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EXHIBIT 1.1
$440,000,000
First Financial Management Corporation
5% Senior Convertible Debentures due 1999
UNDERWRITING AGREEMENT
December 6, 1994
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December 6, 1994
Morgan Stanley & Co. Incorporated
Bear, Stearns & Co., Inc.
CS First Boston Corporation
c/o Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Dear Sirs:
First Financial Management Corporation, a Georgia corporation
(the "Company") proposes to issue and sell to the several Underwriters named in
Schedule I hereto (the "Underwriters") $440,000,000 principal amount of its 5%
Senior Convertible Debentures due 1999 (the "Initial Debt Securities"). The
Company also grants to the Underwriters, severally and not jointly, the option
described in Section 2 to purchase all or any part of the additional principal
amount of debt securities as set forth in Schedule I to cover over-allotments
(the "Option Debt Securities") on the terms and conditions stated herein. The
Option Debt Securities together with the Initial Debt Securities are herein
called the "Debt Securities". The Debt Securities will be issued pursuant to
the provisions of an Indenture dated as of December 5, 1994 (as amended or
supplemented, the "Indenture") between the Company and NationsBank of Georgia,
National Association, as Trustee (the "Trustee").
The Initial Debt Securities and the Option Debt Securities are
convertible (the "Initial Convertible Debt Securities" and the "Option
Convertible Debt Securities," respectively, and, collectively, the "Convertible
Debt Securities") into shares of common stock, par value $.10 per share, of the
Company (the "Common Stock"). The shares of Common Stock issuable upon
conversion of the Initial Convertible Debt Securities are referred to herein as
the "Initial Shares," and the shares of Common Stock issuable upon conversion
of any Option Convertible Debt Securities are referred to herein as the "Option
Shares," and together with the Initial Shares, are collectively herein called
the "Shares." The Convertible Debt Securities and the Shares are collectively
referred to as the "Offered Securities."
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement, including a prospectus,
relating to the Offered Securities. The registration statement as amended at
the time it becomes effective, including the information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to
Rule 430A under the Securities Act of 1933, as amended (the "Securities Act"),
is hereinafter referred to as the Registration Statement; the prospectus
together with the prospectus supplement in the form first used to confirm sales
of Offered Securities is hereinafter referred to as the Prospectus (including,
in the case of all references to the Registration Statement and the
Prospectus, documents incorporated therein by reference).
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I.
The Company represents and warrants to each of the
Underwriters that:
(a) The Registration Statement has become effective; no
stop order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) Each document filed or to be filed pursuant to
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and
incorporated by reference in the Prospectus complied or will comply when so
filed in all material respects with the Exchange Act and the applicable
rules and regulations of the Commission thereunder, (ii) each part of the
Registration Statement, when such part became effective, did not contain
and each such part, as amended or supplemented, if applicable, will not
contain any 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, (iii) the Registration Statement and the Prospectus
comply and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iv) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations
and warranties set forth in this paragraph 1(b) do not apply (A) to
statements or omissions in the Registration Statement or the Prospectus
based upon information relating to any Underwriter furnished to the Company
in writing by such Underwriter through you expressly for use therein or (B)
to that part of the Registration Statement that consists of the Statements
of Eligibility and Qualification (Form T-1s) under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), of the Trustees.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the state of
Georgia, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified
to transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole.
(d) Each subsidiary listed on Schedule II hereto (each
such subsidiary being referred to herein as a "Subsidiary") of the Company
has been duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to transact
business and
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is in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by the
Company and is a valid and binding agreement of the Company, enforceable in
accordance with its terms (i) except as the enforceability thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting creditors' rights generally and (ii) subject to general
principles of equity (regardless of whether enforceability is considered in
a proceeding at law or in equity).
(g) The Convertible Debt Securities have been duly
authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will be
entitled to the benefits of the Indenture, and will be valid and binding
obligations of the Company, enforceable in accordance with their terms (i)
except as the enforceability thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting creditors'
rights generally and (ii) subject to general principles of equity
(regardless of whether enforceability is considered in a proceeding at law
or in equity).
(h) The Convertible Debt Securities will be convertible
into the Shares of the Company in accordance with the terms of the
Indenture; the Shares initially issuable upon conversion of the Convertible
Debt Securities have been duly authorized and reserved for issuance upon
such conversion and, when issued upon such conversion, will be validly
issued, fully paid and nonassessable, and neither the shareholders of the
Company nor any other person have any statutory preemptive rights with
respect to the Convertible Debt Securities or the Shares.
(i) The execution and delivery by the Company of this
Agreement and the Indenture, the performance by the Company of its
obligations under the Indenture and the issuance and delivery of the
Convertible Debt Securities and the Shares initially issuable upon
conversion thereof, will not contravene any provision of applicable law or
the certificate of incorporation or by-laws of the Company or any agreement
or other instrument binding upon the Company or any of its subsidiaries
that is material to the Company and its subsidiaries, taken as a whole, or
any judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any Subsidiary, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company
of its obligations under this Agreement, the Indenture or the Offered
Securities, except such
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as may be required by the securities or Blue Sky laws of the various states
in connection with the offer and sale of the Offered Securities.
(j) There has not occurred any material adverse change,
or any development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from that
set forth in the Prospectus.
(k) There are no legal or governmental proceedings
pending or threatened to which the Company or any of its Subsidiaries is a
party or to which any of the properties of the Company or any of its
Subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required.
(l) Each preliminary prospectus or prospectus supplement
filed as part of the registration statement as originally filed or as part
of any amendment thereto, or filed pursuant to Rule 424 under the
Securities Act, complied when so filed in all material respects with the
Securities Act and the rules and regulations of the Commission thereunder.
(m) The Company is not an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined
in the Investment Company Act of 1940, as amended.
(n) The Company has no reason to believe that the effect
of any and all applicable federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws") on the business, operations and properties of the
Company and its Subsidiaries will impose costs and liabilities (including,
without limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws or
any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties) which singly or
in the aggregate, would have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(o) The Company has complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida);
neither the Company nor any affiliate of the Company does business with the
government of Cuba or with any person or affiliate located in Cuba.
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II.
The Company hereby agrees to sell to the several Underwriters,
and the Underwriters, upon the basis of the representations and warranties
herein contained, but subject to the conditions hereinafter stated, agree,
severally and not jointly, to purchase from the Company the respective
principal amounts of Offered Securities set forth in Schedule I hereto opposite
their names at 99% of their principal amount -- the purchase price -- plus
accrued interest, if any, from December 13, 1994 to the date of payment and
delivery.
In addition, on the basis of the representations and
warranties herein contained, and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to $66,000,000 additional principal amount of
Option Debt Securities at the same purchase price as shall be applicable to the
Initial Debt Securities. The option hereby granted will expire 30 days after
the date hereof, and may be exercised, in whole or in part (but not more than
once), only for the purpose of covering over-allotments that may be made in
connection with the offering and distribution of the Initial Debt Securities
per notice by you to the Company setting forth the principal amount of Option
Debt Securities as to which the several Underwriters are exercising this
option, and the time and date of payment and delivery thereof. Such time and
date of delivery (each, a "Date of Delivery") shall be determined by you but
shall not be later than seven full business days after the exercise of such
option, nor in any event prior to the Closing Time. If the option is exercised
as to all or any portion of the Option Debt Securities, each of the
Underwriters, acting severally and not jointly, will purchase from the Company
that portion of the aggregate number of Option Debt Securities being purchased
which the number of Initial Debt Securities set forth opposite the name of such
Underwriter become to the total number of Initial Debt Securities.
III.
The Company is advised by you that the Underwriters propose to
make a public offering of their respective portions of the Offered Securities
as soon after the Registration Statement and this Agreement have become
effective as in your judgment is advisable. The Company is further advised by
you that the Offered Securities are to be offered to the public initially at
100% of their principal amount -- the public offering price -- plus accrued
interest, if any, and to certain dealers selected by you at a price that
represents a concession not in excess of .60% of their principal amount under
the public offering price, and that any Underwriter may allow, and such dealers
may reallow, a concession, not in excess of .10% of their principal amount, to
any Underwriter or to certain other dealers.
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IV.
Payment for the Offered Securities shall be made by certified
or official bank check or checks payable to the order of the Company in New
York Clearing House funds at the office of Shearman & Sterling, 599 Lexington
Avenue, New York, New York, at 10:00 A.M., local time, on December 13, 1994, or
at such other time on the same or such other date, not later than December 20,
1994, as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the Closing Date.
Payment for the Offered Securities shall be made against
delivery to you for the respective accounts of the several Underwriters of the
Offered Securities registered in such names and in such denominations as you
shall request in writing not later than two full business days prior to the
date of delivery, with any transfer taxes payable in connection with the
transfer of the Offered Securities to the Underwriters duly paid.
V.
The obligations of the Company and the several obligations of
the Underwriters hereunder are subject to the condition that the Registration
Statement shall have become effective not later than the date hereof.
The several obligations of the Underwriters hereunder are
subject to the following further conditions:
(a) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date,
(i) there shall not have occurred any
downgrading, nor shall any notice have been given of any
intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the
possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule
436(g) (2) under the Securities Act; and
(ii) there shall not have occurred any change, or
any development involving a prospective change, in the
condition, financial or otherwise, or in the earnings,
business or operations, of the Company and its subsidiaries,
taken as a whole, from that set forth in the Registration
Statement, that, in your judgment, is material and adverse and
that makes it, in your judgment, impracticable to market the
Offered Securities on the terms and in the manner contemplated
in the Prospectus.
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(b) The Underwriters shall have received on the Closing
Date a certificate, dated the Closing Date and signed by an executive
officer of the Company, to the effect set forth in clause (a)(i) above and
to the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date and
that the Company has complied with all of the agreements and satisfied all
of the conditions on its part to be performed or satisfied on or before the
Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his knowledge after due inquiry.
(c) You shall have received on the Closing Date an
opinion of Sutherland, Asbill & Brennan, counsel for the Company, dated
the Closing Date, to the effect that
(i) the Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation and has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus; provided,
however, that such counsel may state that to the extent their
opinion regarding corporate power and authority might also
imply an opinion regarding due organization, such counsel is
relying solely on a presumption of regularity and continuity
without having examined any organizational minutes or other
organization procedures with respect to the Company or the
applicable corporate law in existence at the time of the
Company's organization;
(ii) each of the Subsidiaries of the Company has
been duly incorporated, is validly existing as a corporation
in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus; provided, however, that such counsel may state
that to the extent their opinion regarding corporate power and
authority might also imply an opinion regarding due
organization, such counsel is relying solely on a presumption
of regularity and continuity without having examined any
organizational minutes or other organization procedures with
respect to any Subsidiary or the applicable corporate law in
existence at the time of any Subsidiary's organization;
(iii) this Agreement has been duly authorized,
executed and delivered by the Company;
(iv) the Indenture has been duly qualified under
the Trust Indenture Act and has been duly authorized, executed
and delivered by the Company and is a valid and binding
agreement of the Company, enforceable in accordance with its
terms (a) except as the enforceability thereof may be limited
by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization,
moratorium or similar laws
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affecting creditors' rights generally and (b) subject to
general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in
equity);
(v) the Convertible Debt Securities have been
duly authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered
to and paid for by the Underwriters in accordance with the
terms of this Agreement, will be entitled to the benefits of
the Indenture and will be valid and binding obligations of the
Company, enforceable in accordance with their terms (a) except
as the enforceability thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or
similar laws affecting creditors' rights generally and (b)
subject to general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in
equity);
(vi) the Convertible Debt Securities will be
convertible into the Shares of the Company in accordance with
the terms of the Indenture; the Shares initially issuable upon
conversion of the Convertible Debt Securities have been duly
authorized and reserved for issuance upon such conversion and,
when issued upon such conversion, will be validly issued,
fully paid and nonassessable, and neither the shareholders of
the Company nor any other person have any statutory preemptive
rights with respect to the Convertible Debt Securities or the
Shares;
(vii) the execution and delivery by the Company of
this Agreement and the Indenture, the performance by the
Company of its obligations under the Indenture, and the
issuance and delivery of the Convertible Debt Securities and
the shares initially issuable upon conversion thereof will not
contravene any provision of applicable law or the certificate
of incorporation or by-laws of the Company or, to the best of
such counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over
the Company or any subsidiary, and to the best of such
counsel's knowledge, no consent, approval, authorization or
order of or qualification with any governmental body or agency
is required for the performance by the Company of its
obligations under this Agreement and the Indenture, except
such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of
the Offered Securities;
(viii) the statements (1) in the Prospectus under
the captions "Description of Debt Securities," "Description of
Capital Stock" and "Description of Debentures" and (2) in the
Registration Statement under Item 15, in each case insofar as
such statements constitute summaries of the legal matters,
documents and proceedings referred to therein, fairly present
the
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information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein;
(ix) the Company is not an "investment company" or
an entity "controlled" by an "investment company," as such
terms are defined in the Investment Company Act of 1940, as
amended;
(x) such counsel is of the opinion that the
Registration Statement and Prospectus (except for financial
statements and schedules included therein and except for that
part of the Registration Statement that consists of the Form
T-1s heretofore referred to, as to which such counsel need not
express any opinion) comply as to form in all material
respects with the Securities Act and the rules and regulations
of the Commission thereunder.
In addition, such counsel shall state that nothing has come to
such counsel's attention which causes such counsel to: (1) believe that
(except for financial statements and schedules as to which such counsel need
not express any belief and except for that part of the Registration Statement
that constitutes the Form T-1s heretofore referred to) the Registration
Statement and the prospectus included therein at the time the Registration
Statement became effective contained any 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 (2) believe that (except for
financial statements and schedules and except for that portion of the
Registration Statement that constitutes the Form T-1s hereinafter referred to,
as to which such counsel need not express any belief) the Prospectus as of the
Closing Date contained any untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(d) You shall have received on the Closing Date an
opinion of Randolph L.M. Hutto, Executive Vice President and General Counsel,
dated the Closing Date, to the effect that (i) to the best of such counsel's
knowledge, the execution and delivery by the Company of this Agreement and the
Indenture, the performance by the Company of its obligations under the
Indenture, and the issuance and delivery of the Convertible Debt Securities and
the Shares initially issuable upon conversion thereof will not contravene any
agreement or other instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its subsidiaries, taken as a
whole; (ii) after due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company or any of
its Subsidiaries is a party or to which any of the properties of the Company or
any of its Subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required; and (iii) each document filed pursuant to the Exchange Act and
incorporated by reference in the Registration Statement and the Prospectus
(except for financial statements and schedules as to which counsel need not
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express any opinion) complied when so filed as to form in all material respects
with the Exchange Act and the applicable rules and regulations of the
Commission thereunder.
(e) You shall have received on the Closing Date an
opinion of Shearman & Sterling, counsel for the Underwriters, dated the Closing
Date, covering the matters referred to in subparagraphs (iii), (iv), (v),
(viii) (but only as to the statements in the Prospectus under "Description of
Debentures" and "Underwriters"), and subparagraph (x) of paragraph (c) above
and the paragraph immediately thereafter.
With respect to subparagraph (x) of paragraph (c) above and
the paragraph immediately thereafter, Sutherland, Asbill & Brennan and Shearman
& Sterling each may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto (other than the documents
incorporated therein by reference) and review and discussion of the contents
thereof, but are without independent check or verification except as specified.
Shearman & Sterling may rely on the opinion of Sutherland, Asbill & Brennan with
respect to matters of Georgia law.
The opinion of Sutherland, Asbill & Brennan described in
paragraph (c) above shall be rendered to you at the request of the Company and
shall so state therein.
(f) You shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date, as
the case may be, in form and substance reasonably satisfactory to you, from
Deloitte & Touche LLP and Price Waterhouse LLP, independent public accountants
for the Company and Western Union Financial Services, Inc., respectively,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in or incorporated by
reference into the Registration Statement and the Prospectus.
VI.
In further consideration of the agreements of the Underwriters
herein contained, the Company covenants as follows:
(a) To furnish to you, without charge, one signed copy of
the Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto but including documents incorporated by
reference, excluding the exhibits thereto) and, during the period mentioned
in paragraph (c) below, as many copies of the Prospectus, any documents
incorporated therein by reference (excluding the exhibits thereto) and any
supplements and amendments to the Prospectus or to the Registration
Statement as you may reasonably request. The terms "supplement" and
"amendment" or "amend" as used
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in this Agreement shall include all documents subsequently filed by the
Company with the Commission pursuant to the Securities Exchange Act of
1934, as amended, that are deemed to be incorporated by reference in the
Prospectus.
(b) Before amending or supplementing the Registration
Statement or the Prospectus during the period from the date hereof through
the Closing Date, to furnish to you a copy of each such proposed amendment
or supplement and not to file any such proposed amendment or supplement to
which you reasonably object. For a period of two years after the date
hereof, the Company will furnish to you a copy of each amendment or
supplement to the Registration Statement.
(c) If, during such period after the first date of the
public offering of the Offered Securities as in the opinion of your counsel
the Prospectus is required by law to be delivered in connection with sales
by an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of your counsel, it is necessary to amend or supplement the
Prospectus to comply with law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to the
dealers (whose names and addresses you will furnish to the Company) to
which Offered Securities may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as
so amended or supplemented will not, in the light of the circumstances when
the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Offered Securities for
offer and sale under the securities or Blue Sky laws of such jurisdictions
as you shall reasonably request and to pay all expenses (including fees and
disbursements of counsel) in connection with such qualification and in
connection with (i) the determination of the eligibility of the Offered
Securities for investment under the laws of such jurisdictions as you may
designate and (ii) any review of the offering of the Offered Securities by
the National Association of Securities Dealers, Inc.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement covering the
twelve-month period ending December 31, 1995 that satisfies the provisions
of Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(f) During the period ending 90 days after the date of
the Prospectus, it will not offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common
Stock,
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other than (i) the Debentures offered hereby, (ii) the Common Stock
issuable upon conversion of the Debentures, (iii) securities issued by the
Company in connection with acquisitions by the Company, provided that no
such securities may be issued or sold in a public distribution during such
90-day period, (iv) shares of Common Stock, options to purchase Common
Stock, or shares of Common Stock issued upon exercise of such options,
granted or purchased (A) under the Company's existing stock option, stock
purchase and stock grant plans, or (B) under such plans that may be adopted
by the Company in the future covering up to an aggregate of 10 million
additional shares of Common Stock, and (v) shares of Common Stock issuable
upon exercise of the Company's outstanding warrants.
(g) To pay all expenses incident to the performance of
its obligations under this Agreement, including (i) the preparation and
filing of the Registration Statement and the Prospectus and all amendments
and supplements thereto, (ii) the preparation, issuance and delivery of the
Offered Securities, including any transfer taxes payable in connection with
the transfer of the Offered Securities to the Underwriters, (iii) the fees
and disbursements of the Company's counsel and accountants, (iv) the
qualification of the Offered Securities under state securities or Blue Sky
laws in accordance with the provisions of VI(d), including filing fees and
the fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of any Blue Sky or Legal
Investment Memoranda, copies of which shall be delivered to the Company,
(v) the printing and delivery to the Underwriters, in quantities as
hereinabove stated, copies of the Registration Statement and all amendments
thereto and of each preliminary prospectus and the Prospectus and any
amendments or supplements thereto, (vi) the printing and delivery to the
Underwriters of copies of any Blue Sky or Legal Investment Memoranda, (vii)
the filing fees and expenses, if any, incurred with respect to any filing
with the National Association of Securities Dealers, Inc., made in
connection with the offering of the Offered Securities, (viii) any expenses
incurred by the Company in connection with a "road show" presentation to
potential investors and (ix) the listing of the Convertible Debt Securities
and the Common Stock on the New York Stock Exchange Inc.
VII.
The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls such Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred by any Underwriter or any such controlling person in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements
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thereto), or caused by 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 or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein; provided, however, that the foregoing indemnity agreement with
respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased Offered Securities, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or supplemented if
the Company shall have furnished any amendments or supplements thereto) was not
sent or given by or on behalf of such Underwriter to such person, if required
by law so to have been delivered, at or prior to the written confirmation of
the sale of the Offered Securities to such person, and if the Prospectus (as so
amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages or liabilities.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus,
the Prospectus or any amendments or supplements thereto.
In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either of the two preceding paragraphs,
such person (the "indemnified party") shall promptly notify the person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by Morgan Stanley
& Co. Incorporated, in the case of parties
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indemnified pursuant to the second preceding paragraph, and by the Company, in
the case of parties indemnified pursuant to the first preceding paragraph. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of
any pending or threatened 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 proceeding.
If the indemnification provided for in the first or second
paragraph of this Article VII is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Offered Securities 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 on
the one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other hand in connection with the offering of the Offered Securities
shall be deemed to be in the same respective proportions as the net proceeds
from the offering of the Offered Securities (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate public offering price of the
Offered Securities. The relative fault of the Company on the one hand and of
the Underwriters 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 by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Underwriters' respective obligations
to contribute pursuant to this Article VII are several in proportion to the
respective principal amounts of Offered Securities they have purchased
hereunder, and not joint.
The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Article VII were determined
by 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 the immediately preceding
paragraph. The amount paid or payable by an indemnified
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party as a result of the losses, claims, damages and liabilities referred to in
the immediately preceding paragraph 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 or defending any such
action or claim. Notwithstanding the provisions of this Article VII, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Offered Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that 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 Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies provided
for in this Article VII are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or in
equity.
The indemnity and contribution provisions contained in this
Article VII and the representations and warranties of the Company contained in
this Agreement shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter or by or on
behalf of the Company, its officers or directors or any person controlling the
Company and (iii) acceptance of and payment for any of the Offered Securities.
VIII.
This Agreement shall be subject to termination by notice given
by you to the Company, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses (a)(i) through (iv), such event singly or
together with any other such event makes it, in your judgment, impracticable to
market the Offered Securities on the terms and in the manner contemplated in
the Prospectus.
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IX.
This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement by the
Commission.
If, on the Closing Date, any one or more of the Underwriters
shall fail or refuse to purchase Debt Securities that it or they have agreed to
purchase hereunder on such date, and the aggregate principal amount of Debt
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase is not more than one-tenth of the aggregate principal
amount of the Debt Securities to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the principal
amount of Debt Securities set forth opposite their respective names in Schedule
I bears to the principal amount of Debt Securities set forth opposite the names
of all such non-defaulting Underwriters, or in such other proportions as you
may specify, to purchase the Debt Securities which such defaulting Underwriter
or Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the principal amount of Debt Securities that any
Underwriter has agreed to purchase pursuant to Article II be increased pursuant
to this Article IX by an amount in excess of one-ninth of such principal amount
of Debt Securities without the written consent of such Underwriter. If, on the
Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase
Debt Securities and the aggregate principal amount of Debt Securities with
respect to which such default occurs is more than one-tenth of the aggregate
principal amount of Debt Securities to be purchased on such date, and
arrangements satisfactory to you and the Company for the purchase of such Debt
Securities are not made within 36 hours after such default, this Agreement
shall terminate without liability on the part of any non-defaulting Underwriter
or the Company. In any such case 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
in the Prospectus or in 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 default of such Underwriter under
this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Underwriters in connection with
this Agreement or the offering contemplated hereunder.
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This Agreement may be signed in two or more counterparts, each
of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
Very truly yours,
FIRST FINANCIAL MANAGEMENT
CORPORATION
By /s/ M. Tarlton Pittard
-------------------------------
M. Tarlton Pittard
Senior Executive Vice President
Accepted, December 6, 1994
Morgan Stanley & Co. Incorporated
Bear, Stearns & Co. Inc.
CS First Boston Corporation
Acting severally on behalf of
themselves and the several
Underwriters named herein.
By Morgan Stanley & Co. Incorporated
By /s/ Scott R. Brakebill
----------------------
Scott R. Brakebill
Managing Director
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SCHEDULE I
Principal Amount
of Debt Securities
Underwriter To Be Purchased
- ----------- ------------------
Morgan Stanley & Co. Incorporated $129,673,400
Bear, Stearns & Co. Inc. 129,663,300
CS First Boston Corporation 129,663,300
J.C. Bradford & Co. 3,000,000
Dean Witter Reynolds Inc. 6,000,000
Hambrecht & Quist Incorporated 6,000,000
Kidder, Peabody & Co. Incorporated 6,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated 6,000,000
Montgomery Securities 6,000,000
Piper Jaffray Inc. 3,000,000
The Robinson-Humphrey Company, Inc. 3,000,000
Salomon Brothers Inc 6,000,000
Smith Barney Inc. 6,000,000
------------
Total . . . . . . . . . . . . . $440,000,000
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SCHEDULE II
For purposes of this Underwriting Agreement, the term "Subsidiary"
when capitalized shall include only the following principal subsidiaries of
First Financial Management Corporation:
Subsidiary State of Incorporation
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Appalachian Computer Services, Inc. Kentucky
FIRST HEALTH Services Corporation Virginia
FIRST HEALTH Strategies, Inc. Delaware
GENEX Services, Inc. Pennsylvania
International Banking Technologies, Inc. Georgia
MicroBilt Corporation Georgia
National Bancard Corporation Florida
TeleCheck International, Inc. Georgia
TeleCheck Services, Inc. Delaware
First Financial Bank Georgia
Nationwide Credit, Inc. Georgia
Western Union Financial Services, Inc. Delaware