<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 16, 1996
REGISTRATION NO. 333-09771
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
MMI COMPANIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
DELAWARE 36-3263253
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
540 LAKE COOK ROAD, DEERFIELD, ILLINOIS 60015-5290 (847) 940-7550
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
WAYNE A. SINCLAIR, ESQ.
MMI COMPANIES, INC.
540 LAKE COOK ROAD, DEERFIELD, ILLINOIS 60015-5290 (847) 940-7550
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
JERALD P. ESRICK, ESQ. JOHN S. D'ALIMONTE, ESQ.
WILDMAN, HARROLD, ALLEN & DIXON WILLKIE FARR & GALLAGHER
225 WEST WACKER DRIVE ONE CITICORP CENTER
SUITE 3000 153 EAST 53RD STREET
CHICAGO, ILLINOIS 60606 NEW YORK, NEW YORK 10022
(312) 201-2508 (212) 821-8000
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable 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]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) of
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
----------------
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>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Set forth below is an estimate of the approximate amount of fees and
expenses (other than underwriting discounts and commissions) payable by the
Company in connection with the issuance and distribution of the shares of
Common Stock pursuant to the Prospectus contained in this Registration
Statement.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee.............. $ 32,755
NYSE filing fee.................................................. 34,000
NASD filing fee.................................................. 9,999
Accountants' fees and expenses................................... 75,000
Legal fees and expenses.......................................... 75,000
Blue Sky fees and expenses....................................... 10,000
Printing and engraving........................................... 50,000
Miscellaneous expenses........................................... 13,246
--------
Total........................................................ $300,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant, being incorporated under the General Corporation Law of the
State of Delaware (the "GCL"), is empowered by Section 145 of the GCL, subject
to the procedures and limitations stated therein, to indemnify any person
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him or her in
connection with any threatened, pending or completed action, suit or
proceeding to which such person is made a party or threatened to be made a
party by reason of the fact that he or she is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise ("Corporate
Persons"). Section 145 provides that indemnification pursuant to its
provisions is not exclusive of other rights of indemnification to which a
person may be entitled under any by-law, agreement, vote of stockholders or
disinterested directors or otherwise.
Article XIV of the Registrant's by-laws provides for indemnification and
insurance on behalf of the Corporate Persons. Article XIV provides that the
Registrant will indemnify any Corporate Person who is or was a party, or is
threatened to be made a party, to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(an "Action") by reason of the fact that he or she is or was a Corporate
Person against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him or her in
connection with such Action, if he or she acted in good faith and in a manner
he or she reasonably believed to be in, or not opposed to, the best interests
of the Registrant and, with respect to any criminal Action, had no reasonable
cause to believe his or her conduct was unlawful. With respect to an Action by
or in the right of the Registrant, Article XIV also provides that no
indemnification shall be made in respect of any claim, issue or matter as to
which the Corporate Person is adjudged to be liable for negligence or
misconduct in the performance of his or her duty to the Registrant, except to
the extent that, the court in which the Action was brought determines upon
application that in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses as the court
shall deem proper. To the extent that a Corporate Person has been successful
in the defense of any Action, or in the defense of any claim, issue or matter
therein, Article XIV provides that he or she will be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him
or her in connection therewith. Any indemnification under Article XIV (unless
ordered by a court) will be made only as authorized in the specific case, upon
a determination, reasonably made, that indemnification is proper in the
circumstances because the Corporate Person has met the applicable standards of
conduct. Such determination may be made (i) by the board of directors of the
Registrant by a majority vote of a quorum consisting of directors who were not
II-1
<PAGE>
parties to such Action, or (ii) if such quorum is not obtainable, or, even if
obtainable, a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (iii) by the stockholders of the
Registrant by a majority vote of a quorum consisting of stockholders who were
not parties to such action. Also, Article XIV provides that the Registrant
will pay the expenses incurred in defending an Action in advance of the final
disposition of such Action as authorized by the board of directors of the
Registrant in the specific case upon receipt of an undertaking by or on behalf
of the Corporate Person to repay such amount. The indemnification provided by
Article XIV is not exclusive of any other rights of indemnification to which
Corporate Persons may be entitled. Article XIV also authorizes the Registrant
to purchase insurance on behalf of any Corporate Person against any liability
incurred by him or her in, or arising out of, his or her status as a Corporate
Person, whether or not the Registrant would have the power to indemnify him or
her against such liability.
Article Ninth of the Registrant's certificate of incorporation eliminates,
to the fullest extent permitted by paragraph (7) of subsection (b) of Section
102 of the GCL, as the same may be amended or supplemented, or any
corresponding provision of the GCL, the personal liability of directors. That
paragraph allows corporations incorporated under the GCL to eliminate the
personal liability of a director to the corporation or its stockholders for
monetary damages for a breach of fiduciary duty as a director. However, that
paragraph does not allow corporations to limit the liability of a director (i)
for any breach of his or her duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for unlawful
payment of a dividend or unlawful stock purchase or redemption or (iv) for any
transaction for which the director derived an improper personal benefit.
The Company maintains liability insurance for its directors and officers.
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement.
5.1 Opinion of Wildman, Harrold, Allen & Dixon.
23.1 Consent of Ernst & Young LLP.+
Consent of Wildman, Harrold, Allen & Dixon (contained in Exhibit
23.2 5.1).
24.1 Powers of attorney.+
27.1 Financial data schedule, December 31, 1995.+
27.2 Financial data schedule, June 30, 1996.**
Information from reports furnished to state insurance regulatory
28.1 authorities.*
</TABLE>
- --------
+Previously filed.
*Incorporated herein by reference to Report on Form 10-K dated December 31,
1995, Commission File No. 1-11920.
**Incorporated herein by reference to Report on Form 10-Q dated June 30, 1996,
Commission File No. 1-11920.
ITEM 17. UNDERTAKINGS
The Registrant hereby 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 of 1933;
(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.
II-2
<PAGE>
Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the
low or high and of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table
in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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 securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 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.
(5) That, insofar as indemnification for liabilities arising under the
Securities Act of 1933 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
Securities and Exchange Commission such indemnification is against public
policy as expressed in the 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 had been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(6) That, for purposes of determining any liability under the 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 Company pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act of 1933 shall be deemed to be part of this
registration statement as of the time it was declared effective.
(7) That, for the purpose of determining any liability under the
Securities Act of 1933, 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 be 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 Amendment No. 2
to Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Deerfield, State of Illinois, on
September 16, 1996.
MMI Companies, Inc.
/s/ B. Frederick Becker
By: _________________________________
B. Frederick Becker
Chairman and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ B. Frederick Becker Chairman, Chief Executive September 16, 1996
____________________________________ Officer and Director
B. Frederick Becker
/s/ Paul M. Orzech Executive Vice President and September 16, 1996
____________________________________ Chief Financial Officer
Paul M. Orzech
/s/ Joseph R. Herman Vice President and September 16, 1996
____________________________________ Controller
Joseph R. Herman
* Director September 16, 1996
____________________________________
Richard R. Barr
* Director September 16, 1996
____________________________________
James A. Block, M.D.
* Director September 16, 1996
____________________________________
George B. Caldwell
* Director September 16, 1996
____________________________________
F. Laird Facey, M.D.
* Director September 16, 1996
____________________________________
William M. Kelley
* Director September 16, 1996
____________________________________
Andrew David Kennedy, Esq.
* Director September 16, 1996
____________________________________
Timothy R. McCormick
* Director September 16, 1996
____________________________________
Gerald L. McManis
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Director September 16, 1996
____________________________________
Scott S. Parker
* Director September 16, 1996
____________________________________
Edward C. Peddie
* Director September 16, 1996
____________________________________
Anthony J. Perry
* Director September 16, 1996
____________________________________
Joseph D. Sargent
* Director September 16, 1996
____________________________________
Marshall Whisnant
</TABLE>
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*By his signature below, B. Frederick Becker, pursuant to duly executed powers
of attorney filed with the Securities and Exchange Commission, has signed
this Amendment No. 2 to Registration Statement on behalf of the above
listed persons designated by asterisks, in the capacities set forth
opposite their respective names.
/s/ B. Frederick Becker
By: _________________________________
B. Frederick Becker
Attorney-in-fact
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement.
5.1 Opinion of Wildman, Harrold, Allen & Dixon.
23.1 Consent of Ernst & Young LLP.+
Consent of Wildman, Harrold, Allen & Dixon (contained in Exhibit
23.2 5.1).
24.1 Powers of attorney.+
27.1 Financial data schedule, December 31, 1995.+
27.2 Financial data schedule, June 30, 1996.**
Information from reports furnished to state insurance regulatory
28.1 authorities.*
</TABLE>
- --------
+Previously filed.
*Incorporated herein by reference to Report on Form 10-K dated December 31,
1995, Commission File No. 1-11920.
**Incorporated herein by reference to Report on Form 10-Q dated June 30, 1996,
Commission File No. 1-11920.
<PAGE>
EXHIBIT 1.1
2,507,733 SHARES
MMI COMPANIES, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
September , 1996
SMITH BARNEY INC.
CONNING & COMPANY
J.P. MORGAN & CO.
As Representatives of the
Several Underwriters
c/o SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
MMI Companies, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell an aggregate of 1,250,000 shares of its common stock, $0.10 par
value per share, to the several Underwriters named in Schedule II hereto (the
"Underwriters") and the persons named in Schedule I hereto (the "Selling
Stockholders") propose to sell to the several Underwriters an aggregate of
1,257,733 shares of common stock of the Company. The Company and the Selling
Stockholders are hereinafter sometimes referred to as the "Sellers." The
Company's common stock, $0.10 par value per share, is hereinafter referred to
as the "Common Stock" and the 1,250,000 shares of Common Stock to be issued
and sold to the Underwriters by the Company and the 1,257,733 shares of Common
Stock to be sold to the Underwriters by the Selling Stockholders are
hereinafter referred to as the "Firm Shares." The Company also proposes to
sell to the Underwriters, upon the terms and conditions set forth in Section 2
hereof, up to an additional 376,160 shares (the "Additional Shares") of Common
Stock. The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "Shares."
The Company and the Selling Stockholders wish to confirm as follows their
respective agreements with you (the "Representatives") and the other several
Underwriters on whose behalf you are acting, in connection with the several
purchases of the Shares by the Underwriters.
1. Registration Statement and Prospectus. The Company has prepared and filed
with the Securities and Exchange Commission (the "Commission") in accordance
with the provisions of the Securities Act of 1933, as amended, and the rules
and regulations of the Commission thereunder (collectively, the "Act"), a
registration statement on Form S-3 under the Act (the "registration
statement"), including a prospectus subject to completion relating to the
Shares. The term "Registration Statement" as used in this Agreement means the
registration statement and any registration statement filed pursuant to Rule
462(b) under the Act (an "Abbreviated Registration Statement") (in each case,
including all financial schedules and exhibits), as amended at the time it
becomes effective, or, if the registration statement became effective prior to
the execution of this Agreement, as supplemented or amended prior to the
execution of this Agreement. If it is contemplated, at the time this Agreement
is executed, that a post-effective amendment to the registration statement
will be filed and must be declared effective before the offering of the Shares
may commence, the term "Registration Statement" as used in this Agreement
means the registration statement as amended by said post-effective amendment.
The term "Prospectus" as used in this Agreement means the prospectus in the
form included in the Registration Statement, or, if the prospectus included in
the Registration Statement omits information in reliance on Rule 430A under
<PAGE>
the Act and such information is included in a prospectus filed with the
Commission pursuant to Rule 424(b) under the Act, the term "Prospectus" as used
in this Agreement means the prospectus in the form included in the Registration
Statement as supplemented by the addition of the Rule 430A information
contained in the prospectus filed with the Commission pursuant to Rule 424(b).
The term "Prepricing Prospectus" as used in this Agreement means the prospectus
subject to completion in the form included in the registration statement at the
time of the initial filing of the registration statement with the Commission,
and as such prospectus shall have been amended from time to time prior to the
date of the Prospectus. Any reference in this Agreement to the registration
statement, the Registration Statement, any Prepricing Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 under the Act, as of the
date of the registration statement, the Registration Statement, such Prepricing
Prospectus or the Prospectus, as the case may be, and any reference to any
amendment or supplement to the registration statement, the Registration
Statement, any Prepricing Prospectus or the Prospectus shall be deemed to refer
to and include any documents filed after such date under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") which, upon filing, are
incorporated by reference therein, as required by paragraph (b) of Item 12 of
Form S-3. As used herein, the term "Incorporated Documents" means the documents
which at the time are incorporated by reference in the registration statement,
the Registration Statement, any Prepricing Prospectus, the Prospectus, or any
amendment or supplement thereto.
2. Agreements to Sell and Purchase. Subject to such adjustments as you may
determine in order to avoid fractional shares, the Company hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
each Underwriter and, upon the basis of the representations, warranties and
agreements of the Company and the Selling Stockholders herein contained and
subject to all the terms and conditions set forth herein, each Underwriter
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of [$ ] per Share (the "purchase price per share"), the number of
Firm Shares which bears the same proportion to the aggregate number of Firm
Shares to be issued and sold by the Company as the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule II hereto (or such
number of Firm Shares increased as set forth in Section 12 hereof) bears to the
aggregate number of Firm Shares to be sold by the Company and the Selling
Stockholders.
Subject to such adjustments as you may determine in order to avoid fractional
shares, each Selling Stockholder agrees, subject to all the terms and
conditions set forth herein, to sell to each Underwriter and, upon the basis of
the representations, warranties and agreements of the Company and the Selling
Stockholders herein contained and subject to all the terms and conditions set
forth herein, each Underwriter, severally and not jointly, agrees to purchase
from each Selling Stockholder at the purchase price per share that number of
Firm Shares which bears the same proportion to the number of Firm Shares set
forth opposite the name of such Selling Stockholder in Schedule I hereto as the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule II hereto (or such number of Firm Shares increased as set forth in
Section 12 hereof) bears to the aggregate number of Firm Shares to be sold by
the Company and the Selling Stockholders.
The Company also agrees, subject to all the terms and conditions set forth
herein, to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Company and the Selling
Stockholders herein contained and subject to all the terms and conditions set
forth herein, the Underwriters shall have the right to purchase from the
Company, at the purchase price per share, pursuant to an option (the "over-
allotment option") which may be exercised at any time and from time to time
prior to 9:00 P.M., New York City time, on the 30th day after the date of the
Prospectus (or, if such 30th day shall be a Saturday or Sunday or a holiday, on
the next business day thereafter when the New York Stock Exchange is open for
trading), the 376,160 Additional Shares or any part thereof. The Additional
Shares may be purchased only for the purpose of covering over-allotments made
in connection with the offering of the Firm Shares. The number of Additional
Shares which the Underwriters elect to purchase upon any exercise of the over-
allotment option shall be provided by the Company. Upon any exercise of the
over-allotment option, each Underwriter, severally and not jointly, agrees to
purchase from the Company the number of Additional Shares (subject to such
adjustments as you may determine in order to avoid fractional shares) which
bears the same proportion to the number of Additional
2
<PAGE>
Shares to be sold by the Company as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule II hereto (or such number of
Firm Shares increased as set forth in Section 12 hereof) bears to the aggregate
number of Firm Shares to be sold by the Company and the Selling Stockholders.
Certificates in transferable form for the Shares which each of the Selling
Stockholders agrees to sell pursuant to this Agreement have been placed in
custody with Wayne A. Sinclair (the "Custodian") for delivery under this
Agreement pursuant to a Custody Agreement and Power of Attorney (the "Custody
Agreement") executed by each of the Selling Stockholders appointing B.
Frederick Becker and Paul M. Orzech as agents and attorneys-in-fact (the
"Attorneys-in-Fact"). Each Selling Stockholder agrees that (i) the Shares
represented by the certificates held in custody pursuant to the Custody
Agreement are subject to the interests of the Underwriters, the Company and
each other Selling Stockholder, (ii) the arrangements made by the Selling
Stockholders for such custody are, except as specifically provided in the
Custody Agreement, irrevocable, and (iii) the obligations of the Selling
Stockholders hereunder and under the Custody Agreement shall not be terminated
by any act of such Selling Stockholder or by operation of law, whether by the
death or incapacity of any Selling Stockholder or the occurrence of any other
event. If any Selling Stockholder shall die or be incapacitated or if any other
event shall occur before the delivery of the Shares hereunder, certificates for
the Shares of such Selling Stockholder shall be delivered to the Underwriters
by the Attorneys-in-Fact in accordance with the terms and conditions of this
Agreement and the Custody Agreement as if such death or incapacity or other
event had not occurred, regardless of whether or not the Attorneys-in-Fact or
any Underwriter shall have received notice of such death, incapacity or other
event. Each Attorney-in-Fact is authorized, on behalf of each of the Selling
Stockholders, to execute this Agreement and any other documents necessary or
desirable in connection with the sale of the Shares to be sold hereunder by
such Selling Stockholder, to make delivery of the certificates for such Shares,
to receive the proceeds of the sale of such Shares, to give receipts for such
proceeds, to pay therefrom any expenses to be borne by such Selling Stockholder
in connection with the sale and public offering of such Shares, to distribute
the balance thereof to such Selling Stockholder, and to take such other action
as may be necessary or desirable in connection with the transactions
contemplated by this Agreement. Each Attorney-in-Fact agrees to perform his
duties under the Custody Agreement.
3. Terms of Public Offering. The Sellers have been advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable and initially to offer the
Shares upon the terms set forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the Underwriters
of and payment for the Firm Shares shall be made at the office of Wildman,
Harrold, Allen & Dixon, 225 West Wacker Drive, Chicago, Illinois 60606 at 9:00
A.M., Chicago time, on [ , 1996] (the "Closing Date"). The place of
closing for the Firm Shares and the Closing Date may be varied by agreement
among you, the Company and the Attorneys-in-Fact.
Delivery to the Underwriters of and payment for any Additional Shares to be
purchased by the Underwriters shall be made at the aforementioned office of
Wildman, Harrold, Allen & Dixon at such time on such date (the "Option Closing
Date"), which may be the same as the Closing Date but shall in no event be
earlier than the Closing Date nor earlier than two nor later than ten business
days after the giving of the notice hereinafter referred to, as shall be
specified in a written notice from you on behalf of the Underwriters to the
Company of the Underwriters' determination to purchase a number, specified in
such notice, of Additional Shares. The place of closing for any Additional
Shares and the Option Closing Date for such Shares may be varied by agreement
among you and the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 9:30 A.M., New York City time, on the second
business day preceding the Closing Date or any Option Closing Date, as the case
may be. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 9:30 A.M., New York City time, on the
business day next preceding the Closing Date or the Option Closing Date, as
3
<PAGE>
the case may be. The certificates evidencing the Firm Shares and any
Additional Shares to be purchased hereunder shall be delivered to you on the
Closing Date or the Option Closing Date, as the case may be, against payment
of the purchase price therefor by wire transfer of immediately available funds
to the order of the Company and the Attorneys-in-Fact.
5. Agreements of the Company. The Company agrees with the several
Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective before the offering of the Shares may
commence, the Company will endeavor to cause the Registration Statement or
such post-effective amendment to become effective as soon as possible and
will advise you promptly and, if requested by you, will confirm such advice
in writing, when the Registration Statement or such post-effective
amendment has become effective.
(b) The Company will advise you promptly and, if requested by you, will
confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Registration Statement, any Prepricing
Prospectus or the Prospectus or for additional information; (ii) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or of the suspension of qualification of the
Shares for offering or sale in any jurisdiction or the initiation of any
proceeding for such purpose; and (iii) within the period of time referred
to in paragraph (f) below, of any change in the Company's condition
(financial or other), business, properties, net worth or results of
operations, or of the happening of any event, which makes any statement of
a material fact made in the Registration Statement or the Prospectus (as
then amended or supplemented) untrue or which requires the making of any
additions to or changes in the Registration Statement or the Prospectus (as
then amended or supplemented) in order to state a material fact required by
the Act or the regulations thereunder to be stated therein or necessary in
order to make the statements therein not misleading, or of the necessity to
amend or supplement the Prospectus (as then amended or supplemented) to
comply with the Act or any other law. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration
Statement, the Company will make every reasonable effort to obtain the
withdrawal of such order at the earliest possible time.
(c) The Company will furnish to you, without charge (i) four signed
copies of the registration statement as originally filed with the
Commission and of each amendment thereto, including financial statements
and all exhibits to the registration statement, (ii) such number of
conformed copies of the registration statement as originally filed and of
each amendment thereto, but without exhibits, as you may reasonably
request, (iii) such number of copies of the Incorporated Documents, without
exhibits, as you may reasonably request, and (iv) four copies of the
exhibits to the Incorporated Documents.
(d) The Company will not file any amendment to the Registration Statement
or make any amendment or supplement to the Prospectus or, prior to the end
of the period of time referred to in the first sentence in subsection (f)
below, file any document which, upon filing becomes an Incorporated
Document, of which you shall not previously have been advised or to which,
after you shall have received a copy of the document proposed to be filed,
you shall reasonably object.
(e) Prior to the execution and delivery of this Agreement, the Company
has delivered to you, without charge, in such quantities as you have
reasonably requested, copies of each form of the Prepricing Prospectus. The
Company consents to the use, in accordance with the provisions of the Act
and with the securities or Blue Sky laws of the jurisdictions in which the
Shares are offered by the several Underwriters and by dealers, prior to the
date of the Prospectus, of each Prepricing Prospectus so furnished by the
Company.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the opinion
of counsel for the Underwriters a prospectus is required by the Act to be
delivered in connection with sales by any Underwriter or dealer, the
Company will expeditiously deliver to each Underwriter and each dealer,
without charge, as many copies of the Prospectus (and of any amendment or
supplement thereto) as you may reasonably request. The Company consents to
the use of the
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Prospectus (and of any amendment or supplement thereto) in accordance with
the provisions of the Act and with the securities or Blue Sky laws of the
jurisdictions in which the Shares are offered by the several Underwriters
and by all dealers to whom Shares may be sold, both in connection with the
offering and sale of the Shares and for such period of time thereafter as
the Prospectus is required by the Act to be delivered in connection with
sales by any Underwriter or dealer. If during such period of time any event
shall occur that in the judgment of the Company or in the opinion of
counsel for the Underwriters is required to be set forth in the Prospectus
(as then amended or supplemented) or should be set forth therein in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary to supplement
or amend the Prospectus (or to file under the Exchange Act any document
which, upon filing, becomes an Incorporated Document) in order to comply
with the Act or any other law, the Company will forthwith prepare and,
subject to the provisions of paragraph (d) above, file with the Commission
an appropriate supplement or amendment thereto (or to such document), and
will expeditiously furnish to the Underwriters and dealers a reasonable
number of copies thereof. In the event that the Company and you, as
Representatives of the several Underwriters, agree that the Prospectus
should be amended or supplemented, the Company, if requested by you, will
promptly issue a press release announcing or disclosing the matters to be
covered by the proposed amendment or supplement.
(g) The Company will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the
Shares for offering and sale by the several Underwriters and by dealers
under the securities or Blue Sky laws of such jurisdictions as you may
designate and will file such consents to service of process or other
documents necessary or appropriate in order to effect such registration or
qualification; provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified
or to take any action which would subject it to service of process in
suits, other than those arising out of the offering or sale of the Shares,
in any jurisdiction where it is not now so subject.
(h) The Company will make generally available to its security holders a
consolidated earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as
practicable after the end of such period, which consolidated earnings
statement shall satisfy the provisions of Section 11(a) of the Act.
(i) During the period of three years hereafter, the Company will furnish
to you (i) as soon as available, a copy of each report of the Company
mailed to stockholders or filed with the Commission, and (ii) from time to
time such other information concerning the Company as you may reasonably
request.
(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second paragraph of Section 12 hereof or by notice given by you terminating
this Agreement pursuant to Section 12 or Section 13 hereof) or if this
Agreement shall be terminated by the Underwriters because of any failure or
refusal on the part of the Company or the Selling Stockholders to comply
with the terms or fulfill any of the conditions of this Agreement, the
Company agrees to reimburse the Representatives for all out-of-pocket
expenses (including fees and expenses of counsel for the Underwriters)
incurred by you in connection herewith.
(k) The Company will apply the net proceeds from the sale of the Shares
to be sold by it hereunder substantially in accordance with the description
set forth in the Prospectus.
(l) If Rule 430A of the Act is employed, the Company will timely file the
Prospectus pursuant to Rule 424(b) under the Act and will advise you of the
time and manner of such filing.
(m) Except as provided in this Agreement and except for (i) the issuance
of Common Stock as a result of the exercise of the currently outstanding
options to purchase 974,554 shares of Common Stock held by current and
former employees and directors of the Company; (ii) issuances of up to
10,000 shares of Common Stock under the Company's Employee Stock Investment
Plan in the ordinary course of business, and (iii) grants of options or
warrants to purchase up to 200,000 shares of Common Stock to any officer or
director under the Company's 1993 Employee Stock Plan or the Company's 1993
Non-Employee Directors' Formula Stock Option Plan, the Company will not
sell, contract to sell or otherwise dispose of any Common
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Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, or grant any options or warrants to purchase Common Stock,
for a period of 90 days after the date of the Prospectus, without the prior
written consent of Smith Barney Inc.
(n) The Company has furnished or will furnish to you "lock-up" letters,
in form and substance satisfactory to you, signed by each of its current
executive officers and directors and Lutheran General HealthSystem.
(o) Except as stated in this Agreement and in the Prepricing Prospectus
and Prospectus, the Company has not taken, nor will it take, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.
(p) The Company will use its best efforts to have the shares of Common
Stock which it agrees to sell under this Agreement listed, subject to
notice of issuance, on the New York Stock Exchange on or before the Closing
Date.
6. Agreements of the Selling Stockholders. Each of the Selling Stockholders
agrees with the several Underwriters as follows:
(a) Such Selling Stockholder will cooperate to the extent necessary to
cause the registration statement or any post-effective amendment thereto to
become effective at the earliest possible time.
(b) Such Selling Stockholder will pay all Federal and other taxes, if any
on the transfer or sale of the Shares being sold by such Selling
Stockholder to the Underwriters.
(c) Such Selling Stockholder will do or perform all things required to be
done or performed by such Selling Stockholder prior to the Closing Date or
any Option Closing Date, as the case may be, to satisfy all conditions
precedent to the delivery of the Shares pursuant to this Agreement.
(d) Except as stated in this Agreement and in the Prepricing Prospectus
and the Prospectus, such Selling Stockholder will not take, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.
(e) Such Selling Stockholder will advise you promptly, and if requested
by you, will confirm such advice in writing, within the period of time
referred to in Section 5(f) hereof, of any change in information relating
to such Selling Stockholder or any new information relating to such Selling
Stockholder that suggests that any statement made in the Registration
Statement or the Prospectus (as then amended or supplemented, if amended or
supplemented) is or may be untrue in any material respect or that the
Registration Statement or Prospectus (as then amended or supplemented, if
amended or supplemented) omits or may omit to state a material fact or a
fact necessary to be stated therein in order to make the statements therein
not misleading in any material respect, or of the necessity to amend or
supplement the Prospectus (as then amended or supplemented, if amended or
supplemented) in order to comply with the Act or any other law.
7. Representations and Warranties of the Company. The Company represents and
warrants to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the registration
statement as originally filed or as part of any amendment or supplement
thereto, or filed pursuant to Rule 424 under the Act, complied when so
filed in all material respects with the provisions of the Act. The
Commission has not issued any order preventing or suspending the use of any
Prepricing Prospectus.
(b) The Company and the transactions contemplated by this Agreement meet
the requirements for using Form S-3 under the Act. The registration
statement in the form in which it became or becomes effective and also in
such form as it may be when any post-effective amendment thereto shall
become effective and the Prospectus and any supplement or amendment thereto
when filed with the Commission under Rule 424(b) under the Act, complied or
will comply in all material respects with the provisions of the Act and
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will not at any such times contain 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, except that this
representation and warranty does not apply to statements in or omissions
from the registration statement or the prospectus made in reliance upon and
in conformity with information relating to any Underwriter furnished to the
Company in writing by or on behalf of any Underwriter through you expressly
for use therein.
(c) The Incorporated Documents heretofore filed, when they were filed
(or, if any amendment with respect to any such document was filed, when
such amendment was filed), conformed in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder,
any further Incorporated Documents so filed will, when they are filed,
conform in all material respects with the requirements of the Exchange Act
and the rules and regulations thereunder; no such document when it was
filed (or, if an amendment with respect to any such document was filed,
when such amendment was filed), contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and no
such further document, when it is filed, will contain an untrue statement
of a material fact or will omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading.
(d) The Company's authorized and outstanding capital stock is on the date
hereof, and will be on the Closing Date (adjusted to reflect the exercise
of any stock options outstanding on the date hereof and referred to in the
Prospectus), as set forth in the Prospectus under the caption
"Capitalization;" all of the outstanding shares of Common Stock of the
Company have been duly authorized and validly issued, are fully paid and
nonassessable and are free of any preemptive or similar rights; the Shares
to be issued and sold by the Company have been duly authorized and, when
issued and delivered to the Underwriters against payment therefor in
accordance with the terms hereof, will be validly issued, fully paid and
nonassessable and free of any preemptive or similar rights; and the capital
stock of the Company conforms to the description thereof incorporated by
reference in the Registration Statement and the Prospectus.
(e) The Company is a corporation duly organized and validly existing in
good standing under the laws of the State of Delaware with full corporate
power and authority to own, lease and operate its properties and to conduct
its business as described in the Registration Statement and the Prospectus,
and is duly registered and qualified to conduct its business and is in good
standing in each jurisdiction or place where the nature of its properties
or the conduct of its business requires such registration or qualification,
except where the failure so to register or qualify does not have a material
adverse effect on the condition (financial or other), business, properties,
net worth or results of operations of the Company and the Subsidiaries (as
hereinafter defined) taken as a whole (such an effect, a "Material Adverse
Effect).
(f) All the Company's "significant subsidiaries"(as such term is defined
in Rule 1-02 of Regulation S-X) (the "Material Subsidiaries") are listed in
an exhibit to the Company's Annual Report on Form 10-K which is
incorporated by reference into the Registration Statement. Each subsidiary
of the Company (collectively, the "Subsidiaries") is a corporation duly
organized, validly existing and in good standing in the jurisdiction of its
incorporation, with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus, and is duly registered and
qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of
its business requires such registration or qualification, except where the
failure so to register or qualify does not have a Material Adverse Effect;
all of the outstanding shares of capital stock of each of the Subsidiaries
have been duly authorized and validly issued, are fully paid and
nonassessable, and are owned by the Company directly, or indirectly through
one of the other Subsidiaries, free and clear of any lien, adverse claim,
security interest, equity or other encumbrance, except as otherwise set
forth in the Prospectus.
(g) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened, against the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries, or to
which any of their respective properties is subject, that are required to
be described in the Registration Statement or the Prospectus but are not
described as required, and there are no agreements,
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contracts, indentures, leases or other instruments that are required to be
described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement or any Incorporated Document that
are not described or filed as required by the Act or the Exchange Act.
(h) Neither the Company nor any of the Subsidiaries is in violation of
its certificate or articles of incorporation or by-laws, or other
organizational documents, or of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any of the
Subsidiaries or of any decree of any court or governmental agency or body
(including, without limitation, any domestic or foreign insurance
regulatory body, agency or authority) having jurisdiction over the Company
or any of the Subsidiaries, or in default in any material respect in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
material agreement, indenture, lease or other instrument to which the
Company or any of the Subsidiaries is a party or by which any of them or
any of their respective properties may be bound except where such violation
or default would not have a Material Adverse Effect.
(i) Neither the issuance and sale of the Shares, the execution, delivery
or performance of this Agreement by the Company nor the consummation by the
Company of the transactions contemplated hereby and in the Prospectus (A)
requires any consent, approval, authorization or other order of or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency or official (including without
limitation, any domestic or foreign insurance regulatory body, agency or
authority), except such as may be required for the registration of the
Shares under the Act and the Exchange Act and compliance with the
securities or Blue Sky laws of various jurisdictions, all of which have
been or will be effected in accordance with this Agreement, or (B)
conflicts or will conflict with or constitutes or will constitute a breach
of, or a default under, the certificate or articles of incorporation or
bylaws, or other organizational documents, of the Company or any of the
Subsidiaries or (C) conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, any agreement, indenture, lease
or other instrument to which the Company or any of the Subsidiaries is a
party or by which any of them or any of their respective properties may be
bound, except where such conflict, breach or default would not have a
Material Adverse Effect, or (D) violates or will violate any statute, law,
regulation or filing or judgment, injunction, order or decree of any court,
governmental agency or body (including, without limitation, any domestic or
foreign insurance regulatory body, agency or authority) applicable to the
Company or any of the Subsidiaries or any of their respective properties,
except where such violation would not have a material Adverse Effect or (E)
will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to the terms of any agreement or instrument to which
any of them is a party or by which any of them may be bound or to which any
of the property or assets of any of them is subject, except where such
lien, charge or encumbrance would not have a Material Adverse Effect.
(j) The auditors, Ernst & Young LLP, who have certified or shall certify
the financial statements included or incorporated by reference in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto) are independent auditors as required by the Act.
(k) The financial statements, together with related schedules and notes,
included or incorporated by reference in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), present fairly the
consolidated financial position, results of operations and changes in
financial position of the Company and the Subsidiaries on the basis stated
in the Registration Statement at the respective dates or for the respective
periods to which they apply; such statements and related schedules and
notes have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, except as
disclosed therein; and the other financial and statistical information and
data included or incorporated by reference in the Registration Statement
and the Prospectus (and any amendment or supplement thereto) are fairly
presented and prepared on a basis consistent with such financial statements
and the books and records of the Company and the Subsidiaries.
The statutory financial statements of each of American Continental
Insurance Company ("ACIC"), American Continental Life Insurance Company
("ACLIC") and Health Providers Insurance Company
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("HPIC") required or permitted to be prepared in accordance with the
insurance laws of the States of Missouri and Illinois, as applicable, and
the rules and regulations of the insurance departments and agencies thereof
from which, with certain adjustments as are disclosed in the Prospectus,
certain ratios and other statistical data contained in the Registration
Statement and the Prospectus have been derived, have for each relevant
period been prepared in conformity with, or as permitted by, the
requirements of the applicable insurance laws, rules and regulations and
present fairly the information purported to be shown. ACIC, ACLIC and HPIC
are the only Subsidiaries required or permitted to prepare statutory
financial statements. The statutory financial statements are prepared in
conformity with accounting practices prescribed or permitted by the
National Association of Insurance Commissioners and state insurance
regulatory authorities.
(l) The Company has full corporate power and authority to enter into this
Agreement and the execution and delivery of, and the performance by the
Company of its obligations under, this Agreement have been duly and validly
authorized by the Company, and this Agreement has been duly executed and
delivered by the Company and constitutes the valid and legally binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except as rights to indemnity and contribution hereunder
may be limited by federal or state securities laws and except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, and other laws relating to or affecting creditors' rights
generally and by general equitable principles.
(m) Except as disclosed in the Registration Statement and the Prospectus
(or any amendment or supplement thereto), subsequent to the respective
dates as of which such information is given in the Registration Statement
and the Prospectus (or any amendment or supplement thereto), neither the
Company nor any of the Subsidiaries has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in
the ordinary course of business, that is material to the Company and the
Subsidiaries taken as a whole, and there has not been any change in the
capital stock, or material increase in the short-term debt or long-term
debt, of the Company or any of the Subsidiaries, or any material decrease
in the statutory surplus of ACIC, ACLIC or HPIC, or any material decrease
in the results of operations, investments or total assets of the Company or
any of ACIC, ACLIC, HPIC, MMI Risk Management Resources, Inc. or any other
Material Subsidiary, or any material adverse change, or any development
involving or which may reasonably be expected to involve, a prospective
material adverse change, in the condition (financial or other), business,
net worth or results of operations of the Company and the Subsidiaries
taken as a whole.
(n) Each of the Company and the Subsidiaries has good and marketable
title to all property (real and personal) described in the Prospectus as
being owned by it, free and clear of all liens, claims, security interests
or other encumbrances ("Liens") except such as are described in the
Registration Statement and the Prospectus or in a document filed as an
exhibit to the Registration Statement and immaterial Liens that do not and
will not interfere with such Company's use of or ability to derive benefit
from the affected Properties, and all the property described in the
Prospectus as being held under lease by each of the Company and the
Subsidiaries is held by it under valid, subsisting and enforceable leases,
except where such invalidity would not have a Material Adverse Effect.
(o) The Company has not distributed and, prior to the later to occur of
(i) the Closing Date and (ii) completion of the distribution of the Shares,
will not distribute any offering material in connection with the offering
and sale of the Shares other than the Registration Statement, the
Prepricing Prospectus, the Prospectus or other materials, if any, permitted
by the Act.
(p) The Company and each of the Subsidiaries has such permits, licenses,
franchises and authorizations of governmental or regulatory authorities
(including, without limitation, all permits, licenses, franchises and
authorizations of all applicable insurance regulatory bodies, agencies or
authorities) ("permits") as are necessary to own its respective properties
and to conduct its business in the manner described in the Prospectus,
subject to such qualifications as may be set forth in the Prospectus and
except where the failure to obtain such permits would not have a Material
Adverse Effect; the Company and each of the Subsidiaries has fulfilled and
performed all its material obligations with respect to such permits and no
event has
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occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such permit, subject in each
case to such qualification as may be set forth in the Prospectus; and,
except as described in the Prospectus, none of such permits contains any
restriction that is materially burdensome to the Company or any of the
Subsidiaries.
(q) The Company and each of the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(r) To the Company's knowledge, neither the Company nor any of its
Subsidiaries nor any employee or agent of the Company or any Subsidiary has
made any payment of funds of the Company or any Subsidiary or received or
retained any funds in violation of any law, rule or regulation, which
payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.
(s) The Company and each of the Subsidiaries have filed all tax returns
required to be filed, which returns are complete and correct in all
material respects, and neither the Company nor any Subsidiary is in default
in the payment of any taxes which were payable pursuant to said returns or
any assessments with respect thereto.
(t) No holder of any security of the Company has any right, which right
has not been fully complied with or waived by the holder thereof, to
require registration of shares of Common Stock or any other security of the
Company because of the filing of the Registration Statement or consummation
of the transactions contemplated by this Agreement.
(u) The Company and the Subsidiaries own or possess all patents,
trademarks (including "RISKKEY"), trademark registrations, service marks,
service mark registrations, trade names, copyrights, licenses, inventions,
trade secrets and rights described in the Prospectus as being owned by them
or any of them, and the Company is not aware of any claim to the contrary
or any challenge by any other person to the rights of the Company and the
Subsidiaries with respect to the foregoing.
(v) The Company is not now and, after sale of the Shares to be sold by it
hereunder and application of the net proceeds from such sale as described
in the Prospectus under the caption "Use of Proceeds," will not be an
"investment company" within the meaning of the Investment Company Act of
1940, as amended.
(w) All reinsurance treaties, contracts, agreements and arrangements and
all retrocession agreements, contracts and arrangements (collectively,
"Reinsurance and Retrocession Agreements") to which the Company or any of
the Subsidiaries is a party are in full force and effect and neither the
Company nor any of the Subsidiaries is in violation of, or in default in
the performance, observance or fulfillment of, any obligation, agreement,
covenant or condition contained therein, except where such violation or
default would not have a Material Adverse Effect; except as otherwise
described in the Prospectus, neither the Company nor any of its
Subsidiaries has received any notice from the other parties to the
Reinsurance and Retrocession Agreements and the Company and each of the
Subsidiaries have no reason to believe that any of the other parties to the
Reinsurance and Retrocession Agreements will be unable to perform
thereunder, it being understood that, in the industry in which the Company
and the Subsidiaries operate, it is customary and expected for a certain
number of such parties to be unable to perform.
(x) Except as described in or contemplated by the Prospectus, there are
no commitments, plans or arrangements to issue any shares of capital stock
of the Company or any of the Subsidiaries or any security convertible into
or exchangeable for any shares of capital stock of the Company or any of
the Subsidiaries.
(y) The form of certificate for the Common Stock conforms to the
requirements of the Delaware General Corporation Law and the New York Stock
Exchange.
(z) The Company has complied with all provisions of Florida Statutes (S)
517.075, relating to issuers doing business with Cuba.
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8. Representations and Warranties of the Selling Stockholders. Each Selling
Stockholder represents and warrants to each Underwriter that:
(a) Each such Selling Stockholder which is not an individual is duly
organized and validly existing in good standing under the laws of the
jurisdiction of its organization.
(b) Such Selling Stockholder now has, and on the Closing Date will have,
valid and marketable title to the Shares to be sold by such Selling
Stockholder, free and clear of any lien, claim, security interest or other
encumbrance, including, without limitation, any restriction on transfer,
except for the restrictions and encumbrances set forth in the Custody
Agreements.
(c) Such Selling Stockholder now has, and on the Closing Date will have,
full legal right, power and authorization, and any approval required by
law, to sell, assign, transfer and deliver such Shares in the manner
provided in this Agreement, and upon delivery of and payment for such
Shares hereunder, the several Underwriters will acquire valid and
marketable title to such Shares free and clear of any lien, claim, security
interest, or other encumbrance.
(d) This Agreement and the Custody Agreement have been duly authorized,
executed and delivered by or on behalf of such Selling Stockholder and are
the valid and binding agreements of such Selling Stockholder enforceable
against such Selling Stockholder in accordance with their terms, except as
enforcement of rights to indemnity and contribution hereunder may be
limited by federal or state securities laws and except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights generally and by
general equitable principles.
(e) Neither the sale of the Shares, the execution and delivery of this
Agreement or the Custody Agreement by or on behalf of such Selling
Stockholder nor the consummation of the transactions herein, therein or in
the Prospectus contemplated by or on behalf of such Selling Stockholder (A)
requires any consent, approval, authorization or order of, or filing or
registration with, any court, regulatory body, administrative agency or
other governmental body, agency or official except such as may be required
under the Act and the Exchange Act or such as may be required under state
securities or Blue Sky laws governing the purchase and distribution of the
Shares or (B) conflicts or will conflict with or constitutes or will
constitute a breach of, or default under, or violates or will violate, any
agreement, indenture or other instrument to which such Selling Stockholder
is a party or by which such Selling Stockholder is or may be bound or to
which any of such Selling Stockholder's property or assets is subject, or
any statute, law, rule, regulation, ruling, judgment, injunction, order or
decree of any court, governmental agency or body (including, without
limitation, any domestic or foreign insurance regulatory body, agency or
authority) applicable to such Selling Stockholder or to any property or
assets of such Selling Stockholder.
(f) The Information relating to such Selling Stockholder contained in the
Registration Statement and the Prospectus, insofar as such information has
been furnished in writing by or on behalf of the Selling Stockholder
expressly for use in the Registration Statement, the Prospectus or any
Prepricing Prospectus, or any supplement or amendment thereto, does not and
will not contain an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading.
(g) The representations and warranties of such Selling Stockholder in the
Custody Agreement are, and on the Closing Date and any Option Closing Date
will be, true and correct.
(h) Such Selling Stockholder has not taken, directly or indirectly, any
action designed to or that might reasonably be expected to cause or result
in stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares, except for the lock-up
arrangements described in the Prospectus.
9. Indemnification and Contribution. (a) The Company agrees to indemnify and
hold harmless each of you and each other Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any Prepricing Prospectus or
in the
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Registration Statement or the Prospectus or in any amendment or supplement
thereto, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages, liabilities or expenses arise out of or are based upon any
untrue statement or omission or alleged untrue statement or omission which has
been made therein or omitted therefrom in reliance upon and in conformity with
the information relating to such Underwriter furnished in writing to the
Company by or on behalf of any Underwriter through you expressly for use in
connection therewith; provided, however, that the indemnification contained in
this paragraph (a) with respect to any Prepricing Prospectus shall not inure
to the benefit of any Underwriter (or to the benefit of any person controlling
such Underwriter) on account of any such loss, claim, damage, liability or
expense arising from the sale of the Shares by such Underwriter to any person
if a copy of the Prospectus shall not have been delivered or sent to such
person within the time required by the Act and the regulations thereunder, and
the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in such Prepricing Prospectus was
corrected in the Prospectus, provided that the Company has delivered the
Prospectus to the several Underwriters in requisite quantity on a timely basis
to permit such delivery or sending. The foregoing indemnity agreement shall be
in addition to any liability which the Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company, such Underwriter or such
controlling person shall promptly notify the parties against whom
indemnification is being sought (the "indemnifying parties"), and such
indemnifying parties shall assume the defense thereof, including the
employment of counsel and payment of all fees and expenses. Such Underwriter
or any such controlling person shall have the right to employ separate counsel
in any such action, suit or proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Underwriter or such controlling person unless (i) the indemnifying
parties have agreed in writing to pay such fees and expenses, (ii) the
indemnifying parties have failed to assume the defense and employ counsel, or
(iii) the named parties to any such action, suit or proceeding (including any
impleaded parties) include both such Underwriter or such controlling person
and the indemnifying parties and such Underwriter or such controlling person
shall have been advised by its counsel that representation of such indemnified
party and any indemnifying party by the same counsel would be inappropriate
under applicable standards of professional conduct (whether or not such
representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the indemnifying
party shall not have the right to assume the defense of such action, suit or
proceeding on behalf of such Underwriter or such controlling person). It is
understood, however, that the indemnifying parties shall, in connection with
any one such action, suit or proceeding or separate but substantially similar
or related actions, suits or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of only one separate firm of attorneys (in addition to any
local counsel) at any time for all such Underwriters and controlling persons
not having actual or potential differing interests with you or among
themselves, which firm shall be designated in writing by Smith Barney Inc.,
and that all such fees and expenses shall be reimbursed as they are incurred.
The indemnifying parties shall not be liable for any settlement of any such
action, suit or proceeding effected without their written consent, but if
settled with such written consent, or if there be a final judgment for the
plaintiff in any such action, suit or proceeding, the indemnifying parties
agree to indemnify and hold harmless any Underwriter, to the extent provided
in the preceding paragraph, and any such controlling person from and against
any loss, claim, damage, liability or expense by reason of such settlement or
judgment.
(c) Each Selling Stockholder agrees, severally and not jointly, to indemnify
and hold harmless each of you and each other Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act, the Company, its directors, its officers
who sign the Registration Statement, and any person who controls the Company
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act to the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with respect to the information furnished in writing by
or on behalf of such Selling Stockholder expressly for use in the Registration
Statement, the Prospectus or any Prepricing Prospectus, or any amendment or
supplement thereto. If any action, suit or proceeding shall be brought against
any Underwriter, any such controlling person of any Underwriter, the Company,
any of its directors, any such officer, or any such
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controlling person of the Company, based on the Registration Statement, the
Prospectus or any Prepricing Prospectus or any amendment or supplement
thereto, and in respect of which indemnity may be sought against any Selling
Stockholder pursuant to this paragraph (c), such Selling Stockholder shall
have the rights and duties given to the Company by paragraph (b) above (except
that if the Company shall have assumed the defense thereof such Selling
Stockholder shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the fees and expenses of
such counsel shall be at such Selling Stockholder's expense), and each
Underwriter, each such controlling person of any Underwriter, the Company, its
directors, any such officer, and any such controlling person of the Company
shall have the rights and duties given to the Underwriters by paragraph (b)
above. The foregoing indemnity agreement shall be in addition to any liability
which any Selling Stockholder may otherwise have. The aggregate liability of
such Selling Stockholder under the indemnity agreement contained in this
Section 9 shall not exceed the proceeds received by such Selling Shareholder
from the sale of Shares sold by it under this Agreement.
(d) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the
Registration Statement, each Selling Stockholder, any of its directors and any
person who controls the Company or the Selling Stockholders within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Underwriter, but
only with respect to information relating to such Underwriter furnished in
writing by or on behalf of such Underwriter through you expressly for use in
the Registration Statement, the Prospectus or any Prepricing Prospectus, or
any amendment or supplement thereto. If any action, suit or proceeding shall
be brought against the Company, any of its directors, any such officer, any
Selling Stockholder, any of their directors or any such controlling person
based on the Registration Statement, the Prospectus or any Prepricing
Prospectus, or any amendment or supplement thereto, and in respect of which
indemnity may be sought against any Underwriter pursuant to this paragraph
(d), such Underwriter shall have the rights and duties given to the Company
and Selling Stockholders by paragraph (b) above (except that if the Company or
the Selling Stockholders shall have assumed the defense thereof such
Underwriter shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the fees and expenses of
such counsel shall be at such Underwriter's expense), and the Company, its
directors, any such officer, the Selling Stockholders, any of their directors
and any such controlling person shall have the rights and duties given to the
Underwriters by paragraph (b) above. The foregoing indemnity agreement shall
be in addition to any liability which any Underwriter may otherwise have.
(e) If the indemnification provided for in this Section 9 is unavailable to
an indemnified party under paragraphs (a), (c) or (d) hereof in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on
the other hand from the offering of the Shares, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Stockholders on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
the Selling Stockholders on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from
the offering (before deducting expenses) received by the Company and the
Selling Stockholders bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus; provided that, in the event that the
Underwriters shall have purchased any Additional Shares hereunder, any
determination of the relative benefits received by the Company, the Selling
Stockholders or the Underwriters from the offering of the Shares shall include
the net proceeds (before deducting expenses) received by the Company and the
Selling Stockholders, and the underwriting discounts and commissions received
by the Underwriters, from the sale of such Additional Shares, in each case
computed on the basis of the respective amounts set forth in the notes to the
table on the cover page of the Prospectus. The relative fault of the Company
and the Selling Stockholders on the one hand and the Underwriters
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on the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Selling Stockholders on the one hand or by the
Underwriters on the other hand and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
(f) The Company, the Selling Stockholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 9
were determined by a pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in
paragraph (e) above. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities and expenses referred to in
paragraph (e) above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating any claim or defending any
such action, suit or proceeding. Notwithstanding the provisions of this
Section 9, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price of the Shares underwritten by it and
distributed to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several in proportion to the respective numbers
of Firm Shares set forth opposite their names in Schedule II hereto (or such
numbers of Firm Shares increased as set forth in Section 12 hereof) and not
joint.
(g) No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
(h) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 9 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Company and the Selling Stockholders set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Company, its directors or officers
or the Selling Stockholders or any person controlling the Company, (ii)
acceptance of any Shares and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to any Underwriter or any person
controlling any Underwriter, or to the Company, its directors or officers, or
any person controlling the Company, or to any Selling Stockholder, its
directors or officers, or any person controlling a Selling Stockholder, shall
be entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 9.
10. Conditions of Underwriters' Obligations. The several obligations of the
Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment thereto
to be declared, or, in the case of an Abbreviated Registration Statement, to
become, effective before the offering of the Shares may commence, the
registration statement or such post-effective amendment or Abbreviated
Registration Statement shall have become effective not later than 5:30 P.M.,
New York City time, on the date hereof, or at such later date and time as
shall be consented to in writing by you, and all filings, if any, required by
Rules 424 and 430A under the Act shall have been timely made, no stop order
suspending the effectiveness of the registration statement shall have been
issued and no proceeding for that purpose shall have been instituted or, to
the knowledge of the Company or any Underwriter, threatened by the Commission,
and any request of the Commission for additional information (to be included
in the registration statement or the prospectus or otherwise) shall have been
complied with to your satisfaction.
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(b) Subsequent to the effective date of this Agreement, there shall not have
occurred (i) any change, or any development involving a prospective change, in
or affecting the condition (financial or other), business, properties, net
worth, or results of operations of the Company or the Subsidiaries not
contemplated by the Prospectus, which in your opinion, as Representatives of
the several Underwriters, would materially adversely affect the market for the
Shares, or (ii) any event or development relating to or involving the Company
or any officer or director of the Company or any Selling Stockholder which
makes any statement made in the Prospectus untrue or which, in the opinion of
the Company and its counsel or the Underwriters and their counsel, requires
the making of any addition to or change in the Prospectus in order to state a
material fact required by the Act or any other law to be stated therein or
necessary in order to make the statements therein not misleading, if amending
or supplementing the Prospectus to reflect such event or development would, in
your opinion, as Representatives of the several Underwriters, materially
adversely affect the market for the Shares.
(c) You shall have received on the Closing Date, an opinion of Wildman,
Harrold, Allen & Dixon, counsel for the Company and the persons named in Part
B of Schedule I hereto (the "Individual Selling Stockholders"), dated the
Closing Date and addressed to you, as Representatives of the several
Underwriters, to the effect that:
(i) The Company is a corporation duly incorporated and validly existing
in good standing under the laws of the State of Delaware with full
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), and is duly
registered and qualified to conduct its business and is in good standing in
each jurisdiction or place where the nature of its properties or the
conduct of its business requires such registration or qualification, except
where the failure so to register or qualify does not have a Material
Adverse Effect;
(ii) Each of the Material Subsidiaries is a corporation duly organized
and validly existing in good standing under the laws of the jurisdiction of
its organization, with full corporate power and authority to own, lease,
and operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto); and all the outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable, and are owned by the Company directly, or indirectly
through one of the other Subsidiaries, free and clear of any perfected
security interest, or, to the best knowledge of such counsel after
reasonable inquiry, any other security interest, lien, adverse claim,
equity or other encumbrance, except as otherwise set forth in the
Registration Statement;
(iii) The authorized and outstanding capital stock of the Company as of
June 30, 1996 is as set forth under the caption "Capitalization" in the
Prospectus; and the authorized capital stock of the Company conforms in all
material respects as to legal matters to the description thereof
incorporated by reference in the Prospectus;
(iv) All the shares of capital stock of the Company outstanding prior to
the issuance of the Shares to be issued and sold by the Company hereunder
have been duly authorized and validly issued, and are fully paid and
nonassessable;
(v) The Shares to be issued and sold to the Underwriters by the Company
hereunder have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor in accordance with the terms hereof,
will be validly issued, fully paid and nonassessable and free of any
preemptive, or to the best knowledge of such counsel after reasonable
inquiry, similar rights that entitle or will entitle any person to acquire
any Shares upon the issuance thereof by the Company;
(vi) The form of certificates for the Shares conforms to the requirements
of the Delaware General Corporation Law and the New York Stock Exchange;
(vii) The Registration Statement and all post-effective amendments, if
any, have become effective under the Act and, to the best knowledge of such
counsel after reasonable inquiry, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose are pending before or contemplated by the
Commission; and any required filing of the Prospectus pursuant to Rule
424(b) has been made in accordance with Rule 424(b);
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(viii) The Company has full corporate power and authority to enter into
this Agreement and to issue, sell and deliver the Shares to be sold by it
to the Underwriters as provided herein, and this Agreement has been duly
authorized, executed and delivered by the Company and is a valid, legal and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforcement of rights to indemnity and
contribution hereunder may be limited by Federal or state securities laws
or principles of public policy and subject to the qualification that the
enforceability of the Company's obligations hereunder may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium,
and other laws relating to or affecting creditors' rights generally and by
general equitable principles;
(ix) Neither the Company nor any of the Material Subsidiaries is in
violation of its respective certificate or articles of incorporation or
bylaws, or other organizational documents, or to the best knowledge of such
counsel after reasonable inquiry, is in default in the performance of any
material obligation, agreement or condition contained in any bond,
debenture, note or other evidence of indebtedness;
(x) Neither the offer, sale or delivery of the Shares to be sold by the
Company hereunder, the execution, delivery or performance of this
Agreement, compliance by the Company with the provisions hereof nor
consummation by the Company of the transactions contemplated hereby
conflicts or will conflict with or constitutes or will constitute a breach
of, or a default under, the certificate or articles of incorporation or
bylaws, or other organizational documents, of the Company or any of the
Material Subsidiaries or any agreement, indenture, lease or other
instrument to which the Company or any of the Material Subsidiaries is a
party or by which any of them or any of their respective properties is
bound that is an exhibit to the Registration Statement or to any
Incorporated Document or is known to such counsel after reasonable inquiry,
or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of the
Material Subsidiaries, nor will any such action result in any violation of
any existing law, regulation, ruling (assuming compliance with all
applicable state securities and Blue Sky laws), judgment, injunction, order
or decree known to such counsel after reasonable inquiry, applicable to the
Company, the Material Subsidiaries or any of their respective properties,
except where such violation would not have a Material Adverse Effect;
(xi) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency, or official is required on the
part of the Company (except as have been obtained under the Act and the
Exchange Act or such as may be required under state securities or Blue Sky
laws governing the purchase and distribution of the Shares) for the valid
issuance and sale of the Shares to the Underwriters as contemplated by this
Agreement;
(xii) The Registration Statement and the Prospectus and any supplements
or amendments thereto (except for the financial statements and the notes
thereto and the schedules and other financial and statistical data included
therein, as to which such counsel need not express any opinion) comply as
to form in all material respects with the requirements of the Act; and each
of the Incorporated Documents (except for the financial statements and the
notes thereto and the schedules and other financial and statistical data
included therein, as to which counsel need not express any opinion)
complies as to form in all material respects with the Exchange Act and the
rules and regulations of the Commission thereunder;
(xiii) To the best knowledge of such counsel after reasonable inquiry,
(A) other than as described or contemplated in the Prospectus (or any
supplement thereto), there are no legal or governmental proceedings pending
or threatened against the Company or any of the Subsidiaries, or to which
the Company or any of the Subsidiaries, or any of their property, is
subject, which are required to be described in the Registration Statement
or Prospectus (or any amendment or supplement thereto) and (B) there are no
agreements, contracts, indentures, leases or other instruments, that are
required to be described in the Registration Statement or the Prospectus
(or any amendment or supplement thereto) or to be filed as an exhibit to
the Registration Statement or any Incorporated Document that are not
described or filed as required, as the case may be;
(xiv) The statements in the Registration Statement and Prospectus,
insofar as they are descriptions of contracts, agreements or other legal
documents, or refer to statements of law or legal conclusions, are accurate
and present fairly the information required to be shown;
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(xv) This Agreement and the Custody Agreement have each been duly
executed and delivered by or on behalf of each of the Individual Selling
Stockholders and are valid and binding agreements of each Individual
Selling Stockholder enforceable against each Individual Selling Stockholder
in accordance with their terms, except as enforcement of rights to
indemnity and contribution hereunder may be limited by federal or state
securities laws or principles of public policy and subject to the
qualification that the enforceability of the Individual Selling
Stockholders' obligations hereunder may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium, and other
laws relating to or affecting creditors' rights generally and by general
equitable principles;
(xvi) Each Individual Selling Stockholder has full legal right, power and
authorization, and any approval required by law, to sell, assign, transfer
and deliver good and marketable title to the Shares which such Individual
Selling Stockholder has agreed to sell pursuant to this Agreement;
(xvii) The execution and delivery of this Agreement and the Custody
Agreement by the Individual Selling Stockholders and the consummation of
the transactions contemplated hereby and thereby will not conflict with,
violate, result in a breach of or constitute a default under the terms or
provisions of any agreement, indenture, mortgage or other instrument known
to such counsel to which any Individual Selling Stockholder is a party or
by which any of them or any of their assets or property is bound, or any
court order or decree or any law, rule, or regulation applicable to any
Individual Selling Stockholder or to any of the property or assets of any
Individual Selling Stockholder;
(xviii) Upon delivery of the Shares to be sold by the Individual Selling
Stockholders and the Company pursuant to this Agreement and payment
therefor as contemplated herein the Underwriters will acquire good and
marketable title to such Shares free and clear of any adverse claim,
assuming that each Underwriter purchases such Shares in good faith without
notice of any adverse claims; and
(xix) Although counsel has not undertaken, except as otherwise indicated
in their opinion, to determine independently, and does not assume any
responsibility for, the accuracy or completeness of the statements in the
Registration Statement, such counsel has participated in the preparation of
the Registration Statement and the Prospectus with representatives of the
Company, the Company's independent auditors and representatives of the
Underwriters and Underwriters' counsel, including review and discussion of
the contents thereof (including review and discussion of the contents of
all Incorporated Documents), and nothing has come to the attention of such
counsel that has caused them to believe that the Registration Statement
(including the Incorporated Documents) at the time the Registration
Statement became effective, or the Prospectus, as of its date and as of the
Closing Date or the Option Closing Date, as the case may be, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading or that any amendment or supplement to the Prospectus, as of
its respective date, and as of the Closing Date or the Option Closing Date,
as the case may be, contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no opinion
with respect to the financial statements and the notes thereto and the
schedules and other financial and statistical data included in the
Registration Statement or the Prospectus or any Incorporated Document).
In rendering their opinion as aforesaid, counsel may rely upon an opinion
or opinions, each dated the Closing Date, of other counsel retained by them
or the Company as to laws of any jurisdiction other than the United States,
the State of Illinois or the State of Delaware, provided that (1) each such
counsel is reasonably acceptable to the Representatives, (2) such reliance
is expressly authorized by each opinion so relied upon and a copy of each
such opinion is delivered to the Representatives and is, in form and
substance satisfactory to them and their counsel, and (3) counsel shall
state in their opinion that they believe that they and the Underwriters are
justified in relying thereon. The opinion rendered by counsel for the
Company pursuant to the foregoing paragraph (c), and the opinion or
opinions of counsel relied upon by counsel for the Company in rendering
their opinion, shall expressly authorize counsel for the Underwriters to
rely thereon in delivering their opinion pursuant to paragraph (e) of this
Section 10.
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(d) (1) You shall have received on the Closing Date, an opinion of Wayne A.
Sinclair, Esq., corporate counsel for the Company, dated the Closing Date and
addressed to you, as Representatives of the several Underwriters, to the
effect that:
(i) The Company and each of the Subsidiaries has full corporate power and
authority, and all necessary governmental authorizations, approvals,
orders, licenses, certificates, franchises and permits of and from all
governmental regulatory officials and bodies (except where the failure so
to have any such authorizations, approvals, orders, licenses, certificates,
franchises or permits, individually or in the aggregate, would not have a
material adverse effect on the business, properties, operations or
financial condition of the Company and the Subsidiaries taken as a whole),
to own their respective properties and to conduct their respective
businesses as now being conducted, as described in the Prospectus;
(ii) The Company owns of record, directly or indirectly, all the
outstanding shares of capital stock of each of the Subsidiaries free and
clear of any lien, adverse claim, security interest, equity, or other
encumbrance, except as otherwise described in the Prospectus;
(iii) Other than as described or contemplated in the Prospectus (or any
supplement thereto), there are no legal or governmental proceedings pending
or threatened against the Company or any of the Subsidiaries, or to which
the Company or any of the Subsidiaries, or any of their property, is
subject, which are required to be described in the Registration Statement
or Prospectus (or any amendment or supplement thereto);
(iv) There are no agreements, contracts, indentures, leases or other
instruments, that are required to be described in the Registration
Statement or the Prospectus (or any amendment or supplement thereto) or to
be filed as an exhibit to the Registration Statement or any Incorporated
Document that are not described or filed as required, as the case may be;
(v) The Company and the Subsidiaries own all patents, trademarks
(including "RISKKEY"), trademark registrations, service marks, service mark
registrations, trade names, copyrights, licenses, inventions, trade secrets
and rights described in the Prospectus as being owned by them or any of
them, and such counsel is not aware of any claim to the contrary or any
challenge by any other person to the rights of the Company and the
Subsidiaries with respect to the foregoing;
(vi) Neither the Company nor any of the Subsidiaries is in violation of
any law, ordinance, administrative or governmental rule or regulation
applicable to the Company or any of the Subsidiaries or of any decree of
any court or governmental agency or body having jurisdiction over the
Company or any of the Subsidiaries, except where such violation would not
have a Material Adverse Effect;
(vii) Except as described in or contemplated by the Prospectus, there are
no outstanding options, warrants or other rights calling for the issuance
of, and such counsel does not know of any commitment, plan or arrangement
to issue, any shares of capital stock of the Company or any security
convertible into or exchangeable or exercisable for capital stock of the
Company;
(viii) Except as described in or contemplated by the Prospectus, there is
no holder of any security of the Company or any other person who has the
right, contractual or otherwise, to cause the Company to sell or otherwise
issue to them, or to permit them to underwrite the sale of, the Shares; and
no holder of any security of the Company has any right, which right has not
been fully complied with or waived by the holder thereof to require
registration of shares of common stock or any other security of the Company
because of the filing of the Registration Statement or consummation of the
transactions contemplated by this Agreement; and
(ix) Although counsel has not undertaken, except as otherwise indicated
in their opinion, to determine independently, and does not assume any
responsibility for, the accuracy or completeness of the statements in the
Registration Statement, such counsel has participated in the preparation of
the Registration Statement and the Prospectus with representatives of the
Company, the Company's independent auditors and representatives of the
Underwriters and Underwriters' counsel, including review and discussion of
the contents thereof (including review and discussion of the contents of
all Incorporated Documents), and nothing has come to the attention of such
counsel that has caused them to believe that the Registration
18
<PAGE>
Statement (including the Incorporated Documents) at the time the
Registration Statement became effective, or the Prospectus, as of its date
and as of the Closing Date or the Option Closing Date, as the case may be,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that any amendment or supplement to
the Prospectus, as of its respective date, and as of the Closing Date or
the Option Closing Date, as the case may be, contained any untrue statement
of a material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading (it being understood that such counsel
need express no opinion with respect to the financial statements and the
notes thereto and the schedules and other financial and statistical data
included in the Registration Statement or the Prospectus or any
Incorporated Document).
(2) You shall have received on the Closing Date, an opinion of Fredric J.
Entin, General Counsel for American Hospital Association Services, Inc., dated
the Closing Date and addressed to you, as Representative of the several
Underwriters, with respect to the matters referred to in clauses (xv) to
(xviii) inclusive of the foregoing paragraph (c); provided, however, that for
purposes of the opinion to be delivered pursuant to this paragraph (d)(2), all
references in said clauses (xv) to (xviii) to the Individual Selling
Stockholders shall be changed to American Hospital Association Services, Inc.
(3) You shall have received on the Closing Date, an opinion of Michael E.
Kerns, Senior Associate General Counsel, or Gail D. Hasbrouck, General
Counsel, for Lutheran General HealthSystem, dated the Closing Date and
addressed to you, as Representative of the several Underwriters, with respect
to the matters referred to in clauses (xv) to (xviii) of the foregoing
paragraph (c); provided, however, that for purposes of the opinion to be
delivered pursuant to this paragraph (d)(3), all references in said clauses
(xv) to (xviii) to the Individual Selling Stockholders shall be changed to
Lutheran General HealthSystem.
The opinions rendered by counsel pursuant to the foregoing paragraph (d)
shall expressly authorize counsel for the Underwriters to rely thereon in
delivering their opinion pursuant to paragraph (e) of this Section 10.
(e) You shall have received on the Closing Date an opinion of Willkie Farr &
Gallagher, counsel for the Underwriters, dated the Closing Date and addressed
to you, as Representatives of the several Underwriters, with respect to the
matters referred to in clauses (v), (vii), (viii), (xii) and (xix) of the
foregoing paragraph (c) and such other related matters as you may request. In
rendering their opinion, counsel for the Underwriters may rely on the opinions
of counsel referred to in paragraphs (c) and (d) of this Section 10.
(f) You shall have received letters addressed to you, as Representatives of
the several Underwriters, and dated the date hereof and the Closing Date from
Ernst & Young LLP, independent auditors, identical in substance to the forms
heretofore approved by you.
(g) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been taken or, to the knowledge of the Company, shall be contemplated by
the Commission at or prior to the Closing Date; (ii) there shall not have been
any change in the capital stock of the Company (other than changes resulting
from the exercise of the currently outstanding options to purchase 974,554
shares of Common Stock held by current and former employees and directors of
the Company) nor any material increase in the short-term or long-term debt or
any material decrease in the statutory surplus of ACIC, ACLIC or HPIC, or any
material decrease in the results of operations, investments or total assets of
the Company (other than in the ordinary course of business) from that set
forth or contemplated in the Registration Statement or the Prospectus (or any
amendment or Supplement thereto); (iii) there shall not have been, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), except
as may otherwise be stated in the Registration Statement and Prospectus (or
any amendment or supplement thereto), any material adverse change in the
condition (financial or other), business, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a whole; (iv) the
Company and the Subsidiaries shall not have any liabilities or obligations,
direct or contingent
19
<PAGE>
(whether or not in the ordinary course of business), that are material to the
Company and the Subsidiaries, taken as a whole, other than those reflected in
the Registration Statement or the Prospectus (or any amendment or supplement
thereto); and (v) all the representations and warranties of the Company
contained in this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date as if made on and as of the Closing
Date, and you shall have received a certificate, dated the Closing Date and
signed by the chief executive officer and the chief financial officer of the
Company (or such other officers as are acceptable to you), to the effect set
forth in this Section 10(g) and in Section 10(h) hereof.
(h) The Company shall not have failed at or prior to the Closing Date to
have performed or complied with any of its agreements herein contained and
required to be performed or complied with by it hereunder at or prior to the
Closing Date.
(i) All the representations and warranties of the Selling Stockholders
contained in this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date as if made on and as of the Closing
Date, and you shall have received a certificate, dated the Closing Date and
signed by or on behalf of the Selling Stockholders to the effect set forth in
this Section 10(i) and in Section 10(j) hereof.
(j) The Selling Stockholders shall not have failed at or prior to the
Closing Date to have performed or complied with any of their agreements herein
contained and required to be performed or complied with by them hereunder at
or prior to the Closing Date.
(k) Prior to the Closing Date the shares of Common Stock which the Company
agrees to sell pursuant to this Agreement shall have been listed, subject to
notice of issuance, on the New York Stock Exchange.
(l) The Sellers shall have furnished or caused to be furnished to you such
further certificates and documents as you shall have reasonably requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form
and substance to you and your counsel.
Any certificate or document signed by any officer of the Company or any
Attorney-in-Fact or any Selling Stockholder and delivered to you, as
Representatives of the Underwriters, or to counsel for the Underwriters, shall
be deemed a representation and warranty by the Company, the Selling
Stockholders or the particular Selling Stockholder, as the case may be, to
each Underwriter as to the statements made therein.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the satisfaction on and as of any Option Closing Date
of the conditions set forth in this Section 10, except that, if any Option
Closing Date is other than the Closing Date, the certificates, opinions and
letters referred to in paragraphs (c) through (i) shall be dated the Option
Closing Date in question and the opinions called for by paragraphs (c), (d)
and (e) shall be revised to reflect the sale of Additional Shares.
11. Expenses. The Company agrees to pay the following costs and expenses and
all other costs and expenses incident to the performance by the Sellers of
their obligations hereunder: (i) the preparation, printing or reproduction,
and filing with the Commission of the registration statement (including
financial statements and exhibits thereto), each Prepricing Prospectus, the
Prospectus, and each amendment or supplement to any of them; (ii) the printing
(or reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the registration
statement, each Prepricing Prospectus, the Prospectus, the Incorporated
Documents, and all amendments or supplements to any of them, as may be
reasonably requested for use in connection with the offering and sale of the
Shares; (iii) the preparation, printing, authentication, issuance and delivery
of certificates for the Shares, including any stamp taxes in connection with
the original issuance and sale of the Shares; (iv) the printing (or
reproduction) and delivery of this Agreement, the preliminary and supplemental
Blue Sky Memoranda and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the Shares; (v)
the listing of the Shares on the New
20
<PAGE>
York Stock Exchange; (vi) the registration or qualification of the Shares for
offer and sale under the securities or Blue Sky laws of the several states as
provided in Section 5(g) hereof (including the reasonable fees, expenses and
disbursements of counsel for the Underwriters relating to the preparation,
printing or reproduction, and delivery of the preliminary and supplemental
Blue Sky Memoranda and such registration and qualification); (vii) the filing
fees and the fees and expenses of counsel for the Underwriters in connection
with any filings required to be made with the National Association of
Securities Dealers, Inc.; (viii) the transportation and other expenses
incurred by or on behalf of Company representatives in connection with
presentations to prospective purchasers of the Shares; and (ix) the fees and
expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company. Any fees and expenses
of counsel (including local and special counsel) for the Selling Stockholders
shall be borne by the Selling Stockholders who choose or are required to
retain counsel.
12. Effective Date of Agreement. This Agreement shall become effective: (i)
upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for the
registration statement or a post-effective amendment thereto to be declared
effective before the offering of the Shares may commence, when notification of
the effectiveness of the registration statement or such post-effective
amendment has been released by the Commission. Until such time as this
Agreement shall have become effective, it may be terminated by the Company, by
notifying you, or by you, as Representatives of the several Underwriters, by
notifying the Company and the Selling Stockholders.
If any one or more of the Underwriters shall fail or refuse to purchase
Shares which it or they are obligated to purchase hereunder on the Closing
Date, and the aggregate number of Shares which such defaulting Underwriter or
Underwriters are obligated but fail or refuse to purchase is not more than
one-tenth of the aggregate number of Shares which the Underwriters are
obligated to purchase on the Closing Date, each non-defaulting Underwriter
shall be obligated, severally, in the proportion which the number of Firm
Shares set forth opposite its name in Schedule II hereto bears to the
aggregate number of Firm Shares set forth opposite the names of all non-
defaulting Underwriters or in such other proportion as you may specify in
accordance with Section 20 of the Master Agreement Among Underwriters of Smith
Barney Inc., to purchase the Shares which such defaulting Underwriter or
Underwriters are obligated, but fail or refuse, to purchase. If any one or
more of the Underwriters shall fail or refuse to purchase Shares which it or
they are obligated to purchase on the Closing Date and the aggregate number of
Shares with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares which the Underwriters are obligated to purchase on
the Closing Date and arrangements satisfactory to you and the Company for the
purchase of such Shares by one or more non-defaulting Underwriters or other
party or parties approved by you and the Company are not made within 36 hours
after such default, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter or the Company. In any such case which
does not result in termination of this Agreement, either you or the Company
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the
Registration Statement and the Prospectus or any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any such
default of any such Underwriter under this Agreement. The term "Underwriter"
as used in this Agreement includes, for all purposes of this Agreement, any
party not listed in Schedule II hereto who, with your approval and the
approval of the Company, purchases Shares which a defaulting Underwriter is
obligated, but fails or refuses, to purchase.
Any notice under this Section 12 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
13. Termination of Agreement. This Agreement shall be subject to termination
in your absolute discretion, without liability on the part of any Underwriter
to the Company or any Selling Stockholder, by notice to the Company, if prior
to the Closing Date or any Option Closing Date (if different from the Closing
Date and then only as to the Additional Shares), as the case may be, (i)
trading in securities generally on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market shall have been suspended or
materially
21
<PAGE>
limited, (ii) a general moratorium on commercial banking activities in New
York or Illinois shall have been declared by either federal or state
authorities, or (iii) there shall have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in your
judgment, impracticable or inadvisable to commence or continue the offering of
the Shares at the offering price to the public set forth on the cover page of
the Prospectus or to enforce contracts for the resale of the Shares by the
Underwriters. Notice of such termination may be given to the Company by
telegram, telecopy or telephone and shall be subsequently confirmed by letter.
14. Information Furnished by the Underwriters. The statements set forth in
the last paragraph on the cover page, the stabilization legend on the inside
cover page, and the statements in the first and third paragraphs under the
caption "Underwriting" in any Prepricing Prospectus and in the Prospectus,
constitute the only information furnished by or on behalf of the Underwriters
through you as such information is referred to in Sections 7(b) and 9 hereof.
15. Miscellaneous. Except as otherwise provided in Sections 5, 12 and 13
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company, at the office of the
Company at 540 Lake Cook Road, Deerfield, Illinois 60015-5290, Attention:
Wayne A. Sinclair, Esq., Senior Vice President, Secretary and General Counsel;
or (ii) if to the Selling Stockholders, at the office of the Company at 540
Lake Cook Road, Deerfield, Illinois, 60015-5290, Attention: Paul M. Orzech,
Executive Vice President and Chief Financial Officer, with copies to Lutheran
General HealthSystem, 2025 Windsor Drive, Oak Brook, Illinois 60521-1586,
Attention: Legal Department, and American Hospital Association Services, Inc.,
One North Franklin Street, Chicago, Illinois 60606, Attention: James A.
Henderson, Vice President & Associate General Counsel, or (iii) if to you, as
Representatives of the several Underwriters, care of Smith Barney Inc., 333
West 34th Street, New York, New York 10001, Attention: Manager, Investment
Banking Division.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Company, its directors and officers, and the other
controlling persons referred to in Section 9 hereof and their respective
successors and assigns, to the extent provided herein, and no other person
shall acquire or have any right under or by virtue of this Agreement. Neither
the term "successor" nor the term "successors and assigns" as used in this
Agreement shall include a purchaser from any Underwriter of any of the Shares
in his status as such purchaser.
16. Applicable Law; Counterparts. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
22
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement among
the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
MMI COMPANIES, INC.
By: _________________________________
Name:
Title:
Each of the Selling Stockholders
named inSchedule I hereto
AMERICAN HOSPITAL ASSOCIATION
SERVICES, INC.
By: _________________________________
Name:
Attorney-in-Fact
LUTHERAN GENERAL HEALTHSYSTEM
By: _________________________________
Name:
Attorney-in-Fact
DAVID A. BROOKS
By: _________________________________
Name:
Attorney-in-Fact
DANIEL O. CERMAK and MARTHA L.
CERMAK, as joint tenants
By: _________________________________
Name:
Attorney-in-Fact
23
<PAGE>
WAYNE FIELD and MARIA FIELD, as
joint tenants
By: _________________________________
Name:
Attorney-in-Fact
JAMES E. SANDUM
By: _________________________________
Name:
Attorney-in-Fact
SMITH BARNEY, INC., Custodian for
the IRA of LOWELL J. NOTEBOOM
By: _________________________________
Name:
Attorney-in-Fact
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule II hereto.
SMITH BARNEY INC.
CONNING & COMPANY
J.P. MORGAN & CO.
As Representatives of
the Several Underwriters
By SMITH BARNEY INC.
By: _________________________________
Name:
Title:
24
<PAGE>
SCHEDULE I
MMI COMPANIES, INC.
<TABLE>
<CAPTION>
NUMBER OF
SELLING STOCKHOLDERS FIRM SHARES
-------------------- -----------
<S> <C>
Part A:
American Hospital Association Services, Inc....................... 949,760
Lutheran General HealthSystem..................................... 300,000
Part B:
David A. Brooks................................................... 2,072
Daniel O. Cermak and Martha L. Cermak, as joint tenants........... 1,165
Wayne Field and Maria Field as joint tenants...................... 2,770
James E. Sandum................................................... 801
Smith Barney, Inc., Custodian for the IRA of Lowell J. Noteboom... 1,165
---------
Total........................................................... 1,257,733
=========
</TABLE>
25
<PAGE>
SCHEDULE II
MMI COMPANIES, INC.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER FIRM SHARES
- ----------- -----------
<S> <C>
Smith Barney Inc....................................................
Conning & Company...................................................
J.P. Morgan & Co....................................................
---------
Total........................................................... 2,507,733
=========
</TABLE>
26
<PAGE>
EXHIBIT 5.1
[Letterhead of Wildman, Harrold, Allen & Dixon]
September 16, 1996
312/201-2000
MMI COMPANIES, INC.
540 Lake Cook Road
Deerfield, Illinois 60015
Re: Registration of 2,883,893 Shares of Common Stock,
$0.10 Par Value per Share
Ladies & Gentlemen:
We have acted as counsel to MMI Companies, Inc. a Delaware corporation (the
"Company"), in connection with the preparation of a Registration Statement on
Form S-3, Registration Number 333-09771, filed by the Company with the
Securities and Exchange Commission (the "Commission") on August 8, 1996, as
amended (the "Registration Statement"). The Registration Statement relates to
the proposed sale of up to 2,883,893 shares of the Company's Common Stock,
$0.10 par value per share (the "Shares"), pursuant to an underwriting
agreement (the "Underwriting Agreement") to be entered into among the Company,
certain selling stockholders and the underwriters as described in the
Registration Statement.
We have examined such documents and corporate and other records as we deemed
necessary for the purpose of rendering this opinion, including the Certificate
of Incorporation, as amended to date, the Amended and Restated By-Laws of the
Company, as amended to date, the Registration Statement pursuant to which the
Shares are to be registered under the Securities Act of 1933, as amended (the
"Act"), and records of corporate proceedings.
Based upon the foregoing, it is our opinion that (i) upon the execution and
delivery of the Underwriting Agreement as approved by the Company's Board of
Directors, the 1,626,160 Shares to be offered and sold by
<PAGE>
MMI COMPANIES, INC.
September 16, 1996
Page 2
the Company, when sold and delivered against payment as provided in the
Underwriting Agreement, will be duly authorized, validly issued, fully paid
and non-assessable, and (ii) the 1,257,733 Shares to be offered and sold by
certain selling stockholders of the Company pursuant to the Underwriting
Agreement have been duly authorized and validly issued, and are fully paid and
non-assessable.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement. We also consent to the reference to our
firm under the caption "Legal Matters" in the Registration Statement. In
giving this consent, we do not thereby admit that we are included in the
category of persons whose consent is required under Section 7 of the Act or
the rules and regulations of the Commission.
Very truly yours,
-------------------------------------
/s/ Wildman, Harrold, Allen & Dixon
