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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: February 6, 1998
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 Underwriting Agreement, dated as of February 2, 1998,
between Federated and the underwriters named therein and the form of First
Supplemental Trust Indenture, dated as of February 6, 1998, between Federated
and Citibank, N.A., as Trustee, as exhibits hereto.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
The following exhibits are filed herewith:
1. Underwriting Agreement, dated as of February 2, 1998, between Federated
Department Stores, Inc. and the underwriters named therein.
2. Form of First Supplemental Trust Indenture, dated as of February 6, 1998,
between Federated Department Stores, Inc. and Citibank, N.A., 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: February 6, 1998 By: /s/Dennis J. Broderick
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Dennis J. Broderick
Senior Vice President, General Counsel
and Secretary
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
1. Underwriting Agreement, dated as of February 2, 1998, between
Federated Department Stores, Inc. and the underwriters named therein.
2. Form of First Supplemental Trust Indenture, dated as of February 6,
1998, between Federated Department Stores, Inc. and Citibank, N.A., as
Trustee.
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EXHIBIT 1
FEDERATED DEPARTMENT STORES, INC.
7% SENIOR DEBENTURES DUE 2028
UNDERWRITING AGREEMENT
February 2, 1998
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Chase Securities Inc.
c/o Credit Suisse First Boston Corporation
11 Madison Avenue
New York, New York 10010
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% Senior Debentures Due 2028 (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. 333-34321) in
respect of the Securities has been filed with the Securities and Exchange
Commission (the "Commission"); such registration statement and any post-
effective amendment thereto, each in the form heretofore delivered or to be
delivered to the Underwriters without exhibits thereto, but with documents
incorporated by reference in the prospectus contained therein, have been
declared effective by the Commission in such form; no other document with
respect to such registration statement or document incorporated by
reference therein has heretofore been filed or transmitted for filing with
the Commission (other than prospectuses filed or to be filed pursuant to
Rule 424(b) of the rules and regulations of the Commission under the
Securities Act of 1933, as amended (the "Act"), each in the form
heretofore delivered or to be delivered to the Underwriters); and no stop
order suspending the effectiveness of such registration statement has been
issued and no proceeding for that purpose has been initiated or threatened
by the Commission (any preliminary prospectus included in such
registration statement or filed with the Commission pursuant to
Rule 424(a) under the Act is hereinafter called a "Preliminary
Prospectus"; the various parts of such registration statement, including
all exhibits thereto and the documents incorporated by reference in the
prospectus contained in the registration statement at the time such part
of the registration statement became effective but excluding Form T-1,
each as amended at the time such part of the registration statement became
effective, are hereinafter collectively called the "Registration
Statement"; the prospectus relating to the Securities, in the form in
which it has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, being hereinafter
called the "Prospectus"; any reference herein to any Preliminary
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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 Credit Suisse First Boston Corporation expressly for
use in the Prospectus as amended or supplemented;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission thereunder
and do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; PROVIDED, HOWEVER, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by the Underwriters through Credit Suisse First Boston Corporation
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
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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 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
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non-assessable and are owned directly or indirectly by the Company, free
and clear of all liens, encumbrances, equities or claims (except as
otherwise disclosed in the Prospectus as amended or supplemented or where,
individually or in the aggregate, the failure to have been duly and validly
authorized and issued, to be fully paid and non-assessable and to be owned
directly or indirectly by the Company free and clear of liens,
encumbrances, equities or claims would not have a Material Adverse Effect);
(h) The Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by the
Indenture, dated as of September 10, 1997 (the "Indenture"), as
supplemented by the First Supplemental Indenture, to be dated as of
February 6, 1998 (the "First Supplemental Indenture"), between the Company
and Citibank N.A., as Trustee (the "Trustee"), under which the Securities
are to be issued; the Indenture has been duly authorized, executed and
delivered and duly qualified under the Trust Indenture Act; the Indenture
constitutes (and the Supplemental Indenture, when executed and delivered by
the Company and the Trustee, will constitute) a valid and legally binding
instrument, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, and other laws of general applicability relating to or
affecting creditors' rights and to general principles of equity, regardless
of whether such enforceability is considered in a proceeding in equity or
at law; and the Securities and the Indenture will conform 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 Indenture, 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 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 Indenture, except the
registration of the Securities under the Act, the Exchange Act and such as
have been obtained under the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriters;
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(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 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, at
a purchase price of 97.764% of the principal amount thereof, plus accrued
interest, if any, from February 6, 1998 to the Time of Delivery hereunder, the
principal amount of Securities set forth opposite the name of such Underwriter
in Schedule I hereto.
3. Upon the authorization by the Underwriters of the release of the
Securities, the several Underwriters propose to offer the Securities for sale
upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
4. (a) The Securities to be purchased by each Underwriter hereunder
will be represented by one or more definitive global securities in book-entry
form which will be deposited by or on behalf of the Company with The Depository
Trust Company ("DTC") or its designated custodian. The Company
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will deliver the Securities to Credit Suisse First Boston Corporation, 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 Credit Suisse First Boston Corporation at DTC.
The Company will cause the certificates representing the Securities to be made
available to Credit Suisse First Boston Corporation 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 February
6, 1998 or such other time and date as Credit Suisse First Boston Corporation
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.
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;
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(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 Act,
to notify the Underwriters and, upon your request and subject to your
approval, to file such document and to prepare and furnish without charge
to each Underwriter and to any dealer in securities as many copies as the
Underwriters may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance; and in case any
Underwriter is required to deliver a prospectus in connection with sales of
any of the Securities at any time nine months or more after the time of
issue of the Prospectus, upon request of such Underwriter but at the
expense of such Underwriter, to prepare and deliver to such Underwriter as
many copies as such Underwriter may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 9(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158, in which case this Section 5(d) shall not
be construed to require the Company to file any report referred to in Rule
158 prior to the time at which such report is otherwise due);
(e) During the period beginning from the date hereof and continuing to
and including the later of the Time of Delivery and such earlier time as
the Underwriters may notify the Company, not to offer, sell, contract to
sell or otherwise dispose of, except as provided hereunder, any securities
of the Company that are substantially similar to the Securities;
(f) For so long as Securities are in global form, to furnish to the
holders 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
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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);
(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 $5,000 in the aggregate) in connection with such
qualification and in connection with the Blue Sky Memorandum; (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
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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;
(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
9
<PAGE>
any change in the capital stock or long-term debt of the Company or any of
its subsidiaries or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company and
its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus as first amended or supplemented, the effect of which, in any
such case described in clause (i) or (ii), is in the judgment of the
Underwriters so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated in the Prospectus as
first amended or supplemented;
(g) On or after the date hereof, (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
any of the Company's debt securities;
(h) On or after the date hereof, there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension or
material limitation in trading in the Company's securities on the New York
Stock Exchange; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities; or (iv) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the
effect of any such event specified in this clause (iv) in the judgment of
the Underwriters makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Securities on the terms and in the
manner contemplated in the Prospectus as first amended or supplemented; or
(v) the occurrence of any material adverse change in the existing
financial, political or economic conditions in the United States or
elsewhere which, in the judgment of the Underwriters, would materially and
adversely affect the financial markets or the market for the Securities and
other debt securities;
(i) The Securities shall have been approved for listing, subject to
official notice of issuance, on the New York Stock Exchange; and
(j) The Company shall have furnished or caused to be furnished to the
Underwriters at the Time of Delivery certificates of officers of the
Company satisfactory to the Underwriters as to the accuracy of the
representations and warranties of the Company herein at and as of such Time
of Delivery, as to the performance by the Company of all of its obligations
hereunder to be performed at or prior to such Time of Delivery, as to the
matters set forth in subsections (a) and (f) of this Section and as to such
other matters as the Underwriters may reasonably request.
8.(a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
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
10
<PAGE>
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 Credit Suisse First Boston Corporation
expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement or the Prospectus as amended or supplemented, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement or
the Prospectus as amended or supplemented, or any such amendment or supplement
thereto in reliance upon and in conformity with written information furnished to
the Company by such Underwriter through Credit Suisse First Boston Corporation
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,
11
<PAGE>
damages or liabilities (or actions in respect thereof) referred to therein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company on the
one hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this subsection (d) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d). 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 (d) 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 Securities which it has agreed to purchase hereunder, the Underwriters may
in their discretion arrange for the Underwriters or another party or other
parties to purchase such Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Underwriters do not
arrange for the purchase
12
<PAGE>
of such Securities, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to the Underwriters to purchase such Securities on such terms. In
the event that, within the respective prescribed periods, the Underwriters
notify the Company that they have so arranged for the purchase of such
Securities or the Company notifies the Underwriters that it has so arranged for
the purchase of such Securities, 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 Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Securities, of a defaulting Underwriter or Underwriters by the Underwriters
and the Company as provided in subsection (a) above, the aggregate principal
amount of such Securities which remains unpurchased does not exceed one-eleventh
of the aggregate principal amount of all the Securities, then the Company shall
have the right to require each non-defaulting Underwriter to purchase the
principal amount of Securities, which such Underwriter agreed to purchase
hereunder and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the principal amount of Securities, which
such Underwriter agreed to purchase hereunder) of the Securities, of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Securities, of a defaulting Underwriter or Underwriters by the Underwriters
and the Company as provided in subsection (a) above, the aggregate principal
amount of Securities, which remains unpurchased exceeds one-eleventh of the
aggregate principal amount of all the Securities, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Securities, of a defaulting Underwriter or
Underwriters, then this Agreement shall thereupon terminate, without liability
on the part of any non-defaulting Underwriter or the Company, except for the
expenses to be 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
13
<PAGE>
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 Credit Suisse
First Boston Corporation, 11 Madison Avenue, New York, New York 10010,
Attention: Investment Banking Department - Transactions Advisory Group; and if
to the Company shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Company set forth in the Registration
Statement, Attention: Chief Financial Officer and Attention: Secretary;
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
hereof shall be delivered or sent by mail, telex or facsimile transmission to
such Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company by the Underwriters upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Securities from any Underwriter shall be deemed a successor or assign
by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
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.
14
<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:
Title:
Accepted as of the date hereof:
CREDIT SUISSE FIRST BOSTON CORPORATION
GOLDMAN, SACHS & CO.
CHASE SECURITIES INC.
By: CREDIT SUISSE FIRST BOSTON CORPORATION
By:__________________________________
On behalf of each of the Underwriters
15
<PAGE>
SCHEDULE I
PRINCIPAL AMOUNT OF SECURITIES
TO BE PURCHASED
Credit Suisse First Boston Corporation. . . . . . . . . . . $135,000,000
Goldman, Sachs & Co. . . . . . . . . . . . . . . . . . . . 120,000,000
Chase Securities Inc. . . . . . . . . . . . . . . . . . . . 45,000,000
------------
Total. . . . . . . . . . . . . . . . . . . . . . . . . $300,000,000
-----------
-----------
<PAGE>
ANNEX I
[Attach executed copy of initial comfort letter]
<PAGE>
ANNEX II
[Attach form of bring-down comfort letter]
<PAGE>
ANNEX III
February ___, 1998
CREDIT SUISSE FIRST BOSTON CORPORATION
GOLDMAN, SACHS & CO.
CHASE SECURITIES INC.
c/o Credit Suisse First Boston Corporation
11 Madison Avenue
New York, New York 10010
Ladies and Gentlemen:
We have acted as your counsel in connection with the purchase by you
of $300,000,000 principal amount of 7% Senior Debentures due 2028 the
"DEBENTURES") of Federated Department Stores, Inc., a Delaware corporation (the
"COMPANY"), pursuant to the Underwriting Agreement dated February 2, 1998
between you and the Company.
We have examined the Registration Statement on Form S-3 (File No.
333-34321) 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 September 11, 1997, as
supplemented by the prospectus supplement dated February 2, 1998 (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 Reports on Form 10-Q of the Company for the fiscal quarters ended May
3, August 2 and November 1, 1997, Amendment No. 1 to Form 10-Q on Form 10-Q/A,
dated December 16, 1997, and the Current Report on Form 8-K of the Company dated
July 15, 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 September 10, 1997, (as supplemented by the First Supplemental Indenture
dated as of February 6, 1998, the "INDENTURE") between the Company and Citibank
N.A., 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
III-1
<PAGE>
Credit Suisse First Boston Corporation February ___, 1998
Goldman, Sachs & Co.
Chase Securities Inc.
and such certificates or comparable documents of public officials and of
officers and representatives of the Company, and have made such other and
further investigations, as we have deemed relevant and necessary as a basis for
the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents.
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.
III-2
<PAGE>
Credit Suisse First Boston Corporation February ___, 1998
Goldman, Sachs & Co.
Chase Securities Inc.
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.
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 February 2, 1998 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.
III-3
<PAGE>
Credit Suisse First Boston Corporation February ___, 1998
Goldman, Sachs & Co.
Chase Securities Inc.
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-4
<PAGE>
ANNEX IV
February ___, 1998
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Chase Securities Inc.
c/o Credit Suisse First Boston Corporation
11 Madison Avenue
New York, New York 10010
Re: $300,000,000 Aggregate Principal Amount of 7% Senior
DEBENTURES DUE 2028 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% Senior
Debentures due 2028 (the "Securities") pursuant to the Underwriting Agreement,
dated February 2, 1998 (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;
IV-1
<PAGE>
Credit Suisse First Boston Corporation February ___, 1998
Goldman, Sachs & Co.
Chase Securities Inc.
3. Each Significant Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation; all of the issued shares of capital
stock of each such Significant Subsidiary have been duly and validly authorized
and issued, are fully paid and non-assessable, and (except as otherwise
disclosed in the Prospectus as amended or supplemented prior to the date hereof)
are owned directly or indirectly by the Company, free and clear of all material
liens, encumbrances, equities or claims; each subsidiary of the Company has been
duly incorporated 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 Indenture, 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
IV-2
<PAGE>
Credit Suisse First Boston Corporation February ___, 1998
Goldman, Sachs & Co.
Chase Securities Inc.
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 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 Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally binding
obligations of the Company enforceable against the Company in accordance with
their terms and entitled to the benefits provided by the Indenture, as
supplemented by the First Supplemental Indenture, except 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 Indenture, 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 Indenture, has
been duly authorized, executed and delivered and constitutes a valid and legally
binding instrument, enforceable against the Company in accordance with its
terms, except as the enforceability of the Indenture, as supplemented by the
Supplemental Indenture, may be limited by bankruptcy, insolvency, reorganization
and other laws of general applicability relating to or affecting creditors'
rights and to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law; and the
Indenture, as supplemented by the Supplemental Indenture, 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 Indenture, except such as have
been obtained under the Act, the Exchange Act, and the Trust
IV-3
<PAGE>
Credit Suisse First Boston Corporation February ___, 1998
Goldman, Sachs & Co.
Chase Securities Inc.
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 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.
IV-4
<PAGE>
Credit Suisse First Boston Corporation February ___, 1998
Goldman, Sachs & Co.
Chase Securities Inc.
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 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
February __, 1998
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Chase Securities Inc.
c/o Credit Suisse First Boston Corporation
11 Madison Avenue
New York, New York 10010
Re: $300,000,000 Aggregate Principal Amount of 7% Senior
DEBENTURES DUE 2028 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% Senior Debentures due 2028 (the "Securities")
pursuant to the Underwriting Agreement, dated February 2, 1998 (the
"Underwriting Agreement"), between you and the Company. This opinion is
furnished to you pursuant to Section 7(d) of the Underwriting Agreement. Except
as otherwise defined herein, terms used herein with initial capital letters are
so used with the respective meanings ascribed thereto in the Underwriting
Agreement.
We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion. Based thereupon, we are of the
opinion that:
1. The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented prior to the date hereof;
2. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
3. The Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally binding
obligations of the Company
V-1
<PAGE>
Credit Suisse First Boston Corporation February ___, 1998
Goldman, Sachs & Co.
Chase Securities Inc.
enforceable against the Company in accordance with their terms and entitled to
the benefits provided by the Indenture, as supplemented by the First
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
Indenture, 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 Indenture, has
been duly authorized, executed and delivered and constitutes a valid and legally
binding instrument, enforceable against the Company in accordance with its
terms, except as the enforceability of the Indenture, as supplemented by the
Supplemental Indenture, may be limited by bankruptcy, insolvency,
reorganization, and other laws of general applicability relating to or affecting
creditors' rights and to general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law; and the
Indenture, as supplemented by the Supplemental Indenture, 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 Indenture, except such as have been obtained
under the Act, the Exchange Act, and the Trust Indenture Act, and such consents,
approvals, authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
6. The statements set forth in the Prospectus as amended or
supplemented prior to the date hereof under the captions "Description of Debt
Securities" and "Description of the 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,
V-2
<PAGE>
Credit Suisse First Boston Corporation February ___, 1998
Goldman, Sachs & Co.
Chase Securities Inc.
complied as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder; and
9. The Registration Statement and the Prospectus and any amendments
and supplements thereto made by the Company prior to the date hereof (other than
the financial statements and related schedules and other financial or
statistical data 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.
V-3
<PAGE>
Credit Suisse First Boston Corporation February ___, 1998
Goldman, Sachs & Co.
Chase Securities Inc.
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.
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>
- --------------------------------------------------------------------------------
FEDERATED DEPARTMENT STORES, INC.
and
CITIBANK, N.A.
TRUSTEE
FIRST SUPPLEMENTAL TRUST INDENTURE
DATED AS OF FEBRUARY 6, 1998
Supplementing that certain
INDENTURE
DATED AS OF SEPTEMBER 10, 1997
Authorizing the Issuance and Delivery of
Senior Securities
consisting of $300,000,000 aggregate principal amount of
7% Senior Debentures Due 2028
- --------------------------------------------------------------------------------
<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.. . . . . . . . . . . . . . . . . . 7
Section 1.1. Issuance of Senior Debentures; Principal Amount;
Maturity.. . .. . . . . . . . . . . . . . . . . . . . . . 7
Section 1.2. Interest on the Senior Debentures; Payment of Interest. . 8
Section 1.3. Execution, Authentication and Delivery of Securities. . . 8
ARTICLE II. CERTAIN DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.1. Certain Definitions.. . . . . . . . . . . . . . . . . . . 8
ARTICLE III. CERTAIN COVENANTS.. . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.1. Liens.. . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.2. Sale and Leaseback Transactions.. . . . . . . . . . . . . 15
Section 3.3. Permitting Unrestricted Subsidiaries to Become
Restricted Subsidiaries . . . . . . . . . . . . . . . . . 16
Section 3.4. Payment Office. . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE IV. ADDITIONAL EVENTS OF DEFAULT.. . . . . . . . . . . . . . . . . . 17
Section 4.1. Additional Events of Default. . . . . . . . . . . . . . . 17
ARTICLE V. DEFEASANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.1. Applicability of Article V of the Indenture.. . . . . . . 18
ARTICLE VI. REDEMPTION OF SENIOR DEBENTURES. . . . . . . . . . . . . . . . . 18
Section 6.1. Right of Redemption.. . . . . . . . . . . . . . . . . . . 18
ARTICLE VII. MISCELLANEOUS.. . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 7.1. Reference to and Effect on the Indenture. . . . . . . . . 19
Section 7.2. Waiver of Certain Covenants.. . . . . . . . . . . . . . . 19
Section 7.3. Supplemental Indenture May be Executed In Counterparts. . 19
Section 7.4. Effect of Headings. . . . . . . . . . . . . . . . . . . . 19
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of February 6, 1998, between
Federated Department Stores, Inc., a corporation duly organized and existing
under the laws of the State of Delaware (the "COMPANY"), and Citibank, N.A., a
national banking association duly incorporated under the laws of the United
States of America, as Trustee (the "TRUSTEE"), supplementing that certain
Indenture, dated as of September 10, 1997, 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% Senior Debentures Due 2028" (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% SENIOR DEBENTURE DUE 2028
No. R- $
Cusip No. 31410H AK7
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 February 15,
2028 and to pay interest thereon from February 6, 1998 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semiannually on February 15 and August 15 of each year, commencing on August 15,
1998, at the rate of 7% 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 February 1 or August 1 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for shall forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities of this series not less than 10
calendar days prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in said
Indenture.
Payment of the principal of and any such interest on this Security
shall be made at the office or agency of the Company maintained for the purpose
in New York, New York, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts; PROVIDED, HOWEVER, that at the option of the Company payment of interest
may be made by check mailed to the address of the Person entitled thereto as
such address appears in the Security Register.
<PAGE>
3
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS SET FORTH ON THE
REVERSE HEREOF. SUCH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS
THOUGH FULLY SET FORTH IN THIS PLACE.
This Security shall not be valid or become obligatory for any purpose
until the certificate of authentication herein has been signed manually by the
Trustee under said Indenture.
IN WITNESS WHEREOF, this instrument has been duly executed in
accordance with the Indenture.
FEDERATED DEPARTMENT STORES, INC.
Date Issued: By:______________________________
Attest:
By:___________________
[Form of Reverse of Security]
FEDERATED DEPARTMENT STORES, INC.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "SECURITIES") issued and to be issued in one or more
series under an Indenture, dated as of September 10, 1997 (herein called the
"INDENTURE"), between the Company and Citibank, N.A. 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.
The Securities are redeemable in whole or in part, at the option of
the Company at any time and from time to time, on not less than 30 or more than
60 days' prior notice mailed to the Holders of the Securities, at a Redemption
Price equal to the greater of (i) 100% of the principal amount of the Securities
to be redeemed and (ii) the sum of the present values of the Remaining Scheduled
Payments thereon discounted to the Redemption Date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate plus 20 basis points, together in either case with accrued interest on the
principal amount being redeemed to the Redemption Date.
<PAGE>
4
"TREASURY RATE" means, with respect to any Redemption Date, the rate
per annum equal to the semiannual equivalent yield to maturity (computed as of
the second business day immediately preceding such Redemption Date) of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date.
"COMPARABLE TREASURY ISSUE" means the United States Treasury security
selected by an Independent Investment Banker that would be utilized, at the time
of selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of the Securities. "INDEPENDENT INVESTMENT BANKER" means one of the Reference
Treasury Dealers appointed by the Company.
"COMPARABLE TREASURY PRICE" means, with respect to any Redemption
Date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third business day preceding such Redemption Date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (a) the average
of the Reference Treasury Dealer Quotations for such Redemption Date, after
excluding the highest and lowest of such Reference Treasury Dealer Quotations,
or (b) if the Trustee obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Quotations. "REFERENCE TREASURY DEALER
QUOTATIONS" means, with respect to each Reference Treasury Dealer and any
Redemption Date, the average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) quoted in writing to the Trustee by such Reference
Treasury Dealer as of 3:30 p.m., New York City time, on the third Business Day
preceding such Redemption Date.
"REFERENCE TREASURY DEALER" means each of Credit Suisse First Boston
Corporation, Goldman, Sachs & Co. and Chase Securities Inc. and their respective
successors and two other nationally recognized investment banking firms that are
Primary Treasury Dealers specified form time to time by the Company; PROVIDED,
HOWEVER, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "PRIMARY TREASURY DEALER"), the
Company shall designate as a substitute another nationally recognized investment
banking firm that is a Primary Treasury Dealer.
"REMAINING SCHEDULED PAYMENTS" means, with respect to each Security to
be redeemed, the remaining scheduled payments of the principal thereof and
interest thereon that would be due after the related Redemption Date but for
such redemption, except that, if such Redemption Date is not an interest payment
date with respect to such Security, the amount of the next succeeding scheduled
interest payment thereon will be reduced by the amount of interest accrued
thereon to such Redemption Date.
On and after any Redemption Date, interest will cease to accrue on the
Securities or any portion thereof called for redemption. Prior to any
Redemption Date, the Company shall deposit with a paying agent money sufficient
to pay the Redemption Price of and accrued interest on the Securities to be
redeemed on such date. If less than all the Securities are to be redeemed,
<PAGE>
5
the Securities to be redeemed shall be selected by the Trustee by such method as
the Trustee shall deem fair and appropriate in accordance with methods generally
used at the time of selection by fiduciaries in similar circumstances.
The Indenture contains provisions for defeasance at any time of (a)
the entire indebtedness of this Security or (b) certain restrictive covenants
and Events of Default with respect to this Security, in each case upon
compliance with certain conditions set forth in the Indenture.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request and shall have failed to institute such proceeding for 60 calendar
days after receipt of such notice, request, and offer of indemnity. The
foregoing shall apply to any suit instituted by the Holder of this Security for
the enforcement of any payment of principal hereof or any premium or interest
hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and 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.
<PAGE>
6
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.
D. The Trustee's certificate of authentication shall be in
substantially the following form:
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7
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated: _________________
CITIBANK, N.A., 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 February 6, 1998 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.
<PAGE>
8
(b) The Senior Debentures shall be issued in the aggregate principal
amount of $300,000,000 and shall mature on February 15, 2028.
SECTION 1.2. INTEREST ON THE SENIOR DEBENTURES; PAYMENT OF INTEREST.
(a) The Senior Debentures shall bear interest at the rate of 7% per
annum from February 6, 1998, 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 February 1 or August 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.
SECTION 1.3. EXECUTION, AUTHENTICATION AND DELIVERY OF SECURITIES.
The Securities will be executed on behalf of the Company by the
Chairman or any Vice Chairman of the Board of Directors, the Chief Executive
Officer, the President, or any Vice President of the Company and attested by any
other executive officer of the Company.
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
<PAGE>
9
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 to the Company by
certain financial institutions pursuant to (i) the Five-Year Credit
Agreement, pursuant to which such financial institutions have provided the
Company with a $1,500,000,000 revolving loan facility and (ii) the 364-Day
Credit Agreement, pursuant to which such financial institutions have provided
the Company with a $500,000,000 revolving loan facility, with Citibank N.A.,
as administrative agent and paying agent, The Chase Manhattan Bank, as
administrative agent, BankBoston, N.A., as syndication agent, and Bank of
America National Trust & Savings Association, as documentation agent, as the
same may be amended, supplemented, or otherwise modified from time to time.
"CASH EQUIVALENT" means: (a) obligations issued or 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 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 intangibles, all as set forth on the most recent balance sheet of the
Company and its consolidated Subsidiaries and computed in accordance with GAAP.
<PAGE>
10
"EXISTING INDEBTEDNESS" means all Indebtedness under or evidenced by:
(a) the Senior Debentures; (b) the Company's 7.45% Senior Debentures Due 2017;
(c) the Company's 6.79% Senior Debentures Due 2027; ; (d) the Company's 10%
Senior Notes Due 2001; (e) the Company's 8.125% Senior Notes Due 2002; (f) the
Company 81/2% Senior Notes due 2003; (g) the Company's 5% Convertible
Subordinated Notes Due 2003; (h) the outstanding principal amount of notes
issued pursuant to the Mortgage Note Agreement, between Macy's Primary Real
Estate, Inc. and Federated Noteholding Corporation; (i) the outstanding
principal amount of notes issued pursuant to the Loan Agreement among Lazarus
PA, Inc., PNC Bank Ohio, National Association, as agent, and the financial
institutions party thereto; (j) Capital Lease Obligations of the Company and the
Restricted Subsidiaries existing on the date of issuance of the Senior
Debentures; (k) the Note Override Agreement, dated as of December 19, 1994, by
Kings Plaza Shopping Center of Avenue U, Inc., as Issuer, and The John Hancock
Mutual Life Insurance Company ("John Hancock"), as Noteholder; and (l) the other
secured Indebtedness of the Company or secured or unsecured Indebtedness of the
Restricted Subsidiaries existing on the date of the 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 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);
<PAGE>
11
(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 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
<PAGE>
12
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 (a)(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 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,
<PAGE>
13
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).
<PAGE>
14
"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
<PAGE>
15
has or might have voting power upon the occurrence of any contingency), or, in
the case of any partnership or other legal entity, more than 50% of the ordinary
equity capital interests, is at the time directly or indirectly owned or
controlled by one or more Unrestricted Subsidiaries and the primary business of
which consists of, and is restricted by the charter, partnership agreement, or
similar organizational document of such Subsidiary to, financing operations on
behalf of the Company and its Subsidiaries, and/or purchasing accounts
receivable or direct or indirect interests therein, and/or making loans secured
by accounts receivable or direct or indirect interests therein (and business
related to the foregoing), or which is otherwise primarily engaged in, and
restricted by its charter, partnership agreement or similar organizational
document to, the business of a finance company (and business related thereto).
ARTICLE III. CERTAIN COVENANTS.
The following covenants shall be applicable to the Company for so long
as any of the Senior Debentures are Outstanding. Nothing in this paragraph
will, however, affect the Company's obligations under any provision of the
Indenture or 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 net
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 or other 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 that 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
<PAGE>
16
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 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 is otherwise in
compliance with all provisions of the Indenture and this Supplemental
Indenture that apply to Restricted Subsidiaries.
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17
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.
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 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 final 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.
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18
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:
(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. REDEMPTION OF SENIOR DEBENTURES.
SECTION 6.1. RIGHT OF REDEMPTION.
The Senior Debentures may be redeemed by the Company in accordance
with provisions of the form of Securities set forth herein.
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19
ARTICLE VII. MISCELLANEOUS.
SECTION 7.1. 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 7.2. 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 7.3. 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 7.4. EFFECT OF HEADINGS.
The Article and Section headings herein are for convenience only and
shall not affect the construction hereof.
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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: Karen M. Hoguet
Title: Senior Vice President, CFO
and Treasurer
Attest:
____________________________________
Name: Susan P. Storer
Title: OVP and Assistant Treasurer
CITIBANK, N.A.,
as Trustee
By:__________________________________
Name:
Title:
Attest:
____________________________________
Name:
Title:
<PAGE>
21
STATE OF )
) ss.:
County of )
On this ____ day of February, 1998, 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/
----------------------------------
NOTARY PUBLIC
<PAGE>
22
STATE OF ____________ )
) ss.:
County of ___________ )
On this ____ day of February, 1998, before me personally came , to me
known, who, being by me duly sworn, did depose and say that he/she is a
____________________________ of CITIBANK, N.A., 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/
----------------------------------
NOTARY PUBLIC
