SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: October 4, 1995
FEDERATED DEPARTMENT STORES, INC.
1440 Broadway, New York, New York 10018
(212) 840-1440
-and-
7 West Seventh Street, Cincinnati,Ohio 45202
(513) 579-7000
Delaware 1-13536 13-3324058
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(State of Incorporation) (Commission File No.) (IRS Id. No.)
Exhibit Index on Page 4
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Item 5. Other Events
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This Current Report on Form 8-K is being filed with the Securities and
Exchange Commission by Federated Department Stores, Inc. ("Federated") for
the purpose of providing the information set forth in a press release issued
by Federated on October 3, 1995, a copy of which is filed as Exhibit 99.1
hereto and incorporated herein by reference, and for the purpose of filing
the Underwriting Agreement, dated as of October 3, 1995, between Federated
and the underwriters named therein and the form of Fifth Supplemental Trust
Indenture, dated as of October 6, 1995, between Federated and State Street Bank
and Trust Company (successor to The First National Bank of Boston), as Trustee,
as exhibits hereto.
Item 7. Financial Statements, Pro Forma Financial
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Information and Exhibits.
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The following exhibits are filed herewith:
1. Underwriting Agreement, dated as of October 3, 1995, between Federated
Department Stores, Inc. and the underwriters named therein.
4. Form of Fifth Supplemental Trust Indenture, dated as of October 6,
1995, between Federated Department Stores, Inc. and State Street
Bank and Trust Company (successor to The First National Bank of
Boston), as Trustee.
99.1 Press Release dated October 3, 1995.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FEDERATED DEPARTMENT STORES, INC.
Date: October 4, 1995 By: /s/ Dennis J. Broderick
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Dennis J. Broderick
Senior Vice President,
General Counsel and
Secretary
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EXHIBIT INDEX
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Exhibit
Number Description Page
------ ----------- ----
1. Underwriting Agreement, dated as of September 22, 1995, between
Federated Department Stores, Inc. and the underwriters named therein.
4. Form of Fifth Supplemental Trust Indenture, dated as of October 6,
1995, between Federated Department Stores, Inc. and State Street
Bank and Trust Company (successor to The First National Bank of
Boston), as Trustee.
99.1 Press Release dated October 3, 1995.
Federated Department Stores, Inc.
8.125% Senior Notes due 2002
Underwriting Agreement
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October 3,1995
Goldman, Sachs & Co.,
CS First Boston Corporation,
Lehman Brothers Inc. and
Citicorp Securities, Inc.,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004
Ladies and Gentlemen:
Federated Department Stores, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to you (the "Underwriters") an aggregate of $400,000,000
principal amount of Notes specified above (the "Securities").
1. The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement on Form S-3 (File No. 33-59691) in
respect of the Securities has been filed with the Securities and Exchange
Commission (the "Commission"); such registration statement and any post-
effective amendment thereto, each in the form heretofore delivered or to be
delivered to the Underwriters without exhibits thereto, but with documents
incorporated by reference in the prospectus contained therein, have been
declared effective by the Commission in such form; no other document with
respect to such registration statement or document incorporated by
reference therein has heretofore been filed or transmitted for filing with
the Commission (other than prospectuses filed or to be filed pursuant to
Rule 424(b) of the rules and regulations of the Commission under the
Securities Act of 1933, as amended (the "Act"), each in the form heretofore
delivered or to be delivered to the Underwriters); and no stop order
suspending the effectiveness of such registration statement has been issued
and no proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in such registration
statement or filed with the Commission pursuant to Rule 424(a) under the
Act is hereinafter called a "Preliminary Prospectus"; the various parts of
such registration statement, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
registration statement at the time such part of the registration statement
became effective but excluding Form T-1, each as amended at the time such
part of the registration statement became effective, are hereinafter
collectively called the "Registration Statement"; the prospectus relating
to the Securities, in the form in which it has most recently been filed, or
transmitted for filing, with the Commission on or prior to the date of this
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Agreement, being hereinafter called the "Prospectus"; any reference herein
to any Preliminary 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 such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the date
of such Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of the
Company filed pursuant to Sections 13(a) or 15(d) of the Exchange Act after
the effective date of the Registration Statement that is incorporated by
reference in the Registration Statement; and any reference to the
Prospectus as amended or supplemented shall be deemed to refer to the
Prospectus as amended or supplemented in relation to the Securities in the
form in which it is filed with the Commission pursuant to Rule 424(b) under
the Act in accordance with Section 5(a) hereof, including any documents
incorporated by reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents 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; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement thereto,
when such documents become effective or are filed with the Commission, as
the case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not 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; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by the
Underwriters through Goldman, Sachs & Co. expressly for use in the
Prospectus as amended or supplemented;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission thereunder
and do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
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; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
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by the Underwriters through Goldman, Sachs & Co. expressly for use in the
Prospectus as amended or supplemented;
(d) There has not been any material adverse change in the business,
financial position or results of operations of the Company and its
subsidiaries, taken as a whole, from the respective dates as of which
information is given in the Registration Statement and the Prospectus.
Neither the Company nor any of its subsidiaries has sustained since the
date of the latest audited financial statements included or incorporated by
reference in the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented; and, since the respective dates as
of which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock (other than
immaterial issuances and forfeitures of stock in connection with equity-
based compensation plans of executive officers of the Company or as set
forth or contemplated in the Prospectus as amended or supplemented, or any
increase in excess of $25,000,000 in long-term debt of the Company or any
of its subsidiaries otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented, or any material adverse change, or
any development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus
as amended or supplemented;
(e) The Company and its subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are disclosed in the Prospectus as
amended or supplemented, or as do not, individually or in the aggregate,
have a material adverse effect on the business, financial position or
results of operations or reasonably foreseeable prospects of the Company
and its subsidiaries taken as a whole (a "Material Adverse Effect"); and
any real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as would not, individually or in the aggregate,
have a Material Adverse Effect;
(f) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus as amended or
supplemented, and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it is required to be so qualified, except where
failure to be so qualified and in good standing individually or in the
aggregate would not have a Material Adverse Effect; and each Significant
Subsidiary (as such term is defined in Rule 405 under the Act) has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation and each subsidiary of
the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, except where failure to be duly incorporated, validly
existing and in good standing would not, individually or in the aggregate,
have a Material Adverse Effect;
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(g) All of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable; all of the issued shares of capital stock of each
Significant Subsidiary have been duly and validly authorized and issued,
are fully paid and non-assessable and (except as otherwise disclosed in the
Prospectus as amended or supplemented) are owned directly or indirectly by
the Company, free and clear of all material liens, encumbrances, equities
or claims; and all of the issued shares of capital stock of each subsidiary
of the Company have been duly and validly authorized and issued, are fully
paid and non-assessable and are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims
(except as otherwise disclosed in the Prospectus as amended or supplemented
or where, individually or in the aggregate, the failure to have been duly
and validly authorized and issued, to be fully paid and non-assessable and
to be owned directly or indirectly by the Company free and clear of liens,
encumbrances, equities or claims would not have a Material Adverse Effect);
(h) The Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by the
Indenture, dated as of December 15, 1994 (the "Indenture"), as supplemented
by the Fifth Supplemental Indenture (the "Supplemental Indenture"), between
the Company and State Street Bank and Trust Company (successor to The First
National Bank of Boston), as Trustee (the "Trustee"), under which the
Securities are to be issued; the Indenture has been duly authorized,
executed and delivered and duly qualified under the Trust Indenture Act;
the Indenture constitutes (and the Supplemental Indenture, when executed
and delivered by the Company and the Trustee, will constitute) a valid and
legally binding instrument, enforceable in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, and other laws of general applicability
relating to or affecting creditors' rights and to general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law; and the Securities and the Indenture will
conform to the descriptions thereof in the Prospectus as amended or
supplemented;
(i) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture, as
supplemented by the Supplemental Indenture, and this Agreement and the
consummation of the transactions herein and therein contemplated (other
than to the extent set forth in the Prospectus as amended or supplemented
under the caption "Description of the Notes--Certain Restrictive
Covenants--Change of Control") will not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, sale/leaseback agreement,
loan agreement or other similar financing agreement or instrument or other
agreement or instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, except for such conflicts, breaches, violations
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and defaults as individually or in the aggregate would not have a Material
Adverse Effect, nor will such action result in any material violation of
the provisions of the Certificate of Incorporation or By-laws of the
Company or any material statute, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of
its Significant Subsidiaries or any of their properties, nor will such
action result in any violation of the provisions of any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any of
their properties except for such violations as individually or in the
aggregate would not have a Material Adverse Effect; and no consent,
approval, authorization, order, registration or qualification of or with
any such court or governmental agency or body is required for the issue and
sale of the Securities or the consummation by the Company of the
transactions contemplated by this Agreement or the Indenture, as
supplemented by the Supplemental Indenture, except the registration of the
Securities under the Act, the Exchange Act and such as have been obtained
under the Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the
Securities by the Underwriters;
(j) Neither the Company nor any of its Significant Subsidiaries (i)
is in violation of its certificate of incorporation or by-laws (or
comparable governing documents), (ii) is in default, and no event has
occurred which, with notice or lapse of time or both, would constitute such
a default, in the due performance or observance of any material obligation,
covenant or condition contained in any indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound, or (iii) is in
material violation of any material law, ordinance, governmental rule,
regulation or court decree to which it or its property is subject, or (iv)
has failed to obtain any material license, permit, certificate, franchise
or other governmental authorization or permit necessary to the ownership of
its property or to the conduct of its business; and none of the
subsidiaries of the Company (i) is in violation of its certificate of
incorporation or by-laws (or comparable governing documents), (ii) is in
default, and no event has occurred which, with notice or lapse of time or
both, would constitute such a default, in the due performance or observance
of any obligation, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its properties
may be bound, or (iii) is in violation of any law, ordinance, governmental
rule, regulation or court decree to which it or its property is subject, or
(iv) has failed to obtain any license, permit, certificate, franchise or
other governmental authorization or permit necessary to the ownership of
its property or to the conduct of its business, except for such violations,
defaults and failures as individually or in the aggregate would not have a
Material Adverse Effect;
(k) The statements set forth in the Prospectus as amended or
supplemented under the captions "Description of Debt Securities" and
"Description of the Notes", insofar as they purport to constitute a summary
of the terms of the Securities, and under the captions "Plan of
Distribution" and "Underwriting", insofar as they purport to describe the
provisions of the laws and documents referred to therein, present fair and
accurate summaries of such terms and fair and accurate descriptions of such
provisions, respectively.
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(l) Other than as set forth in the Prospectus as amended or
supplemented, there are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect; and, to
the best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(m) The Company is not and, after giving effect to the offering and
sale of the Securities, will not be 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 (the "Investment Company Act");
(n) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes; and
(o) KPMG Peat Marwick LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price of 98.265% of the principal amount thereof, plus accrued
interest, if any, from October 6, 1995 to the Time of Delivery hereunder, the
principal amount of Securities set forth opposite the name of such Underwriter
in Schedule I hereto.
3. Upon the authorization by the Underwriters of the release of the
Securities, the several Underwriters propose to offer the Securities for sale
upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
4. (a) The Securities to be purchased by each Underwriter hereunder
will be represented by one or more definitive global securities in book-entry
form which will be deposited by or on behalf of the Company with The Depository
Trust Company ("DTC") or its designated custodian. The Company will deliver the
Securities to Goldman, Sachs & Co., for the account of each Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor in
Federal (same-day) funds by wire transfer to an account designated by the
Company for such purpose, by causing DTC to credit the Securities to the account
of Goldman, Sachs & Co. at DTC. The Company will cause the certificates
representing the Securities to be made available to Goldman, Sachs & Co. for
checking at least twenty-four hours prior to the Time of Delivery (as defined
below) at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be 9:30 a.m.,
New York City time, on October 6, 1995 or such other time and date as Goldman,
Sachs & Co. and the Company may agree upon in writing. Such time and date are
herein called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the cross-
receipt for the Securities and any additional documents requested by the
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Underwriters pursuant to Section 7(j) hereof, will be delivered at the offices
of Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York 10017
(the "Closing Location"), and the Securities will be delivered at the Designated
Office, all at the Time of Delivery. A meeting will be held at the Closing
Location at 2:00 p.m., New York City time, on the New York Business Day next
preceding the Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For purposes of this Section 4, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus as amended or supplemented in a form
approved by the Underwriters and to file such Prospectus pursuant to Rule
424(b) under the Act not later than the Commission's close of business on
the second business day following the execution and delivery of this
Agreement or, if applicable, such earlier time as may be required by Rule
424(b); to make no further amendment or any supplement to the Registration
Statement or Prospectus after the date of this Agreement and prior to the
Time of Delivery for which shall be disapproved by the Underwriters
promptly after reasonable notice thereof; to advise the Underwriters
promptly of such amendment or supplement after such Time of Delivery and
furnish the Underwriters with copies thereof; to file promptly all reports
and any definitive proxy or information statements required to be filed by
the Company with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Securities, and
during such same period to advise the Underwriters promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed with the Commission, of
the issuance by the Commission of any stop order or of any order preventing
or suspending the use of any prospectus relating to the Securities, of the
suspension of the qualification of the Securities for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any such stop order or of
any such order preventing or suspending the use of any prospectus relating
to the Securities or suspending any such qualification, to promptly use its
best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Underwriters may reasonably request to qualify the Securities for offering
and sale under the securities laws of such jurisdictions as the
Underwriters may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as long
as may be necessary to complete the distribution of the Securities,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation, to file a general consent to service of
process in any jurisdiction or to take any action that would subject it to
general taxation in any jurisdiction;
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(c) Prior to 10:00 a.m., New York City time, on the business day next
succeeding the date of this Agreement and from time to time thereafter, to
furnish the Underwriters with copies of the Prospectus as amended or
supplemented in such quantities in New York City as the Underwriters may
reasonably request, and, if the delivery of a prospectus is required at any
time prior to the expiration of nine months after the time of issue of the
Prospectus in connection with the offering or sale of the Securities and if
at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in light of the circumstances
under which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary during such
same period to amend or supplement such Prospectus or to file under the
Exchange Act any document incorporated by reference in such Prospectus in
order to comply with the Act, the Exchange Act or the Trust Indenture Act,
to notify the Underwriters and, upon your request and subject to your
approval, to file such document and to prepare and furnish without charge
to each Underwriter and to any dealer in securities as many copies as the
Underwriters may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance; and in case any
Underwriter is required to deliver a prospectus in connection with sales of
any of the Securities at any time nine months or more after the time of
issue of the Prospectus, upon request of such Underwriter but at the
expense of such Underwriter, to prepare and deliver to such Underwriter as
many copies as such Underwriter may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 9(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158, in which case this Section 5(d) shall not
be construed to require the Company to file any report referred to in Rule
158 prior to the time at which such report is otherwise due);
(e) During the period beginning from the date hereof and continuing
to and including the later of the Time of Delivery and such earlier time as
the Underwriters may notify the Company, not to offer, sell, contract to
sell or otherwise dispose of, except as provided hereunder, any securities
of the Company that are substantially similar to the Securities;
(f) For so long as Securities are in global form, to furnish to the
holders of the Securities as soon as practicable after the end of each
fiscal year an annual report (including a balance sheet and statements of
income, shareholders' equity and cash flows of the Company and its
consolidated subsidiaries certified by independent public accountants) and,
as soon as practicable after the end of each of the first three quarters of
each fiscal year (beginning with the fiscal quarter ending after the
effective date of the Registration Statement), consolidated summary
financial information of the Company and its subsidiaries for such quarter
in reasonable detail; and to furnish to the holders of the Securities all
other documents specified in Section 7.04 of the Indenture, all in the
manner so specified;
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(g) During a period of three years from the effective date of the
Registration Statement, to furnish to the Underwriters copies of all
reports or other communications (financial or other) furnished to the
Company's stockholders generally, and to deliver to the Underwriters (i) as
soon as they are available, (A) copies of any reports and financial
statements furnished to or filed with the Commission or any national
securities exchange on which the Securities or any class of securities of
the Company is listed and (B) the documents specified in Section 7.04 of
the Indenture, as in effect at the Time of Delivery, and (ii) such
additional information concerning the business and financial condition of
the Company as the Underwriters may from time to time reasonably request,
provided that any material nonpublic information received by the
Underwriters will be held in confidence and not used in violation of any
applicable law (such financial statements to be on a consolidated basis to
the extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its shareholders generally or to the
Commission);
(h) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the
Prospectus as amended or supplemented under the caption "Use of Proceeds";
and
(i) To use its best efforts to list the Securities, subject to
official notice of issuance, on the New York Stock Exchange.
6. The Company covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of producing any
Agreement among Underwriters, this Agreement, the Indenture, the Blue Sky and
Legal Investment Memoranda, closing documents (including any compilations
thereof) and any other documents in connection with the offering, purchase, sale
and delivery of the Securities; (iii) all expenses in connection with the
qualification of the Securities for offering and sale under state securities
laws as provided in Section 5(b) hereof, including the fees and disbursements of
counsel for the Underwriters (not to exceed $15,000 in the aggregate) in
connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (iv) any fees charged by securities rating services for
rating the Securities; (v) the filing fees incident to, and fees and the
disbursements of counsel for the Underwriters in connection with, any required
review by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Securities; (vi) the cost of preparing the Securities; (vii) the
fees and expenses of the Trustee and any agent of the Trustee and the fees and
disbursements of counsel for the Trustee in connection with the Indenture and
the Securities; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 7 and 9 hereof, the Underwriters will pay
all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
9
<PAGE>
7. The obligations of the Underwriters to purchase the Securities
hereunder shall be subject in the sole discretion of the Underwriters to the
condition that all representations and warranties and other statements of the
Company herein are, at and as of the Time of Delivery, true and correct, the
condition that the Company shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented, shall have been filed
with the Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by the rules and regulations under the
Act and in accordance with Section 5(a) hereof and the Indenture shall have
been qualified under the Trust Indenture Act; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information
on the part of the Commission shall have been complied with to the
reasonable satisfaction of the Underwriters;
(b) Simpson Thacher & Bartlett, counsel for the Underwriters, shall
have furnished to the Underwriters a written opinion, dated the Time of
Delivery, in substantially the form attached hereto as Annex II;
(c) The General Counsel or Deputy General Counsel of the Company
shall have furnished to the Underwriters his written opinion, dated the
Time of Delivery, in substantially the form attached hereto as Annex III;
(d) Jones, Day, Reavis & Pogue, counsel for the Company, shall have
furnished to the Underwriters a written opinion, dated the Time of
Delivery, in substantially the form attached hereto as Annex IV;
(e) On the date hereof at a time prior to the execution of this
Agreement, and at 9:30 a.m., New York City time, on the effective date of
any post-effective amendment to the Registration Statement filed subsequent
to the date of this Agreement, KPMG Peat Marwick LLP and Price Waterhouse
LLP shall have each furnished to the Underwriters a letter, dated the date
of delivery thereof, in form and substance satisfactory to the
Underwriters, and KPMG Peat Marwick LLP and Price Waterhouse LLP shall have
each furnished to the Underwriters a "bring-down" letter, dated the Time of
Delivery, in form and substance satisfactory to the Underwriters (the
executed copies of the letters delivered prior to the execution of this
Agreement are attached hereto as Annex I(a) and Annex II(b), respectively,
and draft forms of the letters to be delivered on the effective date of any
post-effective amendment to the Registration Statement and as of the Time
of Delivery are attached hereto as Annex I(b) and Annex II(b),
respectively);
(f)(i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as first amended or
supplemented any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus as first
amended or supplemented, and (ii) since the respective dates as of which
information is given in the Prospectus as first amended or supplemented
10
<PAGE>
there shall not have been any change in the capital stock or long-term debt
of the Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth
or contemplated in the Prospectus as first amended or supplemented, the
effect of which, in any such case described in clause (i) or (ii), is in
the judgment of the Underwriters so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities on the terms and in the manner contemplated in
the Prospectus as first amended or supplemented;
(g) On or after the date hereof, (i) no downgrading shall have
occurred in the
rating accorded the Company's debt securities by any "nationally recognized
statistical rating organization", as that term is defined by the Commission
for purposes of Rule 436(g)(2) under the Act, and (ii) no such organization
shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any of the Company's
debt securities;
(h) On or after the date hereof, there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension or
material limitation in trading in the Company's securities on the New York
Stock Exchange; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities; or (iv) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the
effect of any such event specified in this clause (iv) in the judgment of
the Underwriters makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Securities on the terms and in the
manner contemplated in the Prospectus as first amended or supplemented; or
(v) the occurrence of any material adverse change in the existing
financial, political or economic conditions in the United States or
elsewhere which, in the judgment of the Underwriters, would materially and
adversely affect the financial markets or the market for the Securities and
other debt securities;
(i) The Securities shall have been approved for listing, subject to
official notice of issuance, on the New York Stock Exchange; and
(j) The Company shall have furnished or caused to be furnished to the
Underwriters at the Time of Delivery certificates of officers of the
Company satisfactory to the Underwriters as to the accuracy of the
representations and warranties of the Company herein at and as of such Time
of Delivery, as to the performance by the Company of all of its obligations
hereunder to be performed at or prior to such Time of Delivery, as to the
matters set forth in subsections (a) and (f) of this Section and as to such
other matters as the Underwriters may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
11
<PAGE>
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement or
the Prospectus as amended or supplemented, or any such amendment or supplement
thereto in reliance upon and in conformity with written information furnished to
the Company by any Underwriter through Goldman, Sachs & Co. expressly for use
therein.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement or the Prospectus as amended or supplemented, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement or
the Prospectus as amended or supplemented, or any such amendment or supplement
thereto in reliance upon and in conformity with written information furnished to
the Company by such Underwriter through Goldman, Sachs & Co. expressly for use
therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
12
<PAGE>
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) 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 from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), 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 shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company 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. The relative fault
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 on the
one hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this subsection (d) 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 which does not
take account of the equitable considerations referred to above in this
subsection (e). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (e) shall be deemed to include 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 subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered 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 in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
13
<PAGE>
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company (including any
person who, with his or her consent, is named in the Registration Statement as
about to become a director of the Company) and to each person, if any, who
controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Securities which it has agreed to purchase hereunder, the
Underwriters may in their discretion arrange for the Underwriters or another
party or other parties to purchase such Securities on the terms contained
herein. If within thirty-six hours after such default by any Underwriter the
Underwriters do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to the Underwriters to
purchase such Securities on such terms. In the event that, within the
respective prescribed periods, the Underwriters notify the Company that they
have so arranged for the purchase of such Securities, or the Company notifies
the Underwriters that it has so arranged for the purchase of such Securities,
the Underwriters or the Company shall have the right to postpone the Time of
Delivery for a period of not more than seven days in order to effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus as amended or supplemented or in any other documents or arrangements,
and the Company agrees to file promptly any amendments or supplements to the
Registration Statement or the Prospectus which in the opinion of the
Underwriters may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by the Underwriters
and the Company as provided in subsection (a) above, the aggregate principal
amount of such Securities which remains unpurchased does not exceed one-eleventh
of the aggregate principal amount of all the Securities, then the Company shall
have the right to require each non-defaulting Underwriter to purchase the
principal amount of Securities which such Underwriter agreed to purchase
hereunder and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the principal amount of Securities which
such Underwriter agreed to purchase hereunder) of the Securities of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by the Underwriters
and the Company as provided in subsection (a) above, the aggregate principal
amount of Securities which remains unpurchased exceeds one-eleventh of the
aggregate principal amount of all the Securities, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Securities of a defaulting Underwriter or Underwriters,
then this Agreement shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter or the Company, except for the expenses to be
14
<PAGE>
borne by the Company and the Underwriters as provided in Section 6 hereof and
the indemnity and contribution agreements in Section 8 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters for all out-of-pocket expenses,
including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Securities, but the Company shall then be under no further liability to any
Underwriter except as provided in Sections 6 and 8 hereof.
12. All statements, requests, notices, and agreements hereunder shall
be in writing, and if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to the Underwriters in care of Goldman, Sachs &
Co., 85 Broad Street, New York, New York 10004, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Chief Financial Officer and Attention:
Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by the Underwriters upon request. Any such statements,
requests, notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Securities from any Underwriter shall be deemed a successor or assign
by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
15
<PAGE>
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us seven counterparts hereof, and upon the acceptance hereof by
the Underwriters, this letter and such acceptance hereof shall constitute a
binding agreement among each of the Underwriters and the Company.
Very truly yours,
FEDERATED DEPARTMENT STORES, INC.
By:
---------------------
Name:
Title:
Accepted as of the date hereof:
GOLDMAN, SACHS & CO.,
CS FIRST BOSTON CORPORATION,
LEHMAN BROTHERS INC. and
CITICORP SECURITIES, INC.
By:
-----------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
16
<PAGE>
SCHEDULE I
Principal Amount of
Securities
to be Purchased
Goldman, Sachs & Co. . . . . . . . . . . $200,000,000
CS First Boston Corporation . . . . . . . . 100,000,000
Lehman Brothers Inc. . . . . . . . . . . . 60,000,000
Citicorp Securities, Inc. . . . . . . . . . 40,000,000
----------
Total . . . . . . . . . . . . . . . $400,000,000
===========
17
<PAGE>
ANNEX I(a)
[Attach executed copy of initial comfort letter]
<PAGE>
ANNEX I(b)
[Attach executed copy of initial comfort letter]
<PAGE>
ANNEX II(a)
[Attach form of bring-down comfort letter]
<PAGE>
ANNEX II(b)
[Attach form of bring-down comfort letter]
<PAGE>
ANNEX III
GOLDMAN, SACHS & CO., OCTOBER __, 1995
CS FIRST BOSTON CORPORATION,
LEHMAN BROTHERS INC. and
CITICORP SECURITIES, INC.,
c/o Goldman, Sachs & Co.,
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
We have acted as your counsel in connection with the
purchase by you of $400,000,000 aggregate principal amount of
8.125% Senior Notes due 2002 (the "Notes") of Federated
Department Stores, Inc., a Delaware corporation (the
"Company"), pursuant to the Underwriting Agreement dated
October 3, 1995 between you and the Company .
We have examined the Registration Statement on Form
S-3 (File No. 33-59691) filed by the Company under the
Securities Act of 1933, as amended (the "Act"), as it became
effective under the Act (the "Registration Statement"); and
the Company's prospectus dated June 28, 1995, as supplemented
by the prospectus supplement dated October 3, 1995 (the
"Prospectus"), filed by the Company pursuant to Rule 424(b) of
the rules and regulations of the Securities and Exchange
Commission (the "Commission") under the Act, which pursuant to
Form S-3 incorporates by reference the Annual Report on Form
10-K of the Company for the fiscal year ended January 28,
1995, the Quarterly Reports on Form 10-Q of the Company for
the fiscal quarters ended April 29 and July 30, 1995, the
Current Reports on Form 8-K of the Company dated September 21,
September 22, September 26, September 27 and October _, 1995
(the "Exchange Act Documents"), each as filed under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"); and the Indenture dated as of December 15, 1994, (as
supplemented by the Fifth Supplemental Indenture dated as of
October __, 1995, the "Indenture") between the Company and
State Street Bank and Trust Company (successor to First
National Bank of Boston), as Trustee (the "Trustee") relating
to the Notes. In addition, we have examined, and have relied
as to matters of fact upon, the documents delivered to you at
the closing, and upon originals or copies, certified or
otherwise identified to our satisfaction, of such corporate
records, agreements, documents and other instruments and such
certificates or comparable documents of public officials and
of officers and representatives of the Company, and have made
such other and further investigations, as we have deemed
relevant and necessary as a basis for the opinions hereinafter
set forth.
In such examination, we have assumed the genuineness
of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents
submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents.
III-1
<PAGE>
Goldman, Sachs & Co. October __, 1995
Based upon the foregoing, and subject to the
qualifications and limitations stated herein, we are of the
opinion that:
1. The Company has been duly incorporated and is
validly existing and in good standing as a corporation
under the laws of the State of Delaware.
2. The Indenture has been duly authorized, executed
and delivered by the Company and duly qualified under the
Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and, assuming due authorization,
execution and delivery thereof by the Trustee,
constitutes a valid and legally binding instrument of the
Company enforceable against the Company in accordance
with its terms.
3. The Notes have been duly authorized, executed and
issued by the Company and, assuming due authentication
thereof by the Trustee and upon payment and delivery in
accordance with the Underwriting Agreement, will
constitute valid and legally binding obligations of the
Company enforceable against the Company in accordance
with their terms and entitled to the benefits of the
Indenture.
4. The statements made in the Prospectus under the
captions "Description of Debt Securities" and
"Description of the Notes," insofar as they purport to
constitute summaries of certain terms of documents
referred to therein, constitute accurate summaries of the
terms of such documents in all material respects.
5. The Underwriting Agreement has been duly
authorized, executed and delivered by the Company.
Our opinions set forth in paragraphs 2 and 3 above
are subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing.
All legal proceedings taken by the Company in
connection with the offering of the Notes and the legal
opinions, dated the date hereof, rendered to you by Dennis J.
Broderick, General Counsel of the Company, and Jones, Day,
Reavis & Pogue, counsel for the Company, pursuant to the
Underwriting Agreement, are in form satisfactory to us.
We have not independently verified the accuracy,
completeness or fairness of the statements made or included in
the Registration Statement, the Prospectus or the Exchange Act
Documents and take no responsibility therefor, except as and
to the extent set forth in paragraph 4 above. In the course of
the preparation by the Company of the Registration Statement
and the Prospectus Supplement (excluding the Exchange Act
III-2
<PAGE>
Goldman, Sachs & Co. October __, 1995
Documents), we participated in conferences with certain
officers and employees of the Company, with representatives of
KPMG Peat Marwick LLP and Price Waterhouse LLP and with
counsel to the Company. We did not participate in the
preparation of the Exchange Act Documents. Based upon our
examination of the Registration Statement, the Prospectus and
the Exchange Act Documents, our investigations made in
connection with the preparation of the Registration Statement
and the Prospectus Supplement (excluding the Exchange Act
Documents) and our participation in the conferences referred
to above, (i) we are of the opinion that the Registration
Statement, as of its effective date, and the Prospectus, as of
October 3, 1995, complied as to form in all material respects
with the requirements of the Act, the Trust Indenture Act and
the applicable rules and regulations of the Commission
thereunder and that the Exchange Act Documents complied as to
form when filed in all material respects with the requirements
of the Exchange Act and the applicable rules and regulations
of the Commission thereunder, except that in each case we
express no opinion with respect to the financial statements or
other financial data contained or incorporated by reference in
the Registration Statement, the Prospectus or the Exchange Act
Documents, and (ii) we have no reason to believe that the
Registration Statement , as of its effective date (including
the Exchange Act Documents on file with the Commission on such
effective date), contained any untrue statement of a material
fact or omitted to state any material fact required to be
stated therein or necessary in order to make the statements
therein not misleading or that the Prospectus (including the
Exchange Act Documents) as of its date and as of the date
hereof contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading, except that in
each case we express no belief with respect to the financial
statements or other financial data contained or incorporated
by reference in the Registration Statement, the Prospectus or
the Exchange Act Documents.
We are members of the Bar of the State of New York
and we do not express any opinion herein concerning any law
other than the law of the State of New York, the federal law
of the United States and the Delaware General Corporation Law.
This opinion is rendered to you in connection with
the above described transactions. This opinion may not be
relied upon by you for any other purpose, or relied upon by,
or furnished to, any other person, firm or corporation without
our prior written consent.
Very truly yours,
SIMPSON THACHER & BARTLETT
III-3
<PAGE>
ANNEX IV
October __, 1995
Goldman, Sachs & Co.,
CS First Boston Corporation,
Lehman Brothers Inc. and
Citicorp Securities, Inc.,
c/o Goldman, Sachs & Co.,
85 Broad Street
New York, New York 10004
Re: $400,000,000 Aggregate Principal Amount of 8.125% Senior
Notes due 2002 of Federated Department Stores, Inc.
--------------------------------------------------------
Ladies and Gentlemen:
As General Counsel of Federated Department Stores,
Inc. (the "Company"), I have acted as counsel for the Company
in connection with the sale of $400,000,000 aggregate
principal amount of the Company's 8.125% Senior Notes due 2002
(the "Notes") pursuant to the Underwriting Agreement, dated
October 3, 1995 (the "Underwriting Agreement"), between you
and the Company. This opinion is furnished to you pursuant to
Section 7(c) of the Underwriting Agreement. Except as
otherwise defined herein, terms used herein with initial
capital letters are so used with the respective meanings
ascribed thereto in the Underwriting Agreement.
I have examined such documents, records and matters
of law as I have deemed necessary for purposes of this
opinion. Based thereupon, I am of the opinion that:
1. The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with corporate power and
authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented prior
to the date hereof;
2. All of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and
are fully paid and non-assessable;
3. The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it
is required to be so qualified, except for such failures to be
so qualified and in good standing as individually or in the
aggregate would not have a Material Adverse Effect;
IV-1
<PAGE>
Goldman, Sachs & Co. October __, 1995
4. Each Significant Subsidiary of the Company has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of its
jurisdiction of incorporation; all of the issued shares of
capital stock of each such Significant Subsidiary have been
duly and validly authorized and issued, are fully paid and
non-assessable, and (except as otherwise disclosed in the
Prospectus as amended or supplemented prior to the date
hereof) are owned directly or indirectly by the Company, free
and clear of all material liens, encumbrances, equities or
claims; each subsidiary of the Company has been duly
incorporated as is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation,
except where the failure to be duly incorporated, validly
existing and in good standing would not, individually or in
the aggregate, have a material adverse effect on the Company
and its subsidiaries, taken as a whole; and all of the issued
shares of capital stock of each subsidiary of the Company have
been duly and validly authorized and issued, are fully paid
and non-assessable and are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities
or claims (except as otherwise disclosed in the Prospectus as
amended or supplemented prior to the date hereof or where,
individually or in the aggregate, the failure to have been
duly and validly authorized and issued, to be fully paid and
non-assessable or to be owned directly or indirectly by the
Company free and clear of liens, encumbrances, equities or
claims would not have a Material Adverse Effect);
5. To my knowledge, other than as disclosed in the
Prospectus as amended or supplemented prior to the date
hereof, there are no legal or governmental proceedings pending
to which the Company or any of its subsidiaries is a party or
of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, is reasonably likely
individually or in the aggregate to have a Material Adverse
Effect; and, to my knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others;
6. The issue and sale of the Securities and the
compliance by the Company with all of the provisions of the
Securities, the Indenture and the Underwriting Agreement and
the consummation of the transactions therein contemplated
(other than to the extent set forth in the Prospectus as
amended or supplemented prior to the date hereof under the
caption "Description of the Notes--Certain Restrictive
Covenants--Change of Control") will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, sale/leaseback agreement, loan
agreement or other financing agreement or any other agreement
or instrument known to me to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject,
except for such conflicts, breaches, violations and defaults
as individually or in the aggregate would not have a Material
Adverse Effect, nor will such action result in any material
violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or (a) any material
statute, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the
Company or any of its Significant Subsidiaries or any of their
properties or (b) any statute, order, rule or regulation of
any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their
properties, except, with respect to this clause (b) only, for
such violations, defaults and failures as individually or in
the aggregate would not have a Material Adverse Effect;
IV-2
<PAGE>
Goldman, Sachs & Co. October __, 1995
7. Neither the Company nor any of its Significant
Subsidiaries is (a) in violation of its certificate of
incorporation or by-laws (or comparable governing documents)
or (b) in default in the performance or observance of any
material obligation, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument known to me after due inquiry to
which it is a party or by which it or any of its properties
may be bound, and, to my knowledge after due inquiry, none of
the subsidiaries of the Company is (a) in material violation
of its certificate of incorporation or by-laws (or comparable
governing documents) or (b) in default in the performance or
observance of any material obligation, covenant or condition
contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument known to me
after due inquiry to which it is a party or by which it or any
of its properties may be bound, except for such violations and
defaults as individually or in the aggregate would not have a
Material Adverse Effect;
8. The Underwriting Agreement has been duly
authorized, executed and delivered by the Company;
9. The Securities have been duly authorized,
executed, authenticated, issued, and delivered and constitute
valid and legally binding obligations of the Company
enforceable against the Company in accordance with their terms
and entitled to the benefits provided by the Indenture, except
as the enforceability of the Securities and the Indenture may
be limited by bankruptcy, insolvency, reorganization, and
other laws of general applicability relating to or affecting
creditors' rights and to general principles of equity,
regardless of whether such enforceability is considered in a
proceeding in equity or at law; and the Securities and the
Indenture conform in all material respects to the descriptions
thereof in the Prospectus, as amended or supplemented prior to
the date hereof;
10. The Indenture has been duly authorized, executed
and delivered and constitutes a valid and legally binding
instrument, enforceable against the Company in accordance with
its terms, except as the enforceability of the Indenture may
be limited by bankruptcy, insolvency, reorganization, and
other laws of general applicability relating to or affecting
creditors' rights and to general principles of equity,
regardless of whether such enforceability is considered in a
proceeding in equity or at law; and the Indenture has been
duly qualified under the Trust Indenture Act;
11. No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale
of the Securities or the consummation by the Company of the
transactions contemplated by the Underwriting Agreement or the
Indenture, except such as have been obtained under the Act,
the Exchange Act, and the Trust Indenture Act, and such
consents, approvals, authorizations, registrations, or
qualifications as may be required under the state securities
or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
IV-3
<PAGE>
Goldman, Sachs & Co. October __, 1995
12. The statements set forth in the Prospectus, as
amended or supplemented prior to the date hereof, under the
captions "Description of Debt Securities" and "Description of
the Notes," and under the captions "Plan of Distribution" and
"Underwriting," insofar as they purport to summarize the
provisions of the laws and documents referred to therein,
present fair summaries of such provisions;
13. 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;
14. The documents incorporated by reference in the
Prospectus or any amendment or supplement thereto made by the
Company prior to the date hereof (other than the financial
statements and related schedules and other financial or
statistical data contained therein, as to which I express no
opinion), when they were filed with the Commission, complied
as to form in all material respects with the requirements of
the Exchange Act and the rules and regulations of the
Commission thereunder; and I have no reason to believe that
any of the documents referred to in this paragraph 14, when
such documents were so filed, contained an 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 when such documents
were so filed, not misleading. However, I have not
independently verified, and I assume no responsibility for the
accuracy, completeness or fairness of the Registration
Statement or the Prospectus, as amended or supplemented
(including any documents incorporated by reference therein),
except to the extent of the opinion expressed in paragraph
12); and
15. The Registration Statement and the Prospectus and
any amendments and supplements thereto made by the Company
prior to the Time of Delivery (other than the financial
statements and related schedules and other financial or
statistical data therein, as to which I express no opinion)
comply as to form in all material respects with the
requirements of the Act and the Trust Indenture Act and the
rules and regulations thereunder; and I do not know of any
amendment to the Registration Statement required to be filed
or of any contract or other document of a character required
to be filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the Prospectus
or required to be described in the Registration Statement or
the Prospectus which are not filed or incorporated by
reference or described as required.
In rendering the opinions in paragraphs 9 through 15
hereof, I have relied solely on the opinion of Jones, Day,
Reavis & Pogue furnished to you pursuant to Section [8(d)] of
the Underwriting Agreement.
In rendering this opinion, I have assumed that (i)
the signatures on all documents examined by me are genuine and
that, where any such signature purports to have been made in a
corporate, governmental, fiduciary or other capacity, the
person who affixed such signature to such document had
authority to do so and (ii) the statements and certificates
described in the following paragraph are accurate in all
material respects at the date of this opinion.
IV-4
<PAGE>
Goldman, Sachs & Co. October __, 1995
I am a member of the bar of the State of Ohio, and
have not been admitted to the bar of any other jurisdiction.
In rendering the opinions set forth herein, my examination of
matters of law has been limited to the federal laws of the
United States of America, the corporation laws of the States
of Delaware and Ohio, and the laws of the State of New York.
In rendering the opinions in paragraphs 1-13 and paragraph 15,
I have relied, as to certain matters of fact, without any
independent investigation, inquiry or verification, upon
statements or certificates of representatives of the Company
and of the Trustee under the Indenture and upon statements or
certificates of public officials.
This opinion is furnished by me, as General Counsel
of the Company, to you solely for your benefit and solely with
respect to the purchase by you of the Notes from the Company,
upon the understanding that I am not assuming hereby any
professional responsibility to any other person whatsoever.
Very truly yours,
Dennis J. Broderick
IV-5
<PAGE>
Annex V
October __, 1995
Goldman, Sachs & Co.,
CS First Boston Corporation,
Lehman Brothers Inc. and
Citicorp Securities, Inc.,
c/o Goldman, Sachs & Co.,
85 Broad Street
New York, New York 10004
Re: $400,000,000 Aggregate Principal Amount of 8.125% Senior
Notes due 2002 of Federated Department Stores, Inc.
-------------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel for Federated Department
Stores, Inc. (the "Company") in connection with the sale of
$400,000,000 aggregate principal amount of the Company's
8.125% Senior Notes due 2002 (the "Notes") pursuant to the
Underwriting Agreement, dated October 3, 1995 (the
"Underwriting Agreement"), between you and the Company. This
opinion is furnished to you pursuant to Section 7(d) of the
Underwriting Agreement. Except as otherwise defined herein,
terms used herein with initial capital letters are so used
with the respective meanings ascribed thereto in the
Underwriting Agreement.
We have examined such documents, records, and matters
of law as we have deemed necessary for purposes of this
opinion. Based thereupon, we are of the opinion that:
1. The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with corporate power and
authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented prior
to the date hereof;
2. The Underwriting Agreement has been duly
authorized, executed, and delivered by the Company;
3. The Securities have been duly authorized,
executed, authenticated, issued, and delivered and constitute
valid and legally binding obligations of the Company
enforceable against the Company in accordance with their terms
and entitled to the benefits provided by the Indenture, except
as the enforceability of the Securities and the Indenture may
be limited by bankruptcy, insolvency, reorganization, and
other laws of general applicability relating to or affecting
creditors' rights and to general principles of equity,
regardless of whether such enforceability is considered in a
proceeding in equity or at law; and the Securities and the
Indenture conform in all material respects to the descriptions
thereof in the Prospectus as amended or supplemented prior to
the date hereof;
V-1
<PAGE>
Goldman, Sachs & Co. October __, 1995
4. The Indenture has been duly authorized, executed,
and delivered and constitutes a valid and legally binding
instrument, enforceable against the Company in accordance with
its terms, except as the enforceability of the Indenture may
be limited by bankruptcy, insolvency, reorganization, and
other laws of general applicability relating to or affecting
creditors' rights and to general principles of equity,
regardless of whether such enforceability is considered in a
proceeding in equity or at law; and the Indenture has been
duly qualified under the Trust Indenture Act;
5. No consent, approval, authorization, order,
registration, or qualification of or with any such court or
governmental agency or body is required for the issue and sale
of the Securities or the consummation by the Company of the
transactions contemplated by the Underwriting Agreement or the
Indenture, except such as have been obtained under the Act,
the Exchange Act, and the Trust Indenture Act, and such
consents, approvals, authorizations, registrations, or
qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution
of the Securities by the Underwriters;
6. The statements set forth in the Prospectus as
amended or supplemented prior to the date hereof under the
captions "Description of Debt Securities" and "Description of
the Notes," and under the captions "Plan of Distribution" and
"Underwriting," insofar as they purport to summarize the
provisions of the laws and documents referred to therein,
present fair summaries of such provisions;
7. 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;
8. The documents incorporated by reference in the
Prospectus or any amendment or supplement thereto made by the
Company prior to the date hereof (other than the financial
statements and related schedules and other financial or
statistical data contained therein, as to which we express no
opinion), when they were filed with the Commission, complied
as to form in all material respects with the requirements of
the Exchange Act and the rules and regulations of the
Commission thereunder; and
9. The Registration Statement and the Prospectus and
any amendments and supplements thereto made by the Company
prior to the date hereof (other than the financial statements
and related schedules and other financial or statistical data
therein, as to which we express no opinion) comply as to form
in all material respects with the requirements of the Act and
the Trust Indenture Act and the rules and regulations
thereunder; and we do not know of any amendment to the
Registration Statement required to be filed or of any
contracts or other documents of a character required to be
filed as an exhibit to the Registration Statement or required
to be incorporated by reference into the Prospectus or
required to be described in the Registration Statement or the
Prospectus which are not filed or incorporated by reference or
described as required.
V-2
<PAGE>
Goldman, Sachs & Co. October __, 1995
We have participated in the preparation of the
Registration Statement and the Prospectus (but not the
documents incorporated into the Registration Statement or the
Prospectus by reference) and, based on such participation, no
facts have come to our attention which cause us to believe
that, as of its effective date, the Registration Statement or
any amendment thereto made by the Company prior to the date
hereof (other than the financial statements and related
schedules and other financial data contained therein, as to
which we express no belief) 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, as of its date, the Prospectus or any
amendment or supplement thereto made by the Company prior to
the date hereof (other than the financial statements and
related schedules and other financial data contained therein,
as to which we express no belief) contained an untrue
statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading
or that, as of the date hereof, either the Registration
Statement or the Prospectus or any amendment or supplement
thereto made by the Company prior to the date hereof (other
than the financial statements and related schedules and other
financial data contained therein, as to which we express no
belief) contains an untrue statement of a material fact or
omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading. However, we have not
independently verified, and we assume no responsibility for,
the accuracy, completeness, or fairness of the Registration
Statement or the Prospectus as amended or supplemented
(including any documents incorporated or deemed to be
incorporated by reference therein) except to the extent of the
opinion expressed in paragraph 6.
In rendering the foregoing opinions, we have assumed
(i) the due authorization, execution, and delivery of the
Underwriting Agreement by or on behalf of the Underwriters,
(ii) that the signature on all documents examined by us are
genuine and that where any such signature purports to have
been made in a corporate, governmental, fiduciary, or other
capacity, the person who affixed such signature to such
document had authority to do so, and (iii) that the statements
and certificates described in the following paragraph are
accurate in all material respects at the date of this opinion.
In rendering the opinions in paragraphs 1 through 9,
(i) our examination of matters of law has been limited to the
federal laws of the United States of America, the laws of the
State of New York, and the General Corporation Law of the
State of Delaware and (ii) we have relied, as to certain
matters of fact, without any independent investigation,
inquiry, or verification, upon statements or certificates of
representatives of the Company and of the Trustee under the
Indenture and upon statements or certificates of public
officials.
V-3
<PAGE>
Goldman, Sachs & Co. October __, 1995
This opinion is furnished by us, as counsel for the
Company, to you solely for your benefit and solely with
respect to the purchase by you of the Notes from the Company,
upon the understanding that we are not assuming hereby any
professional responsibility to any other person whatsoever.
Very truly yours,
JONES, DAY, REAVIS & POGUE
V-4
Exhibit 4
================================================================================
FEDERATED DEPARTMENT STORES, INC.
and
STATE STREET BANK AND TRUST COMPANY
(successor to The First National Bank of Boston),
Trustee
FIFTH SUPPLEMENTAL TRUST INDENTURE
Dated as of October 6, 1995
Supplementing that certain
INDENTURE
Dated as of December 15, 1994
Authorizing the Issuance and Delivery of
Senior Securities
consisting of $400,000,000 aggregate principal amount of
8.125% Senior Notes due 2002
================================================================================
<PAGE>
Table of Contents
Page
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
[Form of Face of Security] . . . . . . . . . . . . . . . . . . . . . . 2
[Form of Reverse of Security] . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE I. ISSUANCE OF SENIOR NOTES. . . . . . . . . . . . . . . . . . 6
Section 1.1. Issuance of Senior Notes; Principal Amount;
Maturity. . . . . . . . . . . . . . . . . . . . . 6
Section 1.2. Interest on the Senior Notes; Payment of Interest. . 7
ARTICLE II. CERTAIN DEFINITIONS. . . . . . . . . . . . . . . . . . . . 8
Section 2.1. Certain Definitions. . . . . . . . . . . . . . . . . 8
ARTICLE III. CERTAIN COVENANTS. . . . . . . . . . . . . . . . . . . . . 17
Section 3.1. Indebtedness. . . . . . . . . . . . . . . . . . . . 17
Section 3.2. Liens. . . . . . . . . . . . . . . . . . . . . . . . 18
Section 3.3. Restricted Payments. . . . . . . . . . . . . . . . . 18
Section 3.4. Change of Control. . . . . . . . . . . . . . . . . . 19
Section 3.5. Payment Restrictions Affecting Restricted
Subsidiaries. . . . . . . . . . . . . . . . . . . 20
Section 3.6. Issuance of Subsidiary Preferred Stock. . . . . . . 20
Section 3.7. Asset Sales. . . . . . . . . . . . . . . . . . . . . 20
Section 3.8. Transactions with Affiliates. . . . . . . . . . . . 22
Section 3.9. Sale and Leaseback Transactions. . . . . . . . . . . 22
Section 3.10. Merger and Certain Other Transactions. . . . . . . 22
Section 3.11. Permitting Unrestricted Subsidiaries to Become
Restricted Subsidiaries. . . . . . . . . . . . 22
Section 3.12. Payment Office. . . . . . . . . . . . . . . . . . . 23
ARTICLE IV. ADDITIONAL EVENTS OF DEFAULT. . . . . . . . . . . . . . . . 23
Section 4.1. Additional Events of Default. . . . . . . . . . . . 23
ARTICLE V. DEFEASANCE. . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 5.1. Applicability of Article V of the Indenture. . . . . 24
ARTICLE VI. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.1. Reference to and Effect on the Indenture. . . . . . 24
Section 6.2. Waiver of Certain Covenants. . . . . . . . . . . . . 25
Section 6.3. Supplemental Indenture May be Executed In
Counterparts. . . . . . . . . . . . . . . . . . . 25
Section 6.4. Effect of Headings. . . . . . . . . . . . . . . . . 26
<PAGE>
FIFTH SUPPLEMENTAL INDENTURE, dated as of October 6, 1995,
between Federated Department Stores, Inc., a corporation duly organized and
existing under the laws of the State of Delaware (the "Company"), and State
Street Bank and Trust Company (successor to The First National Bank of
Boston), a trust company organized under the laws of the Commonwealth of
Massachusetts, as Trustee (the "Trustee"), supplementing that certain
Indenture, dated as of December 15, 1994, between the Company and the
Trustee (the "Indenture").
RECITALS
A. The Company has duly authorized the execution and delivery
of the Indenture to provide for the issuance from time to time of its
unsecured debentures, notes, or other evidences of indebtedness (the
"Securities") to be issued in one or more series as provided for in the
Indenture.
B. The Indenture provides that the Securities of each series
shall be in substantially the form set forth in the Indenture, or in such
other form as may be established by or pursuant to a Board Resolution or in
one or more indentures supplemental thereto, in each case with such
appropriate insertions, omissions, substitutions, and other variations as
are required or permitted by the Indenture, and may have such letters,
numbers, or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined to be
required by the officers executing such Securities, as evidenced by their
execution thereof.
C. The Company and the Trustee have agreed that the Company
shall issue and deliver, and the Trustee shall authenticate, Securities
denominated "8.125% Senior Notes due 2002" (the "Senior Notes") pursuant to
the terms of this Supplemental Indenture and substantially in the form set
forth below, in each case with such appropriate insertions, omissions,
substitutions, and other variations as are required or permitted by the
Indenture and this Supplemental Indenture, and with such letters, numbers,
or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities
exchange or as may, consistently herewith, be determined by the officers
executing such Securities, as evidenced by their execution of such
Securities.
<PAGE>
2
[Form of Face of Security]
This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee thereof. This Security may not be transferred to, or registered or
exchanged for Securities registered in the name of, any Person other than
the Depositary or a nominee thereof, and no such transfer may be
registered, except in the limited circumstances described in the Indenture.
Every Security authenticated and delivered upon registration of transfer
of, or in exchange for or in lieu of, this Security shall be a Global
Security subject to the foregoing, except in such limited circumstances.
FEDERATED DEPARTMENT STORES, INC.
8.125% SENIOR NOTE DUE 2002
No. R- ________ $________
FEDERATED DEPARTMENT STORES, INC., a corporation duly organized
and existing under the laws of the State of Delaware (hereinafter called
the "Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
Cede & Co., or registered assigns, the principal sum of $____________ on
October 15, 2002, and to pay interest thereon from October 6, 1995 or from
the most recent Interest Payment Date to which interest has been paid or
duly provided for, semiannually on April 15 and October 15 of each year,
commencing on April 15, 1996, at the rate of 8.125% per annum, until the
principal hereof is paid or made available for payment. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment
Date shall, as provided in said Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at
the close of business on the Regular Record Date for such interest, which
shall be the April 1 or October 1 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid or duly provided for shall forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to
the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest to be fixed by the Trustee,
notice whereof shall be given to Holders of Securities of this series not
less than 10 calendar days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements
of any securities exchange on which the Securities of this series may be
listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture.
Payment of the principal of and any such interest on this
Security shall be made at the office or agency of the Company maintained
for the purpose in New York, New York, in such coin or currency of the
United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that at the option
of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address appears in the
Security Register.
<PAGE>
3
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS SET FORTH ON
THE REVERSE HEREOF. SUCH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME
EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE.
This Security shall not be valid or become obligatory for any
purpose until the certificate of authentication herein has been signed
manually by the Trustee under said Indenture.
IN WITNESS WHEREOF, this instrument has been duly executed in
accordance with the Indenture.
FEDERATED DEPARTMENT STORES, INC.
Date Issued:__________ By:______________________________
Attest:
By:___________________
[Form of Reverse of Security]
FEDERATED DEPARTMENT STORES, INC.
This Security is one of a duly authorized issue of securities of
the Company (herein called the "Securities") issued and to be issued in one
or more series under an Indenture, dated as of December 15, 1994 (herein
called the "Indenture"), between the Company and State Street Bank and
Trust Company, as Trustee (herein called the "Trustee," which term includes
any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties, and immunities
thereunder of the Company, the Trustee, and the Holders of the Securities
and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated
on the face hereof, limited in aggregate principal amount to $400,000,000.
Upon the occurrence of a Change of Control prior to such time as
the Company shall have reached Investment Grade Status or, thereafter, upon
the occurrence of a Designated Event with respect to the Company and a
Rating Decline in connection therewith, the Company is required to offer to
purchase the Securities at a purchase price equal to 101% of the principal
amount thereof, together in the case of any such purchase with accrued and
unpaid interest to the Purchase Date, but interest installments with a
Stated Maturity on or prior to such Purchase Date
<PAGE>
4
shall be payable to the Holders of such Securities of record at the close
of business on the relevant Record Dates referred to on the face hereof,
all as provided in the Indenture.
In the event of the repurchase of this Security in part only, a
new Security or Securities of this series and of like tenor for the portion
hereof not so repurchased shall be issued in the name of the Holder hereof
upon the cancellation hereof.
The Indenture contains provisions for defeasance at any time of
(a) the entire indebtedness of this Security or (b) certain restrictive
covenants and Events of Default with respect to this Security, in each case
upon compliance with certain conditions set forth in the Indenture.
If an Event of Default with respect to Securities of this series
shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities
of each series to be affected under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a majority in
principal amount of the Securities at the time Outstanding of each series
to be affected. The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of all
Securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture
and their consequences. Any such consent or waiver by the Holder of this
Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this
Security.
As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have the right to institute any
proceeding with respect to the Indenture or for the appointment of a
receiver or trustee or for any other remedy thereunder unless such Holder
shall have previously given the Trustee written notice of a continuing
Event of Default with respect to the Securities of this series, the Holders
of not less than 25% in principal amount of the Securities of this series
at the time Outstanding shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default as Trustee and
offered the Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in principal amount of Securities
of this series at the time Outstanding a direction inconsistent with such
request and shall have failed to institute such proceeding for 60 calendar
days after receipt of such notice, request, and offer of indemnity. The
foregoing shall apply to any suit instituted by the Holder of this Security
for the enforcement of any payment of principal hereof or any premium or
interest hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and
<PAGE>
5
unconditional, to pay the principal of and any premium and interest on this
Security at the times, place, and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registerable in the
Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the
principal of and any premium and interest on this Security are payable,
duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed
by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities of this series and of like tenor, of
authorized denominations and for the same aggregate principal amount, shall
be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and integral multiples
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of like tenor
of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee, and any agent of the Company or the
Trustee may treat the Person in whose name this Security is registered as
the owner hereof for all purposes, whether or not this Security shall be
overdue, and neither the Company, the Trustee, nor any such agent shall be
affected by notice to the contrary.
Unless this Security is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to
the Company or its agent for registration of transfer, exchange, or
payment, and any Security issued upon registration of transfer of, or in
exchange for or in lieu of, this Security is registered in the name of Cede
& Co. or such other name as requested by an authorized representative of
The Depository Trust Company and payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL because the registered owner hereof, Cede & Co., has an
interest herein.
All terms used in this Security that are defined in the Indenture
shall have the respective meanings assigned to them in the Indenture.
<PAGE>
6
D. The Trustee's certificate of authentication shall be in
substantially the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:___________________________
Authorized Officer
E. All acts and things necessary to make the Senior Notes, when
the Senior Notes have been executed by the Company and authenticated by the
Trustee and delivered as provided in the Indenture and this Supplemental
Indenture, the valid, binding, and legal obligations of the Company and to
constitute these presents a valid indenture and agreement according to its
terms, have been done and performed, and the execution and delivery by the
Company of the Indenture and this Supplemental Indenture and the issue
hereunder of the Senior Notes have in all respects been duly authorized;
and the Company, in the exercise of legal right and power in it vested, is
executing and delivering the Indenture and this Supplemental Indenture and
proposes to make, execute, issue, and deliver the Senior Notes.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
In order to declare the terms and conditions upon which the
Senior Notes are authenticated, issued, and delivered, and in consideration
of the premises and of the purchase and acceptance of the Senior Notes by
the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of the respective Holders from time to time of the Senior Notes, as
follows:
ARTICLE I. ISSUANCE OF SENIOR NOTES.
Section 1.1. Issuance of Senior Notes; Principal Amount; Maturity.
(a) On October 6, 1995, the Company shall issue and deliver to
the Trustee, and the Trustee shall authenticate, Senior Notes substantially
in the form set forth above, in each case with such appropriate insertions,
omissions, substitutions, and other variations as are required or permitted
by the Indenture and this Supplemental Indenture, and with such letters,
numbers, or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with the rules of any securities
exchange or as may, consistently herewith,
<PAGE>
7
be determined by the officers executing such Senior Notes, as evidenced by
their execution of such Senior Notes.
(b) The Senior Notes shall be issued in the aggregate principal
amount of $400,000,000 and shall mature on October 15, 2002.
Section 1.2. Interest on the Senior Notes; Payment of Interest.
(a) The Senior Notes shall bear interest at the rate of 8.125% per
annum from October 6, 1995, except in the case of Senior Notes delivered
pursuant to Sections 2.05 or 2.07 of the Indenture, which shall bear
interest from the last Interest Payment Date through which interest has
been paid.
(b) The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date shall, as provided in such
Indenture, be paid to the Person in whose name a Senior Note (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest, which shall be the April 1 or
October 1 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for shall forthwith cease to be payable to the Holder
on such Regular Record Date and may either be paid to the Person in whose
name the Senior Note (or one or more Predecessor Securities) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 calendar
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities of this series may be listed, and upon
such notice as may be required by such exchange, all as more fully provided
in the Indenture.
(c) Payment of the principal of (and premium, if any) and any
such interest on the Senior Notes shall be made at the office or agency of
the Company maintained for the purpose in New York, New York, in such coin
or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts; provided, however,
that at the option of the Company payment of interest may be made by check
mailed to the address of the Person entitled thereto as such address
appears in the Security Register.
<PAGE>
8
ARTICLE II. CERTAIN DEFINITIONS.
Section 2.1. Certain Definitions.
The terms defined in this Section 2.1 (except as herein otherwise
expressly provided or unless the context of this Supplemental Indenture
otherwise requires) for all purposes of this Supplemental Indenture and of
any indenture supplemental hereto have the respective meanings specified in
this Section 2.1. All accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with GAAP. All other terms
used in this Supplemental Indenture that are defined in the Indenture or
the Trust Indenture Act, either directly or by reference therein (except as
herein otherwise expressly provided or unless the context of this
Supplemental Indenture otherwise requires), have the respective meanings
assigned to such terms in the Indenture or the Trust Indenture Act, as the
case may be, as in force at the date of this Supplemental Indenture as
originally executed.
"Bank Facilities" means the Credit Agreement, dated as of
December 19, 1994, among the Company, certain financial institutions,
Citibank, N.A., as administrative agent, and Chemical Bank, as agent, as
the same may be amended, supplemented, or otherwise modified from time to
time.
"Cash Equivalent" means: (a) obligations unconditionally
guaranteed as to principal and interest by the United States of America or
by any agency or authority controlled or supervised by and acting as an
instrumentality of the United States of America; (b) obligations
(including, but not limited to, demand or time deposits, bankers'
acceptances and certificates of deposit) issued by a depository institution
or trust company or a wholly owned Subsidiary or branch office of any
depository institution or trust company, provided that (i) such depository
institution or trust company has, at the time of the Company's or any
Restricted Subsidiary's investment therein or contractual commitment
providing for such investment, capital, surplus, or undivided profits (as
of the date of such institution's most recently published financial
statements) in excess of $100.0 million and (ii) the commercial paper of
such depository institution or trust company, at the time of the Company's
or any Restricted Subsidiary's investment therein or contractual commitment
providing for such investment, is rated at least A1 by S&P or P-1 by
Moody's; (c) debt obligations (including, but not limited to, commercial
paper and medium term notes) issued or unconditionally guaranteed as to
principal and interest by any corporation, state or municipal government or
agency or instrumentality thereof, or foreign sovereignty, if the
commercial paper of such corporation, state or municipal government or
foreign sovereignty, at the time of the Company's or any Restricted
Subsidiary's investment therein or contractual commitment providing for
such investment, is rated at least A1 by S&P or P-1 by Moody's; (d)
repurchase obligations with a term of not more than seven calendar days for
underlying securities of the type described above entered into with a
depository institution or trust company meeting the qualifications
described in clause (b) above; and (e) Investments in money market or
mutual funds that invest predominantly in Cash Equivalents of the type
described in clauses (a), (b), (c), and (d) above; provided, however, that,
in the case of clauses (a) through (c) above, each such investment has a
maturity of one year or less from the date of acquisition thereof.
"Change of Control" means the occurrence of any of the following
events: (a) any "Person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act)
<PAGE>
9
is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act), directly or indirectly, of more than 50% of the
total voting power of all classes of stock of the Company entitled to vote
generally in the election of directors of the Company ("Voting Stock");
(b) the Company consolidates with, or merges with or into, another Person
or sells, assigns, conveys, transfers, leases, or otherwise disposes of all
or substantially all of its assets to any Person, or another Person
consolidates with, or merges with or into, the Company, in any such event
pursuant to a transaction in which the outstanding Voting Stock of the
Company is converted into or exchanged for cash, securities, or other
property, other than any such transaction where (i) the outstanding Voting
Stock of the Company is converted into or exchanged for (1) Voting Stock
(other than redeemable Voting Stock) of the surviving or transferee
corporation, (2) cash, securities, and other property in an amount that
could be paid by the Company as a Restricted Payment, or (3) a combination
thereof, and (ii) immediately after such transaction (A) no "person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange
Act) is or becomes the "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act), directly or indirectly, of more than 50% of
the total Voting Stock of the Company and (B) the holders of equity
securities of the Company immediately prior to such transaction hold,
immediately following such transaction, a majority of the total Voting
Stock of the Person surviving such transaction, (c) during any consecutive
two-year period, individuals who at the beginning of such period
constituted the Board of Directors (together with any new directors whose
election by such Board of Directors or whose nomination for election by the
stockholders of the Company was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously
so approved) cease for any reason to constitute a majority of the Board of
Directors then in office; or (d) the dissolution or liquidation of the
Company.
"Consolidated Net Worth" of the Company means the stockholders'
equity of the Company and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP; provided that adjustments following the date
of this Supplemental Indenture to the accounting books and records of the
Company, in accordance with Accounting Principles Board Opinions Nos. 16
and 17 (or successor opinions thereto) or otherwise, resulting from the
acquisition of control of the Company by another Person shall not be given
effect.
"Debt Rating" means the actual rating assigned to the Notes by
Moody's or S&P. The Company shall use its best efforts to cause both
Moody's and S&P to make a rating of the Senior Notes publicly available,
but in the event that either Moody's or S&P does not make a rating of the
Senior Notes publicly available, the Company shall select any other
nationally recognized securities rating agency ( a "Recognized Rating
Agency") to make such a rating. In such event, the terms "Moody's" and
"S&P," as the case may be, mean, for purposes of this definition, such
other Recognized Rating Agency.
"Designated Event" shall be deemed to have occurred at such time
as (a) a Change of Control occurs or (b) a Designated Restricted Payment
Event occurs.
"Designated Restricted Payment Event" means the (i) declaration
or payment of any dividend on, or the making of any distribution on account
of, the Company's capital stock or (ii) purchase, redemption, or
acquisition or retirement for value of any capital stock (including any
option, warrant, or right to purchase capital stock) of the Company owned
beneficially by
<PAGE>
10
a Person other than a wholly owned Subsidiary of the Company, by the
Company or any Subsidiary of the Company, directly or indirectly, if, after
giving effect to any such action set forth in clause (i) or (ii), the
Consolidated Net Worth of the Company as at the end of the last fiscal
quarter for which consolidated financial statements are available is less
than $2,750.0 million.
"Effective Date" means December 19, 1994.
"Existing Indebtedness" means all Indebtedness under or evidenced
by: (a) the Senior Notes; (b) the Company's 10% Senior Notes due 2001; (c)
the Company's 5% Convertible Subordinated Notes due 2003; (d) the
outstanding principal amount of notes issued pursuant to the Loan
Agreement, dated as of December 30, 1987, by and among Allied Stores
General Real Estate Company and certain of its Subsidiaries and The
Prudential Insurance Company of America; (e) the outstanding principal
amount of notes issued pursuant to the Mortgage Note Agreement, dated as of
the Effective Date, between Macy's Primary Real Estate, Inc. and Federated
Noteholding Corporation; (f) the outstanding principal amount of notes
issued pursuant to the Loan Agreement, dated as of May 26, 1994, by and
among Joseph Horne Co., Inc., PNC Bank Ohio, National Association, as
agent, and the financial institutions listed on the signature pages
thereof; (g) the Capital Lease Obligations of the Company and the
Restricted Subsidiaries existing on the date of the initial issuance of the
Senior Notes; (h) the outstanding principal amount of uncertificated
obligations of the Company owed to the Internal Revenue Service and other
taxing authorities; (i) the existing secured mortgage debt of the Macy's
Debtors assumed pursuant to the Plan; (j) the Note Override Agreement,
dated as of the Effective Date, by Kings Plaza Shopping Center of Avenue U,
Inc., as Issuer, and The John Hancock Mutual Life Insurance Company ("John
Hancock"), as Noteholder, and the Promissory Note, dated as of the
Effective Date, by Macy's Kings Plaza Real Estate, Inc., as Issuer, and
John Hancock, as Noteholder; and (k) the other secured Indebtedness of the
Company or secured or unsecured Indebtedness of the Restricted Subsidiaries
existing on the date of the initial issuance of the Senior Notes.
"Full Rating Category" means (i) with respect to S&P, any of the
following categories: BB, B, CCC, CC, and C and (ii) with respect to
Moody's, any of the following categories: Ba, B, Caa, Ca, and C. In
determining whether the rating of the Senior Notes has decreased by the
equivalent of one Full Rating Category, gradation within Full Rating
Categories (+ and - for S&P; and 1, 2, and 3 for Moody's) shall be taken
into account (e.g., with respect to S&P, a decline in rating from BB+ to
BB-, or from BB to B+, shall constitute a decrease of less than one Full
Rating Category).
"Interest Coverage Ratio" means the ratio of (a) the sum of (i)
net income (other than net income of any Restricted Subsidiary during a
period in which such Restricted Subsidiary is prohibited from paying
dividends pursuant to any provision referred to in clause (ii), (iii), or
(iv) of Section 3.5 hereof), (ii) net interest expense, (iii) cash
dividends with respect to redeemable preferred stock (to the extent
deducted from net income and not included in net interest expense in
accordance with GAAP), (iv) income tax expense, (v) depreciation expense,
(vi) amortization expense, and (vii) the net amount, which may be less than
zero, of extraordinary and unusual losses minus extraordinary and unusual
gains of the Company and its Subsidiaries on a consolidated basis, to (b)
net interest expense, plus cash dividends with respect to redeemable
preferred stock (to the extent deducted from net income and not included in
net
<PAGE>
11
interest expense in accordance with GAAP), of the Company and its
Subsidiaries on a consolidated basis, all as determined in accordance with
GAAP (or, in respect of the net income of any Restricted Subsidiary for
purposes of the parenthetical in clause (a)(i) above, the normal accounting
practices of such Restricted Subsidiary as in effect from time to time),
for the four most recently completed fiscal quarters of the Company.
"Investment" means, with respect to any Person, any direct or
indirect loan or other extension of credit or capital contribution to (by
means of any transfer of cash or other property to others or any payment
for property or services for the account or use of others), or any purchase
or acquisition by such Person of any capital stock, bonds, notes,
debentures, or other securities or evidences of Indebtedness issued by any
other Person. The amount of any Investment shall be the original cost
thereof, plus the cost of all additions thereto, without any adjustments
for increases or decreases in value, write-ups, write-downs, or write-offs
with respect to such Investment.
"Investment Grade" means a rating of at least BBB- (or the
equivalent) or higher by S&P and Baa3 (or the equivalent) or higher by
Moody's.
"Investment Grade Status" exists as of a date and thereafter if
at such date the Debt Rating by both Moody's and S&P is Investment Grade.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
security interest, or preference, priority, or other security agreement or
preferential arrangement of any kind or nature whatsoever intended to
assure payment of any Indebtedness or other obligation, including without
limitation any conditional sale, deferred purchase price, or other title
retention agreement, the interest of a lessor under a Capital Lease
Obligation, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing, under the Uniform
Commercial Code or comparable law of any jurisdiction, of any financing
statement naming the owner of the asset to which such Lien relates as
debtor.
"Moody's" means Moody's Investors Service, or any successor to
the rating agency business thereof.
"Notice" means, with respect to an Offer to Purchase, a written
notice stating:
(a) the Section of this Supplemental Indenture pursuant to which
such Offer to Purchase is being made;
(b) the applicable Purchase Amount (including, if less than all
the Senior Notes, the calculation thereof pursuant to the Section
hereof requiring such Offer to Purchase);
(c) the applicable Purchase Date;
<PAGE>
12
(d) the purchase price to be paid by the Company for each $1,000
principal amount at maturity of Senior Notes accepted for payment (as
specified in this Supplemental Indenture);
(e) that the Holder of any Senior Note may tender for purchase
by the Company all or any portion of such Senior Note equal to $1,000
principal amount or any integral multiple thereof;
(f) the place or places where Senior Notes are to be surrendered
for tender pursuant to such Offer to Purchase;
(g) any Senior Note not tendered or tendered but not purchased
by the Company pursuant to such Offer to Purchase shall continue to
accrue interest as set forth in such Senior Note and this Supplemental
Indenture;
(h) that on the Purchase Date the purchase price shall become
due and payable upon each Senior Note (or portion thereof) selected
for purchase pursuant to such Offer to Purchase and that interest
thereon shall cease to accrue on and after the Purchase Date;
(i) that each Holder electing to tender a Senior Note pursuant
to such Offer to Purchase shall be required to surrender such Senior
Note at the place or places specified in the Notice prior to the close
of business on the fifth Business Day prior to the Purchase Date (such
Senior Note being, if the Company or the Trustee so requires, duly
endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the
Holder thereof or its attorney duly authorized in writing);
(j) that (i) if Senior Notes (or portions thereof) in an
aggregate principal amount less than or equal to the Purchase Amount
are duly tendered and not withdrawn pursuant to such Offer to
Purchase, the Company shall purchase all such Senior Notes and (ii) if
Senior Notes in an aggregate principal amount in excess of the
Purchase Amount are duly tendered and not withdrawn pursuant to such
Offer to Purchase, (A) the Company shall purchase Senior Notes having
an aggregate principal amount equal to the Purchase Amount and (B) the
particular Senior Notes (or portions thereof) to be purchased shall be
selected by such method as the Trustee shall deem fair and appropriate
and which may provide for the selection for purchase of portions
(equal to $1,000 or an integral multiple of $1,000) of the principal
amount of Senior Notes of a denomination larger than $1,000;
(k) that, in the case of any Holder whose Senior Note is
purchased only in part, the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Senior Note
without service charge, a new Senior Note or Senior Notes of any
authorized denomination as requested by such Holder in an aggregate
principal amount equal to and in exchange for the unpurchased portion
of the Senior Note so tendered; and
(l) any other information required by applicable law to be
included therein.
<PAGE>
13
"Offer to Purchase" means an offer to purchase Senior Notes
pursuant to and in accordance with a Notice, in the aggregate Purchase
Amount, on the Purchase Date, and at the purchase price specified in such
Notice (as determined pursuant to this Supplemental Indenture). Any Offer
to Purchase shall remain open from the time of mailing of the Notice until
the Purchase Date, and shall be governed by and effected in accordance
with, and the Company and the Trustee shall perform their respective
obligations specified in, the Notice for such Offer to Purchase.
"Permitted Indebtedness" means: (a) Existing Indebtedness; (b)
Indebtedness under the Bank Facilities in an aggregate principal amount at
any one time not to exceed $2,800.0 million, less (i) principal payments
actually made by the Company on any term loan facility under such Bank
Facilities (other than principal payments made in connection with or
pursuant to a refinancing of the Bank Facilities in compliance with clause
(j) below) and (ii) any amounts by which any revolving credit facility
commitments under the Bank Facilities are permanently reduced (other than
permanent reductions made in connection with or pursuant to a refinancing
of the Bank Facilities in compliance with clause (j) below) except that
under no circumstances shall the total allowable indebtedness under this
clause (b) be less than $1,250.0 million (subject to increase from and
after the date hereof at a rate, compounded annually, equal to 3% per
annum) if incurred for the purpose of providing the Company and its
Subsidiaries with working capital, including without limitation bankers'
acceptances, letters of credit, and similar assurances of payment whether
as part of the Bank Facilities or otherwise; (c) Indebtedness existing as
of the date of the initial issuance of Senior Notes of any Subsidiary of
the Company engaged primarily in the business of owning or leasing real
property; (d) Indebtedness incurred for the purpose of financing store
construction and remodeling or other capital expenditures; (e) unsecured
Indebtedness among the Company and its Subsidiaries; (f) Indebtedness in
respect of the deferred purchase price of property or arising under any
conditional sale or other title retention agreement; (g) Indebtedness of a
Person acquired by the Company or a Subsidiary of the Company at the time
of such acquisition; (h) to the extent deemed to be "Indebtedness,"
obligations under swap agreements, cap agreements, collar agreements,
insurance arrangements, or any other agreement or arrangement, in each case
designed to provide protection against fluctuations in interest rates, the
cost of currency or the cost of goods (other than inventory); (i) other
Indebtedness in outstanding amounts not to exceed $750.0 million in the
aggregate incurred by the Company and the Restricted Subsidiaries at any
particular time; and (j) Indebtedness incurred in connection with any
extension, renewal, refinancing, replacement, or refunding (including
successive extensions, renewals, refinancings, replacements, or
refundings), in whole or in part, of any Indebtedness of the Company or the
Restricted Subsidiaries; provided, however, that the principal amount of
the Indebtedness so incurred does not exceed the sum of the principal
amount of the Indebtedness so extended, renewed, refinanced, replaced, or
refunded, plus all interest accrued thereon and all related fees and
expenses (including any payments made in connection with procuring any
required lender or similar consents).
"Permitted Investments" means: (a) Cash Equivalents; (b)
Investments in another Person, if as a result of such Investment (i) such
other Person becomes a Restricted Subsidiary of the Company or (ii) such
other Person is merged or consolidated with or into, or transfers or
conveys all or substantially all of its assets to, the Company or a
Restricted Subsidiary of the Company; (c) Investments in the Company or any
Restricted Subsidiary of the Company; (d) Investments represented by
accounts receivable created or acquired in the ordinary course of
<PAGE>
14
business, extensions of trade credit on commercially reasonable terms in
accordance with normal trade practices, or liabilities to the Company or
any Restricted Subsidiary represented by customer credit card obligations;
(e) commissions and advances to employees of the Company and its
Subsidiaries in the ordinary course of business; (f) investments
representing notes, securities, or other instruments or obligations
acquired in connection with the sale of assets; (g) Investments in the form
of the sale (on a "true-sale" non-recourse basis) of receivables
transferred from the Company or any Restricted Subsidiary, or transfers of
cash, to an Unrestricted Subsidiary as a capital contribution or in
exchange for Indebtedness of such Unrestricted Subsidiary or cash; (h)
Permitted Joint Venture Investments; (i) Investments representing capital
stock or obligations issued to the Company or any Restricted Subsidiary in
settlement of claims against any other Person by reason of a composition or
readjustment of debt or a reorganization of any debtor of the Company or
such Restricted Subsidiary; (j) loans or advances to vendors in connection
with in-store merchandising to be repaid either on a lump-sum basis or over
a period of time by the delivery of merchandise; (k) loans or advances to
sublessees in an aggregate amount not to exceed $5 million at any time
outstanding; (l) construction advances to developers; (m) Investments in
swap agreements, cap agreements, collar agreements, insurance arrangements
or any other agreement or arrangement, in each case designed to provide
protection against fluctuations in interest rates, the cost of currency or
the cost of goods (other than inventory); and (n) other Investments not to
exceed $200.0 million in the aggregate.
"Permitted Joint Venture Investments" means Investments in joint
ventures or other risk-sharing arrangements (which may include investments
in partnerships or corporations) the purpose of which is to engage in the
same or similar lines of business as the operating business of the Company
or a Restricted Subsidiary or in businesses consistent with the fundamental
nature of the operating business of the Company or a Restricted Subsidiary
or necessary or desirable to facilitate the opening business of the Company
or a Restricted Subsidiary and is a business or operation that the Company
or a Restricted Subsidiary could engage in directly under the terms hereof
and that constitute "Investments" solely due to the fact that Persons other
than the Company or a Restricted Subsidiary have an interest in such
business or operation; provided, however, that the business of such joint
venture, partnership, or corporation is, by the terms of the applicable
joint venture agreement, partnership agreement, or corporate charter,
prohibited from the making of Investments other than Permitted Investments
to the extent the Company could make such Investments directly in
accordance with the terms hereof.
"Permitted Liens" means: (a) Liens (other than Liens on
inventory) securing Indebtedness referred to in any of clauses (a) through
(d) and clauses (f) through (j) of the definition of "Permitted
Indebtedness"; (b) Liens incurred and pledges and deposits made in the
ordinary course of business in connection with liability insurance,
workers' compensation, unemployment insurance, old-age pensions, and other
social security benefits other than in respect of employee benefit plans
subject to the Employee Retirement Income Security Act of 1974, as amended;
(c) Liens securing performance, surety, and appeal bonds and other
obligations of like nature incurred in the ordinary course of business; (d)
Liens on goods and documents securing trade letters of credit; (e) Liens
imposed by law, such as carriers', warehousemen's, mechanics',
materialmen's, and vendor's Liens, incurred in the ordinary course of
business and securing obligations which are not yet due or which are being
contested in good faith by appropriate proceedings; (f) Liens securing the
payment of taxes, assessments, and governmental charges or levies, either
(i) not delinquent or (ii) being contested in good faith by appropriate
legal or
<PAGE>
15
administrative proceedings and as to which adequate reserves shall have
been established on the books of the relevant Person in conformity with
GAAP; (g) zoning restrictions, easements, rights of way, reciprocal
easement agreements, operating agreements, covenants, conditions, or
restrictions on the use of any parcel of property that are routinely
granted in real estate transactions or do not interfere in any material
respect with the ordinary conduct of the business of the Company and its
Subsidiaries or the value of such property for the purpose of such
business; (h) Liens on property existing at the time such property is
acquired; (i) purchase money Liens upon or in any property acquired or held
in the ordinary course of business to secure Indebtedness incurred solely
for the purpose of financing the acquisition of such property; (j) Liens on
the assets of any Subsidiary of the Company at the time such Subsidiary is
acquired; (k) Liens with respect to obligations in outstanding amounts not
to exceed $100.0 million at any particular time and that (i) are not
incurred in connection with the borrowing of money or obtaining advances or
credit (other than trade credit in the ordinary course of business) and
(ii) do not in the aggregate interfere in any material respect with the
ordinary conduct of the business of the Company and its Subsidiaries; and
(l) without limiting the ability of the Company or any Restricted
Subsidiary to create, incur, assume, or suffer to exist any Lien otherwise
permitted under any of the foregoing clauses, any extension, renewal, or
replacement, in whole or in part, of any Lien described in the foregoing
clauses; provided, however, that any such extension, renewal, or
replacement Lien is limited to the property or assets covered by the Lien
extended, renewed, or replaced or substitute property or assets, the value
of which is determined by the Board of Directors of the Company to be not
materially greater than the value of the property or assets for which the
substitute property or assets are substituted.
"Plan" means the Amended Joint Plan of Reorganization of R.H.
Macy & Co., Inc. and certain of its Subsidiaries.
"Purchase Amount" means the aggregate outstanding principal
amount of the Senior Notes required to be offered to be purchased by the
Company pursuant to an Offer to Purchase.
"Purchase Date" means, with respect to any Offer to Purchase, a
date specified by the Company in such Offer to Purchase not less than 30
calendar days or more than 60 calendar days after the date of the mailing
of the Notice of such Offer to Purchase (or such other time period as is
necessary for the Offer to Purchase to remain open for a sufficient period
of time to comply with applicable securities laws).
"Rating Decline" means the occurrence of the following on, or
within 90 calendar days after, the date of public disclosure of the
occurrence of a Designated Event (which period shall be extended, for a
period not to exceed 90 calendar days, so long as the Debt Rating is under
publicly announced consideration for possible downgrading by both Moody's
and S&P): (i) in the event the Senior Notes are rated Investment Grade by
Moody's or S&P on the earlier of the date immediately preceding the date of
the public disclosure of (w) the occurrence of a Designated Event or (x)
(if applicable) the intention of the Company to effect a Designated Event,
the Debt Rating by both Moody's and S&P shall be below Investment Grade or
(ii) in the event the Senior Notes are rated below Investment Grade by both
Moody's and S&P on the earlier of the date immediately preceding the date
of the public disclosure of (y) the occurrence of a Designated Event or (z)
(if applicable) the intention of the Company to effect a Designated
<PAGE>
16
Event, the Debt Rating by each of Moody's and S&P shall be decreased by at
least one Full Rating Category. In the event that either Moody's or S&P
does not make a rating of the Senior Notes publicly available, and the
Company selects a Recognized Rating Agency to make such a rating, (i) the
terms "Moody's" or "S&P," as the case may be, shall mean such other
Recognized Rating Agency; (ii) the term "Full Rating Category" shall mean,
with respect to such Recognized Rating Agency, the equivalent of any such
category of S&P or Moody's used by such Recognized Rating Agency; and (iii)
the term "Investment Grade" shall mean, with respect to such Recognized
Rating Agency, the equivalent of a rating of at least BBB- in the case of
S&P and at least Baa3 in the case of Moody's used by such Recognized Rating
Agency.
"Restricted Subsidiary" means any direct or indirect subsidiary
(as that term is defined in Regulation S-X promulgated by the Securities
and Exchange Commission) other than an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Rating Group, a division of McGraw-
Hill, Inc., or any successor to the rating agency business thereof.
"Sale and Leaseback Transaction" means, with respect to any
Person, an arrangement with any bank, insurance company, or other lender or
investor or to which such lender or investor is a party providing for the
leasing pursuant to a Capital Lease by such Person or any Subsidiary of
such Person of any property or asset of such Person or such Subsidiary
which has been or is being sold or transferred by such Person or such
Subsidiary to such lender or investor or to any Person to whom funds have
been or are to be advanced by such lender or investor on the security of
such property or asset.
"Senior Indebtedness" means any Indebtedness of the Company or
its Subsidiaries other than Subordinated Indebtedness.
"Significant Subsidiary" means any Subsidiary which accounts for
10.0% or more of the total consolidated assets of the Company and its
Subsidiaries as of any date of determination or 10.0% or more of the total
consolidated revenues of the Company and its Subsidiaries for the most
recently concluded fiscal quarter.
"Subordinated Indebtedness" means any Indebtedness of the Company
which is expressly subordinated in right of payment to the Senior Notes.
"Unrestricted Subsidiary" means (a) FDS National Bank, FACS
Group, Inc., Federated Credit Holdings Corporation, Prime Credit Card
Master Trust (to the extent that it is deemed to be a Subsidiary), Prime
Receivables Corporation, Seven Hills Funding Corporation, Ridge Capital
Trust II (to the extent that it is deemed to be a Subsidiary), Macy
Financial, Inc., R.H. Macy Overseas Finance, N.V., Macy Credit Corp., and
Macy's Data and Credit Services Corp., (b) any Subsidiary of the Company
the primary business of which consists of, and is restricted by the
charter, partnership agreement, or similar organizational document of such
Subsidiary to, financing operations on behalf of the Company and its
Subsidiaries, and/or purchasing accounts receivable or direct or indirect
interests therein, and/or making loans secured by accounts receivable or
direct or indirect interests therein (and business related to the
foregoing), or which is otherwise primarily engaged in, and restricted by
its charter, partnership
<PAGE>
17
agreement, or similar organizational document to, the business of a finance
company (and business related thereto), which, in accordance with the
provisions of this Supplemental Indenture, has been designated by Board
Resolution as an Unrestricted Subsidiary, in each case unless and until any
of the Subsidiaries of the Company referred to in the foregoing clauses (a)
and (b) is, in accordance with the provisions of this Supplemental
Indenture, designated by a Board Resolution as a Restricted Subsidiary, and
(c) any Subsidiary of the Company of which, in the case of a corporation,
more than 50% of the issued and outstanding capital stock having ordinary
voting power to elect a majority of the board of directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation has or might have voting power upon
the occurrence of any contingency), or, in the case of any partnership or
other legal entity, more than 50% of the ordinary equity capital interests,
is at the time directly or indirectly owned or controlled by one or more
Unrestricted Subsidiaries and the primary business of which consists of,
and is restricted by the charter, partnership agreement or similar
organizational document of such Subsidiary to, financing operations on
behalf of the Company and its Subsidiaries, and/or purchasing accounts
receivable or direct or indirect interests therein, and/or making loans
secured by accounts receivable or direct or indirect interests therein (and
business related to the foregoing), or which is otherwise primarily engaged
in, and restricted by its charter, partnership agreement or similar
organizational document to, the business of a finance company (and business
related thereto).
ARTICLE III. CERTAIN COVENANTS.
The following covenants shall be applicable to the Company for so
long as any of the Senior Notes are Outstanding; provided, however, that
upon reaching Investment Grade Status the Company shall be released from
its obligations to comply with each of the following restrictive covenants,
except for those set forth in Sections 3.2, 3.4, 3.9 (including the
provisions of the covenant set forth in Section 3.7 with respect to
application of proceeds), and 3.10. Nothing in this paragraph will,
however, affect the Company's obligations under any provision of the
Indenture or, except for Article III hereof, this Supplemental Indenture.
Section 3.1. Indebtedness.
The Company shall not directly or indirectly incur, assume,
guarantee, or otherwise become liable with respect to any Indebtedness
other than Permitted Indebtedness referred to in clauses (a) through (c),
clauses (e) and (f), and clauses (h) through (j) of the definition thereof,
unless immediately thereafter the Interest Coverage Ratio is 2.0 to 1.0 or
greater, after giving effect, on a pro forma basis as if incurred at the
beginning of the applicable period, to the obligations of the Company and
the Restricted Subsidiaries in respect of such Indebtedness.
The Company shall not permit any Restricted Subsidiary directly
or indirectly to incur, assume, guarantee, or otherwise become liable with
respect to, any Indebtedness (A) other than Permitted Indebtedness referred
to in clauses (a) through (c), clauses (e) and (f) and clauses (h) through
(j) of the definition thereof and (B) other than Permitted Indebtedness,
referred to in clauses (d) and (g) of the definition thereof, provided, in
the case of Permitted Indebtedness incurred pursuant to this clause (B),
immediately thereafter the Interest Coverage Ratio is 2.0 to 1.0 or
greater, after giving effect, on a pro forma basis as if incurred at the
beginning of the
<PAGE>
18
applicable period, to the obligations of the Company and the Restricted
Subsidiaries in respect of such Indebtedness.
Section 3.2. Liens.
The Company shall not, and shall not permit any Restricted
Subsidiary to, create, incur, assume, or suffer to exist any Liens upon any
of their respective assets, other than Permitted Liens, unless the Senior
Notes are secured by an equal and ratable Lien on the same assets.
Section 3.3. Restricted Payments.
The Company shall not, and shall not permit any Restricted
Subsidiary to, (a) declare or pay any dividend on, or make any other
distribution on account of, the Company's capital stock; (b) purchase,
redeem, or otherwise acquire or retire for value any capital stock
(including any option, warrant, or right to purchase capital stock) of the
Company owned beneficially by a Person other than a wholly owned Subsidiary
of the Company; (c) purchase, redeem, or otherwise acquire or retire for
value the principal of any Subordinated Indebtedness (other than the
principal amount of notes outstanding pursuant to the Loan Agreement, dated
as of December 30, 1987, by and among Allied Stores General Real Estate
Company and certain of its Subsidiaries and The Prudential Insurance
Company of America, if deemed to be subordinated by virtue of the Company's
guaranty thereof) prior to the scheduled maturity thereof other than
pursuant to mandatory scheduled redemptions or repayments; or (d) make any
Investment other than Permitted Investments (all such dividends,
distributions, purchases, redemptions, or Investments being collectively
referred to as "Restricted Payments"); if, at the time of such action, or
after giving effect thereto: (i) an Event of Default shall have occurred
and is continuing; (ii) the Company could not incur at least $1.00 of
additional Indebtedness under the Interest Coverage Ratio test in Section
3.1; or (iii) the cumulative amount of Restricted Payments made subsequent
to the Effective Date shall be greater than the sum of: (A) 50% of the
Company's cumulative consolidated net income (or a negative amount equal to
100% of the Company's cumulative consolidated net loss, if applicable) from
January 29, 1995 through the end of the Company's fiscal quarter next
preceding the taking of such action; (B) 100% of the aggregate net cash
proceeds received by the Company from the issue or sale of capital stock of
the Company (other than redeemable capital stock), including capital stock
issued upon the conversion of convertible Indebtedness issued on or after
the Effective Date, in exchange for outstanding Indebtedness, or from the
exercise of options, warrants, or rights to purchase capital stock of the
Company to any Person other than to a Subsidiary of the Company subsequent
to the Effective Date, (with the Company being deemed, in the case of
capital stock issued upon conversion or in exchange for Indebtedness, to
have received net cash proceeds equal to the principal amount of the
Indebtedness so converted or exchanged); and (C) $250.0 million; provided,
however, that (1) the payment of any dividend within 60 calendar days after
the date of declaration thereof, if such declaration complied with the
foregoing redemption or other acquisition provisions on the date of such
declaration, (2) the purchase, redemption, or other acquisition or
retirement for value of any shares of capital stock of the Company in
exchange for, or out of the proceeds of, a substantially concurrent issue
and sale (other than to a Restricted Subsidiary) of other shares of capital
stock (other than redeemable capital stock) of the Company, (3) the
redemption or other acquisition or retirement for value prior to any
scheduled maturity
<PAGE>
19
of any Subordinated Indebtedness in exchange for, or out of the proceeds
of, a substantially concurrent issue and sale of (a) capital stock (other
than redeemable capital stock) of the Company or (b) Subordinated
Indebtedness of the Company, (4) any purchase, redemption, or other
acquisition or retirement for value of any capital stock (including any
option, warrant, or right to purchase capital stock) of the Company issued
to any employee or director of the Company pursuant to any employee benefit
or similar plan, and (5) any redemption of share purchase rights issued
pursuant to the Rights Agreement, dated as of December 19, 1994, by and
between the Company and The Bank of New York, as Rights Agent (as the same
may be amended from time to time), or any similar successor replacement
share purchase rights plan involving an aggregate redemption price (A) for
any one such redemption of less than $10.0 million and (B) for all such
redemptions of not more than $20.0 million, shall not be deemed to
constitute "Restricted Payments" and shall not be prohibited under this
Section.
Section 3.4. Change of Control.
Following (a) a Change of Control prior to such time as the
Company shall have reached Investment Grade Status or (b) a Designated
Event and a Rating Decline in connection therewith after such time as the
Company shall have reached Investment Grade Status, the Company shall offer
to repurchase the Senior Notes pursuant to an Offer to Purchase at a
purchase price equal to 101% of the principal amount thereof, plus accrued
and unpaid interest to the date established for such repurchase. Such
Offer to Purchase shall be made by mailing of a Notice to the Trustee and
each Holder at the address appearing in the Security Register, by first
class mail, postage prepaid, by the Company or, at the Company's request,
by the Trustee in the name and at the expense of the Company, on a date
selected by the Company, which shall be not more than 60 calendar days
following the Change in Control or the later of (i) the Designated Event
and (ii) the Rating Decline, as the case may be. On the Purchase Date, the
Company shall (i) accept for payment the Senior Notes or portions thereof
tendered pursuant to the Offer to Purchase, (ii) deposit with the Paying
Agent money sufficient to pay the purchase price of all Senior Notes or
portions thereof so accepted, and (iii) deliver to the Trustee the Senior
Notes so accepted. The Paying Agent shall promptly mail to the Holders of
Senior Notes such accepted payment in an amount equal to the purchase
price, and the Trustee shall promptly authenticate and mail to each Holder
at the address appearing on the Security Register new Senior Notes equal in
principal amount to any unpurchased portion of the Senior Notes
surrendered. Notwithstanding the foregoing, if the Company effects
Defeasance or Covenant Defeasance of the Senior Notes as provided in
Article V of the Indenture prior to the date Notice of a Rating Decline in
connection with a Designated Event is required, the Company shall not be
obligated to give such Notice or offer to repurchase the Senior Notes as a
result of such Designated Event and Rating Decline.
Acceptance of the Offer to Purchase by a Holder shall be
irrevocable (unless otherwise provided by law). The payment of accrued
interest as part of any repurchase price on any Purchase Date shall be
subject to the right of Holders of record on the relevant Regular Record
Date to receive interest due on an Interest Payment Date that is on or
prior to such Purchase Date.
If an Offer to Purchase Senior Notes is made, the Company shall
comply with all tender offer rules, including but not limited to Section
14(e) under the Exchange Act and Rule 14e-1 thereunder, to the extent
applicable to such Offer to Purchase.
<PAGE>
20
Section 3.5. Payment Restrictions Affecting Restricted Subsidiaries.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer
to exist any contractual restriction on the ability of any Restricted
Subsidiary to (a) pay any dividend on, or make any other distribution on
account of, its capital stock or pay any Indebtedness owed to the Company
or a Restricted Subsidiary or (b) make loans or advances to the Company or
a Restricted Subsidiary, except for (i) restrictions existing as of the
Effective Date, (ii) restrictions in the documentation setting forth the
terms of or entered into in connection with any Permitted Indebtedness,
(iii) restrictions in the documentation setting forth the terms of or
entered into in connection with the sale of such Restricted Subsidiary to a
third party, (iv) restrictions applicable to a Person acquired by the
Company or a Subsidiary of the Company or designated as a Restricted
Subsidiary, which exist at the time of such acquisition or designation, or
(v) other restrictions arising in the ordinary course of business otherwise
than in connection with financing transactions.
Section 3.6. Issuance of Subsidiary Preferred Stock.
The Company shall not permit any Restricted Subsidiary to issue
any shares of preferred stock other than (a) preferred stock issued to the
Company or a wholly owned Subsidiary of the Company or (b) preferred stock
issued to any other Person if, after giving effect thereto on a pro forma
basis as if such preferred stock were issued at the beginning of the
applicable period, such Restricted Subsidiary could have incurred
additional Indebtedness in an amount equal to the aggregate liquidation
value of such preferred stock (assuming such Indebtedness were incurred to
the Person(s) and for the purposes to which and for which such preferred
stock was issued).
Section 3.7. Asset Sales.
The Company shall not, and shall not permit any Restricted
Subsidiary to, consummate any sale of assets (other than sales of
inventories, goods, fixtures, and accounts receivable in the ordinary
course of business, and sales of assets to the Company or a wholly owned
Subsidiary of the Company) unless such sale is for fair market value and,
in the case of individual sales of assets for which the consideration
received (including liabilities assumed) is more than $25.0 million, at
least 75% of the consideration therefor (other than liabilities assumed)
consists of either (a) any combination of cash, cash equivalents, or
promissory notes secured by letters of credit or similar assurances of
payment issued by commercial banks of recognized standing or (b) capital
asset contributions or capital expenditures made for or on behalf of the
Company or a Subsidiary by a third party. Asset sales not subject to
Section 3.8 below shall be presumed to be for fair market value if the
consideration received is less than $25.0 million and shall be conclusively
presumed to have been for fair market value if the transaction is
determined by the Board of Directors to be fair, from a financial point of
view, to the Company. To the extent that the aggregate amount of cash
proceeds (net of all legal, title, and recording tax expenses, commissions,
and other fees and expenses incurred, and all federal, state, provincial,
foreign, and local taxes and reserves required to be accrued as a
liability, as a consequence of such sales of assets, and net of all
payments made on any Indebtedness which is secured by such assets in
accordance with the terms of any Liens upon or with respect to such assets
or which must by the terms of such Lien, or in order to obtain a necessary
consent to such
<PAGE>
21
sale or by applicable law be repaid out of the proceeds from such sales of
assets, and net of all distributions and other payments made to minority
interest holders in Subsidiaries or joint ventures as a result of such
sales of assets) from such sales of assets that shall not have been
reinvested in the business of the Company or its Subsidiaries or used to
reduce Senior Indebtedness of the Company or its Subsidiaries within 12
months of the receipt of such proceeds (with cash equivalents being deemed
to be proceeds upon receipt of such cash equivalents and cash payments
under promissory notes secured as aforesaid being deemed to be proceeds
upon receipt of such payments) shall exceed $100.0 million ("Excess Sale
Proceeds") from time to time, the Company shall offer to repurchase
pursuant to an Offer to Purchase Senior Notes with such Excess Sale
Proceeds (on a pro rata basis with any other Senior Indebtedness of the
Company or its Subsidiaries required by the terms of such Indebtedness to
be repurchased with such Excess Sale Proceeds, based on the principal
amount of such Senior Indebtedness required to be repurchased) at 100% of
principal amount, plus accrued and unpaid interest, and to pay related
costs and expenses. Such Offer to Purchase shall be made by mailing of a
Notice to the Trustee and to each Holder at the address appearing in the
Security Register, by first class mail, postage prepaid, by the Company or,
at the Company's request, by the Trustee in the name and at the expense of
the Company, on a date selected by the Company not later than 12 months
from the date such Offer to Purchase is required to be made pursuant to the
immediately preceding sentence. To the extent that the aggregate purchase
price for Senior Notes or other Senior Indebtedness tendered pursuant to
such offer to repurchase is less than the aggregate purchase price offered
in such offer, an amount of Excess Sale Proceeds equal to such shortfall
shall cease to be Excess Sale Proceeds and may thereafter be used for
general corporate purposes. On the Purchase Date, the Company shall (i)
accept for payment Senior Notes or portions thereof tendered pursuant to
the Offer to Purchase in an aggregate principal amount equal to the
Purchase Amount (selected by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for purchase of
portions (equal to $1,000 or an integral multiple of $1,000) of the
principal amount of Senior Notes of a denomination larger than $1,000),
(ii) deposit with the Paying Agent money sufficient to pay the purchase
price of all Senior Notes or portions thereof so accepted, and (iii)
deliver to the Trustee Senior Notes so accepted. The Paying Agent shall
promptly mail to the Holders of Senior Notes so accepted payment in an
amount equal to the purchase price, and the Trustee shall promptly
authenticate and mail to such Holders a new Senior Note equal in principal
amount to any unpurchased portion of each Senior Note surrendered.
Election of the Offer to Purchase by a Holder shall (unless
otherwise provided by law) be irrevocable. The payment of accrued interest
as part of any repurchase price on any Purchase Date shall be subject to
the right of Holders of record on the relevant Regular Record Date to
receive interest due on an Interest Payment Date that is on or prior to
such Purchase Date.
If an Offer to Purchase Senior Notes is made, the Company shall
comply with all tender offer rules, including but not limited to Section
14(e) under the Exchange Act and Rule 14e-1 thereunder, to the extent
applicable to such Offer to Purchase.
<PAGE>
22
Section 3.8. Transactions with Affiliates.
The Company shall not, and shall not permit any Restricted
Subsidiary to, (a) sell, lease, transfer, or otherwise dispose of any of
its properties, assets, or securities to, (b) purchase any property,
assets, or securities from, or (c) enter into any contract or agreement
with or for the benefit of an Affiliate (as defined below) of the Company
or a Subsidiary of the Company (other than the Company or a wholly-owned
Subsidiary of the Company) (an "Affiliate Transaction") other than
Affiliate Transactions in the ordinary course of business which in the
aggregate do not exceed (i) $25.0 million in any one Affiliate Transaction
or series of related Affiliate Transactions unless a majority of the
disinterested members of the Board of Directors determines that such
Affiliate Transaction or series of Affiliate Transactions is on terms not
less favorable to the Company or such Restricted Subsidiary than those that
would apply to an arms-length transaction with an unaffiliated party and
(ii) $100.0 million in any one Affiliate Transaction or series of related
Affiliate Transactions unless the test set forth in clause (i) has been
satisfied and the Board of Directors of the Company shall have been advised
by an independent financial advisor that, in the opinion of such advisor,
such Affiliate Transaction or series of Affiliate Transactions is fair,
from a financial point of view, to the Company or such Restricted
Subsidiary. Solely for purposes of this Section 3.8, the term "Affiliate"
shall have the meaning set forth in Rule 405 promulgated by the Securities
and Exchange Commission under the Securities Act of 1933, as amended,
provided, however, that there shall be a rebuttable presumption that any
Person that holds more than 15% of the stock having ordinary voting power
of an entity is an "Affiliate" of such entity.
Section 3.9. Sale and Leaseback Transactions.
The Company shall not, and shall not permit any Restricted
Subsidiary to, enter into any Sale and Leaseback Transaction unless: (a)
the Capital Lease Obligation incurred in connection therewith complies with
Section 3.1 and (b) the net cash proceeds therefrom are applied in
compliance with Section 3.7 and to the extent required by Section 3.7. If
the Company reaches Investment Grade Status, the provisions of clause (a)
above shall not apply thereafter.
Section 3.10. Merger and Certain Other Transactions.
In addition to the conditions set forth in Section 11.01 of the
Indenture, the Company, in a single transaction or through a series of
related transactions, shall not consolidate with or merge with or into any
other Person, or transfer (by lease, assignment, sale, or otherwise) all or
substantially all of its properties and assets to another Person unless
immediately after and giving effect to such transaction and the incurrence
of any Indebtedness to be incurred in connection therewith the Surviving
Person could incur $1.00 of additional Indebtedness under the Interest
Coverage Ratio test.
Section 3.11. Permitting Unrestricted Subsidiaries to Become Restricted
Subsidiaries.
The Company shall not permit any Unrestricted Subsidiary to be
designated as a Restricted Subsidiary unless such Subsidiary has
outstanding no Indebtedness except such Indebtedness as the Company could
permit it to become liable for immediately after becoming
<PAGE>
23
a Restricted Subsidiary and such Subsidiary is otherwise in compliance with
all provisions of the Indenture and this Supplemental Indenture that apply
to Restricted Subsidiaries.
Section 3.12. Payment Office.
The Company shall cause a Payment Office for the Senior Notes to
be maintained at all times in New York, New York.
ARTICLE IV. ADDITIONAL EVENTS OF DEFAULT.
Section 4.1. Additional Events of Default.
In addition to the Events of Default set forth in the Indenture,
the term "Event of Default," whenever used in the Indenture or this
Supplemental Indenture with respect to the Senior Notes, means any one of
the following events (whatever the reason for such Event of Default and
whether it may be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree, or order of any court or any
order, rule, or regulation of any administrative or governmental body):
(a) the failure to redeem the Senior Notes when required
pursuant to the terms and conditions thereof or to pay the repurchase
price for Senior Notes to be repurchased in accordance with Section
3.4 or 3.7 of this Supplemental Indenture;
(b) any nonpayment at maturity or other default is made under
any agreement or instrument relating to any other Indebtedness of the
Company or any Restricted Subsidiary (the unpaid principal amount of
which is not less than $100.0 million), and, in any such case, such
default (i) continues beyond any period of grace provided with respect
thereto and (ii) results in such Indebtedness becoming due prior to
its stated maturity or occurs at the final maturity of such
Indebtedness; provided, however, that, subject to the provisions of
Section 9.01 and 8.08 of the Indenture, the Trustee shall not be
deemed to have knowledge of such nonpayment or other default unless
either (1) a Responsible Officer of the Trustee has actual knowledge
of nonpayment or other default or (2) the Trustee has received written
notice thereof from the Company, from any Holder, from the holder of
any such Indebtedness or from the trustee under the agreement or
instrument, relating to such Indebtedness;
(c) the entry of one or more judgments or orders for the payment
of money against the Company or any Restricted Subsidiary, which
judgments and orders create a liability of $100.0 million or more in
excess of insured amounts and have not been stayed (by appeal or
otherwise), vacated, discharged, or otherwise satisfied within 60
calendar days of the entry of such judgments and orders; and
(d) Events of Default of the type and subject to the conditions
set forth in clauses (vi) and (vii) of Section 8.01(a) of the
Indenture in respect of any Significant Subsidiary or, in related
events, any group of Subsidiaries which, if considered in the
aggregate, would be a Significant Subsidiary of the Company.
<PAGE>
24
ARTICLE V. DEFEASANCE.
Section 5.1. Applicability of Article V of the Indenture.
(a) The Senior Notes shall be subject to Defeasance and Covenant
Defeasance as provided in Article V of the Indenture; provided, however,
that no Defeasance or Covenant Defeasance shall be effective unless and
until:
(i) there shall have been delivered to the Trustee the
opinion of a nationally recognized independent public accounting firm
certifying the sufficiency of the amount of the moneys, U.S.
Government Obligations, or a combination thereof, placed on deposit to
pay, without regard to any reinvestment, the principal of and any
premium and interest on the Senior Notes on the Stated Maturity
thereof or on any earlier date on which the Senior Notes shall be
subject to redemption;
(ii) there shall have been delivered to the Trustee the
certificate of a Responsible Officer of the Company certifying, on
behalf of the Company, to the effect that such Defeasance or Covenant
Defeasance shall not result in a breach or violation of, or constitute
a default under, any agreement to which the Company is a party or
violate any law to which the Company is subject; and
(iii) No Event of Default or event that (after notice or
lapse of time or both) would become an Event of Default shall have
occurred and be continuing at the time of such deposit or, with regard
to any Event of Default or any such event specified in Sections
8.01(a)(vi) and (vii), at any time on or prior to the 124th calendar
day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until after such 124th
calendar day).
(b) Upon the exercise of the option provided in Section 5.01 of
the Indenture to have Section 5.03 of the Indenture applied to the
Outstanding Senior Notes, in addition to the obligations from which the
Company shall be released specified in the Indenture, the Company shall be
released from its obligations under Article III hereof.
ARTICLE VI. MISCELLANEOUS.
Section 6.1. Reference to and Effect on the Indenture.
This Supplemental Indenture shall be construed as supplemental to
the Indenture and all the terms and conditions of this Supplemental
Indenture shall be deemed to be part of the terms and conditions of the
Indenture. Except as set forth herein, the Indenture heretofore executed
and delivered is hereby (i) incorporated by reference in this Supplemental
Indenture and (ii) ratified, approved and confirmed.
<PAGE>
25
Section 6.2. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with
any term, provision, or condition set forth in Article III hereof if the
Holders of a majority in principal amount of the Outstanding Senior Notes
shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision or
condition, but no such waiver shall extend to or affect such term,
provision, or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company
and the duties of the Trustee in respect of any such term, provision, or
condition shall remain in full force and effect.
Section 6.3. Supplemental Indenture May be Executed In Counterparts.
This instrument may be executed in any number of counterparts,
each of which shall be an original; but such counterparts shall together
constitute but one and the same instrument.
<PAGE>
26
Section 6.4. Effect of Headings.
The Article and Section headings herein are for convenience only
and shall not affect the construction hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, all as of the day and year first
above written.
[Seal] FEDERATED DEPARTMENT STORES, INC.
By:
-------------------------
Name:
Title:
Attest:
- -----------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
------------------------
Name:
Title:
Attest:
- -----------------------------------
Name:
Title:
<PAGE>
27
STATE OF OHIO )
) ss.:
COUNTY OF HAMILTON )
On this day of October, 1995, before me personally came
, to me known, who, being by me duly sworn, did depose and say that
he/she is a of FEDERATED DEPARTMENT STORES, INC., one of
the entities described in and which executed the above instrument; that
he/she knows the seal of said entity; that the seal or a facsimile thereof
affixed to said instrument is such seal; that it was so affixed by
authority of the Board of Directors of said entity, and that he/she signed
his/her name thereto by like authority.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
--------------------------
Notary Public
<PAGE>
28
COMMONWEALTH OF MASSACHUSETTS)
) ss.:
COUNTY OF NORFOLK )
On this day of October, 1995, before me personally
came , to me known, who, being by me duly sworn, did depose
and say that he/she is a of STATE STREET BANK AND TRUST
COMPANY, one of the entities described in and which executed the above
instrument; that he/she knows the seal of said entity; that the seal or a
facsimile thereof affixed to said instrument is such seal; that it was so
affixed by authority of the Board of Directors of said entity, and that
he/she signed his/her name thereto by like authority.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
--------------------------
Notary Public
<PAGE>
29
Schedule I
Particular Terms of Senior Notes
Maturity: The Senior Notes will mature on October 15, 2002.
Interest: The interest rate per annum on the Senior Notes shall be 8.125%.
Redemption: The Senior Notes will not be redeemable at the option of the
Company prior to maturity and are not subject to a sinking fund.
FEDERATED
----------------------
DEPARTMENT STORES, INC.
Contacts:
News Release Media - Carol Sanger
513/579-7764
Investor - Susan Robinson
513/579-7780
FOR IMMEDIATE RELEASE
FEDERATED PRICES SENIOR NOTE OFFERING
CINCINNATI, OHIO, October 3, 1995 - Federated Department Stores, Inc.
announced today that it has entered into an agreement providing for an
underwritten public offering by the company of $400 million aggregate
principal amount of 8.125 percent senior notes due 2002.
The notes initially will be offered to the public at a price equal to
99.89 percent of the principal amount. The closing of the offering is
subject to customary conditions.
The net proceeds of the offering are expected to be used to prepay the
entire $307.4 million aggregate principal amount of the company's senior
convertible discount notes due 2004, as well as for other general corporate
purposes, which may include expenditures related to Federated's pending
acquisition of Broadway Stores, Inc. If the company's senior convertible
discount notes are prepaid, formal notice of such prepayment will be given
according to the instruments under which the notes were issued.
The notes will be offered only by means of a written prospectus, which
will be available from Goldman, Sachs & Co., CS First Boston, Lehman Brothers
and Citicorp Securities, Inc., who are managers of the underwriting.
Federated, with corporate offices in Cincinnati and New York, is one of
the nation's leading department store retailers, with annual sales of more
than $14 billion. Federated currently operates 358 department stores and more
than 100 specialty and clearance stores in 35 states. Federated's department
stores operate under the names of Bloomingdale's, The Bon Marche, Bullock's,
Burdines, Goldsmith's, Jordan Marsh, Lazarus, Macy's, Rich's and Stern's.
# # #
- --------------------------------------------------------------------------------
Bloomingdale's . The Bon Marche . Bullock's Aeropostale . Charter Club
Burdines . Goldsmith's . Jordan March . Lazarus Macy's Close-Out
Macy's . Rich's . Stern's Bloomingdale's By Mail
