
sales directly to institutional or corporate investors not
reported on the New York Stock Exchange Composite Tape,
(iii) through customary brokerage channels or (iv) in an
underwritten public offering; provided, however, that the
-------- -------
Selling Holders shall not be entitled to sell Shares
pursuant to the Registration Statement in more than one
underwritten public offering or in an underwritten public
offering unless the number of Shares to be sold in such
underwritten public offering equals or exceeds 400,000;
provided, further, however, that an underwritten public
-------- ------- -------
offering shall not be deemed to have occurred if the
conditions to closing specified in the underwriting
agreement entered into in connection with such offering are
not satisfied or waived, other than by reason of a failure
on the part of the Selling Holders.
(c) Registration of Other Securities. In the case of
--------------------------------
an underwritten public offering by one or more of the
Selling Holders, no securities other than Shares shall be
included in such offering, unless (a) the managing
underwriter of such offering shall have advised each
Selling Holder in writing that the inclusion of such other
securities would not adversely affect such offering or (b)
if such managing underwriter shall not have advised each
Selling Holder in writing that the inclusion of such other
securities would not adversely affect such offering, the
Selling Holders of not less than 66 2/3% of all Shares to
be included in the underwritten public offering pursuant to
the Registration Statement shall have consented in writing
to the inclusion of such other securities.
(d) Inclusion of Information. The Company agrees to
------------------------
include in the Registration Statement all information
which, in the opinion of counsel to the Selling Holders and
counsel to the Company, is reasonably required to be
included.
(e) Expenses. The Company will pay all Registration
--------
Expenses in connection with any registration effected
pursuant to this Section 3.1.
(f) Effective Registration Statement. The
--------------------------------
registration effected pursuant to this Section 3.1 shall
not be deemed to have been effected if after it has become
effective, such registration is interfered with by any stop
-3-
<PAGE>
order, injunction or other order or requirement of the
Commission or other governmental agency or court for any
reason not attributable to the Selling Holders and has not
thereafter become effective.
(g) Sales from Time to Time. During the period in
-----------------------
which the Registration Statement shall be effective, the
Selling Holders shall give notice to the Company of each
proposed selling date and the Company shall use its best
efforts to take all actions necessary to permit such sale
under the Registration Statement on such date; provided,
--------
however, that the Selling Holders shall give written notice
-------
to the Company of any proposed underwritten public offering
of the Shares under the Registration Statement at least 30
days prior to the date of such underwritten public
offering.
(h) Selection of Underwriters. The underwriter or
-------------------------
underwriters of each underwritten public offering of the
Shares so to be registered shall be selected by the mutual
agreement of the Company and the Selling Holders, the
approval of such underwriter or underwriters by either the
Company or the Selling Holders not to be unreasonably
withheld.
(i) Priority in Requested Registration. If the
----------------------------------
Shares are to be sold in an underwritten public offering
and if the managing underwriter of any underwritten public
offering shall advise the Company in writing (with a copy
to each Selling Holder of Shares to be included in such
offering) that, in its opinion, the number of securities
requested to be included in such underwritten offering
exceeds the number which can be sold in such offering
within a price range acceptable to the Selling Holders of
66-2/3% of the Shares requested to be included in such
offering, the Company will include in such underwritten
offering, to the extent of the number which the Company is
so advised can be sold in such offering, Shares requested
to be included in such offering, pro rata among the Selling
Holders requesting such offering on the basis of the number
of the Shares of such Selling Holders requested so to be
offered.
(j) Limitations on Sales of Shares. The Selling
------------------------------
Shareholders shall not sell any Shares during the periods
described below after receipt of written notice from the
Company that in its reasonable judgment, it would not be in
the best interests of the Company and its shareholders
generally for Shares to be sold pursuant to the
Registration Statement (for customary reasons including,
but not limited to, such matters as the Company being
-4-
<PAGE>
engaged in active negotiations or planning for a merger or
acquisition or disposition transaction or a private or
public offering of debt securities or having recently
completed such an offering (a "transaction-blackout") or
being in possession of material non-public information
that, in the reasonable opinion of the Company's counsel,
would expose the Company to securities laws liabilities if
Shares continued to be sold pursuant to the Registration
Statement (an "information blackout")). Each blackout
notice shall contain a statement of the reasons for such
blackout and an approximation of the delay. Any
information blackout will expire on the date which is two
business days after the information is disclosed. Any
transaction blackout will expire on the date which is two
business days after the date the transaction is abandoned,
publicly disclosed or completed (whichever occurs first).
The Company shall be required to maintain the effectiveness
of the Registration Statement for an additional period in
respect of any blackout equal to the greater of 15 days and
the duration of such blackout.
3.2. Registration Procedures. If and whenever the Company
-----------------------
is required to use its best efforts to effect the registration of
any Shares under the Securities Act as provided in Section 3.1,
the Company shall as expeditiously as possible:
(a) prepare and file with the Commission the
Registration Statement, and thereafter use its best efforts
to cause the Registration Statement to become effective;
provided that the Company shall not be required to cause
the Registration Statement to become effective prior to the
date specified in Section 3.1(a).
(b) notify each Selling Holder of the Commission's
requests for amending or supplementing the Registration
Statement and the prospectus, and prepare and file with the
Commission such amendments and supplements to the
Registration Statement and the prospectus used in
connection therewith as may be necessary to keep the
Registration Statement effective and to comply with the
provisions of the Securities Act as required to permit or
facilitate the sale and distribution, from time to time, in
accordance with the intended method of disposition selected
by the Selling Holders, for the period such Registration
Statements must remain in effect pursuant to Section 3(a);
provided, however, that in connection with any underwritten
-------- -------
public offering commenced during the period referred to in
Section 3.1(a), the Company shall use its best efforts to
maintain the effectiveness of the Registration Statement
for such reasonable and customary period of time after the
expiration of the period referred to in Section 3.1(a) as
-5-
<PAGE>
the underwriters may request for the limited purpose of
completing such underwritten public offering; provided,
--------
further, however, that the Selling Holders shall cooperate
------- -------
with the Company in negotiating with the underwriters as
short a period of time of continuing effectiveness as is
reasonably possible.
(c) furnish to each Selling Holder, such number of
conformed copies of the Registration Statement and of each
such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the
prospectus contained in the Registration Statement
(including each preliminary prospectus and any summary
prospectus) and any other prospectus filed under Rule 424
under the Securities Act, in conformity with the
requirements of the Securities Act, and such other
documents, as a Selling Holder may reasonably request;
(d) use its best efforts (i) to register or qualify
all of the Shares covered by the Registration Statement
under such other securities or blue sky laws of such States
of the United States of America where an exemption is not
available and as the Selling Holders shall reasonably
request, (ii) to keep such registration or qualification in
effect for so long as the Registration Statement remains in
effect, and (iii) to take any other action which may be
reasonably necessary or advisable to enable the Selling
Holders to consummate the disposition in such jurisdictions
of the securities to be sold by such Selling Holders in
accordance with the intended method of disposition, except
that the Company shall not for any such purpose be required
to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it would not but
for the requirements of this subsection (d) be obligated to
be so qualified or to consent to general service of process
in any such jurisdiction.
(e) use its best efforts to cause all of the Shares
to be registered with or approved by such other federal or
state governmental agencies or authorities as may be
necessary in the opinion of counsel to the Company and
counsel to the Selling Holders to consummate the
disposition of such Shares;
(f) furnish to each Selling Holder a copy of
(i) an opinion of in-house counsel for the
Company, and
(ii) a "comfort" letter addressed to the Company
signed by the independent public accountants who have
-6-
<PAGE>
certified the Company's financial statements included
or incorporated by reference in such Registration
Statement (subject to the consent of such independent
public accountants, such consent not to be
unreasonably withheld),
covering substantially the same matters as are customarily
covered in opinions of issuer's counsel and in accountant's
comfort letters delivered to the underwriters in offerings
of securities of the type contemplated by the intended
method of disposition selected by the Selling Holders;
(g) notify each Selling Holder at any time when a
prospectus relating thereto is required to be delivered
under the Securities Act, upon discovery that, or upon the
happening of any event as a result of which, the prospectus
included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading, in
the light of the circumstances under which they were made,
and at the request of any Selling Holder promptly prepare
and furnish to it a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading in
the light of the circumstances under which they were made;
(h) use its best efforts to list all Shares on any
national securities exchange on which shares of the same
class and, if applicable, series, covered by the
Registration Statement are then listed.
The Company may require that each Selling Holder furnish
the Company such information regarding such Selling Holder and
the distribution of the Shares as the Company may from time to
time reasonably request in writing.
Each Selling Holder agrees by acquisition of such Shares
that, upon receipt of any notice from the Company of the
happening of any event of the kind described in subsection (g) of
this Section 3.2, such Selling Holder will forthwith discontinue
such Selling Holder's disposition of Shares pursuant to the
Registration Statement until such Selling Holder's receipt of the
copies of the supplemented or amended prospectus contemplated by
subsection (g) of this Section 3.2 and, if so directed by the
Company, will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies, then in such
-7-
<PAGE>
Selling Holder's possession, of the prospectus relating to such
Shares current at the time of receipt of such notice.
3.3. Requested Underwritten Offerings. If requested by the
--------------------------------
underwriters for any underwritten offering by Selling Holders
pursuant to the Registration Statement, the Company will use
reasonable efforts to enter into an underwriting agreement with
such underwriters for such offering, such agreement to be
reasonably satisfactory in substance and form to the Company,
each Selling Holder and the underwriters and to contain such
representations and warranties by the Company and such other
terms as are generally prevailing in agreements of that type,
including, without limitation, indemnities to the effect and to
the extent provided in Section 3.5 hereof. The Selling Holders
will cooperate with the Company in the negotiation of the
underwriting agreement and will give consideration to the
reasonable suggestions of the Company regarding the form thereof.
Such Selling Holders shall be parties to such underwriting
agreement and may, at their option, require that any or all of
the representations and warranties by, and the other agreements
on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such
Selling Holders and that any or all of the conditions precedent
to the obligations of such underwriters under such underwriting
agreement be conditions precedent to the obligations of such
Selling Holders. A Selling Holder shall not be required to make
any representations or warranties to or agreements with the
Company or the underwriters other than representations,
warranties or agreements regarding such Selling Holder, such
Selling Holder's Shares, such Selling Holder's intended method of
distribution and any other representations required by law.
3.4. Preparation; Reasonable Investigation. In connection
-------------------------------------
with the preparation and filing under the Securities Act of the
Registration Statement, the Company will give the Selling
Holders, their underwriters, if any, and their respective counsel
and accountants the opportunity to participate in the preparation
of the Registration Statement, each prospectus included therein
or filed with the Commission, and, to the extent practicable,
each amendment thereof or supplement thereto, and give each of
them such access to its books and records (to the extent
customarily given to underwriters of the Company's securities)
and such opportunities to discuss the business of the Company
with its officers and the independent public accountants who have
certified its financial statements as shall be necessary, in the
opinion of such Selling Holders' and such underwriters'
respective counsel, to conduct a reasonable investigation within
the meaning of the Securities Act.
3.5. Indemnification.
---------------
-8-
<PAGE>
(a) Indemnification by the Company. The Company
------------------------------
will, and hereby does, indemnify and hold harmless each
Selling Holder, its directors, officers, agents and
affiliates and each other Person who participates as an
underwriter in the offering or sale or such securities and
each other Person, if any, who controls such Selling Holder
or any such underwriter within the meaning of the
Securities Act, against such losses, claims, damages,
liabilities (or actions or proceedings, whether commenced
or threatened, in respect thereof) and expenses
(collectively, "Claims") that arise out of or are based
------
upon any untrue statement or alleged untrue statement of
any material fact contained in the Registration Statement,
any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to
state therein a material fact required to be stated therein
or necessary to make the statements therein in light of the
circumstances in which they were made not misleading, and
the Company will reimburse each Selling Holder, director,
officer, agent and affiliate, underwriter and controlling
Person for any legal or any other expenses reasonably
incurred by them in connection with investigating or
defending any such Claim; provided, that the Company shall
--------
not be liable in any such case to the extent that any such
Claim arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission
made in the Registration Statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment
or supplement in reliance upon and in conformity with
written information furnished to the Company through an
instrument duly executed by or on behalf of a Selling
Holder or underwriter, as the case may be, specifically
stating that it is for use in the preparation thereof; and
provided, further, that the Company shall not be liable to
-------- -------
any Person who participates as an underwriter in the
offering or sale of Shares or any other Person, if any, who
controls such underwriter within the meaning of the
Securities Act, in any such case to the extent that any
such Claim arises out of such Person's failure to send or
give a copy of the final prospectus, as the same may be
then supplemented or amended, to the Person asserting an
untrue statement or alleged untrue statement or omission or
alleged omission at or prior to the written confirmation of
the sale of Shares to such Person if such statement or
omission was corrected in such final prospectus. Such
indemnity shall remain in full force regardless of any
investigation made by or on behalf of any Selling Holder or
any such director, officer, agent or affiliate or
controlling Person and shall survive the transfer of such
securities by such Selling Holder.
-9-
<PAGE>
(b) Indemnification by the Selling Shareholders.
-------------------------------------------
Each Selling Holder will, and hereby does, indemnify and
hold harmless the Company, and each director of the
Company, each officer of the Company and each other Person,
if any, who controls the Company within the meaning of the
Securities Act, with respect to any statement or alleged
statement in or omission or alleged omission from the
Registration Statement, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made
in reliance upon and in conformity with written information
furnished to the Company through an instrument duly
executed by such Selling Holder specifically stating that
it is for use in the preparation of the Registration
Statement, preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement; provided,
--------
however, that the liability of such a Selling Holder under
-------
this Section 3.5(b) shall be several and not joint and
shall be limited to the amount of proceeds received by such
indemnifying party in the offering giving rise to such
liability. Such indemnity shall remain in full force and
effect, regardless of any investigation made by or on
behalf of the Company or any such director, officer or
controlling Person and shall survive the transfer of such
securities by such Selling Holder.
(c) Notices of Claims, etc. Promptly after receipt
----------------------
by an indemnified party of notice of the commencement of
any action or proceeding involving a claim referred to in
the preceding subdivisions of this Section 3.5, such
indemnified party will, if a claim in respect thereof is to
be made against an indemnifying party, give written notice
to the latter of the commencement of such action; provided,
--------
however, that the failure of any indemnified party to give
-------
notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding
subdivisions of this Section 3.5, except to the extent that
the indemnifying party is actually prejudiced by such
failure to give notice. In case any such action is brought
against an indemnified party, the indemnifying party shall
be entitled to participate in and, unless in such
indemnified party's reasonable judgment a conflict of
interest between such indemnified and indemnifying parties
may exist in respect of such claim, to assume the defense
thereof, jointly with any other indemnifying party
similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party,
and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such
-10-
<PAGE>
indemnified party for any legal or other expenses
subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of
investigation. No indemnifying party shall be liable for
any settlement of any action or proceeding effected without
its written consent. No indemnifying party shall, without
the consent of the indemnified party, consent to entry of
any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a
release from all liability in respect to such claim or
litigation.
(d) Contribution. If the indemnification provided
------------
for in this Section 3.5 shall for any reason be held by a
court to be unavailable to an indemnified party under
subparagraph (a) or (b) hereof in respect of any Claim,
then, in lieu of the amount paid or payable under
subparagraph (a) or (b) hereof, the indemnified party and
the indemnifying party under subparagraph (a) or (b) hereof
shall contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses
reasonably incurred in connection with investigating the
same), in such proportion as is appropriate to reflect the
relative fault of the Company and the Selling Holder which
resulted in such loss, claim, damage or liability, or
action in respect thereof, with respect to the statements
or omissions which resulted in such Claim, as well as any
other relevant equitable considerations. No Person guilty
of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such
fraudulent misrepresentation. The Selling Holder's
obligations to contribute as provided in this subparagraph
(d) are several and not joint in proportion to the relative
value of their respective Shares covered by the
Registration Statement. In addition, no Person shall be
obligated to contribute hereunder any amounts in payment
for any settlement of any action or claim effected without
such Person's consent, which consent shall not be
unreasonably withheld.
(e) Other Indemnification. Indemnification and
---------------------
contribution similar to that specified in the preceding
subdivisions of this Section 3.5 (with appropriate
modifications) shall be given by the Company and each
Selling Holder with respect to any required registration or
other qualification of securities under any federal or
state law or regulation of any governmental authority other
than the Securities Act.
-11-
<PAGE>
(f) Indemnification Payments. The indemnification
------------------------
and contribution required by this Section 3.5 shall be made
by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills
are received or expense, loss, damage or liability is
incurred.
4. Form S-3; Rule 144.
------------------
(a) The Company represents and warrants to each
Selling Shareholder that as of the date hereof it is
eligible to register the Shares on the Commission's Form S-
3, and agrees that during the period that the Company is
required to maintain the effectiveness of the Registration
Statement hereunder it will use its best efforts to
maintain such eligibility.
(b) In order to permit the Selling Holders to sell
the Shares, if they so desire, from time to time, after the
period that the Company is required to maintain the
effectiveness of the Registration Statement hereunder and
prior to the expiration of three years from November 30,
1993, pursuant to Rule 144 promulgated by the Commission or
any successor to such rule or any other rule or regulation
of the Commission that may at any time permit a Selling
Holder to sell securities of the Company to the public
without registration ("Resale Rules"), the Company will
until three years after November 30, 1993, use its best
efforts to:
(i) comply with all rules and regulations of
the Commission applicable in connection with use of
the Resale Rules;
(ii) make and keep adequate and current public
information available, as those terms are understood
and defined in Rule 144, at all times after the date
hereof until three years after November 30, 1993;
(iii) file with the Commission in a timely manner
all reports and other documents required of the
Company under the Exchange Act;
(iv) furnish to any Selling Holder, so long as
such Selling Holder owns any Shares, promptly upon
request (i) a written statement by the Company that it
has complied with the reporting requirements of the
Exchange Act, (ii) a copy of the most recent annual or
quarterly report of the Company and any other reports
and documents so filed by the Company, and (iii) such
other information as may be reasonably requested in
-12-
<PAGE>
availing any Selling Holder of any rule or regulation
of the Commission which permits the selling of any
such securities without registration; and
(v) take any action as shall be reasonably
requested by any Selling Holder or which shall
otherwise facilitate the sale of securities from time
to time by the Holders pursuant to the Resale Rules.
5. Nominees for Beneficial Owners. In the event that any
------------------------------
Shares are held by a nominee for the beneficial owner thereof,
the beneficial owner thereof may, at its election in writing
delivered to the Company (accompanied by a written
acknowledgement of, and consent to, such election by such
nominee), elect to have such nominee treated as the holder of
such Shares for purposes of any request or other action by any
holder or holders of Shares pursuant to this Agreement or any
determination of any number or percentage of shares of Shares
held by any holder or holders of Shares contemplated by this
Agreement. If the beneficial owner of any Shares so elects to be
treated as the holder of such Shares, the Company may require
assurances reasonably satisfactory to it of such owner's
beneficial ownership of such Shares.
6. Notices. All notices, requests, demands and other
-------
communications required or permitted hereunder shall be in
writing and shall be deemed to have been duly given when
delivered by hand or by confirmed facsimile transmission or on
two business days following consignment (freight prepaid) to a
commercial overnight air courier service or seven business days
after being mailed, first class with postage prepaid, and:
(a) if to a Selling Shareholder, addressed to it in
the manner set forth in the Purchase Agreement, or at such
other address as such Selling Shareholder shall have
furnished to the Company in writing;
(b) if to any other holder of Shares who is entitled
to the benefit of this Agreement pursuant to Section 8, at
the address that such holder shall have furnished to the
Company in writing, or, until any such other holder so
furnishes to the Company an address, then to and at the
address of the last holder of such Shares who has furnished
an address to the Company; or
(c) if to the Company, addressed to it in the manner
set forth in the Purchase Agreement, or at such other
address as the Company shall have furnished to each holder
of Shares at the time outstanding.
-13-
<PAGE>
7. Assignments. The rights and obligations of each
-----------
Selling Shareholder under this Agreement may be assigned from
time to time, in whole or in part, without the consent of the
Company to and only to any other Selling Shareholder and any
member of such Selling Shareholder's immediate family, if the
Company is furnished with a written notice of the name and
address of such assignee. Notwithstanding the foregoing, the
rights and obligations of each Selling Shareholder under this
Agreement may not be assigned at a time at which or to a person
to which a transfer of the Shares is not permitted under the
Purchase Agreement.
8. Binding Agreement. This Agreement shall be binding
-----------------
upon and inure to the benefit of and be enforceable by the
parties hereto and, with respect to (i) the Company, its
respective successors and assigns, (ii) with respect to the
Selling Shareholders, their permitted assigns, and their
respective heirs and executors, and (iii) with respect to any
other holder of any Shares, its respective successors, heirs,
executors or permitted assigns, as the case may be.
9. Descriptive Headings. The descriptive headings of the
--------------------
several sections and paragraphs of this Agreement are inserted
for reference only and shall not limit or otherwise affect the
meaning hereof.
10. Governing Law. This Agreement shall be construed and
-------------
enforced in accordance with, and the rights of the parties shall
be governed by, the laws of New York.
11. Counterparts. This Agreement may be executed in any
------------
number of counterparts, each of which shall be deemed an
original, but all such counterparts shall together constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered on the date first above written.
ALEXANDER & ALEXANDER /s/ A. S. Fishman
SERVICES INC. -----------------------------------
I.S. Aitken, by Alan S. Fishman,
By: Donald L. Seeley such Selling Shareholder's
--------------------- attorney-in-fact
Name: Donald L. Seeley
Title:
/s/ A. S. Fishman
-----------------------------------
S.L. Gooch, by Alan S. Fishman,
THE SELLING SHAREHOLDERS: such Selling Shareholder's
attorney-in-fact
A. S. Fishman
-------------------------
A. S. Fishman
-14-
<PAGE>
/s/ A. S. Fishman G. Booth, by /s/ Alan S. Fishman,
-------------------------- such Selling Shareholder's
T.M. Ross, by attorney-in-fact
Alan S. Fishman,
such Selling Shareholder's
attorney-in-fact
/s/ A. S. Fishman
-----------------------------------
J.E. Shepley, by Alan S. Fishman,
such Selling Shareholder's
attorney-in-fact
/s/ A. S. Fishman
-----------------------------------
/s/ A. S. Fishman L. Davis, by Alan S. Fishman,
-------------------------- such Selling Shareholder's
H. James, by Alan S. Fishman, attorney-in-fact
such Selling Shareholder's
attorney-in-fact
/s/ A. S. Fishman
-----------------------------------
/s/ A. S. Fishman J.P. Woodhouse, by Alan S. Fishman,
-------------------------- such Selling Shareholder's
J.R.P. Checkley, by attorney-in-fact
Alan S. Fishman, such Selling
Shareholder's attorney-in-fact
/s/ A. S. Fishman
-----------------------------------
J.D. Fisher, by Alan S. Fishman,
/s/ A. S. Fishman such Selling Shareholder's
-------------------------- attorney-in-fact
R.C.W. Strattan, by
Alan S. Fishman, such Selling
Shareholder's attorney-in-fact
/s/ A. S. Fishman
-----------------------------------
S.M. Riley, by Alan S. Fishman,
such Selling Shareholder's
/s/ A. S. Fishman attorney-in-fact
--------------------------
M. Dyson, by Alan S. Fishman,
such Selling Shareholder's /s/ A. S. Fishman
attorney-in-fact -----------------------------------
S.F. Yeo, by Alan S. Fishman,
such Selling Shareholder's
attorney-in-fact
/s/ A. S. Fishman
--------------------------
S.C. Stoye, by
Alan S. Fishman, /s/ A. S. Fishman
such Selling Shareholder's -----------------------------------
attorney-in-fact P.R. Lockyer, by
Alan S. Fishman, such Selling
Shareholder's attorney-in-fact
/s/ A. S. Fishman
-----------------------------------
/s/ A. S. Fishman R.S. Thomson, by
-------------------------- Alan S. Fishman, such Selling
-15-
<PAGE>
Shareholder's attorney-in-
fact
/s/ A. S. Fishman
--------------------------
N.H. Bankhead, by
Alan S. Fishman, such Selling
Shareholder's attorney-in-fact
/s/ A. S. Fishman
--------------------------
N. Taylor, by Alan S. Fishman,
such Selling Shareholder's
attorney-in-fact
-16-
Exhibit 10.3
June 28, 1994
..
Selling Stockholders
Care of Mr. Peter R. Lockyer or Mr. Nigel Taylor
Carnegie House, Peterborough Road
Harrow, Middlesex HA1 2AJ
UNITED KINGDOM
re: Offering of Alexander & Alexander Services Inc. ("A&A")
Shares of Common Stock ("Common Stock")
Dear Sirs:
Further to our recent discussions, we have set out in Schedule A the terms as
attached hereto under which CS First Boston Corporation, and as may be
appropriate, its affiliates (collectively "CS First Boston" or "we") would be
pleased to participate in connection with the Offering (as defined in Schedule
A) and which we understand to have been agreed between CS First Boston and the
Selling Stockholders as defined in Schedule B (the "Selling Stockholders"). The
undersigned executing this agreement on behalf of the Selling Stockholders
represents and warrants to CS First Boston that he is duly authorized, and has
the requisite power, to enter into this letter agreement on behalf of the
Selling Stockholders.
If Selling Stockholders are in agreement with the terms as specified in Schedule
A, we would be grateful if you would countersign this page, initial each
accompanying page of Schedule A and Schedule B, return all three executed copies
of this letter and the accompanying pages to the undersigned. Once the
agreement has been executed by all three parties, we will return to you one copy
for your records. We look forward to working with you on this assignment.
Yours sincerely,
CS FIRST BOSTON CORPORATION
By: /s/ Richard G. Spiro
---------------------
Richard G. Spiro
Vice President
Acknowledged and agreed to Acknowledged and agreed to
on behalf of the Selling Stockholders ALEXANDER & ALEXANDER SERVICES INC.
By: /s/ P. Lockyer /s/ Nigel Taylor By: /s/ R. A. Kershaw
------------------------------- ------------------------
Name: P. Lockyer Nigel Talyor Name: R. A. Kershaw
Date: 30 June 1994 Title: VP & Treasurer
Date: 7th July 1994
<PAGE>
Schedule A
Offering of A&A Shares
of Common Stock
The Offering
- - The Offering will comprise the sale of up to an aggregate of 1,126,906
shares, or such amount agreed to by the Selling Stockholders and CS First
Boston, of Common Stock to be sold by certain stockholders (the "Selling
Stockholders" as defined in Schedule B) pursuant to a Registration Statement
to be filed with the Securities and Exchange Commission ("SEC").
- - Pursuant to a Registration Rights Agreement dated November 30, 1993, (the
"Registration Rights Agreement"), between A&A and the Selling Stockholders,
the shares registered pursuant to a Registration Statement may be sold by the
Selling Stockholders in their sole discretion, including without limitation:
(i) in "block" sales to institutional investors or through broker-dealers,
(ii) in privately negotiated sales directly to institutional or corporate
investors not reported on the NYSE Composite Tape, (iii) through customary
brokerage channels or (iv) in an underwritten public offering. The type of
offering will be determined based on prevailing stock market conditions and
indicated investor demand. Commissions and underwriting fees will depend on
the type of offering.
Role of CS First Boston
- - CS First Boston will be responsible for managing and executing the Offering.
- - CS First Boston will be responsible for all aspects of the structuring and
execution of the Offering.
- - The Selling Stockholders understand that CS First Boston's participation in
the Offering is subject to, among other things: (i) receipt of certain
internal CS First Boston committee approvals to be obtained after the initial
preparatory work has been undertaken for the Offering; (ii) satisfactory
finalization of the terms and documentation related to the Offering; (iii)
satisfactory completion of all regulatory requirements (including receipt of
all necessary approvals) and compliance with all applicable laws (including
those governing the sale of securities); (iv) satisfactory completion of due
diligence customary in securities offerings of the kind contemplated herein;
(v) the absence of any material adverse change in the condition, business,
results, operation or prospects of A&A since the date of the latest audited
financial statements; (vi) no adverse change in the financial markets; and
(vii) satisfaction of such additional terms and conditions by the Selling
Stockholders as set forth herein.
<PAGE>
Documentation and Due Diligence
- - The Selling Stockholders will retain international counsel to represent them
in this Offering. Such counsel and counsel for CS First Boston will be
entitled to review and comment on drafts of the Registration Statement
prepared by A&A.
- - CS First Boston will help expedite the preparation of all documentation for
the transaction and the conduct of due diligence. Accordingly, CS First
Boston will engage international counsel (Skadden, Arps, Slate, Meagher &
Flom).
- - A due diligence review satisfactory to CS First Boston and its counsel will
be conducted prior to the filing of the Registration Statement.
- - Documentation for the Offering will be governed by New York law, and, as
applicable, state and federal securities law, and will provide for customary
representations, warranties, covenants, blackouts and closing conditions and
for customary indemnification, reimbursement and contribution provisions to
and from the Selling Stockholders, CS First Boston, and A&A, as appropriate
and as consistent with the terms of the Registration Rights Agreement.
Timing
- - CS First Boston will recommend the form of and time to launch the
transaction, based on market conditions, competing equity offerings,
indicated investor demand and SEC approval. All parties will work towards an
expeditious filing of the Registration Statement and completion of the
Offering.
Marketing
- - CS First Boston will assist the Selling Stockholders and A&A in the
preparation and arrangement of its roadshow presentation, if appropriate, and
the preparation of any other marketing materials.
Pricing
- - CS First Boston will update the Selling Stockholders regularly on changes in
market conditions throughout the preparation for the Offering.
- - CS First Boston will be responsible for recommending the final price to the
Selling Stockholders, based upon indicated investor demand, A&A's then market
price and prevailing market conditions. CS First Boston will seek to
maximize such price to the benefit of the Selling Stockholders consistent
with market factors and investor demand.
<PAGE>
Commissions and Expenses
- - CS First Boston will be reimbursed by the Selling Stockholders, whether or
not the Offering is launched or completed, for all reasonable fees and
expenses including international legal counsel, travel, communication and
other out-of-pocket expenses.
Termination; Notice; Law and Jurisdiction
- - Each of the Selling Stockholders (acting through Peter R. Lockyer or Nigel
Taylor) and CS First Boston shall be entitled, upon ten working days' written
notice to the other, to terminate this engagement at any time. No
termination by either party shall, however, affect the obligation of the
Selling Stockholders to reimburse CS First Boston for expenses incurred up to
the time of termination.
- - Any notice which may be given or served by any party hereunder shall be
deemed to have been duly given or served if sent by first class post (return
receipt requested and with a simultaneous copy by telecopy) or by reputable
international courier to the address of the relevant party as follows: in the
case of notices to the Selling Stockholders, attn: Mr. Peter R. Lockyer or
Mr. Nigel Taylor, Carnegie House, Peterborough Road, Harrow, Middlesex HA1
2AJ, United Kingdom, in the case of notices to A&A, attn: Ronald J.
Roessler, General Counsel, 1211 Avenue of the Americas, 44th Floor, New York,
NY 10036, and in the case of notices to CS First Boston Corporation, att:
Mr. Richard G. Spiro, 55 E. 52nd Street, New York, NY 10055, telecopy: (212)
318-1418.
- - This engagement shall be governed by and construed in accordance with the
laws of the New York, without reference to the conflicts of law principles
thereof.
- - Notwithstanding anything to the contrary contained herein or in the letter to
which this schedule is attached, no commitment or agreement, nor any sale or
contract of sale, with respect to the shares of Common Stock is created, it
being understood that any such commitment, agreement or contract shall be
created only upon execution by CS First Boston, A&A and the Selling
Stockholders of an underwriting agreement or purchase agreement with respect
thereto.
<PAGE>
Schedule B
Offering of A&A Shares
of Common Stock
As defined in our letter agreement dated June 28, 1994 and Schedule A thereto,
the Selling Stockholders shall consist of:
Ian S. Aitken
Nigel R. Bankhead
Lynne Davis
Maurice Dyson
Jeremy D. Fisher
Alan S. Fishman
Stephen L. Gooch
Helen James
Peter R. Lockyer
Stephen M. Riley
Thomas M. Ross
John E. Shepley
Simon C. Stoye
Richard C. W. Strattan
Nigel Taylor
Robert S. Thomson
John P. Woodhouse
Stephen F. Yeo
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Alexander & Alexander Services Inc. on Form S-3 of the report of Deloitte &
Touche dated February 25, 1994, appearing in and incorporated by reference in
the Annual Report on Form 10-K of Alexander and Alexander Services Inc. for
the year ended December 31, 1993 and to the reference to Deloitte & Touche LLP
under the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
DELOITTE & TOUCHE LLP
Baltimore, Maryland
August 16, 1994
