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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: July 15, 1997
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.
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 filing the form of Underwriting Agreement, dated as of
July 9, 1997, between Federated and the underwriters therein and the forms of
Eighth and Ninth Supplemental Trust Indentures, dated as of July 14, 1997,
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
INFORMATION AND EXHIBITS.
The following exhibits are filed herewith:
1. Form of Underwriting Agreement, dated as of July 9, 1997, between Federated
Department Stores, Inc. and the underwriters named therein.
2. Form of Eighth Supplemental Trust Indenture, dated as of July 14,
1997, between Federated Department Stores, Inc. and State Street Bank and
Trust Company (successor to The First National Bank of Boston), as Trustee.
3. Form of Ninth Supplemental Trust Indenture, dated as of July 14,
1997, between Federated Department Stores, Inc. and State Street Bank and
Trust Company (successor to The First National Bank of Boston), as Trustee.
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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: July 15, 1997 By: /s/Dennis J. Broderick
--------------------------
Dennis J. Broderick
Senior Vice President,
General Counsel and
Secretary
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EXHIBIT INDEX
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Exhibit
Number Description
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1. Form of Underwriting Agreement, dated as of July 9, 1997, between
Federated Department Stores, Inc. and the underwriters named
therein.
2. Form of Eighth Supplemental Trust Indenture, dated as of
July 14, 1997, between Federated Department Stores, Inc. and
State Street Bank and Trust Company (successor to The First
National Bank of Boston), as Trustee.
3. Form of Ninth Supplemental Trust Indenture, dated as of
July 14, 1997, between Federated Department Stores, Inc. and
State Street Bank and Trust Company (successor to The First
National Bank of Boston), as Trustee.
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EXHIBIT 1
EXECUTION COPY
Federated Department Stores, Inc.
7.45% Senior Debentures due 2017
6.79% Senior Debentures due 2027
Underwriting Agreement
July 9, 1997
Goldman, Sachs & Co.
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
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 $300,000,000
principal amount of 7.45% Senior Debentures due 2017 (the "2017 Debentures") and
an aggregate of $250,000,000 principal amount of 6.79% Senior Debentures due
2027 (the "2027 Debentures" and, together with the 2017 Debentures, 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. 33-64973) 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
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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 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
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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;
(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
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
to all real property and 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
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incorporated, validly existing and in good standing would not,
individually or in the aggregate, have a Material Adverse Effect;
(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 2017 Debentures 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 Eighth Supplemental Indenture dated as of July 14,
1997 (the "Eighth 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 2017 Debentures are
to be issued; the 2027 Debentures 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, as supplemented by the Ninth Supplemental
Indenture dated as of July 14, 1997 (the "Ninth Supplemental Indenture",
and, together with the Eighth Supplemental Indenture, the "Supplemental
Indentures"), between the Company and the Trustee, under which the 2027
Debentures 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 Indentures, 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 in all material respects 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 Indentures, and this Agreement and the
consummation of the transactions herein and therein contemplated 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
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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 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 Indentures, 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) Except for such of the following violations, defaults and
failures as individually or in the aggregate would not have a Material
Adverse Effect, neither the Company nor any of its 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 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;
(k) The statements set forth in the Prospectus as amended or
supplemented under the captions "Description of Debt Securities" and
"Description of the Debentures", 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 the documents referred to therein, constitute
accurate summaries of the terms of such documents in all material
respects;
(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
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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"); and
(n) 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,
(a) at a purchase price of 98.775% of the principal amount thereof, plus accrued
interest, if any, from July 14, 1997 to the Time of Delivery hereunder,the
principal amount of 2017 Debentures set forth opposite the name of such
Underwriter in Schedule I hereto and (b) at a purchase price of 99.391% of the
principal amount thereof, plus accrued interest, if any, from July 14, 1997 to
the Time of Delivery hereunder,the principal amount of 2027 Debentures 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 2017 Debentures and the 2027 Debentures to be purchased
by each Underwriter hereunder will each 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 July 14, 1997 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
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.
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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 in the United
States 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;
(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
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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 2017 Debentures and the 2027 Debentures are in
global form, to furnish to the holders thereof 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;
(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);
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(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 reasonable 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
Memorandum, 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 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.
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 III;
9
<PAGE>
(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 IV;
(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 V;
(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 shall have
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 shall have furnished to the Underwriters a "bring-down"
letter, dated the Time of Delivery, in form and substance satisfactory to
the Underwriters (the executed copy of the letter delivered prior to the
execution of this Agreement is attached hereto as Annex I and draft the
form of the letter to be delivered on the effective date of any
post-effective amendment to the Registration Statement and as of the Time
of Delivery is attached hereto as Annex II);
(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 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
10
<PAGE>
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
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
11
<PAGE>
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 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
12
<PAGE>
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.
(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 2017 Debentures or 2027 Debentures, as the case may be, 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
2017 Debentures or 2027 Debentures 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 2017 Debentures or 2027 Debentures 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 2017 Debentures or 2027 Debentures 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 2017 Debentures or
2027 Debentures or the Company notifies the Underwriters that it has so arranged
for the purchase of such 2017 Debentures or 2027 Debentures, as the case may be,
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 2017 Debentures or 2027 Debentures, as the case may be.
(b) If, after giving effect to any arrangements for the purchase of
the 2017
13
<PAGE>
Debentures or 2027 Debentures, as the case may be, of a defaulting Underwriter
or Underwriters by the Underwriters and the Company as provided in subsection
(a) above, the aggregate principal amount of such 2017 Debentures or 2027
Debentures which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the 2017 Debentures or 2027 Debentures, as the
case may be, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of 2017 Debentures
or 2027 Debentures, as the case may be, 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 2017 Debentures
or 2027 Debentures, as the case may be, which such Underwriter agreed to
purchase hereunder) of the 2017 Debentures or 2027 Debentures, as the case may
be, 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 2017 Debentures or 2027 Debentures, as the case may be, of a defaulting
Underwriter or Underwriters by the Underwriters and the Company as provided in
subsection (a) above, the aggregate principal amount of 2017 Debentures or 2027
Debentures, as the case may be, which remains unpurchased exceeds one-eleventh
of the aggregate principal amount of all the 2017 Debentures or 2027 Debentures,
as the case may be, or if the Company shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase 2017
Debentures or 2027 Debentures, as the case may be, 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 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
14
<PAGE>
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.
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.
15
<PAGE>
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: Dennis J. Broderick
Title: Senior Vice President
Accepted as of the date hereof:
GOLDMAN, SACHS & CO.,
CREDIT SUISSE FIRST BOSTON CORPORATION
PRUDENTIAL SECURITIES INCORPORATED
By:
----------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
16
<PAGE>
SCHEDULE I
Principal Amount
to be Purchased
----------------------------------
2017 Debentures 2027 Debentures
--------------- ---------------
Goldman, Sachs & Co. $165,000,000 $137,500,000
Credit Suisse First Boston Corporation 75,000,000 62,500,000
Prudential Securities Incorporated 60,000,000 50,000,000
------------ ------------
Total $300,000,000 $250,000,000
============ ============
17
<PAGE>
ANNEX I
[Attach executed copy of initial comfort letter]
<PAGE>
ANNEX II
[Attach form of bring-down comfort letter]
<PAGE>
ANNEX III
July 14, 1997
GOLDMAN, SACHS & CO.,
CREDIT SUISSE FIRST BOSTON CORPORATION
PRUDENTIAL SECURITIES INCORPORATED
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 $300,000,000 principal amount of 7.45% Senior Debentures due 2017 (the "2017
Debentures") and $250,000,000 principal amount of 6.79% Senior Debentures due
2027 (the "2027 Debentures" and, together with the 2017 Debentures, the
"Debentures") of Federated Department Stores, Inc., a Delaware corporation (the
"Company"), pursuant to the Underwriting Agreement dated July 9, 1997 between
you and the Company.
We have examined the Registration Statement on Form S-3 (File No.
33-64973) 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 January 22, 1996, as supplemented by the
prospectus supplement dated July 9, 1997 (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 February 1, 1997, the Quarterly Report on Form 10-Q of the
Company for the fiscal quarter ended May 3, 1997 [and the Current Report on Form
8-K of the Company dated July , 1997] (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
Eighth Supplemental Indenture dated as of July 14, 1997 and the Ninth
Supplemental Indenture, dated as of July 14, 1997, 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 Debentures. 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.
III-1
<PAGE>
Goldman, Sachs & Co. July 14, 1997
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
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.
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 obligation of the Company enforceable against the Company
in accordance with its terms.
3. The Debentures 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 Debentures,"
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 Debentures, 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.
III-2
<PAGE>
Goldman, Sachs & Co. July 14, 1997
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
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 Documents), we participated in
conferences with certain officers and employees of the Company, with
representatives of KPMG Peat Marwick 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 July 9, 1997, 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) 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
July 14, 1997
Goldman, Sachs & Co.,
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Re: $300,000,000 Aggregate Principal Amount of 7.45% Senior
Debentures due 2017 and $250,000,000 Aggregate Principal Amount
of 6.79% Senior Debentures due 2027 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 $300,000,000 aggregate principal amount of the Company's 7.45% Senior
Debentures due 2017 (the "2017 Debentures") and $250,000,000 aggregate principal
amount of the Company's 6.79% Senior Debentures due 2027 (the "2027 Debentures",
and, together with the 2017 Debentures, the "Securities") pursuant to the
Underwriting Agreement, dated July 9, 1997 (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. 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;
3. Each Significant Subsidiary of the Company has been duly
incorporated
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<PAGE>
Goldman, Sachs & Co. July 14, 1997
Credit Suisse First Boston Corporation
Prudential Securities 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 and 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, 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);
4. 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;
5. 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 Indentures, and the Underwriting Agreement and
the consummation of the transactions therein contemplated 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;
6. Neither the Company nor any of its subsidiaries is (a) in
violation of its
IV-2
<PAGE>
Goldman, Sachs & Co. July 14, 1997
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
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;
7. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
8. The 2017 Debentures 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, as
supplemented by the Eighth Supplemental Indenture, and the 2027 Debentures 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, as supplemented by the Ninth Supplemental Indenture,
except in each case as the enforceability of the Securities and the Indenture,
as so supplemented, 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, as supplemented by the Supplemental Indentures, conform in all
material respects to the descriptions thereof in the Prospectus, as amended or
supplemented prior to the date hereof;
9. The Indenture, as supplemented by the Supplemental Indentures,
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, as supplemented by the
Supplemental Indentures, 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, as supplemented by the Supplemental Indentures, has been duly
qualified under the Trust Indenture Act;
10. No consent, approval, authorization, order, registration or
qualification of or with any United States 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, as supplemented by the Supplemental Indentures, 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;
11. The statements set forth in the Prospectus, as amended or
supplemented
IV-3
<PAGE>
Goldman, Sachs & Co. July 14, 1997
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
prior to the date hereof, under the captions "Description of Debt Securities"
and "Description of the Debentures," 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, constitute accurate
summaries of such provisions in all material respects;
12. 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;
13. 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 no facts have come to my attention which cause
me to believe that any of the documents referred to in this paragraph 13, 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 11; and
14. 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 8 through 14 hereof, I have
relied solely on the opinion of Jones, Day, Reavis & Pogue furnished to you
pursuant to Section 7(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.
I am a member of the bar of the State of Ohio, and have not been
admitted to the
IV-4
<PAGE>
Goldman, Sachs & Co. July 14, 1997
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
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 1-12
and paragraph 14, 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 Securities 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
July 14, 1997
Goldman, Sachs & Co.
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Re: $300,000,000 Aggregate Principal Amount of 7.45% Senior Debentures
due 2017 and $250,000,000 Aggregate Principal Amount of 6.79% Senior
Debentures due 2027 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 $300,000,000 aggregate principal
amount of the Company's 7.45% Senior Debentures due 2017 (the "2017 Debentures")
and $250,000,000 aggregate principal amount of the Company's 6.79% Senior
Debentures due 2027 (the "2027 Debentures" and, together with the 2017
Debentures, the "Securities") pursuant to the Underwriting Agreement, dated July
9, 1997 (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 2017 Debentures 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
V-1
<PAGE>
Goldman, Sachs & Co. July 14, 1997
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
benefits provided by the Indenture, as supplemented by the Eighth Supplemental
Indenture, and the 2027 Debentures 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, as
supplemented by the Ninth Supplemental Indenture, except in each case as the
enforceability of the Securities and the Indenture, as so supplemented, 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, as
supplemented by the Supplemental Indentures, conform in all material respects to
the descriptions thereof in the Prospectus, as amended or supplemented prior to
the date hereof;
4. The Indenture, as supplemented by the Supplemental Indentures,
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, as supplemented by the
Supplemental Indentures, 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, as supplemented by the Supplemental Indentures, has been duly
qualified under the Trust Indenture Act;
5. No consent, approval, authorization, order, registration or
qualification of or with any 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, as
supplemented by the Supplemental Indentures, 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 Debentures," 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, constitute accurate
summaries of such provisions in all material respects;
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
V-2
<PAGE>
Goldman, Sachs & Co. July 14, 1997
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
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 contained 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.
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. July 14, 1997
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
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
Securities 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
<PAGE>
Exhibit 2
- --------------------------------------------------------------------------------
FEDERATED DEPARTMENT STORES, INC.
and
STATE STREET BANK AND TRUST COMPANY
(successor to The First National Bank of Boston),
Trustee
EIGHTH SUPPLEMENTAL TRUST INDENTURE
Dated as of July 14, 1997
Supplementing that certain
INDENTURE
Dated as of December 15, 1994
Authorizing the Issuance and Delivery of
Senior Securities
consisting of $300,000,000 aggregate principal amount of
7.45% Senior Debentures due 2017
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
RECITALS................................................................... 1
[Form of Face of Security]................................................. 2
[Form of Reverse of Security].............................................. 3
ARTICLE I. ISSUANCE OF SENIOR DEBENTURES................................... 6
Section 1.1. Issuance of Senior Debentures; Principal Amount;
Maturity.............................................. 6
Section 1.2. Interest on the Senior Debentures; Payment of Interest. 6
ARTICLE II. CERTAIN DEFINITIONS............................................ 7
Section 2.1. Certain Definitions.................................... 7
ARTICLE III. CERTAIN COVENANTS............................................. 14
Section 3.1. Liens.................................................. 14
Section 3.2. Sale and Leaseback Transactions........................ 14
Section 3.3. Permitting Unrestricted Subsidiaries to Become
Restricted Subsidiaries............................... 15
Section 3.4. Payment Office......................................... 15
ARTICLE IV. ADDITIONAL EVENTS OF DEFAULT................................... 16
Section 4.1. Additional Events of Default........................... 16
ARTICLE V. DEFEASANCE...................................................... 16
Section 5.1. Applicability of Article V of the Indenture............ 16
ARTICLE VI. MISCELLANEOUS.................................................. 17
Section 6.1. Reference to and Effect on the Indenture............... 17
Section 6.2. Waiver of Certain Covenants............................ 17
Section 6.3. Supplemental Indenture May be Executed In Counterparts. 18
Section 6.4. Effect of Headings..................................... 18
<PAGE>
EIGHTH SUPPLEMENTAL INDENTURE, dated as of July 14, 1997, 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
"7.45% Senior Debentures due 2017" (the "Senior Debentures") 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.
7.45% SENIOR DEBENTURE DUE 2017
No. R- $______
Cusip No.
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 July 15,
2017 and to payinterest thereon from July 14, 1997 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semiannually on January 15 and July 15 of each year, commencing on January 15,
1998, at the rate of 7.45% 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 January 1 or July 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.
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.
<PAGE>
3
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: July 14, 1997 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
$300,000,000.
As a result of certain Sale and Leaseback transactions, the Company
may be required to repurchase this Security. 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
<PAGE>
4
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 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.
<PAGE>
5
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.
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 Debentures, when
the Senior Debentures 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 Debentures 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 Debentures.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
<PAGE>
6
In order to declare the terms and conditions upon which the Senior
Debentures are authenticated, issued, and delivered, and in consideration of the
premises and of the purchase and acceptance of the Senior Debentures 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 Debentures, as
follows:
ARTICLE I. ISSUANCE OF SENIOR DEBENTURES.
Section 1.1. Issuance of Senior Debentures; Principal Amount; Maturity.
(a) On July 14, 1997 the Company shall issue and deliver to the
Trustee, and the Trustee shall authenticate, Senior Debentures 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, be determined by the officers executing such Senior
Debentures, as evidenced by their execution of such Senior Debentures.
(b) The Senior Debentures shall be issued in the aggregate principal
amount of $300,000,000 and shall mature on July 15, 2017.
Section 1.2. Interest on the Senior Debentures; Payment of Interest.
(a) The Senior Debentures shall bear interest at the rate of 7.45%
per annum from July 14, 1997, except in the case of Senior Debentures 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 Debenture (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 January 1 or July 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 Debenture (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 Debentures 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
<PAGE>
7
Person entitled thereto as such address appears in the Security Register.
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 financing provided for by the Credit
Agreement, dated as of December 19, 1994, among the Company, certain financial
institutions, Citibank, N.A., as administrative agent, and The Chase Manhattan
Bank (as successor to 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.
"Consolidated Net Tangible Assets" means total assets (less
depreciation and
<PAGE>
8
valuation reserves and other reserves and items deductible from gross book value
of specific asset accounts under GAAP) after deducting therefrom (i) all current
liabilities and (ii) all goodwill, trade names, trademarks, patents, unamortized
debt discount, organization expenses, and other like intangibles, all as set
forth on the most recent balance sheet of the Company and its consolidated
Subsidiaries and computed in accordance with GAAP.
"Effective Date" means December 19, 1994.
"Existing Indebtedness" means all Indebtedness under or evidenced
by: (a) the Senior Debentures; (b) the Company's 6.79% Senior Debentures due
2027; (c) the Company's 10% Senior Notes due 2001; (d) the Company's 8.125%
Senior Notes due 2002; (e) the Company's 5% Convertible Subordinated Notes due
2003; (f) the Company 8 1/2% Senior Notes due 2003; (g) 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; (h)
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; (i) the outstanding principal amount
of notes issued pursuant to the Loan Agreement, dated as of May 26, 1994, by and
among Lazarus PA, Inc., PNC Bank Ohio, National Association, as agent, and the
financial institutions listed on the signature pages thereof; (j) the Capital
Lease Obligations of the Company and the Restricted Subsidiaries existing on the
date of the initial issuance of the Senior Debentures; (k) the outstanding
principal amount of uncertificated obligations of the Company owed to the
Internal Revenue Service and other taxing authorities; (l) the existing secured
mortgage debt of the Macy's Debtors assumed pursuant to the Plan; (m) 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; (n) the outstanding principal amount of
the notes of Broadway Stores, Inc. ("Broadway") held by Federated Noteholding
Corporation II ("FNC II"); (o) the outstanding principal amount of mortgage
indebtedness of Broadway held by FNC II; (p) the outstanding principal amount of
mortgage indebtedness of Broadway to Bank of America; and (q) 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 Debentures.
"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.
"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
<PAGE>
9
which such Lien relates as debtor.
"Moody's" means Moody's Investors Service, Inc. 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 Debentures, the calculation thereof pursuant to the Section hereof
requiring such Offer to Purchase);
(c) the applicable Purchase Date;
(d) the purchase price to be paid by the Company for each $1,000
principal amount at maturity of Senior Debentures accepted for payment (as
specified in this Supplemental Indenture);
(e) that the Holder of any Senior Debenture may tender for purchase
by the Company all or any portion of such Senior Debenture equal to $1,000
principal amount or any integral multiple thereof;
(f) the place or places where Senior Debentures are to be
surrendered for tender pursuant to such Offer to Purchase;
(g) any Senior Debenture 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 Debenture and this Supplemental
Indenture;
(h) that on the Purchase Date the purchase price shall become due
and payable upon each Senior Debenture (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 Debenture pursuant
to such Offer to Purchase shall be required to surrender such Senior
Debenture 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 Debenture 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 Debentures (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 Debentures and (ii) if Senior
Debentures 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
<PAGE>
10
Company shall purchase Senior Debentures having an aggregate principal
amount equal to the Purchase Amount and (B) the particular Senior
Debentures (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 Debentures
of a denomination larger than $1,000;
(k) that, in the case of any Holder whose Senior Debenture is
purchased only in part, the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Senior Debenture without
service charge, a new Senior Debenture or Senior Debenture 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 Debenture so tendered; and
(l) any other information required by applicable law to be included
therein.
"Offer to Purchase" means an offer to purchase Senior Debentures
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 Liens" means: (a) Liens (other than Liens on inventory)
securing (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 (a)(I) 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 (a)(I) 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 Debentures 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) Indebtedness in respect of the deferred purchase price of
property or arising under any conditional sale or other title retention
agreement; (F) Indebtedness of a Person acquired by the Company or a Subsidiary
of the Company at the time of such acquisition; (G) 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); (H) other
Indebtedness in outstanding amounts not to exceed, in the aggregate, the greater
of $750.0 million and 12.5% of Consolidated Net Tangible Assets of the Company
and the Restricted Subsidiaries at any particular time; and (I) Indebtedness
incurred in connection with any extension, renewal, refinancing, replacement, or
refunding (including successive extensions,
<PAGE>
11
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); (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 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 Debentures 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
<PAGE>
12
with applicable securities laws).
"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 Ratings Service, a division of The
McGraw-Hill Companies, 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 (a)
10.0% or more of the total consolidated assets of the Company and its
Subsidiaries as of any date of determination or (b) 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 Debentures.
"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 Credit Card Master Trust
II (to the extent it is deemed to be a Subsidiary), Prime Receivables
Corporation, Prime II 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 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
<PAGE>
13
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 Debentures are Outstanding. 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. 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
Debentures are secured by an equal and ratable Lien on the same assets.
Section 3.2. Sale and Leaseback Transactions.
The Company shall not, and shall not permit any Restricted
Subsidiary to, enter into any Sale and Leaseback Transaction unless the net cash
proceeds therefrom are applied as follows: 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 Sale and Leaseback Transaction, net of all
payments made on any Indebtedness which is secured by the assets subject to such
Sale and Leaseback Transaction 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 Sale and Leaseback Transaction or by
applicable law be repaid out of the proceeds from such Sale and Leaseback
Transaction, and net of all distributions and other payments made to minority
interest holders in Subsidiaries or joint ventures as a result of such Sale and
Leaseback Transaction) from such Sale and Leaseback Transaction 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 by letters of credit or similar assurances of payment
issued by commercial banks of recognized standing 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 Debentures with such Excess Sale
<PAGE>
14
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 Debentures 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 Debentures 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
Debentures of a denomination larger than $1,000), (ii) deposit with the Paying
Agent money sufficient to pay the purchase price of all Senior Debentures or
portions thereof so accepted, and (iii) deliver to the Trustee Senior Debentures
so accepted. The Paying Agent shall promptly mail to the Holders of Senior
Debentures 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
Debenture equal in principal amount to any unpurchased portion of each Senior
Debenture 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 Debentures 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.
Section 3.3. 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 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 3.4. Payment Office.
The Company shall cause a Payment Office for the Senior Debentures
to be maintained at all times in New York, New York.
<PAGE>
15
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 Debentures, 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 Debentures when required
pursuant to the terms and conditions thereof or to pay the repurchase
price for Senior Debentures to be repurchased in accordance with Section
3.2 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.
ARTICLE V. DEFEASANCE.
Section 5.1. Applicability of Article V of the Indenture.
(a) The Senior Debentures 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:
<PAGE>
16
(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 Debentures on the Stated Maturity thereof or on any earlier
date on which the Senior Debentures 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 Debentures, 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.
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.
<PAGE>
17
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.
Section 6.4. Effect of Headings.
The Article and Section headings herein are for convenience only and
shall not affect the construction hereof.
<PAGE>
18
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: /s/ Karen M. Hoguet
-----------------------------------
Name: Karen M. Hoguet
Title: Senior Vice President and
Treasurer
Attest:
/s/ Susan P. Storer
- ------------------------------------
Name: Susan P. Storer
Title: OVP and Assistant Treasurer
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
-----------------------------------
Name:
Title:
Attest:
- ------------------------------------
Name:
Title:
<PAGE>
19
STATE OF OHIO )
) ss.:
COUNTY OF HAMILTON )
On this 11th day of July, 1997, 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.
/s/ Carol S. Bruser
--------------------------
Notary Public
<PAGE>
20
COMMONWEALTH OF MASSACHUSETTS )
) ss.:
COUNTY OF SUFFOLK )
On this ____ day of July, 1997, 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>
Exhibit 3
- --------------------------------------------------------------------------------
FEDERATED DEPARTMENT STORES, INC.
and
STATE STREET BANK AND TRUST COMPANY
(successor to The First National Bank of Boston),
Trustee
NINTH SUPPLEMENTAL TRUST INDENTURE
Dated as of July 14, 1997
Supplementing that certain
INDENTURE
Dated as of December 15, 1994
Authorizing the Issuance and Delivery of
Senior Securities
consisting of $250,000,000 aggregate principal amount of
6.79% Senior Debentures due 2027
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
Recitals................................................................... 1
Form of Face of Security................................................... 2
Form of Reverse of Security................................................ 3
ARTICLE I. ISSUANCE OF SENIOR DEBENTURES................................... 8
Section 1.1. Issuance of Senior Debentures; Principal Amount;
Maturity.............................................. 8
Section 1.2. Interest on the Senior Debentures; Payment of Interest. 8
ARTICLE II. CERTAIN DEFINITIONS............................................ 9
Section 2.1. Certain Definitions.................................... 9
ARTICLE III. CERTAIN COVENANTS............................................. 15
Section 3.1. Liens.................................................. 16
Section 3.2. Sale and Leaseback Transactions........................ 16
Section 3.3. Permitting Unrestricted Subsidiaries to Become
Restricted Subsidiaries............................... 17
Section 3.4. Payment Office......................................... 17
ARTICLE IV. REPAYMENT OF SENIOR DEBENTURES AT OPTION OF
HOLDERS.............................................................. 17
Section 4.1. Optional Repayment..................................... 17
ARTICLE V. REDEMPTION OF SENIOR DEBENTURES................................. 17
Section 5.1. Right of Redemption.................................... 17
ARTICLE VI. ADDITIONAL EVENTS OF DEFAULT................................... 18
Section 6.1. Additional Events of Default........................... 18
ARTICLE VII. DEFEASANCE.................................................... 18
Section 7.1. Applicability of Article V of the Indenture............ 18
ARTICLE VIII. MISCELLANEOUS................................................ 19
Section 8.1. Reference to and Effect on the Indenture............... 19
Section 8.2. Waiver of Certain Covenants............................ 19
Section 8.3. Supplemental Indenture May be Executed In Counterparts. 20
Section 8.4. Effect of Headings..................................... 20
<PAGE>
NINTH SUPPLEMENTAL INDENTURE, dated as of July 14, 1997, 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
"6.79% Senior Debentures due 2027" (the "Senior Debentures") 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.
6.79% SENIOR DEBENTURE DUE 2027
No. R- $_______
Cusip No.
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 July 15, 2027
and to pay interest thereon from July 14, 1997 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semiannually on January 15 and July 15 of each year, commencing on January 15,
1998, at the rate of 6.79% 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 January 1 or July 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.
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.
<PAGE>
3
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: July 14, 1997 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
$250,000,000.
Subject to and upon compliance with the provisions set forth herein,
each Holder of this Security shall have the right, at such Holder's option, to
require the Company to repay, and if such right is exercised the Company shall
repay, all or any part of such Holder's Securities on July 15, 2004 (the
"Optional Repayment Date") at a price (the "Optional Repayment Price") equal to
100% of the principal amount thereof, together with accrued and unpaid interest,
if any, to July 15, 2004.
To exercise such right, the Holder of this Security shall surrender
this Security, at the office or agency of the Company in New York, New York,
during the period (the "Election Period") beginning on May 15, 2004 and ending
at 5:00 p.m. (New York City time) on June 15, 2004 (or, if June 15, 2004 is not
a Business Day, the next succeeding Business Day), with the form entitled
"Option to Elect Repayment on July 15, 2004" appearing below duly completed. Any
such notice received by the Company during the Election Period shall be
irrevocable. The repayment option may be exercised by any Holder for less than
the entire principal amount of this Security,
<PAGE>
4
provided, that the principal amount with respect to which such right is
exercised must be equal to $1,000 or an integral multiple of $1,000. In the
event of repayment of this Security in part only, a new Security or Securities
of like tenor for the unrepaid portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof. All questions as to the validity,
form, eligibility (including time of receipt) and acceptance of this Security
for repayment shall be determined by the Company, whose determination shall be
final and binding.
Failure by the Company to pay the Optional Repayment Price when
required as described in the preceding paragraphs will result in an Event of
Default under the Indenture.
This Security is not redeemable at the option of the Company prior
to maturity and is not subject to a sinking fund; provided, however, if at any
time on or after July 15, 2004 the aggregate principal amount of the Securities
outstanding is $25,000,000 or less, the Company may elect to redeem the
Securities at any time thereafter, in whole and not in part, on at least 30 days
prior written notice at a redemption price of 100% of the principal amount,
together with accrued and unpaid interest thereon, if any, to the date of
redemption.
As a result of certain Sale and Leaseback transactions, the Company
may be required to repurchase this Security. 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
<PAGE>
5
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 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
***************
Option to Elect Repayment on July 15, 2004
The undersigned registered Holder of this Security hereby
irrevocably exercises the option to require the Company to repay this Security
or portion thereof (which is $1,000 or an integral multiple thereof) below
designated on July 15, 2004, in accordance with the terms of this Security, and
directs that payment be made to the registered Holder hereof unless a different
name has been indicated below.
Dated:__________________, 2004
Signature(s) must be guaranteed if Holder's Signature:
payment is to be made other than to
and in the name of the registered --------------------------------
Holder.
- --------------------------------------
Portion of Security to be repaid (in
integral multiples of $1000) if other
than the full principal amount thereof.
Signature Guarantee
Fill in for payment of Redemption
Price if to be made otherwise than
to the registered Holder
--------------------------------
- --------------------------------------
Name
- --------------------------------------
Address
- --------------------------------------
Please print name and address
(including zip code)
SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NUMBER
<PAGE>
7
*******************
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 Debentures, when
the Senior Debentures 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 Debentures 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 Debentures.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
In order to declare the terms and conditions upon which the Senior
Debentures are authenticated, issued, and delivered, and in consideration of the
premises and of the purchase and acceptance of the Senior Debentures 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 Debentures, as
follows:
ARTICLE I. ISSUANCE OF SENIOR DEBENTURES.
Section 1.1. Issuance of Senior Debentures; Principal Amount; Maturity.
(a) On July 14, 1997 the Company shall issue and deliver to the
Trustee, and the Trustee shall authenticate, Senior Debentures substantially in
the form set forth above, in each case with such appropriate insertions,
omissions, substitutions, and other variations as are required or
<PAGE>
8
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 Senior Debentures, as evidenced by their execution of
such Senior Debentures.
(b) The Senior Debentures shall be issued in the aggregate principal
amount of $250,000,000 and shall mature on July 15, 2027.
Section 1.2. Interest on the Senior Debentures; Payment of Interest.
(a) The Senior Debentures shall bear interest at the rate of 6.79%
per annum from July 14, 1997, except in the case of Senior Debentures 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 Debenture (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 July 1 or January 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 Debenture (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 Debentures 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>
9
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 financing provided for by the Credit
Agreement, dated as of December 19, 1994, among the Company, certain financial
institutions, Citibank, N.A., as administrative agent, and The Chase Manhattan
Bank (as successor to 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.
"Consolidated Net Tangible Assets" means total assets (less
depreciation and valuation reserves and other reserves and items deductible from
gross book value of specific asset accounts under GAAP) after deducting
therefrom (i) all current liabilities and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount, organization expenses, and other
like
<PAGE>
10
intangibles, all as set forth on the most recent balance sheet of the
Company and its consolidated Subsidiaries and computed in accordance with GAAP.
"Effective Date" means December 19, 1994.
"Existing Indebtedness" means all Indebtedness under or evidenced
by: (a) the Senior Debentures; (b) the Company's 6.79% Senior Debentures due
2027; (c) the Company's 10% Senior Notes due 2001; (d) the Company's 8.125%
Senior Notes due 2002; (e) the Company's 5% Convertible Subordinated Notes due
2003; (f) the Company 8 1/2% Senior Notes due 2003; (g) 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; (h)
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; (i) the outstanding principal amount
of notes issued pursuant to the Loan Agreement, dated as of May 26, 1994, by and
among Lazarus PA, Inc., PNC Bank Ohio, National Association, as agent, and the
financial institutions listed on the signature pages thereof; (j) the Capital
Lease Obligations of the Company and the Restricted Subsidiaries existing on the
date of the initial issuance of the Senior Debentures; (k) the outstanding
principal amount of uncertificated obligations of the Company owed to the
Internal Revenue Service and other taxing authorities; (l) the existing secured
mortgage debt of the Macy's Debtors assumed pursuant to the Plan; (m) 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; (n) the outstanding principal amount of
the notes of Broadway Stores, Inc. ("Broadway") held by Federated Noteholding
Corporation II ("FNC II"); (o) the outstanding principal amount of mortgage
indebtedness of Broadway held by FNC II; (p) the outstanding principal amount of
mortgage indebtedness of Broadway to Bank of America; and (q) 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 Debentures.
"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.
"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, Inc. or any successor to
the rating
<PAGE>
11
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 Debentures, the calculation thereof pursuant to the Section hereof
requiring such Offer to Purchase);
(c) the applicable Purchase Date;
(d) the purchase price to be paid by the Company for each $1,000
principal amount at maturity of Senior Debentures accepted for payment (as
specified in this Supplemental Indenture);
(e) that the Holder of any Senior Debenture may tender for purchase
by the Company all or any portion of such Senior Debenture equal to $1,000
principal amount or any integral multiple thereof;
(f) the place or places where Senior Debentures are to be
surrendered for tender pursuant to such Offer to Purchase;
(g) any Senior Debenture 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 Debenture and this Supplemental
Indenture;
(h) that on the Purchase Date the purchase price shall become due
and payable upon each Senior Debenture (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 Debenture pursuant
to such Offer to Purchase shall be required to surrender such Senior
Debenture 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 Debenture 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 Debentures (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 Debentures and (ii) if Senior
Debentures 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 Debentures having an
aggregate principal amount equal to the Purchase Amount and (B) the
particular Senior Debentures (or portions thereof) to be purchased shall
be selected by such method as the Trustee shall deem fair and appropriate
<PAGE>
12
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 Debentures of a denomination larger than $1,000;
(k) that, in the case of any Holder whose Senior Debenture is
purchased only in part, the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Senior Debenture without
service charge, a new Senior Debenture or Senior Debenture 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 Debenture so tendered; and
(l) any other information required by applicable law to be included
therein.
"Offer to Purchase" means an offer to purchase Senior Debentures
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 Liens" means: (a) Liens (other than Liens on inventory)
securing (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 (a)(I) 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 (a)(I) 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 Debentures 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) Indebtedness in respect of the deferred purchase price of
property or arising under any conditional sale or other title retention
agreement; (F) Indebtedness of a Person acquired by the Company or a Subsidiary
of the Company at the time of such acquisition; (G) 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); (H) other
Indebtedness in outstanding amounts not to exceed, in the aggregate, the greater
of $750.0 million and 12.5% of Consolidated Net Tangible Assets of the Company
and the Restricted Subsidiaries at any particular time; and (I) 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
<PAGE>
13
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); (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 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 Debentures 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).
"Restricted Subsidiary" means any direct or indirect subsidiary (as
that term is
<PAGE>
14
defined in Regulation S-X promulgated by the Securities and Exchange Commission)
other than an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Service, a division of The
McGraw-Hill Companies, 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 (a)
10.0% or more of the total consolidated assets of the Company and its
Subsidiaries as of any date of determination or (b) 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 Debentures.
"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 Credit Card Master Trust
II (to the extent it is deemed to be a Subsidiary), Prime Receivables
Corporation, Prime II 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 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
<PAGE>
15
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 Debentures are Outstanding. 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. 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
Debentures are secured by an equal and ratable Lien on the same assets.
Section 3.2. Sale and Leaseback Transactions.
The Company shall not, and shall not permit any Restricted
Subsidiary to, enter into any Sale and Leaseback Transaction unless the net cash
proceeds therefrom are applied as follows: 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 Sale and Leaseback Transaction, net of all
payments made on any Indebtedness which is secured by the assets subject to such
Sale and Leaseback Transaction 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 Sale and Leaseback Transaction or by
applicable law be repaid out of the proceeds from such Sale and Leaseback
Transaction, and net of all distributions and other payments made to minority
interest holders in Subsidiaries or joint ventures as a result of such Sale and
Leaseback Transaction) from such Sale and Leaseback Transaction 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 by letters of credit or similar assurances of payment
issued by commercial banks of recognized standing 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 Debentures 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
<PAGE>
16
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 Debentures 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 Debentures 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 Debentures of a
denomination larger than $1,000), (ii) deposit with the Paying Agent money
sufficient to pay the purchase price of all Senior Debentures or portions
thereof so accepted, and (iii) deliver to the Trustee Senior Debentures so
accepted. The Paying Agent shall promptly mail to the Holders of Senior
Debentures 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
Debenture equal in principal amount to any unpurchased portion of each Senior
Debenture 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 Debentures 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.
Section 3.3. 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 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 3.4. Payment Office.
The Company shall cause a Payment Office for the Senior Debentures
to be maintained at all times in New York, New York.
<PAGE>
17
ARTICLE IV. REPAYMENT OF SENIOR DEBENTURES AT OPTION OF HOLDERS
Section 4.1. Optional Repayment
Registered Holders of Senior Debentures shall have the right to
require the Company to repay such Senior Debentures in accordance the provisions
of the form of Securities set forth herein.
ARTICLE V. REDEMPTION OF SENIOR DEBENTURES
Section 5.1. Right of Redemption
The Senior Debentures may be redeemed by the Company in accordance
the provisions of the form of Securities set forth herein.
ARTICLE VI. ADDITIONAL EVENTS OF DEFAULT.
Section 6.1. 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 Debentures, 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 or repay the Senior Debentures when
required pursuant to the terms and conditions thereof or to pay the
repurchase price for Senior Debentures to be repurchased in accordance
with Sections 3.2, 4.1 and 5.1 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
<PAGE>
18
(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.
ARTICLE VII. DEFEASANCE.
Section 7.1. Applicability of Article V of the Indenture.
(a) The Senior Debentures 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 Debentures on the Stated Maturity thereof or on any earlier
date on which the Senior Debentures 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 Debentures, 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 VIII. MISCELLANEOUS.
Section 8.1. 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
<PAGE>
19
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.
Section 8.2. 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 8.3. 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.
Section 8.4. Effect of Headings.
The Article and Section headings herein are for convenience only and
shall not affect the construction hereof.
<PAGE>
20
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>
STATE OF OHIO )
) ss.:
COUNTY OF HAMILTON )
On this ____ day of July, 1997, 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>
COMMONWEALTH OF MASSACHUSETTS )
) ss.:
COUNTY OF SUFFOLK )
On this ____ day of July, 1997, 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
